'1 U. S. DEPARTMENT OF LABOR United States Conciliation Service Uashington 25; D. C. FINAL REPORT OF DIRECTOR OF CONCILIATION TO: L. B.'Schwellenbach, Secretary of Labor I hive the honor to submit a report of the business of the U. S. Conciliation Service during the period of my incumbency which commenced on September 23, 1945, and terminated August 21, 1947. This report is &rans-mitted at this time because the Conciliation Service, pursuant to the provisions of the Labor-Management Relations Act, is being transferred out of the Department of Labor after having been in the Department for 34 years. The separation of the Service from the Department marks a major turning point, in. the administration of the lapor relations policy of the country. This report is designed as a partial statement of the record of achievement of the Service while in the Department of Labor. It is a history, knowledge of which is essential to properly cope with the difficult industrial relations problems that still beset our economy. It is a history that is reflected in the legislation establishing the new Federal Mediation and Conciliation Service. It is indeed a significant tribute to the farsighted and sincere and human leadership that you have given to the Conciliation Service that Title II of the legislation establishing this new agency is in effect a mere statutory codification of the duties and responsibilities of the Conciliation Service as they are now performed. The primary emphasis of this report will, of course, be upon the years I know best, the two years that spent as 1;irector of the Service. Those two years coincide with two land-mark dates - VS Day and the Labor Management Relations Act. The two years from SepteiLber 1945 when I was appointed Director until my resignation in August 1947 were indeed tumultuous. But upon close reflection it appears that the degree of industrial tumult was not uniform; rather it was at its height when I assumed office and has subsided considerably as I leave office. In the first few months of my incumbency the post VS Day strikes reached an all-time high. As I leave office, labor disputes are at a post-war low. We are, of course, not entirely responsible for that record of declining strikes, but I do believe that it is not unseemly for us to .feel that the Conciliation Service has made a major contribution to the achievement of the general industrial peace that now exists. There are many factors that have contributed to the resumption of relative industrial peace in this country, but i believe the one most important factor was the re-emphasis by labor, management and the government upon free collective bargaining. If ue are to benefit from the experiences of the past two years, if we are to benefit from the failures and successes of our collective bargaining experiences of those years, it is important that we view those years in their proper perspective. • , nen I assume4 office an indtistry-wide oil strike was in full • progress. Soon after I was tworn in by the Sebretary of Labor I returned to Chicago (having just resigned as the'dhatisman of the Chicago Regional War Labor Board) to attempt to forestall a nation-wide strike in the meatpacking industry. Before any time was allowed for full consideration of .the handling of labor problems, the post V,J. Day wave of strikes was upon us. The Northwest Lumber, General Notors,Western•Electric, General Elec trio, and Westinghouse, steel,International Harvester and many other major strikes followed in rapid succession. With labor strife breaking out all over the country, it was imperative that all of our resources be dis patched to the areas of combat and it was, therefore; particularly. difficult to effect the necessary changes in the Service while at the same time con., stantly being called upon to participate in or direct the handling of conciliation and mediation efforts. In discussing the government's role in labor relations it is customary for such dis,cussions 'to revolve around the major strikes. of last .year. The public was properly concerned over the disrtiptive effects of" those strikes in 1946. The seriousness of those strikes cannot be minimized, However, those strikes must be viewed in relation to the events that preceded them. The strikes Of 1946 reflected an exceptional, indeed a unique, relationship. of management, labor and the'government; Labor and management in many industries had had little or' no experience in. the process of free collective bargaining prior.to 1941. The National Labor Rel.ations:Aet was ineffective Until the Supreme Court passed upon it.s. constitutionality in 1937. From that time. On the Wagner Act became more. and more effective and strikes over union recognition and anti-union discrimination dropped considerably. In 1941' when the tools of collective bargaining were beginring to become effective, normal contract negotiations were seriously disrupted by the advent of the program and our. entry into, the war . The establishment of the National Defense .Mediation >Board and thereafter the War Labor Board resulted necessarily a shift of the responsibility for teaching tgreements from the parties themselves to those government agencies. As'a result, on VJ Day we found that the procesbes of collective bargaining were still new and untried in many.areas of our industrial economy. . American management and labor were confronted during this re-conver0.9n period with difficult problems of adjustment such as those affecting_increased cost of living, reduced take-home pay, transfers to .other jobs and new production methods. Every important strike of 1946 stemmed.fram.the problems of adjustment of the general wage level. • • . Despite the difficulties that labor' 'and management have had in, re-learning the free collective bargaining process,'experience in the few months immediately preceding enactment of ble Taft-Hartley Act gave us dramatic proof of the fact that collective bargaining can work. Agreements were reaced through the processes 'of free collective- bargaining in the steel, industry, General Motors., 4eatinghouse, General Electric, Western Union, Radio Corporatio.n of America, the men's clothing industry, the ' ladies clothing industry, the.textile industry,, the big 4 meatpackers, the big 4 rubber-companies and. many others. These agreements worked out across the