policies, and the question might arise. But I don't think that is particularly important. As it stands employers should not be permitted, or any of their agents, to initiate or participate in or supervise in the formation of the constitution, bylaws, and governing rules. Just how would the employer like it if the A. F. of L. or the Railroad Brotherhoods insisted that the trade associations that they belonged to shall have a certain constitutional provision that the unions insist on? They would say, "It is rotten, it is unfair, it is none of your business." Certainly it is none of the employers' business as to what kind of constitution the employees have for their own organization. I agree also that that proviso about discrimination, beginning on the twenty-fifth line, ought to go out.

Now one thing about the constitution of the board. Mr. Beyer pointed out, what is a very important thing, that this board would have to enforce a law; therefore, the suggestion that the board have partisan representation on it, from the point of view of half labor and half capital, with an impartial chairman, is essentially wrong from an administrative point of view. If the law is to be enforced, the person has to represent the Government only. He is sworn to see that the law is enforced. Now when you have a bipartisan board enforcing a law, they cannot get away from the idea that they have been fighting it out in Congress, to see what should get into this law. Now you know how they fought on section 7 (a). The same people that were fighting on that will get into the bipartisan board to administer the law, with the result that they will continue their scraps that presumably were settled by Congress, and the result is that you will get a confused enforcement of the law, and there will often be a compromise on how far they will go in enforcing the law.

Senator DAVIS. Wasn't that the trouble with the old Railroad Labor Board?

Dr. LEISERSON. That is why the old Railroad Labor Board collapsed.

Senator DAVIS. That is right.

Dr. LEISERSON. Therefore I think it is a mistake. Now it may be all right to put on advisory boards of employer and employee representatives, of employer and employee organizations, for the purpose of informing the Government officials on detail problems in various industries, to sit as advisory members from time to time, but to put the enforcement of the law into a bipartisan board, is, in my judgment, a very serious mistake from an administrative point of view.

On the other hand, this same board is going to have functions of conciliation, arbitration, the administrative machinery of election. That is part of the enforcement. It belongs together. They may have elections, sometimes they may have to certify these employees. If there is a strike in a plant where a thousand people are working and 900 go out, you do not have to have an election to determine what the 900 want. They are telling you. It is silly to go through the election business then.

Now, I do not quite agree with Mr. Beyer's suggestion that all of the conciliation work should be thrown back to the Department of Labor, and that the board should have no conciliation function. I think the United States Conciliation Service in the Department of Labor needs to be strengthened, and most of the smaller disputes

Senator WAGNER. Before you leave that subject, I might call attention to some testimony in this way automobile situation which was adduced on the same question. I asked the representative who had been selected by the company union whether he had anything to do, together with the other representatives, in the fixation of the wages that were being paid, and he said no. I asked him if he and his committee had ever attempted to negotiate a collective bargaining agreement on behalf of the workers, and he said no.

Dr. LEISERSON. Usually they do not. They merely elect representatives in this way. Of course the employee representative whose job depends on the employer, especially at a time like this, with so many people out of work, he isn't going to talk to the employer like a high-powered salesman, nor is he going to talk to him like the wage experts and personnel experts, outsiders, who do not belong to the industry at all. They go to colleges and hire psychologists as personnel managers to deal with the ordinary workman, then they turn around and say, "You workmen are not allowed to hire a fellow like we hire, to bargain with us. We do not think we want it. We think it will give somebody a monopoly of labor if you do that sort of thing."

Now the next thing, subsection (3) says the employers shall be prohibited "To initiate, participate in, supervise, or influence the formation, constitution, bylaws", and so on. Now that is absolutely necessary because of what I have just shown you here in this plan. There was a conference at Princeton University this last summer where the personnel managers of the largest industries got together for what, in my judgment, was to work out plans for circumventing this law. I was there at the meeting and I questioned the morals of that kind of a meeting. Can these people get together to work out a form of representation and then spread it throughout the country, impose it on the employees, and then publish statistics about the growth of employee representation plans? But they answered me, and they were sincere in their answer, that "The law gives us the right to educate our employees. It does not prohibit it. We are merely trying to assist them."

