what the railroad industry would resort to the courts in order to protect itself, to avoid confiscation of its property.

There would be no other avenue of salvation open to the railroad industry.

Senator MORSE. That might follow unless in this type of operation the Government would agree to pick up the check for loss, which means that the cost would then be put in the pocketbooks of the taxpayers

rather than the carriers.

Mr. WOLFE. Yes. Then the Government would be put in the unfortunate predicament of the railroads. Under the Unemployment Insurance Act we have to finance the strikers. Under those circumstances the taxpayers would have to finance the strike.

Senator MORSE. Now assuming further that such a plan is put into operation that plan would not result, would it—and I speak from lack of information-would not result in the employment of all the railroad employees?

Mr. WOLFE. No. Depending on what might be considered essential and what might be considered unessential. I am glad you raised that question because it brings into focus another serious problem and that is that there are about 137,000 employees involved in this controversy out of roughly 630,000 employees.

Seventy-four percent are covered by agreements that were made in collective bargaining. Of course our 630.000 employees are going to be out of work. Our other forces and their families are going to suffer just as much as the strikers.

Sureley there ought to be some thought given to them. Now you brought out and I overlooked in answering the question, the question of seniority rules. Who is going to operate these few trains? We would have to work out agreements with the operating brotherhoods and the clerks and the people who load the cars and unload them, the people who handle the train orders, the people who dispatch the trains, the maintence people and all those things in order to get people to move the occasional car or train.

That would mean bringing in the seniority rules; whom would you call or not call. Now those things can't be worked out in a short time. But they would have to be worked out.

Senator MORSE. Let us assume that you are right that a large number of 137,000 involved in the six crafts and the additional thousand involved in the other brotherhoods would not be able to work under this limited operation of the railroads.

Would those not working be entitled to any benefits out of any existing funds because of the fact that their not working is not their fault?

Would they be entitled to benefits out of an existing funds?

Mr. WOLFE. Yes, Senator, they would be entitled to a little more than $50 a week unemployment insurance which the railroads pay for. Senator MORSE. So whether they are out on strike or whether the Government had decided to follow this approach of requiring the railroads to operate those parts of the system necessary to deliver what Government would decree are essential goods that must be delivered in the national interest, the carriers would be subject to payment of $50 a week for those not working?

Mr. WOLFE. Yes, sir, that is correct.

Senator MORSE. Is it your opinion that the result of the operation of this proposal would simply mean that the Government has added great strength to the union's demand and really put the carriers in the position where they would soon be hearing from their stockholders, wondering why, under those circumstances, they do not capituate? Mr. WOLFE. I think that would be a natural retaction, yes, sir. Senator MORSE. That is all, Mr. Chairman.

Senator YARBOROUGH. Mr. Wolfe, do you think it would be cheaper for the railroads to just close down rather than operate partially as you have described?

Mr. WOLFE. Cheaper to close down?

Senator YARBOROUGH. Yes. Suppose you had a strike and closed down entirely-you have already told us about the two items of $6 million apiece that it would cost per day to run the railroads. Do you think it would be cheaper to just close down and save the entire cost than it would be to partially operate?

Mr. WOLFE. The difference would not be great. I think it would probably be more expensive to handle the few cars that someone decided are essential than it would be to lockup.

Senator YARBOROUGH. Has there not been testimony somewhere here sometime that these essential products plus the war effort would represent about 40 percent of the freight moving on the railroads? Mr. WOLFE. That I do not recall, Senator.

Senator YARBOROUGH. Somewhere I have heard that percentage but I do not give that as a correct percentage. I have just heard that figure used somewhere.

Do you have any estimate of what percent of freight that would be, in the war effort, milk and essential things for the cities?

Mr. WOLFE. No, I do not have anything on that at all, because in the first place in order to try to reach a determination you must have an X point to start with. What is to be considered essential.

Senator YARBOROUGH. Of course you know without going into details that for essential war material you would have not only planes and tanks, and so forth, but would have the raw materials going into plants to produce those plans and tanks, too.

Mr. WOLFE. I would think that those things would be essential. If you do not have the materials to construct those things

Senator YARBOROUGH. Assuming that, do you have any way to estimate what percent of the total freight this would be?

Mr. WOLFE. No; I do not have them available to me. I am not a traffic man. That is entirely foreign to my experience and knowledge. But if it should be decided, Mr. Chairman, that you or any member of the committee are going to call in the presidents of some of our railroads, I am sure that they will be able to give you a reasonable estimate.

Senator YARBOROUGH. Thank you, Mr. Wolfe. Are there further questions, Senator Morse?

