Senator HILL. Congress gave it to him.

Mr. ARNALL. That is right. It is fair and equitable.

Senator HUMPHREY. And you have three of the best years out of the four after the war.

Mr. ARNALL. You pick your own.

Senator HUMPHREY. And reasonably good years.

Mr. ARNALL. The best we have had since World War I.

Senator HUMPHREY. In other words, the record years are the standard.

Mr. ARNALL. That is right.

Senator LEHMAN. Supplementing what the chairman has said, when the Capehart amendment was up in Congress, I voted against it and I know the chairman did and the Senator from Alabama did. I thought it was a bad amendment. I still think it is a bad amendment because I think it is arbitrary. But if you can confine the rise in the price of steel to what is called for under the Capehart amendment, which was passed by Congress, and avoid making any further increases, it would seem to me that you are on pretty safe ground.

If you break that and if you break it in steel as you have already testified, you have got to break it in 10, 15, 20, or 25 other commodities. Then you are inevitably going to enter on to a price spiral which will lead to inflation.

I congratulate you on your position. I think it is sound and it is something that shows that the implications of a renewed price spiral had not yet been fully appreciated by the people. If they do appreciate it, I think they will back you up.

I want to say I congratulate you on another statement you made in your presentation here when you wrote that "the reestablishment of confidence in the stability of the price structure and the value of the dollar were major factors in stemming the panic buying which preceded the issuance of the General Ceiling Price Regulation."

you

Of course, any general increase, and you cannot compartmentize this thing, you cannot make a special increase for one thing, but have to make a general increase, and that would break down that psychology which has been so carefully built up. It would again lead to a spiral.

Mr. ARNALL. Thank you for the observation. That is absolutely

correct.

I would like to give you one or two more figures. I thought they were rather interesting. I will give them from memory. I thought you would be interested regarding the steel situation after taxes. We talk about before and after taxes. If you gave the steel companies a price increase of $12 a ton, do you know how much they would keep? They would keep $3.50. They would pay $8.50 in taxes. Senator HUMPHREY. Under the excess-profits tax.

Mr. ARNALL. Yes. So why are we going to penalize all the people in America to give the steel companies that little bit?

Senator LEHMAN. And people in this country just do not realize the evils of inflation, uncontrolled inflation. I have been through it. I have seen it abroad. I remember in 1914 my firm had a deposit of 100,000 marks in Germany with a valuation of $25,000 at that time. Then when inflation set in in 1921, 1922, and 1923 and

1924, the bank stopped sending us their monthly statements showing our deposits.

Finally, after about a year, we did have a letter from them apologizing for having stopped their statements, but they said that the postage stamp which would have had to accompany the statement would have been worth more than our entire deposit of $25,000. That shows the extend of uncontrolled inflation and the effect that it has on people.

Senator HUMPHREY. Gentlemen, are there any other questions? If not, we want to express our appreciation to you.

This committee will stand in recess until the call of the Chair. (Whereupon, at 4:40 p. m., Wednesday, April 16, 1952, the hearing was recessed, subject to the call of the Chair.)

NATIONAL AND EMERGENCY LABOR DISPUTES

TUESDAY, APRIL 22, 1952

UNITED STATES SENATE,

COMMITTEE ON LABOR AND PUBLIC WELFARE,
Washington, D. C.

The committee met, pursuant to call, at 10 a. m., in the old Supreme Court room, the Capitol, Senator James E. Murray (chairman) presiding.

Present: Senators Murray, Neely, Lehman, Pastore, and Taft.

Also present: William H. Colburn, clerk, and Thomas E. Shroyer, staff member, full committee; Jack Barbash, staff director, and Merton C. Bernstein, counsel, Subcommittee on Labor and Labor Management Relations.

The CHAIRMAN. The hearing will come to order, please.

This morning the committee resumes its hearings on Senator Morse's bill, S. 2999, to provide a formal procedure for seizure. By committee action taken yesterday, we will also consider Senate bill 3016, by Senator Morse, which provides for the return of the steel mills to private ownership if certain conditions are met. (The text of S. 3016 follows:)

[S. 3016, 82d Cong., 2d sess.]

