designate to represent the Government and the public?" In replying to that query, the chairman of the committee said, "I believe that interpretation is the correct interpretation." Senator Donnell further clarified the issue by stating that "in order that the President may have the power to take the action mentioned in the second sentence of section 502 there must be an agreement by a majority" of each of the groups. The reply was that the Senator "is absolutely correct." Senator Donnell continued "and unles there is such an agreement by each and all these several segments, the President would not have the power conferred upon him by that section." Senator Donnell was assured that that interpretation "is absolutely accurate."

1

To make the point even more crystal clear, Representative McConnell raised the question in the following manner: "They [the Conference Committee] mentioned here in the descriptive part of the report on page 35 that the President would be authorized under this provision to establish a board, commission, or other agency similar to the War Labor Board of World War II to carry out the purposes of the title. It is my understanding that he could not designate such a board unless it was agreed to under the provisions of title V, is that correct?" Mr. Wolcott: "That is my very distinct understanding."

Thus, it is clear that section V of the Defense Production Act, which is the only section that deals with the establishment of any agency for the settlement of industrial disputes, requires an agreement by representatives of each of the major groups before the President is authorized to establish a power with authority to intervene in labor-management disputes.

Accordingly, the framework of congressional intent is clear and unequivocal: 1. Price and wage stabilization are intended to operate primarily on the basis of voluntary action of business, agriculture, labor, and consumers.

2. Wage stabilization is considered an integral part of price stabilization. 3. Creation of machinery looking toward the settlement of labor disputes is intended to be entirely separate and apart from wage stabilization.

4. In labor-management relations, primary reliance is to be placed upon negotiation and the normal processes of collective bargaining supplemented by the full use of mediation and conciliation to effect settlement in the national interest. 5. Existing labor legislation is to remain in full force and effect and is not to be modified by any action under the Defense Production Act.

6. No governmental labor-disputes agency is to be set up without previous agreement between representatives of labor, management, and the public. The President is authorized to take only "such action as may be agreed upon in any such conference and appropriate to carry out the provisions of this title."

THE WAGE STABILIZATION BOARD IS ORGANIZED

Following the enactment of the Defense Production Act, the President on September 9, 1950, issued Executive Order 10161, part IV of which deals with economic stabilization. The Economic Stabilization Administrator, in accordance with part IV, is authorized to include in his agency a Wage Stabilization Board composed of nine members appointed by the President on a tripartite basis. The function of the Wage Stabilization Board is to "make recommendations to the Administrator regarding the planning and development of wage stabilization policies, and [it] shall perform such further functions with respect to wage stabilization as may be determined by the Administrator after consultation with the Board." There was nothing in the Executive Order relating to the Wage Stabilization Board implying that the Wage Stabilization Board would have any function other than that of advising the Administrator concerning the planning of the development of wage stabilization policies, except the mere reference of "further functions with respect to wage stabilization." It is clear, therefore, that the Wage Stabilization Board was originally set up in accordance with the provisions of the Defense Production Act and congressional intent.

After appointment, the members of the Board, on December 17, 1950, issued a statement of broad philosophy on wage stabilization which concluded with the statement that "the stabilization of wages, salaries, and other compensation, the primary concern of the Wage Stabilization Board, and other measures of the type listed in (c) above (controls over credit, rents, speculative commodity markets, business inventories, and allocation of scarce materials and goods) will not by itself attack inflation at its source, but will merely conceal and defer its effects, while permitting a pressure of hidden spending power to build up.”

1 Congressional Record, September 1, 1950, pp. 14291-14294.

Furthermore, the Wage Stabilization Board concluded that "it will do all in its power to perform its stabilization function according to the intent and spirit of the law." This statement, subscribed to by all nine members of the Wage Stabilization Board, including the three labor representatives, was fully in accord with congressional intent and recognized that the Board's function was to be limited by the intent of Congress.

LABOR DRIVES FOR A DISPUTES BOARD

From its very inception, the Board was handicapped by a struggle instigated by the labor members of the Board to turn the Wage Stabilization Board into a disputes-settling agency. For a considerable period of time, the Board remained inactive on wage-stabilization policies, while labor and public members brought pressure to bear upon the Economic Stabilization Administrator until he delegated to the Board his authority for establishing policies relating to wage stabilization. Furthermore, the labor members of the Board, supported in some measure by the public members, urged that the Board be given the power to deal not only with wage stabilization policy, but also to determine specific labor disputes which might be brought before the Board. It was also apparent that the labor members of the Board preferred to develop wage stabilization policy on a case-by-case basis, rather than establish broad principles applicable uniformly throughout the economy.

