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3 9999 06317 382 5 

-^V qo 



Raymond S. Rubinow 

no. \ 

(A Section of Pa.^t E: Section 7(a) of the Recovery Act) 


Work MaLerlals No. 45 falls into the following parts; 

Part A 
Part B 
Part C 
Part D 
Part E 


Control of Hours and Ree.Tiployment 

Control of Wages 

Control of Other Conditions of Employment 

Section 7(a) of the Recovery Act 

March, 1936 


SSCTIO:,' 7(r.): ITS MlS'^Or", irTIZZPZETATIOr A:"3 An:H:iST3A'TI01: 
Ea;^no nd S . I^roi no vr 

iiarch, 1936 



This study of Section 7(a) was -orerjared by Raymond S. Rubinow 
under the supervision of Miss Mollie Ray Carroll and Messrs. 
P. A, Brissenden and R. W. Stone. 

An account of the contribution of the I>IRA in the field of 
industrial relations through Section 7(a), sub-sections (l) and {?■) , 
may be made to fall under the following tonics: a) the history of 
Section 7(a), its interoretations and the machinery established to 
carry out its -orovisions; b) evalua.ticn of Section 7(a) as a vehicle 
for "tri-7.^rtite cconeration to^^ard recovery" viewed in the light 
of labor's conce-ot of collective bargaining, together with the issues 
that this effort has raised; and c) the ex-oeriences and decisions of 
the labor relations boards in the evolution of a "common law of labor 
relations. " 

Unf ortTmately, it has not -oroved feasible to make available in 
mimeogra-ohed form the ext)eriences and decisions of those Labor 
Relations Boards which operated in direct connection with NRA and 
were therefore aio-Dro-oriate subjects for consideration by the Division 
cf Review. As for the other fields of study suggested above, the 
first a-pTDears in the 'oresent rcioort and the second is also to be found 
in Work Materials Kc 7 45, Part E, under the title, "Partnership toward 
Recovery, Section 7(a) as a Method." 

At the back of this reiDort will be found a brief statement of the 
studies undertaken by the Division of RevieTJ?. 

L. C. Marsliall, 
March 27, 1936 Director, Division of Review 

9860 -i- 



Foreword i 

Summary 1 



Section 7 (a) 2 

The Labor Sections of Title I 3 

Relation of Labor Objectives to other 

Objectives of NIRA 4 


Principles of Organized Labor 7 

Findings of Public Cominissions 8 

Legislative Enactments 9 

Decisions of the Courts 14 


Presidential Message 18 

House Coumittee Hearings 19 

Report of the House Committee 25 

Section 7 (a) on Floor of the House 26 

Senate Com-nittee Hearings 27 

Senate CoiTunittee Reports 39 

Debate in the Senate 41 

From Conference to Lavi? 49 


Early Interpretation 50 

Proposed Industry Interpretations of 

Section 7 ( a) 57 

"Open Shop" Issue 57 

The "Merit Clause" Controversy 50 

"Collective Bargaining" in Coal 61 

The Meaning of Section 7 (a) 64 



"General", "Special", and "Code" Boards .... 67 

The National Labor Board 68 

The National Labor Relations Board 73 

The Special Boards 73 

The Code Boards 74 

Conflict of N.R.A. and N.L.B 75 

Second Year of N.R.A 77 




The Rischt to Bnrgain Collectiv^^ly .80 

The Meaning of Collective Bargaining , . ....... 81 

The Election of Representatives 83 

The Interference of Employers o«.....«....85 
The Issue of Majority Hale 90 




I-A Legislative History 

I-B Guide to Legislative Documentation 



II-A Senator Rotert F. Wagn'^r, of New York 

II-B Mr. lilliam Green, President, American Federation of Lrtor 

II-C Mr. Donald R. Richherg 

II-D Mr. James A. Emery, representing National Association of 

II-E Mr. E. L, Michael, representing Virginia Manufacturers 

II-F Mr. Charles R. Hook, President American Rolling Mill 

II-G Mr, Ro^bert P. Lamont, r'=pres'--inting the American Iron and 

Ste^l Institute 
II-H Mr. John L. Le^ris, representing United Mine Workerrs and 

the Am<=rican Federation of Lator 

Appendix hi senate debate on "existing satisfactory 

relationships" amendtcent to section 7 (a) ... . 137 

appendix iv proposed code of fair cotcpetition for the iron 
aj\td steel industry - schedule c 
fundaicental principles of ei^iployee representa- 
tion plans 152 

