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Mr. CANNON. Last year you told us about a working agreement you had between the Board and the Conciliation Service of the Depart ment of Labor. Has there been any duplication? Are they doin the same class of work that you are doing?

Dr. TAYLOR. No, they are not. We confine ourselves to takin cases only after the Conciliation Service has made every effort to ge these dispute cases settled by voluntary means. A great number a dispute cases are settled by the Conciliation Service by agreement be tween the parties, and then, in the event that the Conciliation Servic fails to get such settlement, the case is certified to the War Labo Board.

Though we do have the right to take dispute cases on our ow motion, I do not know of a single case where that was done in th past year. There may have been one or two where the Board ba exercised this authority in taking a case on its motion. But we insis that the Conciliation Service make every effort to settle the matte amicably before we actually work on it.

We have a very close relationship with the Conciliation Service, s we know the nature of a case which is certified to us, so we will no have to do the work that their agents have undertaken.


(See p. 12)

Mr. CANNON. In your table which you submit here, while it show an increase in every item except 3 out of 19, and the increases ar comparatively small, with the exception of 1, I notice that there i 1 large increase for personnel in the Legal Division, where you pro pose an increase of 126 man-years at a cost of $338,859. Why is ther this disproportionate increase in the Legal Division? f Dr. Taylor. That was the item I mentioned earlier, which has t do with the cases which have piled up on the Board respecting com plaints of wage increases, that is, increases beyond the limits permitte by the Wage Stabilization Act, and therefore in violation of the law As you know, the act of October 2 and the Executive orders thereunde provided that no wage increases shall be granted unless they have bee approved by the War Labor Board.

In the conduct of its work, the Wage and Hour Division of th Department of Labor makes various investigations in connection with the requirements of the Fair Labor Standards Act. Simultane ously, they also make reports to us about wage increases which hav been granted without the approval of the War Labor Board.

Also, we have a whole series of complaints coming in from employers from Government procurement agencies, and the like, about labo piracy because of wage increases being granted without the approva of the War Labor Board.

Those cases require a most careful line of investigation and carefu handling in keeping with legal requirements, and up until this time w have not been equipped to consider them rapidly; they have piled u and it is necessary to clear them up. If we don't clear them up a lo of employers don't know where they stand so far as income-tax liabilit is concerned or reimbursement on Government contracts.

Mr. CANNON. You are asking for an increase of 47 percent for personnel in the Legal Division. Is that a permanent increase or is it merely to meet the emergency?

Mr. KHEEL. This is primarily to meet the emergency situation. We have on hand about 18,000 cases of alleged complaints against employers. These employers are not in a position to finally wind up their contracts with Government procurement agencies as long as there I doubt about their wage matters. The whole purpose in asking for this additional number of personnel is to clear up those cases so that by the end of the fiscal year 1946 we will be in a current position, and we will be able to advise those employers whether or not there is anything wrong with their wage structures.

Mr. CANNON. You are asking for 10.3 man-years for the Steel Commission at a cost of $47,234. What is the occasion for that increase?

Dr. TAYLOR. We recently had in a steel case involving the entire industry in which a problem developed that was of such a nature that we felt it could not be handled by regional boards. The steel industry was not operating on regional lines, and everyone was in agreement that the types of problems were peculiarly steel industry problems. In the Board's decision it set up a Steel Commission to handle those industry-wide problems, so it might be on a stable basis.

Mr. LUDLOW. Dr. Taylor, would you say that so far as wage stabilization is concerned the line has been held very well?

Dr. TAYLOR. I think it has been held very well; yes, sir.

Mr. LUDLOW. You think that procedure will continue to hold up Tery well?

Dr. TAYLOR. It is a little difficult to guess about that. We think that as long as there is this danger of inflation, that the wage line should be held, as long as we are under direction of Congress to stabilize wages at the September 15, 1942 level. We think this program in its entirety has been very effective.

HOURS LOST AS RESULT OF STRIKES Mr. Ludlow. I did not quite understand your answer to Mr. Cannon's question as to the number of hours lost now as compared 10 pre-war years. You said the number of stoppages is greater, but that the duration of strikes is much less. How would that be, considering the actual time lost?