This drive to convert the Board into a disputes-settling agency was so pronounced that during the hearings held by the Board with representatives of labor and management on January 10, 11, and 12, 1951, management representatives repeatedly emphasized that the Board was not intended to deal with labor disputes and, therefore, should not extend its functions to become a disputessettling agency. It was pointed out that the situation in 1951 is entirely different from that in 1942; that the problem now is to fight inflation rather than find a method for settling labor-management disputes. The business groups pointed out that there must be separation between the function of formulating wagestabilization policy and the function of administering it, since otherwise the administering agency would modify the policy in the face of pressure from either side. It was also pointed out that there were no major national labor disputes threatened or actual at that time requiring extraordinary means for dealing with them. In addition, the Labor-Management Relations Act provided a mechanism for handling labor disputes threatening the national welfare, as well as strikes caused by such unjustifiable actions as jurisdictional strikes, secondary boycotts, closed-shop demands, and so on.

It was evident at these hearings that the labor members of the Board were determined to convert the Wage Stabilization Board into a dispute-settling board.

WHY LABOR INSISTS ON A DISPUTES BOARD

Neither then, nor since, have labor leaders or labor members of the Wage Stabilization Board explained why they insist upon the establishment of a labordisputes board. It is axiomatic that the creation of a labor-disputes board prevents, discourages, and undermines the normal processes of collective bargaining. The pressure for setting up a labor-disputes board apparently stems from the following considerations:

1. Labor leaders would prefer to find some other means than the normal process of collective bargaining for achieving their demands.

2. Labor leaders recall that during World War II, an unprecedented growth of union membership resulted in part from decisions of the War Labor Board, based on continuous compromise and on imposition of maintenance of union membership throughout a large segment of American industry. They undoubtedly anticipate that a governmental labor-disputes agency at this time would have the same effect.

3. Labor leaders have done everything possible to make wage stabilization inoperative in practice. They undoubtedly recognize that setting up a labordisputes board would provide a useful mechanism for puncturing any wagestabilization formula that might be developed.

4. Organized labor has sought in every way possible to repeal or hamstring the operation of the Labor-Management Relations Act of 1947. Labor leaders see in a labor-disputes board a method of directly bypassing the national emergency section of the Labor-Management Relations Act and indirectly nullifying other provisions of that law. Organized labor's philosophy is succinctly put in this

1 See excerpts in bold type in text of United Labor Policy Committee's Statement to President Truman on Mobilization and Stabilization-Appendix A.

quotation from the United Labor Policy Committee's statement issued January 11, 1951:

“Labor-management stability is essential to an effective wage-stabilization program. The Taft-Hartley Act, in the past. has impeded such stability by encouraging employers to resist the democratic process of free collective bargaining. If this act remains on the statute books it can only continue to create discord and disputes and further impede labor-management efforts to achieve stability. It is fundamental, therefore, to industrial stability and hence to a sound wage-stabilization policy that the Taft Hartley Act be repealed.”

It is obvious that a governmental disputes board is regarded by organized labor as a practical equivalent of success in its drive to repeal the Labor-Management Relations Act.

LABOR'S PROGRAM OF NONCOOPERATION

The record demonstrates the attitude of labor members of the Wage Stabilization Board with reference to wage stabilization. Since they refused to sign any wage-stabilization order, the general wage freeze announced on January 26, 1951, had to be issued over the signature of the Economic Stabilization Administrator. Following the general wage freeze, continuous discussions were held within the Wage Stabiliaztion Board in an effort to liberalize wage stabilization so as to eliminate time inequities and other major inequities while maintaining an effective wage-stabiliaztion program. These discussions culminated in the development of regulation 6, which provided, in general, that companies whose employees had not had a 10 percent general wage increase since January 1950 could make general increases up to that level. The figure of 10 percent was considerably higher than the increase in the cost of living from January 1950 to February 1951.' The industry members of the Board had recommended a figure of 8 percent. The labor members had recommended a figure of 12 percent, but permitting escalator clauses in existing agreements to operate without limitation. The 10-percent figure was, therefore, a compromise figure reached by the public and industry members.

