Senator ELLENDER. You have always given labor an opportunity to bargain with you? Mr. PRENTIS. Whenever they wanted to, absolutely. Senator DAVIS. The Armstrong Cork was never organized, except here and there with special workers, like I remember in Allegheny, when they used to be there, the coopers were organized. Mr. PRENTIS. We encouraged the formation of so-called shop committees 25 years ago, as a means of this interchange of ideas. It was not an organization in the sense of a labor union, but it performed the functions of a labor union. They did not have a written agreement, but anything those men wanted to bring up they could do so at specific intervals. I think it was every fortnight that they had the meetings. Senator ELLENDER. Such a law probably had to be put on the statute books. If all of the men did what they ought to do the chances are there would not have been any agitation for such a law as this, but you have a few in the minority who have been opposed to collective bargaining and in my opinion they brought about this law. Mr. PRENTIS. There is no doubt about that at all. Senator ELLENDER. What is that? Mr. PRENTIS. There is no doubt but what you say is absolutely true. Whenever you get tensions created beyond a certain point, inevitably they break through and then the pendulum swings too far in a given direction. All I am pleading for is to try to see if we cannot get the pendulum to come back to balance, Senator. Senator ELLENDER. Yes. Mr. PRENTIS. Rightly or wrongly, the average businessman feels that the National Labor Relations Act as presently constituted is unjust to the businessmen. Whether it is true or not, that is what I know he feels, and that that is hindering expansion to some extent. That is not the only factor. After all, this is the thing we talk a lot about, unemployment. As I read history, we have got a lot of big industrial organizations in this country, but, my God, they never can hope to absorb all the unemployment that exists. As business gets good, these organizations will take on more people, but where has unemployment really taken place? How have the people in the past found employment? They found employment from a constant stream of new business enterprises. That is the tragedy in the past 10 years, in my opinion, that we have not started enough new enterprises. All of this legislation, gentlemen, and I am not speaking of the Wagner Act, I am speaking of all the legislation, with the objective of which in 99 cases out of a hundred I am personally in sympathy, but it bears hard on the small enterprise and the new enterprise. Take Lancaster, Pa., where I have lived for the last 2 years, Woolworth started his 5-and-10-cent store in 1878, and you remember old man Heinz, they say he used to start early in the morning to peddle his product. Senator DAVIS. My mother-in-law used to know Heinz when he went around with a wheelbarrow selling horseradish to hotels. Mr. PRENTIS. Yes; and they say Ford started off in the livery stable. It is the little contractor who may start out now and he may become a great big building concern that would build the new art gallery 50 years from now. That has been the history of American enterprise. To give you an idea of what a man has to do who starts in business today, he has not only got to buy the material, manufacture and sell it, meet the pay roll, but he has got to be something of an expert in the field of labor relations, health and safety requirements, workmen's compensation, the Robinson-Bacon Act, security legislation, reciprocal trade treaties, tariffs, local, State, and Federal taxation, and so forth. You take a fellow who has got to do all those things, he will tell you it is a big job. Really speaking seriously now, you take in this country, our own institution is not the biggest company in the United States by a long shot, but if we have got to make 100,000 social-security reports or eleven-hundred-some-odd tax returns, which were the actual figures last year, I do not think I could make them out. I do not have to take a half an hour to make sure that some fellow does not perform sweatshop labor, does not work half an hour overtime, and that we do not get stuck for it-we want to observe the law-I do not have to do that, we can hire people, and even though it is costing us tens of thousands of dollars a year to keep up the record, we have to do it. I want to tell you it adds a devil of a lot to our burden. We are decent citizens and we want to operate within the law. When you add to all of those things that you have got to do the fear of injustice from public authorities, the fear of domination by some great, powerful, important union because you have a small manufacturer or a small businessman, I want to tell you he is at a terrible disadvantage when it comes to dealing with big, powerful labor unions, just as much disadvantage as some struggling manufacturer when he is competing with some big manufacturer. I think I have said enough to make clear to you that I am not opposing the principle of collective