Senator MORSE. No.

Senator YARBOROUGH. Thank you, Mr. Wolfe. Thank you, gentlemen.

Mr. WOLFE. Thank you, Mr. Chairman, and thank you, Senator Morse.

Senator YARBOROUGH. Does Mr. Knight or Mr. McGill either one wish to make a statement?

Mr. MCGILL. I have nothing to add to what has been said, Mr. Chairman.

Senator YARBOROUGH. Thank you.

Mr. KNIGHT. I have nothing to add, Mr. Chairman.
Senator YARBOROUGH. Thank you, gentlemen.

Mr. WOLFE. Thank you, Mr. Chairman.

Senator YARBOROUGH. I have one item to put in the record. Yesterday I did not have copies, I have them now. I do want to ask Mr. Wolfe about it, however, since I am going to have to leave early I hope to have an opportunity when we come back Monday to ask Mr. Wolfe or someone else about it.

This is an article in the Wall Street Journal, April 6, 1967. "Federal officials move to avert strikes against country's railroads, truck lines."

The paragraph I have reference to reads:

Railroad sources in Chicago said carrier officials met yesterday with lobbyists to form strategy. Their current plan involves introduction of a finality bill to abolish strikes under the Railway Labor Act which covers airlines as well as railroads.

(The complete text of the article referred to follows:)

[From the Wall Street Journal, Apr. 6, 1967]

FEDERAL OFFICIALS MOVE TO AVERT STRIKES AGAINST COUNTRY'S RAILROADS, TRUCK LINES

WASHINGTON.-Federal officials moved to avert a nationwide transportation tieup as deadlocked railroad and trucking contract talks headed toward a doublebarrelled strike crisis.

Sources close to both negotiations reported serious deadlocks. "It looks very bad," said one source in the trucking talks. In the railroad negotiations, a union chief said, "there's been no movement on either side." Both negotiations were stalled primarily on wage demands.

Labor Secretary Wirtz called a meeting at the Labor Department for this morning with officials of six rail shopcraft unions that are threatening to strike Wednesday. Meantime, William E. Simkin, director of the Federal Mediation and Conciliation Service, said a walkout "may be imminent" in national negotiations between the Teamsters Union and trucking companies and he asked both sides to continue bargaining with the aid of Federal mediators. Negotiations were to continue late last night.

Mr. Wirtz made the call to the railroad unions after conferring with Francis O'Neill, chairman of the National Mediation Board, which handles rail disputes. Union officials will meet at 10 a.m. today with Under Secretary of Labor James J. Reynolds and Mr. O'Neill, a Labor Department spokesman said. Rail management negotiators have been asked to stand by for a possible later meeting, he added.

The trucking talks reached an impasse yesterday that threatened the first nationwide closedown of common-carrier lines. Mr. Simkin cautioned negotiators in telegrams sent yesterday that such a strike would seriously hurt the economy, defense work and the welfare of many communities.

"SELECTIVE" STRIKES

The national master-freight agreement covering about 450,000 Teamsters expired Saturday, but talks have continued beyond the deadline. Teamsters officials have threatened "selective" strikes against some truckers, but the major industry bargaining group, Trucking Employers Inc., has said it will ask all 1,500 member companies to close operations in response to any walkouts. These

companies carry about 65% of the nation's truck cargo, the group estimates. The Johnson Administration has one anti-strike weapon available in the trucking dispute, but all legal roadblocks to a nationwide rail strike will have been exhausted by next week. In the trucking deadlock, the Government could seek a strike-stopping Federal court injunction under the Taft-Hartley Act, but the railroad dispute has already been through the mediation and cooling-off processes under the Railway Labor Act.

The deadlocked railroad dispute holds the possibility of creating a nationwide rail-strike crisis such as the 1963 threat by the railroad firemen's union, which resulted in quick Congressional passage of compulsory arbitration legislation to prevent the walkout. There seems little question that the White House would again seek quick Congressional action in this case if the rail strike actually materializes.

But, what's more likely is that the Administration will seek to exhaust every avenue it can to postpone the threat and extract a settlement before taking the drastic step of asking Congress to act again.