A BILL To provide an orderly procedure for the relinquishment of possession of the steel plants under conditions which will assure the continued production of the articles and materials required for the common defense

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of Commerce is authorized and directed to relinquish possession of any plants, facilities, and other property of which possession has been taken by him pursuant to the provisions of Executive Order Numbered 10340, dated April 8, 1952, if the company from which possession of such plants, facilities, and other property was taken enters into an agreement with the Secretary within fifteen days after the date of enactment of this Act to make effective in its plants, immediately upon the resumption of possession thereof, all of the recommendations (other than the recommendation for establishment of the union shop) which were made by the Wage Stabilization Board in the report which it transmitted to the President on March 20, 1952, containing its recommendations for settlement of the disputes between the United Steel Workers of America (CIO) and various steel and iron-ore companies.

SEC. 2. (a) The Secretary of Commerce is authorized and directed to make effective, on the sixteenth day after the date of enactment of this Act, in any plant of which he has taken possession under the provisions of such Executive Order Numbered 10340 and with respect to which he has not entered into an agreement under the first section of this Act all of the recommendations (except the recommendation for establishment of the union shop) which were made by the Wage Stabilization Board in the report referred to in the first section of this Act.

(b) The Secretary of Commerce is authorized and directed to relinquish possession of any plant (including the facilities and other property connected

therewith) to which subsection (a) of this section is applicable, whenever he enters into an agreement with the company from which such plant was taken under which such company agrees to continue in effect in such plant the recommendations made effective in such plant by the Secretary under subsection (a). SEC. 3. The Congress hereby declares that any dispute between the United Steel Workers of America (CIO) and various steel and iron-ore companies with respect to whether or not there should be provision for any type of union shop in the plants of such companies is a matter which should be determined, subject to any applicable provisions of Federal or State law, solely by collective bargaining between the parties.

SEC. 4. The Director of Price Stabilization is authorized and directed to act promptly upon any application filed by any company, possession of the plants, facilities, or property of which is relinquished under this Act, for an adjustment in the ceiling price of steel in accordance with clause (1) of the second sentence of section 402 (d) (4) of the Defense Production Act of 1950, as amended.

SEC. 5. (a) The President shall appoint a compensation board to determine the amount to be paid as just compensation to any company possession of the plants, facilities, or property of which was taken pursuant to the provisions of Executive Order 10340. Members of the compensation board shall receive compensation at the rate of $75 for each day actually spent in the work of the board, together with necessary travel and subsistence expenses.

(b) The provisions of sections 9 and 10 (relating to the attendance of witnesses and the production of books, papers, and documents) of the Federal Trade Commission Act, as amended (15 U. S. C. 49, 50), shall be applicable with respect to any hearing or inquiry conducted by the compensation board under this section.

(c) The President shall make such provision for stenographic, clerical, and other assistance and for facilities, services, and supplies, as may be necessary to enable the compensation board to perform its functions.

(d) The determination of the compensation board shall be final and binding upon the parties unless, within thirty days after the issuance of such award, either party moves to have the determination set aside or modified in the United States Court of Claims in accordance with the rules of said court.

The CHAIRMAN. Our first witness this morning is Mr. John Stephens, vice president, United States Steel Co., appearing here this morning as spokesman for the steel industry.

Mr. Stephens?

STATEMENT OF JOHN A. STEPHENS, VICE PRESIDENT, INDUSTRIAL RELATIONS, UNITED STATES STEEL CO.

Mr. STEPHENS. Mr. Chairman, gentlemen of the committee: I am appearing before this committee in order to furnish to its members and to the Congress essential facts concerning the background of the steel dispute.

I should very much appreciate the opportunity, Mr. Chairman, at the conclusion of my prepared statement, to respond to any and all questions, provided I have any knowledge in the area to which the questions are directed. That viewpoint is consistent with your declaration, Mr. Chairman, on April 15, that this committee is desirous of obtaining all of the facts so that the committee, the Congress, and the public generally may be informed concerning the facts in this dispute.

I have been intimately involved in the dispute from its inception. I was chairman of the bargaining conferences between United States Steel Co. and the steelworkers' union from November 27, 1951, to the middle of December. Following the President's certification of the dispute to the Wage Stabilization Board, I, at the request of the Chairman of that Board, served as chairman of a committee authorized by numerous companies in the dispute to coordinate and expedite presen