should never be a work stoppage. I would favor a finality bill, if I had my "druthers," where collective bargaining has broken down and no decision has been reached, that the matter be submitted to an impartial board and, personally, I would be perfectly willing to accept my day in court before that board, appointed by the President of this land, and accept their decision, whether it was against what I thought it should be, but again I say I speak for the Atlantic Coast Line Railroad and no other.

STATEMENT OF GREGORY PRINCE, EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL, ASSOCIATION OF AMERICAN RAILROADS

Mr. PRINCE. Perhaps I could supplement the answer, speaking for the Association of American Railroads if you would like me to do that. I might make it clear that in so speaking I am not representing the views of the Florida East Coast Railroad Co. They have asked that in any statements on this subject that I except them from that representation and I do so at this time.

Mr. Rice expressed his views as the president of the Atlantic Coast Line. The industry's views coincide with his. We do believe that a system should be devised on a permanent basis that will preserve the right of the parties to engage in collective bargaining to the fullest and that should not be interfered with until collective bargaining has failed in its mission.

If the point is reached where collective bargaining has not fulfilled its original purpose and the parties would then be, if they were in the position of being in an ordinary industry, left to so-called selfhelp, we think that at that point the public interest becomes paramount and if you have an industry, particularly operating in conditions such as we have today, where a stoppage and cessation of the service performed by that indsutry cannot be permitted, then you must have a means of bringing about a settlement of the dispute.

We think this should be done on a permanent basis so that you do not have to come back to Congress on each occasion. But in the context of the situation today we recognize that this is not likely to be done at this stage and that the solution presented by Senate Joint Resolution 81 is probably the best solution under the circumstances that can be devised.

I want to come back to one particular question you raised. What standards would you provide in such a bill? We have wrestled with that question at some length and have concluded that the standard of a fair and reasonable determination comes about as close as any determination, as any group of standards that you could set up for the settlement of a labor dispute.

You could recite all kinds of considerations. There is a bill which has been introduced in the House of Representatives by Congressman Pickle that sets forth seven or eight different considerations. Those are reasonable considerations to be taken into account. I think any experienced men appointed as a neutral Board by the President of the United States would in the normal course explore all of those considerations

if they were operating under a standard that called for a fair and reasonable settlement of the dispute.

Mr. MITTELMAN. My point was that since we are essentially substituting compulsory arbitration for the right to strike or lockout, and want to impinge as little as possible on the freedom of the bargaining process, should not the primary consideration be the result which would have obtained had we let nature take its course, rather than what is fair and reasonable? I am not sure that we can really develop standards to determine what is a fair and reasonable award.

Mr. PRINCE. Let me say that I do not think the dice should be loaded in a situation of this kind. If you were considering a standard that would take into account the fact that the railroad would not be operating if it were not for some provision such as this I think that would be a grossly unfair standard. I think it would simply load the dice against a fair and reasonable settlement.

Bear in mind that these men are going to be granted in all probability retroactive pay at the level that a board determines is the fair and reasonable level back to the time, January 1, 1967.

The are not going to lose anything except the temporary use of the money pending the settlement. We do not think that the dice ought to be loaded against us.

I would like to take this opportunity if I may to point out that the dice are already loaded against us with respect to equal bargaining positions, Mr. Schoene and Mr. Leighty and Mr. Fox and the others speak of having an equal bargaining position. They say let us go ahead with the strike since the parties will have an equal bargaining position.

Are you gentlemen aware of the fact that in that situation, under the law enacted by Congress, we would be obliged to pay the railroad employees, approximately $6 million a day in unemployment benefits? Does that put the parties in an equal bargaining position? Five days a week we would pay it. That would mean $30 million a week we would have to pay out of the fund supported exclusively by railroad employers-$30 million a week.

We would have to finance and support the strike against ourselves. Does that leave the parties in an equal bargaining position, I ask you in all fairness? Suppose it had been the other way. The railroad industry fixed charges and the charges that continue whether we are operating or not are estimated to be about $6 million a day.

