Senator TAFT. There is nothing about labor-management in Section. 4, or the settlement of labor disputes or anything of that kind. That relates solely to fixing of wages in relation to the stabilization program; that would not relate to the settlement of disputes.

Dr. TAYLOR. Nor has the Board been given any powers to intervene in any dispute. There are two areas in which the Board has dispute functions, as you well know, the first having to do with the voluntary submission of disputes when the parties to that dispute ask to have the case submitted to the Board.

Senator TAFT. That could be done, of course, under the general mediation provisions of the mediation law, I suppose. I see no reason why anybody should not submit to anyone else a settling of a dispute if they agree to do so.

Dr. TAYLOR. So that you do not refer to that function of the Board. Senator TAFT. No; I am not referring to that; I am referring to the question of whether the President certifies something to the Board. Dr. TAYLOR. Yes.

Senator TAFT. Which does not necessarily have to be of national scope, it just has to relate to the defense program. It might be a little plant somewhere that makes bolts for a gun or something of

that sort.

Dr. TAYLOR. It could be a plant in which an interruption of production would adversely and substantially affect the defense-production program.

Senator TAFT. There would not be many plants in the United States that do not or cannot be said to do that.

Dr. TAYLOR. I think that is true.

As I understand the Executive order, it is when, in the judgment of the President-his opinion-a dispute is of such a nature that it would substantially interfere, he may refer it to the Board which could invite the parties to appear before it not compel-and the Board then makes a report to the President.

Senator TAFT. I am not suggesting the Board is illegal. I am asking if there is any legal authority for it at all, for its action in that process, or whether it is just the President acting as he did. You remember, Mr. Taylor, back in 1946 when the President created a board which was certainly extralegal-it had no standing to settle the General Motors situation; and the steel board also-they were boards that reported the 18-cent wage pattern which subsequently went into effect. But they were, as I recollect it, without authority of any kind; purely extralegal boards, we will say. Is that the way you regard this Board in its functions, in this particular regard?

Dr. TAYLOR. No; I do not. I think it is probably comparable to the Board which was set up at the start of World War II under Executive Order 9017, in which a procedure was devised, under the President's constitutional authority, to deal with a new kind of problem and a new kind of situation.

Senator TAFT. I do not know what constitutional authority he has with respect to it. There is no such authority that I know of, except for his personal advice, to advise him what he should do under certain circumstances. He no doubt can call in anybody to do that at any time. But I know of no constitutional authority to set up any board to settle disputes.

Dr. TAYLOR. I have heard many discussions about that point of the constitutional authority.

Senator HUMPHREY. Would you want to say that that would be a matter of what the judges would determine?

Dr. TAYLOR. I think I would like to say I would not be competent to pass on the question of constitutional authority, which has been debated many times.

Senator TAFT. I do not think there is any question about it that the Board has no power to issue subpenas and call people before it and has no power to issue an order. You have no power to issue an order. I suggest it is an extra-legal board. It that not true? It has no legal authority whatever to make anybody do anything. Is that right?

Dr. TAYLOR. May my counsel respond to that?

Mr. FRIEDIN. If by "legal" it is suggested that there is no specific statute which provides for such a board, I think that might be accurate. But if by "extra-legal" it is suggested that there was no power in the President's office to create such a board, I would respectfully propose that the President, in the exercise of his duties under the Constitution to the effect the procurement of war materials, defense materials, has the duty to provide for the settlement of disputes that might interfere with such procurement. And so long as, in the setting up of such an agency, there is no legal compulsion involved, it would be my judgment that the Board is a legally constituted board, although possibly, with respect to its dispute function, not a statutorily constituted board.

Senator TAFT. I do not dispute the fact that the President may appoint advisers to himself to help him determine the things he can do under the Defense Production Act or that they can advise him as to his general rights to suggest ways of settling disputes. My point is that there is no legal standing for this Board, that this Board has no legal standing except as we may appropriate money to pay its salaries, that it has no power to do anything or make anybody do anything, or do more than simply recommend a settlement.

Dr. TAYLOR. Is that not a virtue, sir, that the fact that we may be able to settle these problems without compulsion that would otherwise go unresolved and interfere with necessary production? Isn't its virtue that it is an extension of the voluntary process?