Regulation 6 by its own provisions was intended to operate only until July 1, 1951, and section I of the regulation provided that the policy of that regulation was to "be fully reviewed and reexamined before" that date.

The labor members not only dissented from this recommendation of the Board, but also resigned in a body on February 16, 1951, and their resignation was subsequently converted into a general labor boycott of the Nation's mobilization program by the resignation of labor members from other agences of the Government's mobilization program on February 28, 1951.

With the resignation of the labor members, the operation of the Wage Stabilization Board came to a full stop, except that the staff of the Wage Stabilization Board could continue to process cases in accordance with policies previously effectuated by the Wage Stabilization Board. The Economic Stabilization Administrator subsequently further liberalized wage-stabilization policies by issuing regulations 8, 9, and 10 which, among other things, permitted certain cost-of-living escalator clauses to operate even if they resulted in general wage increases exceeding 10 percent. But the labor members of the Stabilization Board refused to return to the Board.

ATTEMPTS TO RECONSTITUTE THE WAGE STABILIZATION BOARD

Immediately after the announcement of the general stabilization formula incorporated in regulation 6, cases arose in which labor and management agreed upon wage increases apparently exceeding the ceiling and which could not be put into effect because they were not permissible under established wage-stabilization policy. Neither could the Wage Stabilization Board consider whether an exception should be made in these cases or whether the stabilization policy should be modified because the Board's operation had been disrupted by the walk-out of the labor members and their continued refusal to sit on the Board. In the meantime, agreements reached in the railroad, shipbuilding, meat-packing, and textile industries, among others, which exceeded existing wage ceilings, could not be processed and, in some cases, strikes were called not because of any real dispute with the employer, but because the employer was prohibited by wage-stabilization regulations from paying the full wage increase agreed

1 According to the official statistics of the Bureau of Labor Statistics, the Consumers' Price Index during this time indicated a rise of 8.8 percent.

83762-51-pt. 2—11

upon. During all this time, it is obvious that the leaders of organized labor had adequate recourse if they had been prepared to resume their places on the Wage Stabilization Board and abide by majority decision. They chose, however, by means of vituperation, malicious innuendo and downright untruths to seek to convince the American people that organized labor was the victim of a deliberate conspiracy between the industry and public members of the Board and the Director of Defense Mobilization.1

INDUSTRY'S EFFORTS TO SOLVE THE IMPASSE

Immediately after the walk-out of the labor members, a long series of conferences were held between representatives of labor and the Government and between representatives of industry and the Government. Sincere efforts were made by industry to find a formula which would be acceptable to organized labor so that the Wage Stabilization Board could resume operation. However, it appeared that the real crux of the situation so far as organized labor was concerned was its determination to convert the Wage Stabilization Board into a governmental labor disputes board.

During all of these many negotiations, there was no indication that labor would return to the role offered it in the mobilization program if the wage formula were revised: among a long list of far-reaching demands, the only one pertaining to wage stabilization appeared to be organized labor's insistence upon the conversion of the Wage Stabilization Board into a labor disputes board. In a sincere effort to meet the labor viewpoint, the representatives of business organizations-namely, the National Association of Manufacturers, the Chamber of Commerce of the United States, and the Business Advisory Council to the Secretary of Commerce-unanimously submitted a compromise proposal to the Economic Stabilization Administrator on March 14, 1951. That counterproposal, attached to this statement as appendix C, agreed to the labor proposal that the Wage Stabilization Board be enlarged to 18 members. This management proposal agreed that the reconstituted Board should have the authority to recommend wage-stabilization policy, subject only to approval or rejection of the Economic Stabilization Administrator. The management groups, however, objected to consideration of any nonmentary or noneconomic issues by the reconstituted Wage Stabilization Board or by any other new board. It was proposed that the Wage Stabilization Board might hear interested parties on matters growing out of or directly related to the stabilization program and involving economic or monetary issues only in order to interpret and rule on the application of existing policies, to change existing policies, or adopt new policies. It was made clear that the Board was not to consider any case in which a strike was in progress and was not to make exceptions to existing policies for particular cases. This proposal on the part of the united management representatives was rejected by the spokesmen for organized labor.

Further conferences were held and the management representatives sought to meet labor proposals while avoiding the establishment of a governmental labordisputes board.