Dr. TAYLOR. We might clear that up by saying, as I said, that the percentage of available working time lost through stoppages was ten De-hundredths of 1 percent in 1944 as compared with fifteen oneLundredths of 1 percent in 1943. There has been a decrease there. listead of fifteen one-hundredths of 1 percent as in 1943 it is ten Op-hundredths of 1 percent.

Mr. LUDLOW. Those were both years in the present emergency?
Dr. TAYLOR. Yes.
Mr. LCDLOW. What about the preemergency years?

Dr. TAYLOR. In 1942 it was five one-hundredths of 1 percent, but D 1941 it was thirty-two one-hundredths of 1 percent. In 1940 it

as ten one-hundredths of 1 percent. It was ten one-hundredths of . percent in 1944. In 1939 it was twenty-eight one-hundredths of 1 Dercent.


(See p. 12)

Mr. Ludlow. In regard to your legal division, your base was only 253 positions, but you want to increase that by 101 positions. Will you tell us again what is the need for that great increase?

Dr. Taylor. Yes, sir. It is a matter of checking up on claims that the employer has illegally granted wage increases, checking up with the requirements of the law. This

work of enforcing the Stabilizatior Act, is performed by our Legal Division. We have received from October 8, 1942, to December 8, 1944-since the passage of the actwe have received 51,444 cases where it has been alleged that a wag payment was improper. We have disposed of 33,184 of those cases but there are pending about 17,447 cases, as the inserted table shows

(The table is as follows:)

Statistics of enforcement cases ? received, disposed, and pendingOctober 1942 1

Dec. 8, 1944

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1 The term "case" in these statistics includes all complaints and cases originating from inspections, ir spective of whether violations are ultimately found to exist. * The figures in this

column are taken from the old form of weekly reports used by the various region In most instances the figures for cases pending do not correspond exactly to the difference between the to cases received and the total cases disposed of, but the discrepancies are not large. In regions 1, 2, and 3 actual case inventory has recently been taken and the figure issued for these regions is taken from the resu of such inventory.

* Includes Tool and Die Commission. * Includes West Coast Lumber Commission to the extent that reports from the Commission are availab

Mr. Ludlow. Is that the reason back of this request, that yo want to wipe out your backlog?

Dr. TAYLOR. Yes; that is the reason. In this connection, I shoul like to insert in the record the following statement on enforcemer proceedings.

(The statement is as follows:)


STATEMENT ON ENFORCEMENT PROCEEDINGS Enforcement of the law against the making of unauthorized wage adjustmen is a part of the emergency war program to prevent wage and price inflation. TI National War Labor Board has this duty to perform under the law enacted !

Congress as supplemented by Executive order of the President and regulations of the Economic Stabilization Director,

Under the regulations, the War Labor Board has the obligation to determine whether wage payments have been made in violation of the law. If the Board determines that payments in violation of the law have occurred the regulations provide that the amount of the entire wage so paid (not merely the improper overpayment) shall be disregarded by all executive agencies of the Federal Government, including the taxing authorities, in determining the costs or expenses of the employer. While these penalties are potentially severe, the Board has authority, on the basis of the facts in each particular case, to reduce or eliminate the penalties entirely.

In carrying out this part of the anti-inflation program, the War Labor Board has developed certain principles which it believes should be emphasized as an aid to employers in understanding the policies and procedures of the Board:

(1) The primary objectives of the enforcement program are the elimination of unlawful and unstabilizing wage practices and the protection of employers and employees who do comply with the rules against the unfair competition for labor of those who have failed to comply.

(2) Like all other phases of the Board's work, authority to determine whether a violation exists and, in appropriate cases, to reduce or eliminate the penalties provided by law, is exercised by tripartite divisions of the regional boards consisting of an equal number of representatives of employers, employees, and the public. The tripartite character of each such division enables it to appraise fairly and understandingly the variety of circumstances under which violations cecur and to give just consideration in each case to the existence of extenuating circumstances.

