6, I cannot overemphasize how important these provisions are to safeguard the rights of workers for self-organization and representation through representatives of their own choosing. Article 3 states that it shall be an unfair labor practice for an employer or anyone acting in his interest directly or indirectly to

initiate, participate in, supervise, or influence the formation, constitution, bylaws, other governing rules, operations, policies, or elections of any labor organization.

We believe that that section as I have just read it or referred to it is in thorough accord with the letter and the spirit of section 7 (8) and section 7 (b) of the National Recovery Act. In other words, it is intended to give vitality and strength and reality to the provisions of section 7 (a) and the Senator has well drafted this section, and I imagine that it was drafted out of his experience as a member of the national labor board.

However, I wish to refer to a development which has taken place almost simultaneously with the preparation of this act. Company unions had been established upon the transportation lines of the Nation. These company unions had been organized by the railroad executives. They were fostered, financed, nursed, assisted, and in Imany instances administered by the representatives of the railroad executives. The situation was appealed to the commissioner of railroads. Commissioner Eastman, the Director of RailroadsSenator WAGNER. The coordinator of railroads.

Mr. GREEN. The coordinator of railroads. As the result of his study of the situation he issued the following order, and I think it is quite appropriate for me to read it for the record just now:

The history of the organization of many of the company unions

This is a quotation from a circular, an official document, a circular issued by Coordinator Eastman—

as disclosed in the carriers' answers to my questionnaire, points to the conclusion that they have not been duly designated and authorized to represent employees in accordance with the above requirements. Their organization appears to have been tainted in many instances with coercion or influence on the part of the carrier managements. They must be cleared of such taint if they are to meet the specifications of the Emergency Act.

The principle now embodied in the law, in short, is that railroad managements must keep their hands off, so far as labor organizations are concerned. That this principle is sound is not open to question, if we believe, as we must, that employees are free American citizens and not a menial class subservient to the employing class.

What a splendid argument in opposition to company unions!

Whatever may have been the attitude of employees in the past, it is plain that today they are prepared to insist upon the right to bargain and deal collectively with their employers upon equal terms. The provisions of section 7 (e) with respect to the railroads are paralleled by the provisions of the National Industrial Recovery Act with respect to other industries, and the latter provisions are recog-nized in the codes which have been and are being established. The same principles are implicit in the Railway Labor Act and in the Norris-LaGuardia Antiinjunction Act. They are principles which have, as aforesaid, been accepted by most railroads with respect to certain classes of employees and by some railroads with respect to all classes, and with good results.

Nothing will make for more dissatisfaction among railroad employees and affect their morale more adversely than attempts to undermine these sound principles, which are now a part of the law of the land. No practices retard the permanent improvement of labor relations and destroy the spirit of cooperation between men and managements more effectively than efforts to interfere with

free choice of labor ogranizations and representatives. No one factor leads more certainly in the long run to strikes and threats of strikes. Nor is anything more important to railroad rehabilitation and the future good of the industry than relations between employees and managements which will promote a more constructive and a less defensive attitude on the part of the employees and their organizations. The employees form the largest part of the industry and they can only prosper as it prospers, but this basic fact is often forgotten when the sound principles which the law now recognizes are denied and can be maintained only through struggle and strife.

To the end, therefore, that railroad labor practices may be brought into entire harmony with the law and the basis be laid for peaceful and cooperative labor relations, I offer for your consideration the following suggestions for action on the part of the railroads:

(1) That all carrier officers, subordinate officials, supervisors, and agents be advised by appropriate notice that influence, or coercion by them of employees with respect to membership or nonmembership in organizations of labor or choice of labor representatives, or any interference with such organizations, is illegal and will not be tolerated; and that employees who exercise their right to join or not to join a labor organization, or who legally solicit membership in such an organization or who discontinue membership in or cease to pay dues to a labor organization must not in any way be cautioned, reprimanded, threatened, penalized or otherwise subjected to pressure or discipline because of such action or nonaction.

(2) That all employees be advised by appropriate notice posted on bulletin boards and distributed generally that, in accordance with the provisions of section 2, paragraph 3, of the Railway Labor Act and paragraphs (o), (p), and (q) of section 77 of the Bankruptcy Act as amended March 1933, which paragraphs were by section 7 (e) of the Emergency Railroad Act, 1933, made applicable to all carriers by railroad, they are free to join or not to join any labor organization and will in no way be penalized or prejudiced by the management because of their choice.