bargaining table by labor and management show that they are learning to.work out their differences peacefu4y.. In the first six months of this year the number of work stoppages was at iti lowest since VJ Day. -Not only was the number of.strikes less than at any previous work period, but workers involved' and idleness wereless than. one--fourth of the number involved in the same period of 1946 when: reconversion problems resulted in wide-spread labor-management controversies. See Appendix Table I. TIE REORGANIZATION PROGRAM OF THE CONCILIATION SERVICE Students of industrial relations will want to know the role of the Conciliation Service in assisting labor and management in the achievement of industrial peace. The role played by the Conciliation Service was in large measure an outgrowth of the unanimous recommendation of the President's Labor-Uanagedent Conference on industrial relations which was held in November 1945. This Conference which was composed of .labor and management representatives from the National Association of Manufacturers, Chamber of Commerce, American Federation of Labor, Railway Brotherhoods, Congress of Industrial Organizations and United Mine Vlorkers, reached agreement on few points, but a principal one was "reorganization of the Conciliation Service to the end that it will be established as an effective and completely impartial agency within the Department." The Conference also recommended the establiihment of a Labor-Management Advisory Committee to make "recommendations to the Secretary of Labor or to the Director of the Conciliation Service with respect to the policy, procedures, organization, and development of adequate. standards and qualifications for the personnel of this Service." The work of the Labor-Management Advisory-Committee has not been perfunctory. On the contrary, that Committee has been most helpful in assisting the Service in the formulation and execution of its reorganization program. • The reorganization program of the Service has generated so much discussion among the people in the field of industrial relations that some review of the factors leading to that reorganization may be warranted. Although the Secretary and the Director strongly felt that a unanimous recommendation from leading representatives of labor and management was entitled to considerable weight, it would be misleading to imply that the reorganization program was motivated by no reason other than the unanimous recommendation of the President's Labor-Management Conference. It was recognized that labor-management relations had been going through an evor lutionary process that required certain reorganization of the Conciliation Service in order to more adequately cope with the problems that grew out of this evolutionary process. In the pre-Wagner Act days, the issues between labor and management were comparatively simple. A major area of dispute was the issue of recognition. Large segments of industry were still unwilling to sit down and discuss any.issues with representatives. of their employees and they were under•no statutory' obligation to do so. The conciliator who succeeded in getting labor and management-to sit Own across the bargaining table to discuss recognition' and the wages to be .paid achieved a very difficult goal. 'The power of persuasion was the only qualification necessary in the good 'conciliator. With the adoption of the Wagner Act and numerous other laws relating to labor relations such as the Wage-Hour Act- withits portal to portal problems, the Walsh..Healy Act, with the regulations on wages and working conditions during the era of the National Defense'Nediation Board and the National War Labor Board, and with the growing emphasis on the, relationship between wages and prices, in the era of OPA and wage stabilization, collective bargaining, became more complex. These complexities did not stem only from a plethora of new laws and executive orders. They also stemmed from new concepts in tie area of collective bargaining. As industry recognized the right of employees to bargain through their chosen representatives, the area of collective bargaining expanded. Collective bargaining, instead of being1imited -to such simple issues as union recognition and wage scales, extended into the fields of arbitration procedures, seniority systems, wage incentives, job evaluation, welfare plansj- pension plans, guaranteed annual wage' and many others. • .Mith the coming of VJ Day collective bargaining had become a highly complicated process. Industry ,and labor recognizing the new challenge began to train their representatives in persotnel and industrial relations practices. Industry conducted training courses for its personnel and supervisory staffs. Labor began to conduct shop stewards classes to instruct its representatives in the handling of grievances and conducted classes for its representatives in the art of collective bargaining. Industry and labor both took steps to train their representatives in the field of labor law. Many of the leading universities, recognizing the need by labor and management for trained representatives, instituted industrial relations schools to provide trained leaders in the field. It was apparent that with highly trained people representing industry and labor, on both sides of the collective bargaining table government representatives must be at least as well trained. The art of persuasion alone was no longer a sufficient qualification for a good conciliatar. The good conciliator must now be a labor relations expert to supplement his qualifications of tact and persuasiveness. As this evolutionary process developed, it was imperative that the Conciliation Service be kept at least abreast of, if not ahead of that evolutionary process. Labor and management both had a right to look to the government to provide leadership by providing competent and impartial conciliators to assist the parties in the resolution of their disputes. This does not imply that being a labor relations expert in and of itself makes a man a good conciliator. He must still have the qualifications of impartiality, persuasiveness, and the ability to instill confidence. A great many of the conciliators who had been in the Service before VJ Day had, on their own -initiative, taken steps to keep themselves abreast of current developments in the field of labor relations. However, 4 there was no organized program to insure regular procedures for keeping ' conciliators up to date on labor relations developments.. It was for these reasons together with the unanimous recommendation of the President's Labor-Management Conference that the reorganization program of the Service was instituted. A. number of steps to extend the facilities of the Conciliation Service to assist labor and management in their collective bargaining efforts were taken following the'unanimous-recommendation of the President's Labor-Management. Conference that the Conciliation Service be reorganized. Pursuant to this recommendation certain basic measures were taken to achieve this purpose: .1. Establishment of a Labor-Management Advisory Committee from nominees recommended by the AFL, CIO, NAM, and Chamber of Commerce.. 