Employees in the steel industry and in other industries in the United States are not ignorant and uninformed. They are entirely capable of judging what is for their own good and in their own interests. That is the theory upon which our democratic form of government is based-the principle underlying the right to vote in governmental elections. The employees know what is going on in their own and other industries, as well as in the country at large; they are familiar with conditions and have their own opinions on business and economic subjects. They are fully capable of determining for themselves whether or not their employer is attempting to interfere with, restrain, or coerce them in the exercise of their rights or is dominating a labor organization in which they participate. There is no reason, therefore, why the act should be so construed and applied as to interfere with the free choice of employees as to whether or not they shall be represented by any labor organization for the purposes of collective bargaining or as to the kind of labor organization, if any, which they shall elect to join.

It would be unfortunate, if the act could properly be so construed or applied as to discriminate against any form of labor organization that should be desired by employees, whether that organization be local or national. In many industries local organizations have proved to be most effective agencies for collective bargaining and have been a powerful factor in promoting good labor relations, improving the standards of the workers, preventing stoppages of work and promoting efficiency and economy. The act should not so operate as to discriminate against those organizations, nor should they be denied the benefits of the act, when they have been voluntarily chosen by employees as their representatives for the purposes of collective bargaining.

There is no reason why the act should be so applied as to prevent employees from selecting as a collective bargaining agency a local independent labor organization, rather than a national labor organization. Their free choice in that regard should be respected. To that end, suitable language should be inserted in the act to make it clear that nothing therein shall be so construed as to permit any discrimination between labor organizations, whether local or national, and to insure that effect shall be given to the desires of employees with respect to the agency which shall represent them for purposes of collective bargaining.

Senator DAVIS. Mr. Chairman, I have listened with interest to the gentleman reading that part of the statement. I didn't know there was anything in the Labor Relations Act that prevented you from having a local independent organization?

Mr. TOWER. I think, as a matter of rather common or general knowledge, that the administration of the act has been so handled as in effect to discriminate against local labor organizations, and in favor of the national labor organizations.

Senator DAVIS. I do not think there is anything in the act about a local independent organization.

The CHAIRMAN. Do you know of a case where the Labor Board has done anything to interfere with a local independent labor organization?

Mr. TOWER. My impression from statements which have been made and reports which have appeared from time to time in the press is that

the Board has discriminated against local organizations and in favor of the national organizations?

The CHAIRMAN. When and where?

Mr. TOWER. I am not prepared to cite individual cases, but I think it is a matter of fairly common knowledge or general impression that such has been the case.

it.

The CHAIRMAN. How did the Board justify its action?

Mr. TOWER. That the Board would have to answer; I cannot explain

The CHAIRMAN. It has before us justified many an action in which that charge has been hinted at on the basis of some sort of a collusive contract, for instance. That would be one justification, would it not, and on the basis that the union may not be independent. I doubt whether you can find a case where the Board has justified taking sides on the score that the union is national or is not national. Of course, if they did that, then, as Senator Davis has said, that would be contrary to the law. As I understand the law, there is no reference at all to national or local unions as such.

Mr. TOWER. The point that I am making is that the act should be so phrased as to make it impossible for the administration of it to lead to that effect.

Senator ELLENDER. Mr. Tower, what was the position of your institute when the Wagner Act was up for passage?

Mr. TOWER. The members of the steel industry at the time the act was before the Congress in 1935 appeared, I believe, before this committee to express the opinion that they doubted whether the act as phrased would guarantee the rights of self-organization.

Senator ELLENDER. As a matter of fact, the institute opposed the Wagner Act, did it not?

Mr. TOWER. On the ground that it would not accomplish the declared purposes, I think the statements made by representatives of the industry might have been so construed, but for the reason that I have explained that they doubted whether the act, as drawn, would protect the rights to self-organization and freedom of choice of representatives for collective bargaining, and I think the industry is of the opinion that the subsequent administration of the act, the operation of it, has fully justified those fears then expressed.

Senator ELLENDER. Did the institute offer any amendments at the time the act was being considered, as it is now doing?

Mr. TOWER. I think statements made before the appropriate committee pointed out the weaknesses in the act and the shortcomings, and the fears of what would happen.