appendix v labor advisory board statelcent on the 


BOARD 156 

VI-A The National Lahor Board 

VI-B The National Lahor Relations Board 





IX- A 
IX- B 


X- A 
X- B 





ORDER OP FEBRUARY 1, 1934 157 

ADI'.:ii:i STRATI VE ORDERS X_12 Ai'ID X-69 ... 169 

X-12. . .March 30, 1934 - Industrial 

Relations Committees 
X-69... July 27, 1934, - Lator Complaints 

and Disputes 

BOARD 171 

The National Labor Board 

The National Lahor Relations Board 



S U il I: A 2 Y 

Sectio;i 7 (a), v.rhich rSfi-^ieC. labo:. ' s rij^nt to or;:anl:!e pncl bar- 
£;ain collect ivel-, Mr^s v/ri'ten into the j'ational Incaistr ial T.ecovery Act 
to provide tTot labor's joint paTticiiDation in the recover^- ^orogran. Althotigh 
■■Droninentiy in the i^uhlic e^e, due to the controversy- it aroused, Section 
7 (a) v,'as not a ro,dical innovation in the reg\ilation of indvistrial rela.tions 
in Asierica, hut was the further e:cpression of the trend of the last fift^r 
'^ears. During this time, -he principles of orfiani.zation ov.C collective 
"bargainin-; had been announced "by labor spokesiien, a'xoroved b-^ various 
public comnissions, and upheld b" decisions of the courts. 

As it pasted through the various stages of le::islative consideration, 
Congress joined forces with leaders of labor to prevent the intent of 
Section ? (a) iron being frustrated b-- various propgsals for o^ii-r.lification, 
originating fron indxistry. The Aoj.iinistrator in a.tteiroting to naintain a 
role of "perfect neutrality'" towrrd thj conflictin;- clains of labor an. 
industry, a'j to. the rights rnd duties inposed u- Section 7 (a), disappoint- 
g^ the expectations of labor, and a.roused the opposition of in. ustrv. 

Various Irbor ooaras. v;ere set ud to nediate the disputes and ad- 
judicate the conflicts, arising fron the attcupt tj carr^?- out the -provisions 
of Section 7 (a). Although these boaxds crea+ed the beginnings of a "com- 
mon law" of ^ndu.stria.1 relations, their effectiveness was the 
lack of clear definition of their respective jurisdictions. The series of 
E::ecutive Orders, in shifting aoithorit-^' back and forth between these boards, 
produced a conflict between rgencies whose function shoiild have been sup- 
'olenental ratner than cora-oetitive. 



Tho National Industrial Recovery Act (*) passsd ty Congress on June 
ir, T o.x.x, nod. three titles as follows: 

Title I Industrial Recovery 

Title II Public Works and Constn^Jtion Projects 
Title -III Amendments to Emergency Relief and Construction 
Act and Miscellaneous Provisions 

Title I set forth a program for industrial recovery, the lajor objec- 
tives of which were the remova,l of obstructions' to the free fl )v/ of inter- 
state com/nerce, the promotion of cooperative action among trade groups, and 
between labor and management, the elimination of "unfair competition, and the 
relief of uneraployraeait, under government sanctions and supervision, In this 
title, are fcond the provisions establishing the KRA. (**) 

Section 7 ( a) 

Section 7(a) of Title I of the !!ational Industrial Recovery Act, reads 
as follows: 

"Every codes of fair competition, agreement and license a'oproved, pre- 
scribed or issued under tnis title saall contain the following conditions: 