(3) That those railroads which have at any time in the past required any employees as a condition of employment to sign a contract or agreement to join or not to join a labor organization, notify their employees by an appropriate order that such contracts or agreements have been discarded and are no longer binding in any way.

(4) That all railroads cease in any way to contribute financially to the support of any labor organizations or pay the salaries, wages, or expenses of any labor or employee representative while engaged on behalf of employers in carrying out the purposes of the railway labor act, except in the case of members of local shop committees who work regularly at their trade and who, by virtue of a written rule included in a labor contract protected by the proviso of section 10 (a) of the emergency act, are not to suffer loss of time when they meet with the local shop supervisors or officials on company time for the purpose of handling a local grievance matter.

(5) That those railroads which retain any control over the constitution and bylaws of any labor organization, or whose officers, subordinate officials, supervisors, or agents participate in the process of selecting representatives of employees in connection with labor agreements or disputes, withdraw from all such participation or control.

(6) That those railroads which now extend special privileges exclusively to the members of any labor organization, such as group insurance or contributions to relief funds, either make such privileges available to all employees concerned or cease extending them only to the member of such labor organization.

(7) That those railroads which now audit the accounts and books of labor organizations or act as agents for labor organizations for the purpose of collecting or assisting in the collection of their dues and fees, discontinue providing these services to such labor organizations.

In submitting this matter for your consideration, I do so in the hope and belief that compliance with the law can be assured by voluntary action of the railroads, and I am confident that only good results will flow from such voluntary action.

There is a splendid argument in support of the Wagner bill. That prohibits the representatives of the railroads from doing the very things that you say the management of private industries shall not do, and if this ruling made by Coordinator Eastman, which I under

stand is in accordance with the law, is good for the railroads of the Nation, for the transportation industry, then I say to you that the Wagner bill is good for private industry. It will abolish abuses. will make men free. It will prevent them from being subjected to the membership in a union, a company union, against their will. will eliminate this contantly rising feeling of discontent in the minds of the workers which ultimately must develop into an industrial conflagration. And I say to you, my friends, and I say it in all seriousness and with a full sense of my personal responsibility, that industry in America is, as it were, undermined by a volcano of industrial discontent, and the responsibility is directly traceable to the employers of the Nation, who have in a short-sighted way imposed, if you please, company unions upon the workers of the Nation. They resent it. They hate it. They are against it, and not only will there be strikes in the automobile industry, not so much against wages as against the company unions, but it will spread to steel and other industries of the country, unless the greedy hands of these employers are restrained.

Now may I refer just briefly to the growth of company unions. The growth of company unions in the past few months is ample proof of employers' activities in initiating and supervising these pseudo-labor organizations. First, let us examine the numerical growth of the company union. There is just one bit of statistical information on this subject, the report of the National Industrial Conference Board on Individual and Collective Bargaining Under the N.I.R.A., published in November 1933. This report is obviously a study of a sample of the larger companies in manufacturing and mining in this country. It is a sample large enough to be representative, however, including reports from over 3,300 companies, among the companies with a capitalization of $500,000 or more, representing an aggregate employment of 21⁄2 million wage earners, or approximately 27 percent of the estimated total number of workers now employed in manufacturing and mining. Although the sample is large enough to be representative, no one would suppose that it is an unbiased sample. The interest of the National Industrial Conference Board all these years in company unions would indoubtedly lead its member companies to respond to its questionnaire, while the same reputation would undoubtedly cause some more broad-minded companies to throw the questionnaire into the waste basket promptly. That the conference board assumes that 1,164,000 represents all the workers covered by employee representation in the country and not 27 percent of them is illustrated in its method of computing increase. Its June study, which purported to be a survey and not a sample, found 433,000 members of company unions in manufacturing and mining. This figure is compared with the 1,164,000 to show an increase of 169 percent between June and November in the wage earners in manufacturing and mining industries covered by employee representation plans.

That is significant. Between June and November, immediately following the application of the National Industrial Recovery Act, the development of company unions in industry began, and between June and November the corporations of the country, the organizers of the corporations brought all these millions of workers into company unions, I charge, for no other purpose than to thwart and make in

valid the collective bargaining sections of section 7 (a) of the National Recovery Act.

The CHAIRMAN. How many company unions, if you know, were organized after the passage of the N.R.A.?

Mr. GREEN. I think I have that here. As I go along with my figures, Senator, I will give you that.