Senator ELLENDER. When labor in the steel industry made a drive to organize, what was the position of the institute toward that drive? Mr. TOWER. I do not think that I understand your question.

Senator ELLENDER. What was the position of the institute when the steel industry attempted to unionize?

Mr. TOWER. I do not think the steel industry made any attempt to unionize.

Senator DAVIS. I think some part of the industry signed up on the regular organization basis, and others sort of opposed it, if I remember correctly. For instance, the United States Steel Corporation signed an agreement, and so did Jones & Laughlin and so did many of the other smaller concerns of the country.

Mr. TOWER. The institute had nothing to do with it.

Senator ELLENDER. As I understand it, the Republic Steel did not and a number of the other steel organizations did not go in on it.

Mr. TOWER. As I explained in the beginning of my statement, the institute has never undertaken to interfere, or concern itself rather with the individual relationships between an employer and his employees. It is for the individual company to determine for itself what form of relationship, if any, it shall have between the employer and the employees.

Senator ELLENDER. I have before me, Mr. Tower, an excerpt from an advertisement that was paid for by the institute when the employees in steel attempted to organize soon after the Wagner Act went into effect, and this advertisement, I am informed and the record shows, cost your institute $114,365.01. That testimony was produced before the Civil Liberties Committee, and the advertisement said, in effect:

To the public and the employees in the steel industry—a campaign to unionize the employees of the steel industry has been announced. In order that the employees and the public may know the position of the steel industry in the face of the threatened drive, the industry makes this statement, the American Iron and Steel Institute, that persons and organization not connected with the industry have taken charge of the campaign. There are many disturbing indications that the promoters of the campaign will employ coercion and intimidation of the employees in the industry and foment strikes. The objective of the campaign is the closed shop, which prohibits the employment of anyone not a union member. The steel industry will oppose any attempt to compel its employees to join a union or to pay tribute for the right to work. No employee in the steel industry has to join any organization to get or hold a job. Employment in the industry does not depend upon membership or nonmembership in any organization. Advancement depends on individual merit and effort. These are fundamental American principles to which the industry will steadfastly adhere. The steel industry believes in the principles of collective bargaining and it is in effect throughout the industry. The overwhelming majority of the employees in the steel industry recently participated in annual elections under their own representation plans and elected their representatives for collective bargaining. The elections were conducted by the employees themselves by secret ballot. One of the purposes of the announced campaign is to overthrow those plans and the representatives so elected. As the steel industry is recovering from 6 years of depression and huge losses, and the employees are now begining to receive the benefits of increased operation, any interruption of the forward movement will seriously injure the employees and their families and all businesses dependent upon the industry and will endanger the welfare of the country. The announced drive with its accompanying agitation for industrial strife threatens such interruption. The steel industry will use its resources to the best of its ability to protect its employees and their families from intimidation, coercion, and violence, and to aid them in maintaining collective bargaining free from interference from any source. American Iron and Steel Institute.

Do you recognize that advertisement?

Mr. TOWER. I do.

Senator ELLENDER. And I was correct when I stated that the Steel Institute spent $114,365 for that?

Mr. TOWER. I do not remember the exact sum, but if that sum is in the record, I assume it to be approximately correct.

Senator ELLENDER. Do you know how many newspapers carried that advertisement?

Mr. TOWER. I do not remember at this time; no.

Senator ELLENDER. My information is that 382 papers in 34 States including the District of Columbia, carried that advertisement. You would not deny that?

144458-39—pt. 9- 6

Mr. TOWER. NO; I would not deny it or affirm it; I don't remember the figure.

Senator ELLENDER. Who was the director of publicity for the Iron and Steel Institute, do you know?

Mr. TOWER. Mr. John W. Hill.

Senator ELLENDER. Is he connected with Hill & Knowlton?
Mr. TOWER. He has had that connection; yes.

Senator ELLENDER. What is that?

Mr. TOWER. He has had that connection; yes.

Senator ELLENDER. Is not Mr. Edgar S. Baufield connected with Hill & Knowlton?

Mr. TOWER. I am not well acquainted with the organization of Hill & Knowlton. My dealing has been entirely with Mr. Hill.

