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that this Service inside the Department of Labor had been doing a changes in the good job?

Mr. CHING. I have not-I do not have such a report. I assume that there are men who served on that committee who could be s, is that core called before this committee to testify as to what their ideas are.

I do not know. I was not a party to that conference, and my testimony here today is based on my experience, not only in the Service, u gone into the but outside, together with the best judgment I can use.

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Do you have any statistical measurement other than a general impression, as to the greater degree to which employers have used "tment of Lathe Mediation and Conciliation Service now that it is an independent

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Mr. CHING. The only thing I have to base an opinion on is what our men in the field tell me, what our regional directors and our ciliation and commissioners tell me, and they tell me that there is greater accept

ance of the Service by employers than they ever had before; and some employers have told me that the acceptance by employers was entirely different; that they had a different feeling toward our men because, as one fellow expressed it, they act differently.

He said, they act as if they know that they will be accepted, not only by unions, but also by employers as impartial representatives of the Government. They do not feel the same about their own jobs as they did before. Employers have told me that they have much more confidence in our mediation since they have been divorced from the Department of Labor.

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Senator DOUGLAS. I have not had the opportunity, I am sorry to say it has been my fault-to go over your annual report on your Service, and this is purely for information on my part.

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agency, as compared with the degree to which they used it when it was
inside the Department of Labor?

Mr. CHING. You mean statistically?
Senator DOUGLAS. Yes.

Senator DOUGLAS. Do you have a record of the number of cases successfully conciliated during the period that you have been an independent agency, compared with the number of cases so adjusted when the Service was inside the Department?

Mr. CHING. We have all kinds of statistics, of cases, and all that sort of thing, but I think any one of them would be valueless because there are so many other variable factors.

Senator DOUGLAS. I know.

That is one step, and we are not pass

ing final judgment on it.

Mr. CHING. What do you mean about successfully conciliated?
Senator DOUGLAS. Adjusted to the satisfaction of both parties.
Mr. CHING. Oh, well; I do not expect to ever do that.
(Laughter.]

Senator DOUGLAS. This is an imperfect world.
Mr. CHING. You may get a working agreement.

Senator DOUGLAS. Where working agreements have been reached. Mr. CHING. You may get a working agreement, but we never expect to have a case settled to the satisfaction of both parties.

Senator DOUGLAS. Would you be opposed to having the Service put inside the Department of Labor for housekeeping purposes, provided the head of the Service were independently appointed by the President and had the power of appointment of his staff?

Mr. CHING. A poor housekeeper can make it awfully uncomfortable for you. [Laughter.]

The housekeeper can make it awfully uncomfortable for you at home.

Senator DOUGLAS. Well, in what way can you suggest

Mr. CHING. I think the housekeeper who controls your budget and controls your personnel, pretty nearly controls your Service. I do not see that you can have for housekeeping purposes a very good set-up, because when your budget is in the control of someone else, the personnel policy is in the control of someone else, and that is pretty nearly controlled.

Senator DOUGLAS. Of course, this question as to the location of quasi-judicial bodies is a very perplexing one, which is coming up in connection with the proposed reorganization efforts of the Govern ment. Did you read the testimony of President Hoover which he is reported to have made in the morning's press, before the House Committee on Expenditures in the Executive Departments?

Mr. CHING. I have not studied the testimony yet and, of course, I am in entire sympathy with the reorganization of the executive branch of the Government for greater efficiency. I still maintain that there should be some study given as to how the functions of various agencies are carried on before you start putting them together.

I think if you will pardon me for suggesting it, that a possible alternative deserving attention is an agency of Government on industrial relations which might encompass the National Labor Relations Board, and the Railway Mediation Board, and the Federal Mediation Service. All of these agencies would be dealing with the same problems, that is, the relations between employers and unions. They must all be impartial.