2. Establishment of a Program Division for training of new officers and keeping the staff up to date on current labor relations problems and developing improved mediation tech- niques. . 3. Reorganization of"the Technical 'Division. 4. Decentralization of the field organization. 5. Reorganization of'the Arbitration Division. 6. A salary upgrading .program•designed to hold and attract high-quality men. 7. Appointment of =special conciliators to.supplement the actj.vities.of regular conciliators in key disputes 8. Fact-finding. 1. Labor-Management Advisory •Committee • , Probably the most far-reaching step taken by the Service was the establishment of. the LaborManagement AdvIsory Committee. It is gratifying to note -that. the Tart-Hartley. Act *ovIdes fin- a Labor-Management Advisory Panel, on a statutory basis!, The 'establishment of the Committee marked the first time: in the history of the Department of Labor that industry and- labor jointly. had been given a voice in the formulation of major departmental. policy. An. Advisory Committee was established by the Service on October 18, 1945 prior.. to the President's Labor-Management Conference. The Advisory.Committee was tri-partite and was appointed by the.Secretary. of Labor upon the recommendation of the Director. That Committee worked closely with the Director on policy, procedures, and organization to be used in strengthening the machinery of the Service for the peaceful settlement of labor disputes. As a result of the action taken at .the President's:Labor Manage, ment Conference, the Committee was reconstituted to consist of 8 members selected.from a list of nominees submitted by the AFL, CIO, Chamber of Commerce and the National Association of Manufacturers'. The Committee met with the Director once every month. All contemplated major policy changes were submitted to the Committee for approval prior to their adoption and the Committee actively participated in the policy-making process.. The arbitration policies elsewhere discussed were worked out with. the Committee, including the discontinuance of a permanent, staff and the substitution of an approved arbitration panel, the use of regional labor-management committees for screening the names for this panel, and the very limited use of arbitration paid for by the government. The Committee reviewed and approved the organizational policies of the Service including the increased salary scale for conciliators and their field supervisors, the further development of branch offices, and staff reductions made necessary by budget stringencies. The Committee reviewed and approved of policiei followed in the TeChnical Division, referred to elsewhere in the report, and the training, informational and planning activities of the Program Division also treated below. The Committee underlined the Service policy to preserve and develop the maximum of free collective bargaining and the greatest possible flexibility in the conciliation process. As the Committee formally concluded in a policy statement of December 23, 1946,'"The postwar Government policy of free, collective bargainifig places full responsibility for continuous production on management and on labor. . . This is as it should be. . . Under this policy the Government's role in collective bargaining is limited to one of voluntary mediation through the United States Conciliation Service." It recommended that the Service "preserve a maximum flexibility in its mediation program" and recommended additional procedures of a panel of special conciliators, the use of tri-partite mediation and of Emergency Boards of Inquiry. With the same purposei the Committee assisted in the development of a utilities conference for the better development of peaceful collective bargaining procedures in that industry. It was also on the basis of Committee.recommendations that the Service developed a general pc4icy on its cooperative relations with State mediation agencies and with city labor and management mediation. activities. At the suggestion of the Committee, a pamphlet was prepared, and widely circulated,'giving for the first time a cleat and concise description of the Service for the information of management and labor representatives. The Committee in addition to its regular function of advising the Service was particularly helpful in serving as a clearing house for criticisms that might'be made by labor or management on-the.functioning of the Service. The opportunity thus created to air these criticisms on. a constructive basis was of great assistance in promoting the acceptability of the Service among labor and managemen.6. Many industrialists, for example, who had looked upon the Service as -pro-labor.became more agreeable to accepting the Service as an impartial and. competent agency. to assist them in 'the handling of their labor disputes. Such industrialists.knoming that they had an. active representatipnthrdUgh the Advisory Committee in the formulation-of Conciliation Service policies felt assured that the Service would act in. an impartial role. • 2. Program D:ivision. • This- Division has been somewhat of a cause celebre. It was the subject of considerable criticism by the. House Appropriations Committee, but:matly:'of the criticisms were based upon insufficient facts as to the true functions of the iiivisions The Program Division is a direct outgrowth of the unanimous recommendation of the President's Labor Management Conference. The Labor-Management Conference specifically recommended: "Provision should be made for