bargaining. I do not want any chance of being misunderstood there, but is it any wonder, under the conditions I described, that enterprise tends to lag in this country? It is not any wonder at all. I just make this earnest plea not for the large manufacturer but for the new enterpriser and for the small business, so that you gentlemen that have this tremendous power in your hands will think in terms of that small man and give him the utmost chance, and you can do that, with just the minimum amount of necessary umpiring-that is the word I like to use-not control or to take a part in the game. The umpire does not get into the game himself. Whenever the Government becomes a player in the game then enterprise tends to shrivel up. I merely want to say in conclusion, after a review of all of the facts, and particularly this recital about the small man, that the adoption of the Smith amendments would have a very heartening influence even though they did not go far enough, they would have a very heartening influence at this moment in our country's history. I certainly appreciate the kindness, the courtesy, and patience that you have shown in this general discussion of mine. Those are my general observations, and Mr. Gall, who is the general counsel, as you gentlemen know, of the N. A. M., will discuss the specific details of the amendments at any time you see fit. Senator ELLENDER. The committee will be in recess until 10:30 tomorrow morning. (Whereupon, at 12 noon, a recess was taken until the following day, Wednesday, August 21, 1940, at 10 a. m.) TO AMEND THE NATIONAL LABOR RELATIONS ACT WEDNESDAY, AUGUST 21, 1940 UNITED STATES SENATE, EXECUTIVE SESSION Washington, D. C. The committee met, pursuant to recess, at 10:30 a. m., in the committee room, Capitol Building, Senator Elbert D. Thomas (chairman) presiding. Present: Senators Thomas (chairman), Ellender, Taft, Davis, and The CHAIRMAN. We will be glad to have you proceed, Mr. Gall. STATEMENT OF JOHN C. GALL, COUNSEL, NATIONAL ASSOCIATION OF MANUFACTURERS Mr. GALL. Mr. Chairman and gentlemen of the committee, we appreciate your invitation to us to present our views with respect to the Smith bill, H. R. 9195, to amend the National Labor Relations Act. You will perhaps recall that I appeared before your committee on June 19 and 20, 1939, at the time you were holding hearings on bills introduced by Senators Burke, Walsh, and Holman, all proposing amendments to the National Labor Relations Act. My testimony appears in part 11 of your printed hearings, from page 2024 to page 2174, inclusive. At that time I presented and discussed in detail various amendments to the act suggested by the National Association of Manufacturers. I also discussed at considerable length, particularly in response to questions from the committee, the Board and court decisions which in our view supported the amendments we suggested. In fairness to the committee, I should also point out that Mr. Charles Fahy, general counsel of the National Labor Relations Board, later submitted to the committee a statement in answer to my testimony. His statement appears in part 23 of your printed hearings, at pages 4554 to 4578, inclusive. How adequately Mr. Fahy responded is, of course, a matter for the determination of your committee, but a careful review of our testimony and his answer leaves us convinced of the soundness of our original position. I have no intention of consuming the committee's time by repeating the testimony then given or entering upon a detailed discussion of specific cases. The present invitation of your committee is that we express our views with respect to the provisions of the Smith bill, which passed the House of Representatives by an overwhelming vote on June 7, 1940 (Congressional Record, p. 11812). At the time we were before your committee in 1939 we expressed the firm conviction that the act should be amended and that the Burke bill, S. 1264, was the nearest approach to a substantial legislative remedy yet proposed. We are still of opinion that the Burke bill is preferable to any other measure yet introduced, but we think the Smith bill is constructive, that it promises substantial improvements in administration, and that it should be adopted. We would not take the position that the Smith bill is perfect or that there may not be some details that could be changed to advantage, but the bill as a whole is definitely constructive from the viewpoint of the great body of American employers. As we see it, pretty much all legislation resolves itself into a question of alternatives, rather than a question of perfection. So on the problem of amending the Wagner Act the possible approaches are substantially these: (a) To do nothing. It is difficult for us to believe that Congress will adopt that alternative. Public opinion, including the opinion of labor as well as employers, is overwhelmingly favorable to amendment. This is evidenced by the large margin by which the House passed the Smith bill. (b) To recognize that the problem has changed fundamentally since 1935; that unions