Senator TAFT. I rather doubt that when the Congress has set up this whole mediation procedure here that the President has any right to substitute something else for that. He can have a board to advise himself as to what he should do, and no doubt he can do certain things that the Board could not, but I certainly would this: I am interested principally in knowing whether we should write anything in the Defense Production Act and what it should be if we are going to write it to give whatever authority is necessary. If this program is right, it rather seems to me they ought to have legal power. If it is not right, I do not think they ought to go out and set wage patterns for the country, which by indirect means they are able to force into effect, which are contrary to the principles we have.

Senator HUMPHREY. May I interrupt at this point to say that in the testimony given thus far it appears that Dr. Taylor has stated quite succinctly and concisely what he considers to be the jurisdiction

of the Board or its functions; namely, he says that the Board can act in only two situations, as testified on page 3 of the statement. Dr. TAYLOR. That is right.

Senator HUMPHREY. In you statement you say:

The first arises where the parties themselves jointly agree to submit their differences to the Board for final decision or for recommendations as to settlement. The choice belongs to the parties, not to the Board. The Board itself has no power to take jurisdiction of a dispute on its own motion. Further, even where the parties jointly request the Board to take their case, the Board need not accept jurisdiction unless it believes it to be in the national interest to do so under criteria to be developed by it.

And, secondly:

The only other way the Board may be used to facilitate the settlement of labor disputes is in those cases in which the President is of the opinion that the matter is of a character substantially threatening the progress of the national defense and refers the case to the Board. The Board is then required to investigate the issues in dispute and promptly report to the President with recommendations as to equitable terms of settlement.

You have on page 5 of your testimony:

The principle of voluntarism is the underlying concept of the Board's procedures even in cases referred to it by the President.

Then, further down:

The Board can issue no binding decisions. The Board has no subpena powers. It can only invite the parties to appear before it in its investigation of the dispute.

I mention that because it is entirely possible that if the President desired to have the Secretary of Commerce mediate a dispute he could do it. If he desired to have a member, let us say, of the Securities and Exchange Commission step out and mediate a dispute on the basis of an individual citizen, he could call upon him to do it. What he apparently has done in the Executive order is to take note of the fact that wage-stabilization policy formulation automatically injects certain labor-management difficulties and problems which affect wage-stabilization policy and therefore the whole must be considered in one agency, the whole pattern.

Is that your thinking on it?

Dr. TAYLOR. Yes; if I might add one point to that. If the wage issue can only be determined by the Wage Stabilization Board ultimately, then there is an effect upon the program if other agencies recommend or suggest immediate settlements of wage issues in disputes affecting the production effort. One could conceive of a policy being developed by the Wage Stabilization Board and mediation activity being conducted by an independent agency which would make recommendations entirely inconsistent with the job that the Wage Stabilization Board was seeking to do. It seems to me that it is in that wagestabilization responsibility of the Board that inevitably affects the handling of disputes of the nature under discussion, and I just don't see how you could operate a wage-stabilization program if various boards such as you referred to would be making recommendations as respects the settlement of the issue. There would be a confusing result.

Senator TAFT. You mean you have got to vary the stabilization thing to suit the fact you have got to settle the disputes. You have labor and management on the Board outnumbering the public mem

bers. You upset the whole wage-stabilization idea because they are more interested in settling disputes.

Dr. TAYLOR. No; it is quite the contrary. I am saying that we are going into stabilization; that is our function and what we intend to do. Those rules that the Board develops cannot be eroded by independent boards set up to advise the President, as you say.

Senator HUMPHREY. May I interrupt at that point, that the 1,500 cases which you now have, were it not for the Wage Stabilization Board they would not be cases. In other words, the employer and the union have already agreed to increase wages. But as long as you have a price policy and a wage-stabilization policy it automatically flows that, if you do not have some kind of machinery to hold the parties within the limits of policy, there will be no policy.

Dr. TAYLOR. Exactly. I think it is just so simple that you cannot have various boards recommending as respects national wage stabilization policy.