Suppose vou put the shoe on the other foot and say, let the brotherhoods, the unions contribute $6 million a day to pay our fixed charges and expenses that will continue during the strike period.

Would you call that a fair and equal bargaining position between the two parties? Of course you would not. But the shoe is very much on the other foot. The unemployment payments so load the balance scale in their favor that naturally they think they can force us into capitulation in the event of a strike.

Mr. MITTELMAN. Let me ask you this, Mr. Prince: Is it fair to say that von regard compulsory arbitration not as a substitute for collective bargaining as such, but as a means of redressing the inequality of bargaining power which the railroads have vis-a-vis the unions. with which they deal?

Mr. PRINCE. I would like to express in my own way what I think is a final and binding determination. Let us not call it compulsory

arbitration. We have a lot of semantics in here involved in this thing. When collective bargaining has been given its opportunity and has failed to bring about a settlement the public interest requires a settlement in an industry such as the railroad industry and what is fairer than a determination by a neutral board?

Would you look at the record of today's testimony of Mr. Schoene and Mr. Leighty and basic to their various concepts is the fact that a determination by a neutral board would be an unfair settlement to them because through the forces that they could exercise with these loaded dice they could force a settlement above that.

Mr. Leighty put it in those very words, how terrible it would be for them to have to accept a fair and just settlement by a neutral board when they could have forced a higher settlement.

Now which is the settlement in the public interest? Forget the parties. Which is the settlement in the public interest? The one that the neutral board says is a fair and reasonable settlement or one forced at a higher level than that?

The shippers are going to have to pay for that. The general public is going to have to pay for that unreasonably high settlement. I think it is pretty clear where the public interest lies in a situation like this. Mr. MITTELMAN. Thank you.

Senator YARBOROUGH. Mr. Prince, of course this hearing is directed solely to Senate Joint Resolution 81, not general long-range legislation. This is an emergency in time of war.

The question which Mr. Mittelman had was directed to page 4, section 4 of Senate Joint Resolution 81, where if this resolution becomes law this Board is directed to consider four items: whether it would be in the public interest, achieve a fair and equitable extension of the collective bargaining in this case, protect the collective bargaining process, and fulfill the purposes of the Railway Labor Act.

He was asking whether or not you agree that in such instances the arbitrators should be guided in part by the results which would have been obtained thereby had there been no national emergency, had we had a normal peacetime economy and free collective bargaining resulted.

Now your argument is directed to, one, that in this industry free collective bargaining should be abolished by law. Your basic argument, as I understood, is that the present law is unjust to the railroads.

His sole question, as I interpreted it, was directed to this present emergency. If the right to strike-which is part of our free enterprise system cannot be permitted because of the war emergency, would it be fair to consider what wage would have resulted if you had the free collective bargaining of a nonwartime economy. I want to point out what the issue is. I won't ask you to discuss it unless you wish to. Mr. PRINCE. I will not discuss it extensively or in a time consuming way.

Senator YARBOROUGH. I don't want to go into the permanent status of law because we are not considering a permanent law. We have an emergency situation. I know if we consider permanent changes it will take weeks and weeks of hearings.

Mr. PRINCE. I will address myself to this resolution and this current situation as I understand are the chairman's wishes.

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I think if you rely too exclusively upon trying to guess what the outcome would have been through collective bargaining carried to the end of the line with the exercise of self-help, you are getting into a realm of speculation that doesn't give you much in the way of guidance. I think that the Board will have to take into account the collective bargaining that has been engaged in by the parties on a free basis up to this time, the free collective bargaining of the parties. I think they should take into account what took place under the procedures of the current Railway Labor Act provisions in which under the processes now devised by Congress for the settlement of dispute in the railroad industry you have the various steps of collective bargaining between the parties, mediation, profer of arbitration, and then Emergency Board appointment, recommendations by the Emergency Board.