practical training for newly appointed conciliators. During such training, the newly appointed conciliators should be assigned as observers in. the course of actual conciliation of a variety of cases. Adequate facilities should be made available to assure thorough knowledge on the part of conciliators of the policies of the Service, techniques of conciliation, labor laws, and industrial rela-tions.practice. Information*services should be made available. to all conciliators to keep them currently abreast of developments in the Conciliation Service, and to provide them with up-to-date information on current labor law and industrial relations practice, In addition, periodic refresher courses should be conducted in the interest of maintaining high standards of service." In September 1945, there were few facilities in the Service for intensive training or refresher co1rses and there were no staff functions relating to basic planning of the operations of the Service. The Program Division was established to accomplish these objectives. This Division planned and conducted an in-service training program through periodic refresher courses in. Washington and through one and two-day-regional.conferences. The Washington conferences which were known as Current Problems Confer4nces ran for a 'period .of one week and were held approximately once every 6 weeks. At these conferences basic labor'lawsi contract clause problems, and techniques of conciliation were disaussed and leading representatives of labor and management attended those.discussions and frequently acted as discussion leaders. The area conferences generally had the participation of local labor and management representatiVes and labor relations problems, particularly as they concerned the local area, were disCussed. The Program Division was at work on a loose-leaf basic handbook that would for the first time provide conciliators with an exact statement of government laws and regulations, labor contract• provisions, and Conciliation Service policies andiprocedures. 'The work thus far completed will, of course, require drastic revision in view of recent changes in labor relations laws under the provisions of the Taft-,14rtley Act. A major .function of the Program Division was to prepare a , WEEKLY NEWSLETTER designed to keep commissioners. abreast of current devel- opments that directly affected the disputes...thAt :they were, working on in the field. In addition, the Program Divisi.6n engaged in over-all, planning and actively participated in the formulation sof the program for supplemental mediation devices, including special conciliators, tri-partite mediation and the utilities conferences. The NEWSLETTER contained up-to-date inforinatiori not only on Federal and State.laws and administrative_decisions and regulations, but also on current practices and variations in collective agreements. Such information is used by the Corimiietoner where appropriate to aid in settlements just as a Conciliator drew on a' NEWSLETTER report on a Reynolds Metal-Steel-workers (CIO) 'agreement. In a midwestern city, the.bargaining had become deadlocked on the union security issue. The union wá t prepared to coopOrate in an effective peaceful relationship but insisted it needed a closed shop.' The company'understood.the union's problem but was unwill- ing limit its right to select. the most competent applicantsfor employ.- ment or to force membership in the union. To meet their respective problems, the Conciliator suggested and the parties agreed to use as a model the Reynolds formula as reported in,the NEWSLETTER. One of the aids provided to conciliator;s has been the summaries of up-to-date wage data. Where needed, these can be used by the Commis-.sioners to provide a realistic base for an agreem,4.,on wage demands just asia Conciliator handled a Southern lumber hego#4ibn. The union was justifying its wage demand by citing the increases in cost of living. The employer was refusing any increase because he 'insisted it would seriously injure his competitive relations with other lumber companies. On the basis. of. up-to-date BLS data furnished by the, Commissioner, the parties found that a moderate increase would not only match other lumber increases but would bring the rates for the basic job classifications into line with others. In another case, when a' Conciliator found that despite the insistence of the company a New:England local union was refusin0oincorpo-rate a final arbitration step in its grievance procedure, he turned to the, international union: policy statement made before a Commissioner-is con-feren6e. Fortified with this statement of policy. he sought tl.ie'participa-ton of an international representative, and secured an agreement. pespite the ,criticisms leveled at this Division, I am firmly convinced that it performed many useful and essential functions. I believe that with the adoption of the Taft-Hartley Act it is more imperative than ever before that aonciliators be keptfully abreast of all developments in the field of labor law and labor relations. I am certain that the government cannot provide adequately qualified conciliators unless many of the functions now performed by the Program Division are continued in the new Federal Mediation and Conciliation Service. It may very well be that those functions may be performed by some other division or be divided among several divisions. An objective appraisal of this work, however, will indicate the need for the continuation of the important functions and duties that were performed by the Program Division during my incumbency. 