Now unless you put this in, to prohibit any such activity, you cannot expect common wage earners, who are not college men, to compete with these trained executives, hired by the companies at high salaries, in having their rights protected, and it is that lack of protection of right that causes disputes, strikes, and unrest; it is that kind of unfair dealing and not some outsider.

I have not found anywhere where an employer said to the employee, "You go ahead and organize your own union. Call in the A. F. of L. fellows, call in the company union fellows, call in anybody, it is none of my business; you go ahead and organize your own union", I haven't found in any such places any great unrest. The employees have sometimes joined A. F. of L. unions, sometimes voted down A. F. of L. unions, and set up their independent unions, but it was their own and the purpose of this law is to see that they have that. Senator DAVIS. Doctor, have you got any suggestions as to the language to be used in this particular section?

Dr. LEISERSON. I think on the whole the language here is all right. I think you might leave the word "policies" out, for instance. An employer might want to discuss with an employees' organization,

policies, and the question might arise. But I don't think that is particularly important. As it stands employers should not be permitted, or any of their agents, to initiate or participate in or supervise in the formation of the constitution, bylaws, and governing rules. Just how would the employer like it if the A. F. of L. or the Railroad Brotherhoods insisted that the trade associations that they belonged to shall have a certain constitutional provision that the unions insist on? They would say, "It is rotten, it is unfair, it is none of your business. Certainly it is none of the employers' business as to what kind of constitution the employees have for their own organization. I agree also that that proviso about discrimination, beginning on the twenty-fifth line, ought to go out.

Now one thing about the constitution of the board. Mr. Beyer pointed out, what is a very important thing, that this board would have to enforce a law; therefore, the suggestion that the board have partisan representation on it, from the point of view of half labor and half capital, with an impartial chairman, is essentially wrong from an administrative point of view. If the law is to be enforced, the person has to represent the Government only. He is sworn to see that the law is enforced. Now when you have a bipartisan board enforc ing a law, they cannot get away from the idea that they have been fighting it out in Congress, to see what should get into this law. Now you know how they fought on section 7 (a). The same people that were fighting on that will get into the bipartisan board to administer the law, with the result that they will continue their scraps that presumably were settled by Congress, and the result is that you will get a confused enforcement of the law, and there will often be a compromise on how far they will go in enforcing the law.

Senator DAVIS. Wasn't that the trouble with the old Railroad Labor Board?

Dr. LEISERSON. That is why the old Railroad Labor Board collapsed.

Senator DAVIS. That is right.

Dr. LEISERSON. Therefore I think it is a mistake. Now it may be all right to put on advisory boards of employer and employee representatives, of employer and employee organizations, for the purpose of informing the Government officials on detail problems in various industries, to sit as advisory members from time to time, but to put the enforcement of the law into a bipartisan board, is, in my judgment, a very serious mistake from an administrative point of view.

On the other hand, this same board is going to have functions of conciliation, arbitration, the administrative machinery of election. That is part of the enforcement. It belongs together. They may have elections, sometimes they may have to certify these employees. If there is a strike in a plant where a thousand people are working and 900 go out, you do not have to have an election to determine what the 900 want. They are telling you. It is silly to go through the election business then.

Now, I do not quite agree with Mr. Beyer's suggestion that all of the conciliation work should be thrown back to the Department of Labor, and that the board should have no conciliation function. I think the United States Conciliation Service in the Department of Labor needs to be strengthened, and most of the smaller disputes

that come to the National Labor Board should be handled by them in the first instance.

There are hundreds of small disputes where a conciliator goes out, and he can settle them without any trouble. But when a big dispute comes along, it is not on the enforcement of the law, it is a dispute over and above the law, you need to have, in that case, the next step after the conciliator fails, because the job is too big. At that point the prestige of a national board, in my judgment, might well be enlarged this way: You have three members, then have the Secretary of Labor and Secretary of Commerce as ex-officio members, because this isn't the Labor Department work, this isn't the Department of Commerce work, it is where the two get together, and this national Board, with its prestige, can have examiners to hear cases, or their own members can act as examiners, or themselves act as conciliating bodies, in the bigger disputes.