At a final meeting held on April 17, the management members made the following proposal:

1. That the Wage Stabilization Board shall be enlarged to an 18-man tripartite board, with 6 representing the public, 6 representing management, and 6 representing labor, with authority limited to the formulation and recommendation of wage-stabilization policies, and their interpretation and administration. The Board may adopt such procedures as it deems necessary to clarify questions or disagreements arising out of the meaning and application of established wagestabilization policies in effect.

2. That the Board be requested immediately to review and examine existing wage-stabilization policies with a view to making such recommendations for general revision or additional policies as current economic conditions or wagestabilization issues raised in pending cases may warrant, consistent with the provisions of the Defense Production Act.

3. That with respect to disputes other than questions and disagreements about the meaning and application of wage-stabilization policies, no further steps toward the establishment of a special dispute-settlement agency should be taken, as existing law and procedures are entirely adequate.

This proposal, while it would have permitted complete review of existing wagestabilization policies, was likewise rejected by the labor members, who continued their boycott of Government mobilization agencies, including wage stabilization.

1 See direct quotations from labor publications and spokesmen, appendix B.

EFFORT TO GAIN MANAGEMENT ACCEPTANCE OF LABOR PROPOSAL

In the meantime, the Economic Stabilization Administrator undertook to obtain the assent of business groups to labor's insistence upon the establishment of a labor-disputes board. The Administrator consulted with representatives of the National Association of Manufacturers, the Chamber of Commerce of the United States, the Committee for Economic Development, and the Business Advisory Council. The business representatives were united in their opposition to the establishment of a labor-disputes board.

Finally, apparently at the insistence of organized labor, the President set up a National Advisory Board on Mobilization Policy of 16 members "of outstanding experience and ability." This Board was established by Executive Order No. 10224 "to represent the general public and the public interest," and included members with various kinds of experience, including four members with experience in business management. This Board, under the chairmanship of the Dircetor of Defense Mobilization, held three meetings. The members of the Board were not selected because of any special background or experience in labor-management relations.

The first problem assigned to the Advisory Board was the question of reconstituting the Wage Stabilization Board. At the April 12 meeting of the National Advisory Board on Mobilization Policy, the members with experience in business management made it clear that they were participating in the Board's deliberations in their individual capacities and not as representatives of specific business organizations. They emphasized that their participation on the Board would be in accord with the Executive order creating the Board which required that each member "shall represent the general public and the public interest." They made it clear that the National Advisory Board was not a labormaangement conference and that they did not attend the meeting as delegates to such a conference or to enter into agreements in behalf of any organizations of which some of them happened to be officers.

At its third meeting, on April 17, the industry members of the National Advisory Board on Mobilization Policy were presented by the labor members with a formal document containing labor's proposal for reconstituting the Wage Stabilization Board as a disputes-settling agency. The document was entitled "Memorandum of Agreement," and the document began with these words: "Labor and management have this day * * concluded the following agree

ment * * "It will be recalled that title V of the Defense Production Act authorizes the President only "to take such action as may be agreed upon" in any labor-management-public conference, initiated by the President. The conclusion was inescapable, that an attempt was being made to use the National Advisory Board on Mobilization Policy as a labor-management conference, despite the fact that the members had been appointed "to represent the public and the public interest."

Subsequent developments further led to the conclusion that a deal had been made. When the members with experience in business management refused to sign the agreement proposed by the labor group, the National Advisory Board, at its April 17 meeting, recommended to the President, by a vote of 12 to 4, that the Wage Stabilization Board be enlarged and empowered to assume jurisdiction of any labor dispute referred to it jointly by the parties or certified to the Board by the President of the United States. This recommendation was made over the unanimous dissent and opposition of those members of the Board who were selected because of their experience in business management. The President on April 21 issued an Executive order reconstituting the Wage Stabilization Board as a disputes-settling board, despite the fact that the President had never initiated a labor-management conference to discuss the settlement of disputes as authorized by title V; despite the fact that the President was given no authority except "to take such action as may be agreed upon in any such conference;" and despite the fact that business had, in the public interest, continuously and consistently exposed the establishment of such a governmental disputes board and continues to do so now.

POWER TO "RECOMMEND" AND POWER TO COMPEL

It will be argued that the present Wage Stabilization Board is not the equivalent of the War Labor Board of World War II fame. After all, the Wage Stabilization Board is only given the power to "recommend," unless the parties agree to be bound by the Board's decision. It will be recalled that, despite the extensive power exercised by the War Labor Board, despite its numerous orders