Senator HUMPHREY. In your early remarks in your statement you said something to the effect that, once you had established and once you changed over from an economy of peace to an economy of preparation and once you establish a wage stabilization policy, you automatically limit the area of collective bargaining.

Dr. TAYLOR. Indeed you do.

Senator HUMPHREY. You place certain inflexible limits upon it. Dr. TAYLOR. The interference with collective bargaining starts with wage-stabilization rules.

Senator HUMPHREY. Of course.

Dr. TAYLOR. Where the latitude of the parties is restricted. I have no doubt that, were it not for the wage-stabilization rules presently in effect, the wages that are being negotiated would be far in excess of those that are being submitted to the Board right now for approval. There is a restraining influence. I just do not think that you can say the interference with collective bargaining is limited to wages. The effect of that important aspect of collective bargaining, as well as the other aspects of the mobilization program that I referred to in my statement, means that there is an impact on the whole process of collective bargaining as a result of the defense effort; new problems of all kinds are raised, such as seniority, for example.

Senator TAFT. Price fixing also limits collective bargaining. You cannot sell a steer any more. You do not let them come in and argue every steer. You fix the prices and you say that this is the rule. I suggest that if you are going to have really effective wage fixing you have to do the same thing.

Dr. TAYLOR. I would suggest that they come in and argue in that

area.

Senator TAFT. They do not take each case on its own merits and argue the case. That is the point. What I suggest is also that your Board itself is bound to set aside your own rules, your own stabilization rules, because of the desire to get these cases settled. You are going to knock spots out of the whole stabilization program as long as you have the same Board trying to settle disputes, particularly if the labor-management have a majority on this Board and both want to settle a dispute.

Dr. TAYLOR. On the first point, I do not think there is any possibility of this Board making new policy on its own initiative as you

indicate. As the Board is set up, any policy determinations are subject to the approval of the Economic Stabilization Administration, whose function I would expect would be to develop the wage policy in line with the price policy.

This Wage Stabilization Board has no power in its own initiate to make new wage policy. It is subject to the Administrator's approval. Senator TAFT. You mean you cannot change this 10 percent?

Dr. TAYLOR. I mean exactly that, Senator.

Senator TAFT. You mean this particular Board has no power to change that rule?

Dr. TAYLOR. It may recommend.

Senator TAFT. In individual cases?

Mr. FRIEDIN. You will recall, Senator, in section 403 of the act it was provided that all stabilization functions were to be centered in one agency, which was the Economic Stabilization Agency headed by an Economic Stabilization Administrator, and the price functions and wage functions given to this Board and the Price Administrator within that single agency. That is a requirement of the statute itself. Senator TAFT. Let me go back to the question we got away from, and that is the question of authority.

Dr. TAYLOR. The question of what?

Senator TAFT. Of authority.

Dr. TAYLOR. Yes.

Senator TAFT. You have a dispute that comes up and you settle it. There are no means of enforcement. In other words, there are no means of enforcement as a practical matter. Under the Selective Service Act can the Government not immediately seize the plant if the employer will not agree to the wages or even if the labor does not? Dr. TAYLOR. Well, to begin with the Board would not issue any binding award.

Senator TAFT. I understand that. This is the point I am making. Here is an extralegal board not authorized by Congress in the case of General Motors. As a practical matter it set an 18-cent increase for the United States as a pattern without any legal authority whatsoever. Nevertheless that effect was carried through. Will not the effect of your Board be the same? Will not your Board in effect lay down a standard to which there will be great popular pressure to conform, and will not the Government itself enforce it by seizure of plants under the Selective Service Act so that you are in fact creating an enforcement agency without any legal authority?

Dr. TAYLOR. Well, I do not think it necessarily operates like that. I would have no doubt about the possible effect of a recommendation, that it might have influence on the final settlement, but I would suppose that a public body, faced with an interruption in production that was vital to the defense need, there should be a mechanism set up which would assist the parties in making a settlement if it could be done and in indicating in this instance by a tripartite board of what the public interest would call for under those circumstances.

Senator TAFT. I suggest under the present set-up the Government has in effect the power to enforce any of your decrees and has no power whatever to enforce them against labor as a practical matter. That is the result of the fact that you are operating in an extralegal field.