Government seizure destroys free collective bargaining. The Morse bill interferes with bona fide free collective bargaining. Seizure transfers a dispute from an economic level to the political level and encourages parties to search for political solutions rather than engage in collective bargaining. Seizure of property is no different than seizure of men's rights.

During World War II and also the Korean conflict, emergency boards, with powers to make recommendations backed up by Government pressure to enforce those recommendations on employers and unions, have stimulated industrial disputes.

The Morse bill is a device to effectuate compulsory arbitration. There is no middle ground between Government boards with powers to make recommendations and compulsory arbitration. This fact is well recognized by the Joint Committee on Labor-Management Relations of the Congress of the United States in its report dated December 22, 1948. I would like to quote from page 22 thereof [reading]:

A further suggestion has been made that the emergency board be permitted to make recommendations as well as find the facts in these disputes. That alternative to the act's procedure was considered at length by the committees who drafted the act, and rejected by them as being in fact compulsory arbitration with public opinion providing the compulsion. The committee does not believe, in view of the success of the present procedure, that any case has been made for the adoption of that which was rejected by the committee who framed the law.

The Morse bill is actually compulsory arbitration with seizure the mechanism by which it will be imposed.

Seizure exerts a bad effect on the relationship between the parties. It encourages them to become litigants seeking to persuade a third party rather than play their roles in seeking to find ways and means to cooperate.

If collective bargaining is going to have any chance to succeed, it must be based on mutual understanding rather than legal formulas. When seizure and compulsion enter the picture conflict is encouraged as each party attempts to influence a third party-the Government. Points of difference are exaggerated. Common interest is disregarded. Seizure and collective bargaining do not mix. If seizure is adopted collective bargaining will not long survive.

While seizure is a dangerous expedient which cannot effectively deal with the problem of national emergency strikes, Congress does have a responsibility to deal with the root causes of such strikes, and the basic causes are industry-wide and union-wide bargaining.

The exercise of monopoly power by strong international unions on an industry-wide or union-wide basis is primarily responsible for the major crises which plague us today. This organized-group power led directly to the present steel industry case. It has been responsible for the continuing crises in the coal, maritime, and railroad industries. It has led to the seizure bill now before you.

The report of the Steel Industry Board in 1949 makes some pointed comments about bargaining in that industry. I would like to quote from that report of the Steel Industry Board [reading]:

This practice is clearly a variation from the accepted concept of collective. bargaining as defined in the statutes and interpretations; it tends to promote a feeling of dissatisfaction and disharmony between the parties, which makes cooperation difficult.

Now that the organizational phases of union activities have been passed, the field ought to be reexamined to see whether the public interest requires any

Senator HUMPHREY. The statement will be included in the record at this point, and you may discuss the highlights.

(The statement referred to is as follows:)

TESTIMONY OF IRA MOSHER ON BEHALF OF THE NATIONAL ASSOCIATION OF MANUFACTURERS

My name is Ira Mosher. I am president of Ira Mosher Associates, Inc., New York. I appear before you as a representative of the National Association of Manufacturers, an organization composed of more than 17,500 members. The subject matter before this committee is one of compelling interest to the members of this association. Throughout our history we have been greatly interested in the improvement of employer-employee relations and have been deeply concerned about the causes of strikes and the national labor policy dealing with relations between employers and labor unions.

We have studied the various drafts of Senate 2999, and have reached the conclusion that the general approach involving governmental seizure and c pulsory arbitration will not contribute to the settlement of labor disputes, but will have quite the contrary effect.

It is our considered conclusion

1. If existing provisions of law for dealing with labor-management relations | were utilized, the problem of national emergency strikes would not be nearly as pressing as it has become;

2. The approach provided in the Morse bill is not only dangerous but would i magnify the problem rather than reduce it; and

3. The sound approach is to go to the root of the problem rather than treat the symptoms. In this case, the root of the problem is national industry-wide and union-wide bargaining and the resulting Nation-wide strikes. If Congress were to take action to prohibit Nation-wide bargaining and strikes there would be no need to resort to such dire and futile devices as governmental seizure and compulsory arbitration.