Now only one thing more in conclusion, and that is with respect to the absolute need for this law, especially the provisions of section 5, having to do with the unfair practices, the absolute need for that in the recovery program, if it is going to succeed. The recovery program gives the right

Senator DAVIS. Will you make the first part of your statement again, Doctor?

Dr. LEISERSON. All right. In conclusion I want to point out the absolute need for the enactment of this act, especially of section 5, that is the one prohibiting unfair labor practices and while I am on that, there ought to be one more thing: Prohibiting the use of spies in labor disputes.

You will find the codes have a provision, many of them, the steel code, particularly, has a provision that no member of the code shall employ anybody to get secrets from a competitor. The Secretary of Labor very properly pointed out at the public hearing on that code that employers will use spies to get business secrets from each other; they will not hesitate to use spies in labor organizations. And there is nothing that causes unrest so much as when I, a workman at my bench, do not know whether the other fellow at the next bench is a spy employed by the employer. That is an unfair practice, whether it is labor or business, and you might well include that with the list of unfair practices.

Now the code gives the right to competing employers to get together and make rules of fair competition, which include pricefixing in many cases.

Now there are two great dangers. One is that they will have a monopoly, they will make a monopolistic rule. So the law specifically prohibits monopolistic rules with respect to pricing. But when employers get together they also make monopolistic rules with respect to wages, they decide what the wages shall be among themselves, they bind themselves not to pay anything else, and then turn around and say, "We will not recognize an organization of the employees." They say, "They must compete with us individually." And all the cutthroat competition is good when it comes to labor.

Now look what the Government does. This is Bulletin No. 7 of the National Recovery Administration Manual for the Adjustment of Complaints, and on page 4 the Government tells the world, "It

46652-34-PT 1- -16

is the policy of N.R.A. to build up and strengthen trade associations"; that is, trade unions of employers. If anybody wrote that it is the policy of the Government to build up trade unions, that fellow would lose his job right away. As if there was something wicked about building up a trade union? "It is the policy of the Government to build up and to strengthen trade associations", which means trade unions of employers, "throughout all commerce and industry." In other words, to set up a monopoly like the automobile members say the A. F. of L. is a monopoly, through all commerce and industry, you are going to have trade unions of employers so that they may perform all code administrative functions, they may get together and act as a unit.

Now it is well to recall what that canny Scotchman, Adam Smith, said, that "We must never let either employers or laborers combine", he said, "for it is well known that when business men get together, even for merriment and diversion, the conversation soon turns to prices and ends in a conspiracy against the public." I think there is a great deal of truth in that statement. On the other hand, we cannot get along nowadays with that kind of a suspicious attitude, either toward business or toward labor. We cannot have the kind of competition that Adam Smith wanted, the cutthroat, raw, he-man competition that he wanted. We have got to have regulated control of competition, and the Government properly so provides. Then it goes on to say, "A trade association division has been established in N.R.A. to carry out this policy and to advise and assist industry in the performance of these functions." The Government spending the taxpayers' money to help organize trade unions of employers.

Now the law specifically contemplates that the Government will do the same for labor, and we seem to forget that there is a section 7 (b) in the National Recovery Act.

Senator DAVIS. What is the number of the Government bulletin that you read?

Dr. LEISERSON. That is no. 7, Manual for the Adjustment of Complaints, of the N.R.A.

Now, section 7 (b) of the National Industrial Recovery Act instructs the President to exert his efforts and by the President, of course it means the Administrators under him-to help employers and employees to arrange collective bargains and make agreements. Now, that was the purpose of it. Now, the employers come along and brazenly tell you, "We will not deal with any organization of our employees. We will not recognize their right to an association and to deal with that association as an entity", when the law contemplates it. Now, if you tell them that they are violating the law on that point, they say, "No; there is nothing in here that requires us to negotiate an agreement." Therefore, you have got to have this provision in the act, that they must exert every effort.

There is nothing to prevent us from doing these other things, therefore you have to put these lists of unfair, prohibited practices into a law, and if you do not, I think the danger to the whole program of National Recovery is that you will not have industrial self-government. The theory of industrial self-government, as I have tried to explain to employers, is, "You have a right to govern yourselves, but doesn't the law give the employees the same right to govern themselves and make rules of fair competition among themselves?" "Oh, no; the law does not do that", they say.