(l) That employees shall have the riglit to organize and 
bargain collectively througia representatives of their 
own choosing',, and shall be free from the interference, 
restraint, or coercion of employers of labor, or their 
agents, in the designation cf such representatives or 
in self organization cr in : ther connected activities 
for tue purpose of collective ba,rgaining or other 
mratual aid or protection; 

T/ At the outset of this study to alernative treatments for utilizing 
the four months available, suggested themselves. One was tie de- 
tailed consideration of certain aspects of subject not covered 
by existing studies, li'ie other was the narration of the significant 
events in the nistcry of Section 7(a). The latter more fully met 
the needs of the program of the Division of Review. writer is fully conscious of the limitations cf the present 
product. The pressure of time did mt permit as comprehensive a 
treatment as tic subject merits. Piart.jer, the study lays no claim 
to originality. It attempts merely to supply historical background 
and to bring together in convenient form, as documentary appendices, 
certain scattered materials. 

Grateful acknowledgei.ients are due Drs. Paul Brissenden, i/Iollie Ray 
Carroll aaid R. 1. Stone for comment and criticism freely given, and 
to Mrs. Rath Evans for competent secretarial assistance. 

(*) 43 Stat. L. 195. 

(**) Xiere mention is made in ti s study to the IIIRA, the reference is 

to Title I. 


(2) Tiiat no employee and no one seeking employment sliall be 
required as a condition of employment to join any com- 
pany union or to refrain from joining, organizaing, or 
assisting a labor organization of liis own clioosing; and, 

(3) That employers shall comply with the itiaximum hours of 
labor, minimum rates of pay, and other conditions of 
employment approved or prescribed by the President." 

It will be noticed that Section 7(a) contains three clauses. The 
first is usually knovvn as the "organization and collective bargaining" 
clause. The second is referred to as the "yellow dog contract" clause. 
Both of these clauses have numerous antecedents. ■ Clause (3) re- 
presents a new formulation, applying as i.t does to the pecaliar insti- 
tutional setup of industrial regulation as established by the IIIRA.. 
In this study mention of Section 7(a) has reference to clauses (1) and 
(2) only. (* ) 

The Labor Sections of Title I 

'iTliile Section 7(a) is the most important, there are several pro- 
visions of the Act dealing with labor issues. Tlaese are found in Sec- 
tion 1, Section 3, Section 4 and Section 7, itself. 

Sectionl is a declaration of policy; it states among others, the 
labor objectives of the Act. These are considered in detail below. 

Under Section 3(a) the President is authorized to approve codes 
of fair competition provided tnat "tne President may, as a condition 

of his approval of any sach code, impose such conditions for the 

protection of consumers, competitors, employees and others or in further- 
ance of the public interest as the President in nis discretion deems 

necessary to effectuate the policy herein declared." 

Under Sec ti_pn_ 3(^^)1 the provisions of codes approved by the President, 
including the labor provisions, "shall be the standards of fair competi- 
. tion for such trade or industry or subdivision thereof" and any violation 
of such standard shall be deemed an "unfair method of competition" as de- 
fined by the Federal Trade Commission Act. 

(*) This is also the case in literature of the subject. For the 
view that Section 7(a), clause (3), furnislied the basis for the 
implementation, via Section 7(b), of the rxglits of organization and 
collective bargaining affirmed in Section 7(a), see, Solomon Barkin, 
"Collective Bargaining and Section 7(b) of N.i;.H.A." Annals of 
Academy of Political and Social Science . March, 1936. It has also 
been stated that this clause indicates the-intent of Congress as 
to a minimum wage policy, \inder the codes. See " Policy in the Control 
of Yifages, " Gliapter II. NRA Division of Heivew Labor Studies. 

(**) These are discussed in Chapter II 

Section 3(d) gives tie President power -onder certain special circum- 
stances to "prescribe and approve" a code, wliicji is to nave tlie same ef- 
fect a.s a code approved -under Section 3(a) . ■ 

S ection 4(a) authorized the President to "entar into acjree.nents wit'i, 
and approve voluntary agreements betvveen and among persons engaged in a 
trade or industry, labor organizations and trade or industrial organizations, 
associations, or groups, relating to an; trade or industry, if-. in Ids judg- 
ment such agreements will aid in effectuating tjie policy of this title " 

that is, t_;e President has the power to approve labor pr:)vi3ions .nuttiBlly 
agreed to between labor organizations and employers. 