0, Technical Division The work of the Technical Division was well established long before I assumed office. Its work relates to diSputes between labor and management involving incentive plans, job evaluations, merit rating systems, workload studies, and related questions. The Service has provided trained specialists in the field of industrial engineering and personnel management to assist both companies and unions in resolving disputes of this nature. The President's Labor-Management Conference unanimously recommended that "the Technical Service Division be reorganized, and that it be manned by a qualified and impartial staff. It should operate with the advice and counsel of a Technical Advisory Committee" (Labor-Management). In compliance with these recommendations, a TechniCal Advisory Committee was appointed by the Secretary of Labor consisting of leaders of industry and labor. This Committee has made recommendations on specific methods of operation that have been adopted by the Technical Division. The Labor-Management Technical Advisory Committee reviewed the work of the Technical Division and then set up standards for its perform-. ance. These standards included the requirement that the Technicians could not enter any dispute for the purpose of making a factual study unless both parties requested such study, and that the findings of the Technician were final so far as he was concerned in his further meetings with the Aisputants. The Committee also reviewed the types of reports that had been made and suggested changes in them. They discussed the procedure in handling textile disputes over workloads and set up a definite procedure for studying-and reporting such cases. The method of working with an Arbitrator as a technical advisor was amplified and definite rules set. forth. The Technical Division has worked under these improvements and has' seen the value of them in actual practice. For instance, during the last fiscal year the services of the Technical Division have been jointly requested by all of the large organized textile mills in the South, including Dan River and Erwin Cotton Mills. The more thorough method and reporting, we believe, is responsible for this wider usage of this service in the South. The Committee also approved the Director's proposal that same of the Technicians be placed in the regional offices in order to determine whether they would be more effective than if they were working out of Washington. This was done. In Boston, Cleveland, and Chicago where men are stationed in accordance with this proposal, there was a marked con-tritution to industrial peace. Where few if any cases were handled previously, there now are a small but steady, number. The Technical Commissioners enter a case only upon the joint request of the parties. to the dispute. They never act as arbitrators, although they do on occasion assist arbitrators when technical problems arise. The findings .of fact made by the Technical Commissioners are not binding upon the parties, but it was found that in almost all cases settlements were reached by the parties after the submission of the technical findings or through conferences with the Technical Commissioner after the submission of such findings. Among the more important cases in which the Technical services participated, there is the case of the U, S. Rubber Company at Detroit and also at Mishawaka, Indiana, where our Technicians worked jointly with th6 Company Engineers and the Union Time Study Engineer; Goodyear Tire and Rubber Company, Akron, Ohio, where a detailed study-of an incentive problem for the impartial umpire was instrumental in settling a 2 0 year old grievance; the Lufkin Rule Company, Saginaw, Michigan, where a long strike over terms of the incentive system was settled through the suggestions of a Technician; the Detroit Gear Division, Borg-Warner Corporation, where a grievance over a piece rate threatened to upset the production in the plant; Gauder-Paeschke and Frey, Milwaukee, Wisconsin, Inhere the entire job evaluation plan was in question and a Technician was sufficiently helpful to the parties for them to iron out their diffidulties; the Simmons Company, Kenosha, Nisconsiu, where changes from, wartime material to'peace-time material brought up serious grievances over the new standards and the studies of the Technician were the basis of the settlement of those grievances. 4. Decentralization of the Organization Men I assumed office there were 5 regional offices. Thereafter 2 more regions were established and 4 branch offices and. 17 field offices were set up. .The authority and responsibility for assignment and supervision of mediation and conciliation was placed in the hands of the 7 regional directors and branch office supervisors under whom the entire field staff of conciliators work, In October 1945, the supervisory ratio was an approximate average of 40 men to each supervisor, whereas the' average is now 12 working commissioners to each supervisor. This program permitted the individual supervisor a better opportunity to accurately gauge the capabilities of the individual conciliator. At the 'same time, a supervisor came to know'more intimately the ptoblems of his area and personalities involved. He was thus enabled to make assignments more intelligently by fitting the right man to the right job. Decentrali.zation of the Service has brought about the desirable objective of placing the individual conciliator in a position to learn the - 10 problems of his specific area and to come to know the people concerned with labor relations in that area. It also permitted. the people concerned with labor relations in the area to come to know the conciliator who had the responsibility for assisting them in the.solution of their .labor relations problems. As is well known, effective conciliation requires that the conciliator not only know the specific problems involved but that he have an understanding of the personalities involved in the dispute. On the other hand, the parties to the dispute will not respect the recommendations made by the conciliator unless he enjoys their full confidence. Decentralization of the Service has thus resulted in a closer relationship between the conciliator and the people concerned with labor relations on the local level. It has resulted in taking out of Washington into the industrial centers 99 percent of the actual work of conciliation. 