are no longer weak, poorly financed, struggling, but that many of them are powerful and well-enough financed that they can lend large sums for political and other purposes; that they have a capacity for harm as well as good; and that if they are to receive the benefits of protective legislation and administrative action, they must submit to reasonable regulations and restrictions in the public interest, and the interest of their own members. This approach, which is clearly supported by public opinion, as evidenced by the Fortune poll of May 1940 and the Gallup poll of August 10, 1940, is a realistic one. involves no denial of rights of employees, but it does recognize that the union, whether incorporated or unincorporated, is itself a legal entity; that organizing, promoting, and administering unions and their affairs is just as much a business as banking, financing, manufacturing, practicing any of the professions, or operating a chamber of commerce. It (c) The third alternative is to take the view that most of the defects exposed during the numerous hearings before your committee, before the House Labor Committee, and particularly before the Smith committee, are defects of administration, and that they can be cured by changes in personnel and minor safeguards against recurrence of administrative abuses. That is the method followed by the Smith committee. The Smith bill changes no fundamental provisions of the Wagner Act. It places no restraints on labor organizations. The only provision even tending in that direction is one limiting the Board's power of reinstatement of employees engaging in acts of willful violence, which I shall discuss later. The Smith bill does not challenge in any degree the right of employees to self-organization and collective bargaining. So the Smith bill, in our opinion, is far more moderate in its approach to the problems disclosed by the investigation than might have been expected, or than would have been sustained by a growing public demand for restrictions along the lines of the British law. Nevertheless, because correction of administrative defects is an im portant phase of the whole problem, and because some congressional action at this time is so urgently desired, we support the major principles embodied in the Smith bill. I turn now to the specific provisions of the Smith bill as approved by the House of Representatives on June 7: 1. The first amendment of any consequence approved by the House is a change in the definition of the word "employee." Under section 2 (3) of the present law the term includes any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice. Several things should be noted about the present definition, as interpreted and applied by the National Labor Relations Board: (a) The status of employee is protected even though the cessation of work is entirely voluntarily and is in no way due to any unfair practice by the employer. (b) The term "current labor dispute" is not defined or limited, so that the employer is in jeopardy for an indefinite period if the Board decides later the dispute was "current" at the time of any alleged unfair practices by the employer. (c) The status of employee is protected by the Board even where the employee engages in violence and other unlawful acts, and the employee may be ordered reinstated with or without back pay. The only legal limitation on this discretion of the Board arises, not from the terms of the statute, but from the terms of the Supreme Court's opinion in the Fansteel sit-down strike case. As has been previously shown, and as the Smith committee pointed out in its report, the Board has placed a very narrow construction on the Fansteel decision-much narrower than would be warranted by the language of the Court. The House amendment to section 2, page 3-- Senator TAFT. Page 2, line 6. Mr. GALL. The House amendment is partial, but only a partial, remedy for this situation. In the first place, the House amendment does not undertake to define or limit the term "current." The only other House changes which effect any limitation are those providing time limits within which charges must be brought, and time limits on the period for which pay may be awarded. The proposed change in definition of the term "employee" has been severely criticized, particularly by the minority members of the Smith committee, as designed to turn "the Board into an overburdened Federal police court, charged with administering local regulations." They also attempt to discredit the proposed amendment by relating it to the familiar "coercion from any source" amendment. These criticisms are entirely unwarranted, as will appear from an examination of what the House amendment is and what it is not. (a) The amendment does not permit employer complaints, or independent Board proceedings, against employees engaging in "violence or unlawful destruction or seizure of property." The employee's misconduct may be raised only on the question as to the kind of order to be issued by the Board against an employer in an unfair labor practice case. |