Out of the 3,300 companies reporting, 556 reported that they dealt with their employees only through employee representation. Another 97 companies reported employee representation plans covering some fraction of their workers. Interestingly enough, 400 of these companies had started their employee-representation plan since the enactment of the Industrial Recovery Act.

It will be observed that the conference board asked whether companies dealt with employees individually or through a plan of employee representation or through an organized labor union.

port makes it perfectly clear that the figures do not show how many members company unions now have, and especially how many members outside unions have among their employees. In fact, the report states:

the small proportion of wage earners indicated in this study as dealing with the employer through organized labor unions does not conflict in any way with the claims of greatly increased labor-union membership. It should be borne in mind that this is a study of the relative popularity of methods of dealing with the employer and not in any way a census of membership or nonmembership in organized labor unions.

This has been frequently lost sight of when the conference board figures are quoted-and misquoted-as, for instance, by David Lawrence in a signed article in the Washington Star last week, when he said that 45 percent of the employees-what employees?-are members of unions of their own choosing which are not affiliated with national unions. Taking the figures at their face value, they show that of these 221⁄2 million workers covered, 45.7 percent worked in companies which deal with their employees through company unions, and 9.3 percent through companies which have contracts with bona-fide labor unions.

Senator BORAH. Mr. Green.

The CHAIRMAN. Senator Borah.

Mr. GREEN. Yes?

Senator BORAH. Did you say that the 45 and some percent-
Mr. GREEN. 45.7 percent.

Senator BORAH. Of the labor employees deal with company

unions?

Mr. GREEN. This is what David Lawrence said.

The CHAIRMAN. This is what David Lawrence said. It is a signed article by David Lawrence. You did not yourself assert that information.

Mr. GREEN. No. I do not agree to that. The conference board report quotes statements of some reporting companies that "50 percent of our employees have joined a union." The attitude seems to be: Some of our employees have joined a union; however, we elect to deal with our employees through our works council, which we control; therefore we report that our employees have elected to deal with us through the works council. Such reasoning is on its face disingenuous to the point of cynicism.

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Concerning the growth of company unions since November, no one has accurate information. The files of the National Labor Board indicate that these organizations are still being formed. True, other files-in some cases of the National Labor Board-show that some firms have signed agreements with the chosen representatives of the employees and the company unions are falling into disuse. One instance of this is the Link Belt Co. of Indianapolis.

To summarize what we know about the numbers of workers covered by employees representation plans: The National Industrial Conference Board found a million and a quarter workers covered by such plans in 1932 in all industry. In November 1933 they found almost as many workers so covered in manufacturing and mining industries. An informed estimate of the present membership of company unions throughout the country is between two and three million, not alone in manufacturing and mining but in public utilities and on the railways, and also in trade.

These company unions, I repeat, were formed by the corporations. The laws were drafted by the board of directors, they were taken to the workers ready-made, handed to them, and the workers were told, "The corporation asks you to belong to this company union and be governed by these ready-made laws."

The CHAIRMAN. You mean by-laws?

Mr. GREEN. I mean by-laws. I beg your pardon.
Senator WAGNER. And constitution, too.

Mr. GREEN. And constitution.

The CHAIRMAN. Yes.

Mr. GREEN. They spent the money earned by the corporation in paying highly priced men to draft these laws. They spent the money earned by the company to pay the expenses of the company union. They are using funds out of their earnings for illigitimate purposes, and in my judgment it is illegal and unlawful, because that is a method used by powerful corporations to defeat the purposes of section 7 (a) of the National Recovery Act.

I ask, is it not enough for corporations to exercise all their rights under a corporate charter? Is it not enough to collect from the market in the United States the money which pays the dividends and earnings of the corporation? Is it not enough for employers to organize in the manufacturers' associations and automobile chambers of commerce, and into chambers of commerce free without interference? Is that not enough? What right have they to threaten, coerce, and intimidate the workers and compel them by indirect methods and coercion to belong to their company unions? They are not only exercising their corporate strength over the earnings of the company and in its manufacturing, but they are exercising their corporate strength over the economic power, the social welfare of these millions of employees. Senator BORAH. And prices.

Mr. GREEN. And prices. I say to you-I feel strongly about it, because I see the development of a most menacing situation here, one that is filled with serious potentialities.

The Manufacturers' Association charged some time ago that the strikes of this country were due to labor union activities. I have hurled the charge back in their face, that these strikes are due, directly due to the illegal acts of these corporations in establishing company unions and in imposing these company unions against their will.