Senator DOUGLAS. Well, as I read the press reports, if Mr. Hoover was correctly reported he did not wish to have the quasi-judicial bodies expressly excluded from any program of administrative reorganization, on the ground that, if you start to make such exemptions, you simply open the barn door, and we will have a multiplicity of independent organizations operating outside of the departments; the present considerable degree of chaos would be continued, as I understand his position and, he favored instead giving the President power to include them in any reorganization plan.

What always happens, of course, is that every agency which has any judicial function-and many of them do not-want to maintain their independent status. But there is an over-all problem as well as a specific problem.

Mr. CHING. I do not think the term "judicial functions" can be applied to us. Our Service does not perform a judicial function, but I do believe, I quite agree with you, Senator Douglas, that in the consideration of this matter you cannot have independent agencies all over the lot.

But I think that a great deal of consideration, serious consideration, should be given to what agencies you put together and where you put them.

Senator DOUGLAS. Thank you very much.

Mr. CHING. If you would care to have me, I can give you a memorandum of ideas that we have on the Department for house-keeping purposes. Would the committee care to have that?

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The CHAIRMAN. We would be glad to have that.
Senator DOUGLAS. That is very fine.

(Memoranda were submitted by Mr. Ching which follow:)

FEDERAL MEDIATION AND CONCILIATION SERVICE-EFFECTS OF A HOUSE-
KEEPING TRANSFER TO DEPARTMENT OF LABOR

The Service has been requested to comment on the suggestion that it be transferred to the Department of Labor for housekeeping purposes in the light of the stated position of the Director of the Service that its absorption by the Department for all general purposes would seriously impair the effectiveness of Government mediation. This position was taken on the ground that large sections of the employer groups who require mediation services, if industrial peace is to be promoted, regard the Department of Labor and its top officials, whether or not justifiably, as biased and favorable to the interests of unions in any conflict between unions and management.

The Service most earnestly believes that those reasons which counsel against a transfer of the Service to the Department, generally, apply with equal force to the transfer of the Service to the Department for housekeeping purposes.

Housekeeping, usually refers to those administrative management functions having to do with the hiring and firing of personnel, the formulation and justification of budget estimates and the control of the obligation of funds. Control of any one of these functions would have a vital effect upon the basic substantive policies and programs of the Service.

Policies and programs are formulated and administered by personnel. It is generally recognized that the official who has the power of appointment of personnel is in a most strategic position to control policy and program. A Director of the Service, with bureau status, would not have any effective control over its policies and programs if the appointment, promotion, transfer, discipline, assignment, and separation powers over personnel were lodged in his superior officer. A transfer for housekeeping purposes would give the Secretary of Labor full and final control over the selection and assignment of personnel within the Service. Under such circumstances, independence, with respect to the formulation and execution of policies and operations, would be an illusion. The transfer of the mediation function for housekeeping purposes, in fact and in truth, would not be to a new bureau in the Department of Labor, but to the Secretary of Labor and to the particular Assistant Secretary, to whom he would assign immediate superintendence over the operations of that bureau.

The same considerations apply to budgeting. Budgeting is synonymous with planning. Planning encompasses both policies and programs. That official who controls the budget or who approves or has veto power over the budget of the Service determines its policies and programs.

Similarly, with respect to the control of the obligation of funds. A Secretary of Labor in a position to withhold funds from expenditure for desired purposes or to veto certain expenditures would as surely control policies and programs as if the mediation function were transferred directly to the Secretary of Labor instead of to a bureau in the Department.

It is apparent, from the above, that housekeeping is a deceptive term if it includes control over the matters referred to above.

It should be understood that the effective operation of a mediation service aside from the actual work of mediation involves budget planning, the formulation of basic policies, the supervision and control of personnel and the prudent and efficient expenditure of funds. A transfer for housekeeping purposes would repose in the Secretary of Labor effective control either directly or indirectly over all such funetions. It would lodge in the Secretary power over all policies, programs, and operations of the Service to the same extent as though a full transfer of the mediation function were made to the office of the Secretary of Labor.