ANALYSIS OF S. 2999

As we understand S. 2999, it not only seeks to grant the President legal power to seize private property but also proposes to provide him with a statutory basis for bypassing the procedures established by the Taft-Hartley Act for dealing with national emergencies.

Bypassing of existing law would be encouraged by S. 2999 notwithstanding the proven effectiveness of the national emergency provisions in the cases in which they have been utilized. As stated by the Joint Committee on Labor-Management

Relations in 1948:

"Had the provisions been used to successfully prevent only one threat to the Nation's safety and health, they would have demonstrated their merit. They were used successfully in several cases. Therefore, in the committee's opinion the national emergency provisions must be retained" (S. Rept. No. 986, pt. 3, p. 21).

S. 2999 does not seek directly to repeal the national emergency provisions of the Taft-Hartley Act, which, as all are aware, were not used in the situation which gave rise to these hearings. Rather, by granting the drastic power of seizure to a President whose hostility to that law is well known, it would have the practical effect of casting aside a statute which was very carefully considered by Congress and which has proven to be effective in bringing disputing parties to agreement. Thus, the bill would add to the present title II of the TaftHartley Act five new sections for dealing with national emergency disputes. Mediation and Conciliation Service ignored

The first of these (the proposed sec. 211) would authorize the President, after receiving a report from the head of some unnamed department or agency, to issue a proclamation to the effect that a national emergency threatens or exists because of a labor dispute and to call upon the parties to refrain from or discontinue a stoppage of work or operations.

After issuance of such a proclamation of emergency, the proposed section 212 would require appointment of an "emergency board" which would be directed to investigate the dispute and "seek to induce the parties to reach a settlement." What inducements this board is to use are not specified, but apparently it is

intended to include mediation and conciliation of the type carried on by the present Chairman of the Wage Stabilization Board when he tried to sell the steel industry the "package" wrapped up for it by his agency. In this regard S. 2999 is noteworthy in that it fails even to mention the Federal Mediation and Conciliation Service, established by the Taft-Hartley Act, other than to permit it to provide clerical assistance to and to make it the repository of records of the emergency boards.

No assurance that existing law will be utilized

After investigating a dispute and inducing a settlement, an emergency board would be required to make a written report to the President. This report would include the findings and recommendations of the board which "shall be consistent with all laws and regulations otherwise applicable to compensation, hours, and other terms and conditions and incidents of employment." Presumably this requirement is intended as a limitation but, after the decision of the Wage Stabilization Board in the steel case, it is obvious that such a provision is not enough to insure that provisions of existing law will be utilized.

Under the proposed section 213, if a strike or lock-out occurs or continues after a proclamation has been made, the President must submit to Congress a full statement of the case with such recommendations as he may wish to make, including a recommendation that the United States take possession of and operate the enterprise or enterprises involved in the dispute.

If the latter recommendation is made, the bill would authorize immediate seizure. The bill, however, would give Congress 10 days to exercise the right, which I would suppose it already possesses, to determine that seizure should not have been undertaken, in which event the seized property must be returned to its owners. During such period of possession, the Federal agency or department operating the enterprises could not negotiate with either the labor organization or the employer with respect to terms and conditions of employment nor could it alter them "except in conformity with the recommendations of the emergency board." This provision, exactly as in the steel case, would make genuine collective bargaining between the employees and the employers impossible since there would be no inducement for the beneficiary of the emergency board's wisdom to settle for anything less than was recommended. The result naturally would be compulsory arbitration. While the whole concept of seizure of private property is abhorrent to us, it is our judgment that the chances of the parties reaching an agreement are made even less likely if the United States were to be expressly authorized to alter the wages, hours, and other terms and conditions of employment during the entire period of possession. Constitution rewritten

Under the proposed section 214, possession of any seized properties by the United States would be terminated not later than 60 days after the issuance of the report by the emergency board unless Congress extends the period. The property would presumably be returned sooner if an agreement is reached by the disputing parties or the President finds continued possession is no longer necessary.