'Secti on 7 contains three clauses, the second .and third of v.'hich usually 
have been overlooked in the focussing of public attention upon the more fa- 
mous Section 7(a ) . Section 7(b) sets forth a procedure \7hereby voluntary 
agreements or labor standards may be arrived at throuji collective bargain- 
ing. These agreements, approved by the President, are to have the sanie ef- 
fect as a "code of fair competition." Section 7(c) jives tie President 
the power to investigate conditions end impose a limited code, fixing maxi- 
mum hours, mmimuiB wages and other conditions, to be applied pres^junably in 
the case of a recalcitrant industry. 

Consideration of the above provisions will reveal tieir several statu- 
tory functions. Tlie clauses cf Section 3 point out that in tie process of 
making codes, which are to be subject to the President's ap"iroval, certain 
labor standards will be requisite. As will be noted,' Section -3, however, 
contains no prescription as to the manner (as between individu-il, or col- 
lective, agreement), in which s-ach labor standards are to be p.^rived at. 

Section 4(a ) constitutes a first approach to such a prescription by 
providing that a voluntary collective agreement approved by the President 
will iiaye the same effect as a c:de. 

Section 7 is, of course, tie fullest expression of tie Act's interest 
in the matter, affirming as it does tie to bargain collectively and 
making illegal certain interferences with that rij^at, in sub-section (a); 
suggesting preferred procedure for the formulation of labor standards (by 
collective action), in sub-section (b); and outlining a procedure for deal- 
ing with recalcitrants, in sub-section (c). 

These tnree sets of provisions. Sections 3, 4 and 7, stand as the 
technical expression of the labor objectives of t-i.e Act. 

Relation of Labor Objectives to Ctaer 
Objectives of ITIHA . 

In order to understand these objectives and their relation to the 
rest of the HIEA, we may consider the purpose of the Act as set forth in 
Title I, Section 1 - Declaration of Policy. (*) 

(*) The language of this Section as it appears in the Act, is here 
broken dovm into its separs,te clauses. Tlie nuinbering has been 
done "ay the writer, but the sequence is that found in the Act. 


-5- . . 

"A national emergency productive of widespread unemploy- 
ment and disorganization of industry, winch iDurdens interstate 
and foreign commerce, affects tlie public welfare and vmdermines 
the standards of living of the American people, is hereby de- 
clared to exist. It is hereby declared to be the policy of 
Congress to: 

..1. Remove obstructions to the free flow of interstate 

and foreing coraii:ierce which tend to diminish the amount 

2. Provide for the general welfare by promoting the or- 
ganization of industry for the purpose of cooperative 
action among trade groups. 

3. Induce and maintain united action of labor and manage- 
ment lander adequate governmental sanctions and super- 

4. Eliminate unfair competitive practices. 

5. Promote the fullest possible utilization of the present 
productive capacity of industries. 

6. Avoid undue restriction of production (except as may be 
temporarily required). 

7. Increase the consumption of industrial and agricultural 
products by increasing purchasing power. 

8. Reduce and relieve unemployment. 

9. Improve standards of labor. 

10. Rehabilitate industry. 

11. Conserve natural resources." 

The labor purposes of the Act are thus seen to be implicit, chiefly, 
in clauses three, seven, eight and nine. Tliey were the securing of co- 
operative action of labor and management, the increasing of purchasing power, 
the reduction of unemployment, and the improvement of the standards of labor. 

It is not the purpose nere to examine to what extent some of tliese 
"labor objectives" may or may not be internally consistent, or be in con- 
flict with the other objectives of the Act. Such analyses have been made 
elsewhere. (**) It is appropriate simply to suggest that apparently Section 
7(a) was inserted as an implementation of dbjective Wo. 3 - "To induce and 

(*) Perhaps clauses four, six, ten be included in this list; they 
are, however, of a second order of importance in terms of their im- 
mediacy of bearing upon labor interests. 