FEDERAL MEDIATION AND CONCILIATION SERVICE-COMPARISON OF EFFECTIVE-
NESS OF UNITED STATES CONCILIATION SERVICE IN DEPARTMENT OF LABOR
AND FEDERAL MEDIATION AND CONCILIATION SERVICE, AN INDEPENDENT

AGENCY

During the course of his appearance before the Senate Committee on Labor and Public Welfare, on February 1, 1949, Cyrus S. Ching, Director of the Federal Mediation and Conciliation Service, was requested by several Senators to furnish

the committee with a statistical comparison of the effectiveness and acceptability of the Federal Mediation and Conciliation Service, an independent agency, and its predecessor, the United States Conciliation Service in the Department of Labor. The request was phrased in slightly different form by different members of the Committee. This memorandum represents an effort to deal with all of such requests.

Most of the requests appeared to relate back, directly or indirectly, to a statement made before the committee by Hon. Maurice J. Tobin, Secretary of Labor, on January 31. Mr. Tobin, in support of a proposal to transfer the mediation function to the Department of Labor, said:

"During the 34 years of its existence in the Department, the [U. S.] Conciliation Service successfully settled more than 100,000 cases when serious disputes had arisen. Just before the Service was transferred from the Department it was settling without a work stoppage over 90 percent of those cases in which no work stoppage existed at the time a conciliator was assigned to the case. This record could not have been achieved unless the Service was operating successfully, efficiently and fairly and had the confidence of both management and labor.” In view of the context in which the requests were made, it will be assumed that the committee members desire the analysis to be made with the Secretary's statement as a base of consideration.

1. The Service does not submit any figure of cases which it has "successfully settled" for comparison with the 100,000 figure mentioned by the Secretary. As stated in the testimony of the Director, we do not know when a case has been successfully settled. The resolution and termination of a labor dispute or a stoppage usually depends on a complex of factors such as the balance of strength of the respective parties, general and particular economic conditions, the background and history of bargaining, the personality of the negotiators, and the internal political problems of the unon or the employer. Mediators can assist parties in reaching their own settlements; it is in relatively few cases that they have the opportunity "successfully" to settle labor disputes. There is danger that if the potency of mediators to bring about successful settlements by their individual efforts is overstressed their function will be widely misundersood, and too much will be expected of them. The negotiators will tend to rely unduly upon the alleged magical ability of mediators to snatch rabbits out of hats, and may neglect development of the art of collective bargaining and recognition of their own responsibilities.

The Federal Mediation and Conciliation Service has no basis on which to ques tion the 100,000 figure and does not do so. Further, the Federal Mediation and Conciliation Service makes no claim to the Congress that it has "successfully” settled any particular number of cases, for the reasons set forth above, and for other reasons which will be set forth below. Accordingly, the Service presents no figure to the Congress to indicate its success in settling cases.

2. In paraphrase, the second sentence of the Secretary's statement says that during the period just before the transfer of the mediation function from the Department of Labor (presumably the fiscal year ending June 30, 1947) the United States Conciliation Service settled without subsequent work stoppage, 90 percent of those cases it handled in which no work stoppage had occurred before its intercession.

Comparison with the performance of the Federal Mediation and Conciliation Service requires, first, an analysis of this statement. It should be clearly understood that by doing so we do not question or impugn the Secretary's figures or the past performance of the departmental service and its officers. Anyone reading this memorandum as constituting a criticism of the practices, procedures or reporting methods employed during the fiscal year 1947 by the former Service (the only period under discussion) will have no justification therefor. The sole purpose of the discussion, it will be seen, is to demonstrate that there was such a difference in reporting methods employed by the two agencies that a comparison of their efficiency is impossible on a statistical basis.

Presumably, the "over 90 percent" figure relates to the 34th annual report of the Secretary of Labor for the fiscal year ended June 30, 1947, in which it is said— "Where the Service was called before a strike, 88.9 percent of the threatened work stoppages were averted" (p. 106). [Italics supplied.]