During the seizure period, the United States would hold "in trust" all income received from operation of the enterprise for payment of (1) general operating expenses, (2) just compensation to the owners, and (3) reimbursement of expenses incurred by the United States "for operation of the enterprise." Any remaining income would be covered into the Federal Treasury as "miscellaneous receipts"-a most apt designation.

This is probably the most unique proposal of doubtful constitutionality ever to be seriously considered by a committee of the United States Senate. Here it is actually proposed that the United States, under the Constitution, exercise its power of eminent domain, take private property, operate that property as a trustee, and then require the person from whom the property was taken to pay himself the "just compensation" commanded by the Bill of Rights. On top of all that the owner would even have to pay the expenses of the person who took the property.

After thus rewriting the Constitution so far as the owners of property are concerned, section 214 piously imposes upon labor organizations the duty-without means of enforcement-to seek in good faith to induce employees to refrain from striking or to return to work in event a strike has occurred. I ask you, gentlemen, is management always wrong?

GENERAL CONSIDERATIONS

Thus far I have discussed S. 2999 in broad outline. I should now like to indi cate further the reasons which lead us to the conclusion that seizure and simi.er forms of Government intervention are worse than useless as devices for dealing with labor disputes.

Existing law effective if utilized

It has been generally assumed that an answer must be found to the questi a "Supposing the national emergency provisions of Taft-Hartley has been invoked and the injunction runs its course without settlement, should not some additional provision be made?"

In the first place, the national-emergency provisions of Taft-Hartley has not been given a fair trial. Extralegal "fact-finding boards", and more recently the Wage Stabilization Board have been used as devices to circumvent the nationalemergency provision of Taft-Hartley.

Before concluding that something else should be added, it should be remenbered that the Taft-Hartley law was enacted following a series of major strikes | of unprecedented proportions. We are not now considering something that had not previously been anticipated or experienced. Never before or since has the country suffered as extensive a wave of strikes as we did in 1946. The nationalemergency provision of the Taft-Hartley law was enacted to deal with just that kind of specific situation. On the basis of that experience and in view of careful consideration at that time, the Congress wisely concluded that an open-end arrangement was far superior to any rigid formula such as Government seizure. compulsory arbitration, or labor courts, all of which were considered and discarded at that time. Such measures are alien to a free society. They wou'd bring about so drastic a change in our economic and political systems as to warrant our looking elsewhere for a solution.

Look at the Taft-Hartley law record:

Of the nine cases in which the national-emergency provisions were enforced, the dispute was settled in all but the two maritime cases. Since the onset of the Korean conflict, only once has the national-emergency provision been invoked That was in connection with the copper-mining dispute involving the Mine, Mill and Smelter Workers, the union which has been expelled from the CIO for Communist domination. In that case, the parties reached agreement during the injunction period, an agreement which served as a pattern for other copper cases then pending before the Wage Stabilization Board. The national-emergency provisions of the Taft-Hartley Act have worked and can be relied upon.

The addition of another procedure to supplement the national-emergency provisions of the Labor-Management Relations Act would endanger if not destroy the usefulness of the present provision. For example, in the atomic-energy field. when the national-emergency provision of Taft-Hartley was invoked, it resulted in a solution of the strike by direct negotiation within 52 hours of the expiration of the 80-day period. In contrast, since a special disputes panel was set up in the atomic-energy field to deal with such disputes, voluntary settlements have become practically nonexistent, and substantially every negotiation results in submitting the case to the disputes panel, with resultant damage to collective bargaining.

In the majority of cases where Taft-Hartley has been given a fair trial, it has worked. The failure of present laws to deal with national-emergency strikes is attributable to the fact that the President refuses to utilize the law. Any attempt to go beyond the present national-emergency provision of Taft-Hartley vitiates that entire provision and results in much more serious Government intervention in the operation of our economy.

Such extreme governmental intervention as seizure and compulsory arbitration should not be resorted to. Rather, existing laws should be utilized impartially whenever the need arises.