(**) See Lyon, Leverett S. et al - "The National Recovery Administration , 

Cliapters XVI, XXXI, XXXII 


maintain xmited action of later and management under adequate 
sanction and supervision." Tlie implication is that while such "united 
action" was desired, it was necessary to construct the channel whereby the 
desired objective might be attained. S -ction 7(a) constitutes that chaji- 
nsl , and it is worthy of note also that it represents with one exception 
(*) the only provision whose inclusion in the codes of fair competition 
was mandatory. 

;*) Section 10(b) 


_Cr^_T_EH, 11- a::t3CEDe:'Ts 0^. sect_ip:;i._7(a1 

Section 7(a) was destined to become one of the most controversial 
issues that arose imder the o-oer?.tion of the Uption-^l ladistrial Recovery 
Act. This was due to the atteraated v/ideness of its application, and the 
resistance such attempts encouiitered, rather than to aiiy novelty residing- 
in the section itself. "Jeither the -orinciple affirmed — the ri^ht of 
organization end collective oari_,-ainin^ — nor the languai;;e in which it 
was couched, possessed any t.reat uniqueness or oritjinality. "Jor was 
either foreign to American laoor law or lahor legislation. Their previous 
Isg^islative ap Plication, hov/ever, had heen restricted to a much more 
limited area. It traces as far hack as 1898, and hoth -nrinci-ile and 
lani^auge are found in various from that time on. 

There are at least four kinde oi such expressions of the ri^iht to 
ort;anize and to hargain collectively. First, there are the various pro- 
nouncements of the leaders of organized lahor ^.^oups. Second, there are 
the statements and recomi.iendations of various puolic commissions apioointed 
to study industrial relations or to settle industrial disputes. Third, 
there are the various legislative enactments Tfhich have incorporated one 
or more of the clauses later to he included in Section 7(a) of the IIIRA. 
Fourth, there are the decisions handed domi by the courts. 

Or|:i.'snized Laoor 

The leaders of organized labor have frequently v'oiced labor's belief 
in, and demand for, the right to organize and bargain collectivr^ly. The 
former famous leader of the miners, John Mitchell, wrote, some thirty 
years ago, -oerhaios over-O'-itiiaistically, as follov.'s: 

"The ho-ie of future oeace in the industrial world lies in the trade 
agreement. There is nothin^: so promising to the est abolishment of 
friendly relations between Inbor and capital as the groY/in^^ tendency 
of representatives of both sides to meet in friendly conference in 
order to settle conditions of emi^loyment. The men assembled in 
national joint convention represent t'.'o great esta^tes, the employers 
and the worki.^en of a vast industry. It is like a congress legis- 
lating for a nation or rather like a coming together of the repres- 
entatives of two great nations, u-oon the basis of mutual respect and 
rqutual toleration, for the formulation of a treaty of peace for the 
government of industry and the prosperity ecid. the welfare of the 
contracting parties • • • 

"Trade agreements therefore, even in their simolest form, re-oresent 
the central idea for \?hich trade unionism stands, viz., the collective 
or joint bar^^ain and they presuppose the existence of a union ai:id, 
in the case of agreements upon a large scale, associations of employ- 
ers as ".veil as of worki.ien." (*) 

The v/ell knovn fonier president of the American Federation of Labor, 
Samuel CrOUT^ers, has said on this subject: 

"Collective bargaining means that the organized emi:)loyees of a trade 
or industry, through representatives of their oeoi choosing, shall deal 

with the empl oyer or employers in the making of wa^e scales and 

(*) Johi-L Mitchell, Or,::anized Labor, Hew York, 1903, p. 347, 351 


workirit^' conditions. Collective "barjijeiiiin,^ is tlie only i^vactical 
pro'oosr.l for acijusti.ii\- relations between "che m-na^-ement and the 
workers in ;; business way assuring r-- fair deal lo ooth rides. 