The most obvious options open to the President, should the dispute land in his lap, are as follows: to appeal personally to the parties to delay the strike, meanwhile commanding the parties to stay in negotiation until they reach a settlement (Mr. Johnson successfully used this technique in a previous rail-strike crisis); or he could send emergency legislation to Congress seeking a forced end to the dispute. It's likely he would want to avoid the latter step, fearing that the Congressional mood might broaden strike restrictions beyond the current dispute. Railroad sources in Chicago said carrier officials met yesterday with their lobbyists to form strategy. Their current plan involves introduction of a "finality bill" to abolish strikes under the Railway Labor Act, which covers airlines as well as railroads. The bill is to be introduced jointly in both houses, possibly as early as today or tomorrow, sources said. It would make final and binding the findings of emergency boards appointed by the President; the boards would be made up of one labor representative, on industry representative and three "neutral" members.

TWO-YEAR CONTRACT

The six rail unions are demanding a two-year contract providing general wage increases of 7% the first year and 5% the second year, with additional boosts of 15 cents an hour in each year for skilled journeyman. The top rate for machinists is $3.05 an hour, a wage the union contends falls far below that for comparable jobs on the airlines and in other industries generally.

The railroads have offered a 5% pay increase, following the pattern of recent settlements with major on-train unions and some nonoperating unions. The roads also seek a shorter-term contract, such as the one-year settlements made recently with other unions.

The six unions represent about 150,000 workers who service and repair locomotives and other equipment in the railroad shops. Besides the machinists, the group includes the Sheet Metal Workers International Association, the International Brotherhood of Electrical Workers, the International Brotherhood of Firemen and Oilers, the International Brotherhood of Boiler Makers and the Brotherhood of Railway Carmen.

In the trucking deadlock, the last known union demands amounted to increases in wages and fringe benefits totaling 95 cents an hour over three years, while the trucking companies were offering a three-year package totaling 49 cents an hour. The industry puts the cost of the union demands at 6% a year and its own offer at about 4% a year. These estimates exclude union demands for equipment and safety items that the industry claims would add 5% annually to costs. One major sticking point in the trucking talks is whether wage increases under a cost-of-living wage escalator in the current contract should be included as part of the new package. The formula provides for a cost of living increase of 11 cents an hour, which the companies want to include in their first-year wage proposal, but which the union demands must be added on top of the new wage increase.

Senator YARBOROUGH. The next witness is Mr. G. E. Leighty, chairman of the National Railway Labor Executives Association.

Mr. Leighty, will you introduce those with you for the record?

Mr. LEIGHTY. Yes, sir. On my right is Mr. L. P. Schoene, general counsel for the Railway Labor Executives Association. On my left is Michael Marsh, our research director.

Senator YARBOROUGH. Mr. Schoene is listed as a witness also. Mr. Schoene, do you have a separate statement after Mr. Leighty finishes? Mr. SCHOENE. Yes, I have.

Senator YARBOROUGH. It will not be presented as a joint statement. Each will be separate?

Mr. SCHOENE. They will be separate.

Senator YARBOROUGH. Mr. Leighty, will you proceed in your own way?

STATEMENT OF G. E. LEIGHTY, CHAIRMAN, RAILWAY LABOR EXECUTIVES ASSOCIATION; ACCOMPANIED BY LESTER P. SCHOENE, GENERAL COUNSEL, AND MICHAEL MARSH, RESEARCH DIRECTOR

Mr. LEIGHTY. Thank you, Mr. Chairman.

I am pleased to have this opportunity of appearing before you. There are a number of problems in which we are very much interested. If the chairman will permit I should like to read my statement because I believe that it covers the subjects in a manner which is both brief and is probably more understandable than if I were to attempt to tell you about them off the cuff.

I will have some comment in addition to the statement, however. So if it is agreeable I will proceed to read my statement.

Senator YARBOROUGH. Yes; proceed, Mr. Leighty.

Mr. LEIGHTY. Mr. Chairman and members of the committee, my name is G. E. Leighty and I am chairman of the Railway Labor Executives Association, with headquarters at 400 First Street NW., Washington, D.C. This association speaks for 23 standard railway labor organizations representing nearly all the Nation's railroad employees.

Seated with me is Mr. Lester P. Schoene, the RLEA's general counsel who will also testify as a witness. On my other side is Mr. Michael Marsh, director of research of the RLEA.

In spite of the fact that they are on opposite sides of me they are not necessarily opponents.

In addition to my post with the RLEA I am president of one of the railway labor unions, the Transportation Communication Employees Union. Since 1946 I have served as chairman of the national negotiating committee of the cooperating nonoperating railway unions. My experience in the railroad industry goes back 30 years and I believe I know this industry as well as any man, not only from the standpoint of its labor relations but from the standpoint of its operating practices.

Senator MORSE. May I suggest that you make a very brief statement and describe you and I know what operating unions are and nonoperating unions are. You would be surprised how many people ask me the difference between operating unions and nonoperating unions.