Those are all part of the collective-bargaining process. All of those things should be taken into account by the Board appointed under Senate Joint Resolution 81 as well as the subsequent steps taken by the Mediation Panel, the Special Mediation Panel. I can conceive of all those steps as being part of the background and part of what would be the standards and guideposts for this special board appointed by the President.

Senator YARBOROUGH. Senator Fannin.

Senator FANNIN. Thank you, Mr. Chairman.

Most of the questions that I had have been answered by Mr. Rice and Mr. Prince in their statements. I do want to be sure I understand this, Mr. Prince. You refer to the $6 million a day added cost for unemployment compensation. Is this different from most industries?

Mr. PRINCE. Yes, it is. As far as I know there are only two States which provide for benefits to strikers at all. Those, I believe, are after a substantial waiting period, something like 30 days. This was the situation when I surveyed it 4 or 5 years ago. I don't believe any have set up any provisions for benefit of strikers since then.

We are under a Federal system. The Railroad Unemployment Insurance Act applies exclusively to the railroad industry. General industry is under the State Unemployment Compensation Act.

Senator FANNIN. I think both of you agree with the conclusion of the senior Senator from Oregon that partial seizure would be chaotic. Of course we are here considering special legislation but we also have an obligation to consider permanent legislation and so I would just like to ask you this. Do you think there are enough differences between transportation and other industries to justify different treatment? I think you have stated some of the differences, but would you consider that this would be sufficient to justify different legislation? Mr. RICE. I definitely think that the public interest will have to be the controlling factor.

Mr. PRINCE. I think there is a difference that Congress has recognized in establishing a separate system. The Railway Labor Act so far as the procedure is concerned is separate and apart from the procedures under the National Labor Relations Act and transportation does have many distinguishing characteristics from the general industry. No protection for the public through stockpiling is possible and any number of differences.

I think there is a justification for different treatment.

Senator FANNIN. Should the trucking industry be considered in the same category as the railroad industry and the airlines?

Mr. RICE. Again, a personal expression completely and having many friends in the trucking industry, I think they would fall in the same category.

Senator FANNIN. That is my opinion. Because when we say the transportation industry is different, then we should consider all transportation. It all falls into one category and should be treated so as far as any special legislation is concerned.

Mr. RICE. They may not agree with me, but I certainly think so.
Senator FANNIN. No further questions.

Senator YARBOROUGH. Gentlemen, this concludes the list of witnesses this morning.

I have no desire to get into this debate over permanent legislation. Among the reasons I have heard advanced for permanent legislation that would provide for compulsory arbitration and remove the right to strike is that with the right to strike we might end up with higher wages and therefore with higher shipping charges.

I won't argue the point one way or the other. I point out that this great American economy of ours with $750 billion per year gross national product has not been built on low wages. It is built on high enough wages to enable the working people to educate their children and equip them for a more productive life.

It is built on the productivity of the person. In my opinion, you cannot maintain that productivity of America without educating the other nations. We increase our productivity by our people earning enough to educate each generation. We have out-educated the rest of the world. We are far ahead of Europe in science and technology. We have done this with a higher standard of living. We are only considering this present resolution because of the present emergency. I do not desire to illustrate what kind of long argument we get into if we start on permanent legislation.

I think that some such legislation will doubtless be introduced and recommended at some time or another. It is not going to be a matter of a few days' hearing when we do. It will reach into the whole theory and framework of our economy, what it is built on. It will be a matter that will take great economic studies, industrial engineering and many other things. We hope that we can come to some decision on Senate Joint Resolution 81 before the present resolution expires.

I point out if we open up the whole question of what the permanent legislation will be we will be here for many weeks.

Thank you, gentlemen, thank you for your patience in staying until we could complete the hearing today.

I congratulate you on your knowledge of the railroad industry, Mr. Rice. You made a very clear statement. It contains as much information about how railroads operate, concisely stated, as I have ever heard in my life.

Mr. RICE. Thank you.

(Whereupon, at 1:35 p.m., the subcommittee recessed, to reconvene at 10 a.m., Tuesday, May 16, 1967.)