Senator ELLENDER. Do you know if that firm has ever tried to influence newspapers in carrying on its campaign and propaganda against the Wagner Act?

Mr. TowER. I would not be in a position to know anything about the activities of the firm as a firm.

Senator ELLENDER. You don't know anything about that?
Mr. TOWER. Nothing whatever.

Senator ELLENDER. I have some information to that effect which was produced before the Civil Liberties Committee in some hearings that it concluded some time ago. Do you know how much money was spent by the institute or how much money was paid to this firm of Hill & Knowlton by the institute in order to carry on its propaganda to which I have just referred?

Mr. TOWER. We have never given any firm any money to carry on any propaganda.

Senator ELLENDER. The record before me indicates $152,153.77 from 1934 to 1937.

Mr. TOWER. I have to countersign every check that is drawn against institute funds, and there has never been a check drawn to contribute in any form any sum of money for any propaganda.

Senator ELLENDER. Did the institute itself pay for this advertisement that I have just read?

Mr. TOWER. Right.

Senator ELLENDER. What is that?

Mr. TOWER. Yes; the institute paid for it.

Senator ELLENDER. Is that the only money that was paid by the institute for advertisements?

Mr. TOWER. To the best of my knowledge and belief; yes. Senator ELLENDER. And nothing was paid to Knowlton & Hill for propaganda purposes?

Mr. TOWER. None whatever at any time.

The CHAIRMAN. How do you account for the difference in the money that you paid for this advertisement and the amount of money you paid Knowlton & Hill? The items are not identical.

Mr. TowER. There is a certain fee paid to Mr. Hill regularly for his services as publicity director.

The CHAIRMAN. But not for propaganda?

Mr. TOWER. Not one cent of it.

The CHAIRMAN. I see. Then the money spent was for publicity purposes and not for propaganda?

Mr. TOWER. I do not recognize the sum to which Senator Ellender refers, the $152,000. I have no way of placing what that sum may be. Senator ELLENDER. These were figures taken from hearings which were conducted some time ago, and they form a part of our record. I think you were a member of the subcommittee, were you not, Senator Thomas?

The CHAIRMAN. Yes. Did not your institute issue model constitutions for organizations to follow by the various concerns?

Mr. TOWER. Not to my knowledge.

The CHAIRMAN. You have never seen one of those model constitutions?

Mr. TOWER. I am not sure that I know what you mean by a model constitution.

The CHAIRMAN. A constitution for the organization of an employees' union.

Mr. TOWER. Yes; I have seen copies of so-called employee representation plans. I believe that is what you refer to?

The CHAIRMAN. Yes. Your institute furnished those copies, did it not?

Mr. TOWER. No.

The CHAIRMAN. Who did?

Mr. TOWER. That I can't answer, not knowing the circumstances to which you refer.

The CHAIRMAN. Well, wouldn't it be perfectly natural if you spent a hundred-and-some-odd-thousand dollars to advertise a certain scheme, that probably some of the money would be used in giving the people who expected to fit into that scheme, a type of organization? Mr. TOWER. I am not sure that I understand your position with respect to the spending of money for the advertisement. The only spending of money for advertising was in connection with the advertisement to which the Senator has referred, and it seems to me that the points made in that advertisement are wholly consistent with the avowed purposes of the National Labor Relations Act, and to the points which I have been reading in this statement that I am presenting today, being solely to the point of insisting upon freedom from coercion from any source, and the individual rights of the employees to decide for themselves how they shall organize, if they elect to organize at all, and whom they shall select, if they wish to select anybody, as representatives for purposes of collective bargaining.

That advertisement speaks directly to the protection of the rights that are involved in the declared purposes of the act, as I understand the advertisement, and as I understand the National Labor Relations Act's declared purposes.

Senator ELLENDER. Mr. Tower, do you know whether or not the institute furnished any money to any organization in order to promote or foster company unions, or employee representation plans?

Mr. TowER. I believe there was a contribution of a comparatively small amount.

Senator ELLENDER. $3,500, wasn't it?

Mr. TOWER. Something of that order. I don't remember the exact amount, and I don't remember the exact date, but some several years ago, to a fund that was being raised by the National Association of