5. Arbitration Division In 1945 there was a staff of full-time paid arbitrators. This procedure was discontinued and the policy of the Service of providing free arbitration upon request Was modified. Instead, free arbitration was discouraged in order to avoid premature use of arbitration and parties were required to assume the cost of their arbitration proceeding unless a case of hardship were shown. This change of policy was made pursuant to recommendation of the Advisory Committee, As a further step designed to encourage continuance of the bargaining process, the Service adopted a policy with the approval of the Advisory-Committee providing for submission of panels of arbitrators to the parties in cases relating to new contract terms. The parties would then make the selection of their own arbitrator from the panels submitted. It is, of course, most important that arbitrators enjoy the confidence of the parties by their impartiality and competence. In order to assure parties requesting the appointment of arbitrators by the Service of the qualifications of the arbitrators so selected, all arbitrators on the roster of the Service were approved with respect to competence and impartiality by the National Committee or Regional Labor-4.1anagement Advisory Committees ythich, were made up of leading labor end management representatives in their respective areas. The use of voluntary arbitration has increased decidedly during the war and the increased use of arbitration has been substantially continued during the reconversion period as shown in the 'following tabulations Fiscal Arbitrators Year Appointed 1940-41 . . . . . . •• . 192 1941-42 . . . . . 1941-42 . . . . . .. .` . . • . 453 1942-43 . . . . . . . . . 1,009 1943-44 . . . . . . . . . 1,185 1944-45 . . . . . . . . . 1,151 1945-46 . . . . . . . . . 959 1946-47 . . . . . . . . . 1,003 - 11 The above figures only indicate the number of arbitrators appointed by the Conciliation Service and do not include the cases in which , the arbitrator was selected by some other means. The tremendous increase in the use of arbitration in the year 1942-43 was undoubtedly due in large part to the no strike-no lockout pledge. During the period of this pledge labor and management looked to the use of voluntary arbitration as a. mothod for voluntary adjustment of their disputes with increasing frequency. Great impetus was given to the use of arbitration by the policy of the National War Labor Board of ordering arbitration clauses in contracts .in most eases where issue was raised. The continued high number of arbitration appointzant3 by the Service is no doubt attributable to the increasing aonfil,pace of labor and management in the availability of im-paitial and competent arbitrators through the facilities of the Conciliation Service. The increasing self government implicit in the use of voluntary arbitration is a tribute to the increasing maturity of labor-management relations. 6. Salary Upgrading The President's Labor-Management Conference unanimously recommended that tthe salaries of commissioners and officers in the Service should be sufficient to attract persons possessing the necessary -qualifications." The field of labor relations is a highly competitive one and the Service has long suffered from constant raiding by labor and management who hired away more than 40 men at higher salaries during the last 3 years. A large proportion of the staff has at one time or another been. offered otitside positions at higher salaries. Accordingly, an upgrading program was prepared which was approved by the Congress for the fiscal. year ,1946-47. .For example, in August '47 there were people. in.the top 3 grades as against 26 in November '45. The following chart shows in detail the increase in number of personnel in higher grades:. Number of Employees Grade : Salary Range . Nov. 1945 Jan.- 1947 Aug. 1947- 15 $ 9975.00'.- lopomo 3 13 12 14 8179.50 - 9376.50 4 19 - 19 13 7102.20 8059.80 • 19 - 87 82 ..•• 12 5905.20 - 6862.80 165 126 118 11 4902.00 - 5905.20 76 34 31 10 4525.80 - 5278.20 26 2 2 9 4149.60 - 4902.00- 3 3 2 8 3773.40 - 4525.80 WO 41. Or VP --- 7 3397.20 - 4149.60 5 -, 5 5 6 3021.00 - 3773.40 1 10 10 5 2644.80 - 3397.20 f 15 9 8 4 2394.00 - 2845.44 49 43 34 3 2168.28 - 2619.72 57 - 58 53 2 1954.00 - 2394.00 '18 14 5 441 423 381 -12-. This program of upgrading was criticized to a certain degree during the appropriation hearings before the house on the required budget for the fiscal year 1947-48. However, with the transfer of the Service no definitive action was taken with respect to the upgrading program. That program has been successful in inducing many highly competent and qualified people to remain on the staff of the Service. 7. Special Conciliators The Labor-anagement Advisory Committee, recognizing that there were certain outstanding individuals nationally known for their expertness in the field of labor relations who could not be attracted-to the Service on a full-time basis but who would be willing to give of their time and energies on occasion, recommended the establishment of a panel of 26 special conciliators. These men were appointed upon the recommendation of the Committee and some of them have been used from time to time to supplement the normal activities of the regular staff conciliators. They have been assigned to cases where their particular background and experience adapt them for handling the problems in the particular industry or area in which the dispute has arisen. Some of them have served with signal success, such as the recent Hawaiian pineapple, maritime, and Great Lakes shipping disputes. Although experience in the use of special conciliators has been too limited to draw any definite conclusions, it is believed that on the basis of the past successful experience, the use of such outstanding labor relations experts on occasional part-time basis provides excellent supplementation to the regular conciliation staff. 8. 1 Fact-Finding Public opinion on the subject of fact-finding has been somewhat confused. Many people have been under the mistaken notion that fact-finding is a complete faildre. 