(3) No penalties may be assessed against an employer without his consent except after a hearing and decision by a tripartite division. There is a right of appeal from any such decision to the National War Labor Board in Washington.

(4) The Board's experience has shown, however, that the great majority of cases can be settled with the employer's consent through a simple and informal procedure which does not involve expensive or protracted hearings. Each such voluntary settlement is presented to and acted upon by the tripartite division,

(5) In the normal case it is not necessary for employers to engage special or technical consultants, although they may, of course, be represented in any proceeding by anyone they choose. Complaints have been made to the Board, however, that certain individuals have exaggerated the potential penalties that are likely to be incurred and have claimed special ability to achieve lenient disposition of cases. Any such claims are wholly unwarranted.

(6) In any cases where it is found that improper payments have been made under extenuating circumstances, the prescribed penalties may be reduced or eliminated. The severity of the full sanctions provided by law is reserved for the cases which involve intentional and willful violators as, for example, the second ofender or one who has put an adjustment in effect after disapproval by the Board or one who has failed to discontinue an unauthorized adjustment bafter being directed to do so by the Board.

(7) There is no mechanical formula by which the amount of penalty can be jetermined in advance in any case. Each case must be decided on its own particular facts. The employer's voluntary disclosure of the facts and prompt cooperation in discontinuing unauthorized and unstabilized rates or practices are regarded as important indications or extenuating circumstances. The immediate discontinuance of unlawful and unstabilizing rates or practices is an absolute condition in any case where the Board is asked to reduce or withhold the prescribed penalties.

The cooperation of employers and their understanding of these policies and procedures will enable the Board to carry out its stabilization duties with the est possible friction and delay, and will make it unnecessary for employers to iDeur needless expense.


(See p. 24) Mr. Ludlow. I notice that in the Wage Stabilization Division there

proposed an increase of 30 positions, but you have a decrease in money of $77,655. How can you get an increase in the number of

positions of 30 and a decrease in the amount for salaries of over $77,000?

Dr. TAYLOR. Our problem there has been that we are getting a heavy load in our administrative work, and our load is getting so heavy that we have to have more people in the lower grades.

Mr. KHEEL. Practically all of the 30 positions we are requesting are at the clerical level.

I might add that the 30 positions are distributed throughout the whole country.

Mr. Ludlow. Even so, how can you take on 30 low-salaried employees and show a decrease unless you lay off some of the highersalaried people?

Mr. KHEEL. There has been a change in the nature of our supervisory structure in the Wage Stabilization Division. We were able to eliminate some of the higher positions in the request we make this year.

Mr. Ludlow. The picture seems wholly anomalous. You have a request for 30 additional positions, and a decrease in man-years of 13.1. What is the explanation of that? Will you put an answer to that question in the record ? Mr. KHEEL. Yes; we will be glad to do that. (The statement is as follows:) Although we request 30 additional positions, and indicate that we anticipate a reduced man-year comsumption of 13.1, we are stating that we will need more positions during the course of the year but that we do not expect to use them all for the full year; in fact, we say we will use only 837.3 of the 870 possible manyears. And we are asking for only enough money to pay for the smaller number.


Mr. SNYDER. If I understood the chairman of the Board correctly, he said there were many individuals or corporations or chairmen of groups who come in and say “We want an increase in our wages.” What is that number?

Dr. TAYLOR. Do you mean in the total number?
Mr. SNYDER. Yes.
Dr. TAYLOR. That is 194,000 during the year.

Mr. SNYDER. How many wage groups came in and said “They will not give us the raise that we asked for”?

Dr. TAYLOR. That would be disputes cases, and our receipts were 7,899 during the year.

Mr. KHEEL. I think about 80 percent of those are wage disputes and 20 percent disputes as to other matters.


Mr. SNYDER. Did I understand you to say that the number of walk-outs or strikes authorized by the unions were less this year than last year?

Dr. TAYLOR. I do not know of any strikes authorized by national unions—there might have been one. There is the case of the Mechanics Educational Society of America; but with that possible exception I know of no strike that was authorized.

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