1 We assume that this includes disputes which arose during the war period when the no-strike pledge was in effect and certification by the Service was required as a condition precedent to National War Labor Board jurisdiction.

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We shall proceed on the assumption that reference was intended to be made to the 88.9-percent figure rather than the "over 90 percent" figure in the Secretary's statement.

We understand that in the fiscal year 1947 the United States Conciliation Service, for record purposes, treated every dispute which came to its attention and was assigned to a Commissioner as a "case" excepting, perhaps, an unascertained number of disputes from which Commissioners withdrew. Further, it appears that the departmental Service was not limited or restricted in any way as to the size or kind of labor dispute in which it intervened during the fiscal year 1947. Many of them were minor grievance disputes or contract disputes which did not significantly affect interstate commerce. Presumably the 88.9-percent figure and the "over 90 percent" figure include in the computation a large proportion of such cases.

The present Service keeps its records on the basis of active, "consultation" or 'stand-by" cases.2 We do not consider it desirable to make any representations here with respect to our performance with respect to any but the active cases in which Commissioners of the Federal Mediation and Conciliation Service personally participated in the negotiations. Moreover, an analysis of Federal Mediation and Conciliation Service cases includes grievance cases when, as expressed by the applicable statute, they were cases of last resort or exceptional in character. By statute and declared administrative policy the Service was admonished not to attempt to settle run-of-the-mill grievances. Statute and policy also kept it out of disputes in which the effect on commerce was not substantial.

Although the departmental Service received "strike notices" under the War Labor Disputes Act only 48.3 percent of total cases closed by that Service December 1946 through June 1947 were brought to its notice through that device. For a similar period (December 1947 through June 1948) 71.2 percent 3 of total cases closed by the Federal Mediation and Conciliation Service were brought to its attention through the 30-day notice required to be filed under section 8 (d) of the Labor-Management Relations Act, 1947, by either party desiring to terminate or modify an agreement. Thus, as a matter of compulsory statutory procedure the Federal Mediation and Conciliation Service was almost always alerted concerning a labor dispute in advance of a stoppage; in a large number of cases the departmental Service came into a dispute after the stoppage had occurred. These cases are specifically excluded from the 88.9 percent figure mentioned in the annual report of the former Secretary and the "over 90 percent" figure mentioned by the present Secretary. The Federal Mediation and Conciliation Service computation includes all cases in which there was active participation by a Commissioner.

With these explanations made, it is appropriate to proceed to state the performance of the Federal Mediation and Conciliation Service in terms most comparable to the figures of the departmental Service.

During the last 10 months of the fiscal year 1948 the Federal Mediation and Conciliation Service closed 5,045 active cases. Of this number 4,735 did not involve a work stoppage at the time of intercession; 4,228 cases of the 4,735, or 89.3 percent, were settled without a work stoppage occurring after the Commissioner interceded.

3. Having made the comparison stated above, it is most important to observe that the Federal Mediation and Conciliation Service cannot, in good faith, and will not take credit for the 89.3 percent settlement, without work stoppage, of active cases. In addition to what has been said under "1" above, as to the factors which bring about settlement it is necessary to point out most carefully that the "settlement" of a dispute, even when a commissioner has actively worked with the parties, does not mean, necessarily, that he has brought it about. This assumption denies credit to the exertions of union and employer negotiators which frequently contribute much more to the settlement than the most earnest ministrations of the mediator. The closest analogy is in the field of medical practice. A family doctor who prescribes pills, medicines, and treatments for his patient may feel relieved and comforted when he recovers from a common cold or other ailment; he never knows how much credit should be given to natural processes, the resil

An "active" case is one on which a Commissioner actually exerts his engergies through personal services; acultation" case is one in which he offers advice but does not actually participate in negotiations; a stand-by case is one in which the jurisdiction and responsibility of the Service is noted, but the course of negotiations do not require it to intercede. See first annual report of the Federal Mediation and Concilia

tion Service, pp. 29, 30.

In the last 4 months of 1948 this figure rose to 88 percent.

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