'Nothing could be further from the truth. The fact is that 11 fact-finding boards were set up in 1946, 2 of them appointed by the President and 9 by the Secretary of Labor. In every one of the 9 cases in which the board vas set up by the Secretary of Labor, the findings of the board were used as a basis for settlement of the dispute. A review of the word of the fact-finding boards indicates that they served not only to focus attention Upon the facts and recommenda tions by the parties but by the public as well. That result was achieved -by following three basic rules in setting up such boards: (1) Fact-finding was used only in cases where actual disputes of fact existed which if studied by an impartial board would result in conclusions of value to the parties in the negotiations and to the public concerned with the dispute. (2) Both sides were consulted before a fact-finding board was appointed and approval was received from both sides to the use of this procedure before it was adopted. Thus both parties were convinced that the board would be of real, value and cooperation was thus insured. As a result, the boards were able to receive all necessary facts and they en-S joyed the confidence of the parties. (3) The procedure was entirely voluntary at all stages. The findings or recommendations of the boards have been advisory only and have never been compulsory. In other words, the Secretary of Labor never said to the parties that they must accept -the findings of the board. lie merely sent them the report with a statement that he hoped they would consider it in their future negotiations. In this way the use of fact-finding for arbitration purposes was avoided. Comments on the Reorganization Program This is the record as we in the Conciliation Service saw it; it is the record as I believe large segments of industry and labor saw it. It is the record as the 79th Congress saw it. Unfortunately, it is not the record as some members of the 80th Congress saw it. Reorganization inevitably means change. The attacks that followed our reorganization and the retirement or layoff of some 39 .conciliators were directed either at me personally or upon the administrative practices of the Service. In all the attacks upon our Service, there has been no criticism of our increasing effectiveness and our impartiality as conciliators. The personal and administrative criticisms were all answered in detail in the hearings before the Senate Committee on Appropriations.V The Senate repudiated the action of the House in attempting to usurp the executive function by directing the Secretary of Labor whom to hire and wham to fire. In the Senate debates on the Conciliation Service appropriations not a single word of criticism was uttered against the Service. Gratifying support was given to the Service in the editorial columns of the leading newspapers of the country and by leaders in the field of industrial relations representing industry, labor and the public. The disagreement between the .House and Senate was referred to the Conference Committee for resolution. However, that disagreement was left unresolved as a result of the enactment of the Taft-Hartley Act. Since the Act provided for transfer of the Conciliation Service out of the Department of Labor, that portion of the Labor Department Appropriations' Act relating to the Conciliation Service was stricken from the Bill and instead Congress provided funds for .the interim period until August 21, 1947. No limitations were placed upon this interim budget. 1/ Hearings before Sub-Committee of Committee on Appropriations, U.S. Senate, 80th Congress, 1st Session, on H.R. 2700. Pages 233-237, 286-305. . -14- rr The Washington Post on July 6, 1947, in an editorial commenting upon the appropriation measure, said: £*""SiDic*e. the Labor Department's Conciliation Service is soon 'tdi)e-i4iineited, the SeTtte:,victory over the.likoase in respect Of thiail5fopr:ia:tion may seem acadeplic., We, think, on the con trtiry.,-;"thti.toonstituted a:vic.6ory of essential principle. The, House, at the instance of Representative Frank Keefe, had placed in its appropriations bill for the Labor Department a clause forbidding the. payment of salaries to the director of the Conciliatiori Service, Edgar Warren, and 100 other top officials. The Senate refused to accept this vindictive provision. Senator Knowland in particular deserves credit for his insistence in conference on the Senate position that this provision was improper and inequitable.. It would have amounted, indeed, as we have previously asserted, to a species of legislative blackmail and an invasion of the executive power to hire .and fire. . "Now that the. House has yielded, agreeing to the appropriation of funds for the Conciliation Service until its transfer with no strings attached, Mr. Warren has .submitted his resignation. The resolution of this House-Senate conflict constitutes_ complete vindication for him - a vindication which his personal integrity and the fidelity of his service to the Labor Departmerit thoroughly warranted. He headed the Conciliation Service in a period when labor relations were peculiarly trying and contributed much to their amelioration." In the last fiscal year our conciliators were instrumental in aiding labor and managemmt.in the peaceful settlement of more than 13,000 labor-management disputes. In .9 out of every 10 disputes in which our conciliators were given an opportunity to assist the parties before s strike be.gan, the dispute was settled without any interruption,of work.2/ There are scores of letters in the files of the Conciliation Service from. management and labor attesting to the benefits received through the .use of the Service. It is letters such as these that bring real satisfaction- to those engaged, in government service. C." Conclusions As we moved away from the era of government regulation shortly following VJ Day,,there were some who left that era reluctantly. But informed representatives of management and labor were unanimous in their testimony before the Senate and House Labor Committees in their -opposition to compulsoiy arbitration. ,.. . •. • r 47. See Appendix Tables II, III and IV on cases handled by the Service. - 15 Experience has taught us that labor-managemeilt relations cannot be properly handled 1?3r law, edict, or regulation. Having recently left -the era of government regulation in,1945, we must not board the merrygo-round back to an era of government regulation. Successful labor relations can be created only in an atmosphere ,of mutual cooperation and assistance. Too often government regulations, no matter how well Intended, create suspicion. Labor-Management peace cannot be achieved in an atmosphere of distrust and 1#tterness. It can be achieved only in 'a spirit of goodwill an&cooperation.. It can be achieved only through the difficult but creative process of free collective bargaining. The question will still be asked, what shall we do about strikes? People will ask if strikes are good or if they are bad. Others will ask if strikes ever ,perform a useful function in Our system. Some will wonder whether strikes should be outlawed completely. There is no simple answer to all these questions nor can we adopt the simple answer that strikes are bad. parties who have experienced a strike