Seizure: A form of nationalization

National-emergency strikes inconvenience and arouse the public, and extreme measures are often advocated for their solution. While public reaction against abuses is very often justified, it occasionally evokes emotional rather than thoughtful response. The present bill disregards the facts and overlooks the realities of industrial relations. In so doing, it establishes a doctrine of Federal intervention that puts this country squarely on the road to Government domination of industrial relations and but a stone's throw from dictatorship.

Secretary of Labor Lewis Schwellenbach gave us a significant warning on November 4, 1945, when he pointed out:

"I know how impatient the people are when a government fails to suppress strikes. I cannot forget, however, that it was this same impatience with strikes which caused the Italian people to take their first step along the totalitarian road which led them to discontent and to despair. Both management and labor should not forget this fact. If they fail us now, they will be the first to pay the price. America must have a free industry and free labor."

Labor and management will indeed be “the first to pay the price" if the Morse bill is enacted. Mr. William Green, president of the American Federation of Labor, spoke to this point in 1941 when a similar bill was being considered. He said that the seizure bill struck "at the very vital and fundamental American principles of private ownership." It is clear that once seizure is adopted as a national policy in peacetime it can lead only to ultimate nationalization of industry. This is not the solution to a problem arising because of executive-department refusal to invoke and utilize existing law, a law which has demonstrated its effectiveness in the several cases in which it has been applied. Seizure is a device for nationalization. Either party may force seizure if they believe they have a "friendly gentleman in the White House." Seizure enables any major union leader, by threat of strike, to force nationalization on his industry. Any administration would be in position to use the seizure device to promote socialism or any other foreign ideologies. Many Americans wonder if that was not the motivation underlying the present steel seizure, particularly in view of the emotional attack on the steel industry by major administration spokesmen.

Plant seizure has not settled labor disputes

From 1941 through June 30, 1947, the Federal Government seized private businesses 59 times because of labor disputes. Three of these cases occurred prior to the actual war period, 47 occurred during the war, and 9 during the reconversion period while the War Labor Disputes Act was still in effect. While the maintenance of uninterrupted production, the claimed objective of seizure, was served generally, the issues in dispute in many cases remained unsettled. Commenting on postwar seizures in the New York Harbor Tugboat case, the 1946 Coal Industry case, and the railroad strike of 1946, Ludwig Teller, attorney and author, writes:

"But the Government seizure did not, in any of these cases, terminate the strike. The strikes continued in disregard of the Government's intervention, and were settled, each in its own way, by other means.'

Experience in these 59 instances of seizure may be summarized as follows: 1. Bona fide collective bargaining was set aside;

2. The sanctity of collective agreement was violated;

3. Government agencies changed the terms and conditions of employment during the seizure on their own initiative. A case in point is the Krug-Lewis agreement, in which the Government sat down at the bargaining table with the union, negotiating an 181⁄2-cent increase, a welfare and pension fund financed by a 5-cent-per-ton royalty, and mandatory compliance with a Federal Mine Safety Code. The royalty arrangement, imposing a new private tax on the consumer, was something entirely new in industrial employment. The mine operators refused to accept this agreement, and the mines remained under Government control until the War Labor Disputes Act expired June 30, 1947; 4. Compulsory union membership, in the form of maintenance of membership, was in some cases forced by seizure into collective agreements over management opposition, pursuant to WLB recommendations. Such compulsory unionism spread throughout large sectors of industry.

Seizure is a two-edged sword

That Government seizure fails to settle labor disputes is nowhere more graphically illustrated than in the railroad industry which has been under Government operation for nearly 2 years. Strikes occurred even during this Government seizure. It is obvious that seizure is a two-edged sword which may be used against labor unions as well as employers. This is pointed up by the recent statement of James P. Shields, grand chief engineer of the Brotherhood of Locomotive Engineers, as follows:

1 The New York Times, July 29, 1941.

2 Management Functions Under Collective Bargaining; Baker, Voorhis & Co., New York, 1947, p. 363.