have learned the hard way, that strikes are wasteful and we must therefore continue the search for means to avoid this disorderly method of settling, disputes. Our experience in the Conciliation .Service shows us-that strikes teach all the parties the value of compromise. They teach labor to avoid the demands.for impossible gains by teaching the rank and file to refrain from, making demands in excess of those for which they are willing to strike. They teach management the cost of saying "no" without seeking a posible area of mutual agreement. In the.hearings before the Senate and House Labor Committees on pending labor legislation the leading organizations of labor and management were unanimous in their opposition to compulsory arbitration and other forms of control of .labor-management relations by government decree. Thus the search for a substitute for strikes always leads back to self-government. Thus the responsibility is thrown back on labor and management to resolve their differences through the processes of collective bargaining. Are in the Conciliation Service operated upon the general premise that true industrial peace could be achieved only by agreement freely reached by the parties. We believed that government should intervene only to assist the parties upon -a voluntary basis when their bargaining process bogged down. Conciliation and mediation are voluntary processes and that is as it should be. The Conciliation Service cannot order anybody to do anything, It acts as an agent to bring the parties together. The method used for bringing the parties together may vary, of course, from case to case, but in all instances it requires that the conciliator combine in one person impartiality and tolerance, a technical knowledge of the intricacies of labor relations in the field in which he' is working, tact and understanding in dealing with people, as well as the personal qualities of • 16- persuasion, good humor, and foresight in grasping the workability of the agreements with which the parties must live. The good conciliator may be required to take an active rather than a passive role to achieve the desired objective of assisting the parties in reaching an agreement. The all-important fact, however, is this: the agreement is always that of the parties reached freely by give and take across the bargaining table. The best conciliator in the world cannot make the parties agree unless they have a will to agree. The major agreements consummated over the past few months preceding the enactment of the Labor hlanagement Relations ct are wholesome proof of the fact that industrial relations have come of age in this country. As we make adjustments during this reconversion period from a war economy to a peace economy, the outlook for industrial peace improves to the same degree that we achieve economic stability and to the same degree that we allow the parties to work out their problems by themselves free of governmental interference and regulation. Labor and management have found to their dismay that government interference and regulation act as a crutch upon hich the parties rely, rather than helping them along the path to self-government. Just when labor and management are learning to walk without assistance, te must not set them back by a new dependence upon the crutch of government regulation. Labor and management have learned that regulation of the bargaining process inevitably leads to regulation of prices and other segments of our industrial economy. A free enterprise system cannot succeed in the absence of free collective bargaining. if we avoid the pitfalls of renewed government interference and regulation, I am confident that with increased economic stability collective bargaining can work even better than it has in the last few months. I am confident that with government participation kept to a minimum, management and labor can work out their problems through the processes of free collective bargaining. Respectfully submitted, /7) I 1.4:11/ 1\ kdgEir. iAarren, Director ‘ U.. S./Conciliation Service • August 21, 1947 STATISTICILL APPENDIX Table I Total Stoppages and Number of Viorkers Involved* January 1945—June 1947, by Months * Source, Bureau of Labor Statistics. Number stoppages ' in effect during month Number workers involved • hionth 1945 !January 1.February parch April May June !July !August September lOctober November December 1 1946 1January February !March April IMay June July August September October November December 1947 January February IMarch !April try une r 65 55,100 313 118,000 422 226,000 486 327,000 517 358,000 576 382,000 611 413,000 586 354,000 730 611,000 737 852,000 619 660,000 367 504,000 502 1,740,000 515 1,500,000 698 i 1,010,000 827 1,180,000 768 1,510,000 758 455,000 910 408,000 965 1 425,000 853 499,000 848 # 467,000 677 707,000 402 500,000 290 ; 100,000 290 1 -90,000 325 100,900 460 600;000 425 200,000 350 475,090 Table II Cases Closed by the United States Conciliation Service by Type of Case Fiscal Years 1941 through 1947 Fiscal Year Ended June 30 Type of Case 1 1941 1942 1 1943 1944 1945 1946 1947 i -- - -; i . 'otal dispute cases Work stoppages 13,705 6,467 114,344 21,698 23,121 16,434 14,422 !1,53.5 1,781 I 2,086 2,843 3,207 3,206 3,047 All other disputes i2,170 4,686 112,258 18,855 19,914 13,228 111,375 Settled by agreement !3,360 5,683 110,923 16,295 15,426 15,061 113,023 1 192 453 I 1,009 1,185 1,151 959 1,008 659 3,186 5,153 7,630 .1280 i 687 76 i 148 213 i66 123 247 rbitration cases . 1 eferred to NWLB & other Government agencies i 233 1 114 echnical cases Special services 1,588 1,515 ! 2,058 J 1,701 . 1,469 '1,324 1,034 Table III Dispute Cases Closed by the U. S. Conciliation service, September 1, 1945 - June 30, 1947 I Number of Number of Workers 1 Type of Case Cases Involved 'Total dispute cases 1 27,652 12,728,934 Work stoppages 1 5,744 4,239,132 All other disputes i 21,903 8,489,752 Table IV Dispute Cases Closed hithout a ork btoppage Occurring During the Pendency of Commissioner's Assignment--.1947 Six Month : Jan. total Type of Case Feb. march April -may June 16,599 before stoppage !Assignments terminated J5,972 without a work st6p-page occurring 931 1 840 962 1 1,101 1,375 862 780 893 993 1,207 !Total cases assigned 1,390 1,237 Percent of the assign- 90.5 92.6 92.9 92;8 90.2 87.8 89.0 ments terminated without a work stoppage