"In no other walk of life does the idea exist that a i.ian iimst 
arbitrarily accept any offer made 'oy another. There are two sides 
alv/ays to an ai^'reenient. Each side 0T3^;ht to have equal chances 
to propose and insist uion what it considers r fair agreenent . . . 

"Collective bart^'aini!; j in industry does not imnly that w-a,_;,G earners 
shall assume control of industry, or res-Donsibilitjr for financial 
management. It -Droi:>oses that the enriTloyees shall have the rij^^ht 
to organize and to deal with the emijloyer through selected repre- 
sentatives as to wages and ?forking conditions." (*) 

ii'r. V/illiam G-reen, the iresent president of the A. ?. of L., when 
secretary of the United Lane \7orkers of Aiierica, v/rote as folloifs: 

"Collective bargaining and union recognition go hand in hand. In 
fact there can be no recognition of the principle of collective 
bargaining without a corresponding- recognition of the right of 
workers to organize into trade unions. Collr^ctive bargaining is 
a meajiingless term, void of any virtue and of no consequence 
Yfhatever when the workers are denied the righ^ to organize and 
union— recognition is not accorded them. To den^'' the v/orkers the 
riglit to organize is nn thin_: more th- n im.u-oper interference with 
the exercise of -^n inherent right and the normal activities of a 
free people." (**) 


Probably the most famous of the -Tdblic coiffi.ii'oiion? in the field 
of industrial relations was the Industrial Coira'aission created by Act of 
Congress in 1898, and vdiich ~:)ublished a report of some twenty volu^aes. 
Its Pinal P.eport, issued in 1903, contains the followin, statement 
indicating- the Commission's sup'^orc of the principle of collective 

Adv antages p2\ Collective Ear'-ainin;.; 

"Hiatever may be though-t of the desirability of legislation regarding 
the settlement of labor disputes, there is - gener;.! concensus of 
o-oinion that the volu^itar;- este"nsion ''ud lerfeccion of systems of 
collective bargaining, conciliation, nnd arbitration v:ithin the 
various trades themselves would prove highly advantageous, both to 
employers and working men, and to the general public. These practices 
are not indeed equally s.-oplicable to all trades and localities. 
Thus it is qialte com;..only asserted that, in ohe absence of reasonably 
strong organization among v.'orking men, they can neither su-ff iciently 
command the respect of employers, nor exercise a sufficiently strong 
aggregate control over individual employees, to make collective 
bargainin.'j and arbitration oracticable. To i-nsure success there must 
be on each side a-n'oroximately equal strength, a fairly high degree 
of intelligence, and a disposition to fairness and to businesslike 

.,____Jiethods.,Jl_.Cil*jL ^. —^—-^ .— ,■ - -- — 

(*) American Pederationist, iiarch 1930, w. 35S-359 

(**) United L'ine 'iTorkers Journal, hay 17, 1923, p. 10 

(***) Pinrl Seport of the Ind'astrial Commission, i,7ashint.-Gon, 1D03. 

9850 Volurae XIX, pp. 84-1-845 

The report of the Anthracite Ccal Commission created to settle the 
anthracite strike of 1902, included among its eleven awards, the following: 

"The Commission adjudges' and av^ards: ""That no person shall he re- 
fused employment, or in any way discriminated against, on account 
of membership or non-memhership in any labor organization, and 
that there shall be no discrimination against, or interference with, 
any employee who is not a member of any labor orfanization by mem- 
■.- bars of such organizationo "(* ) 

The United States Commission on Industrial Relations created by Act 
of Congress in 1912, made in its Final Re-port (1915), certain pronounce- 
ments and recommendations; hearing upon the subject of collective bargain- 
ing and employers' associa'tions.(**') The Report considered that .joint 
agreements between employers associations and trade unions were the most 
satisfactory way of regulating conditions of employment. Provided that 
they vere preceded by a,dequate discussion and deliberation, such agree- 
ments vrere held to be a more comprehensive, elastic and democratic form 
of regulation than that of legislation enactment. The Commission recom- 

"the extension of joint agreements as regards not only the 
field of industry which they cover, end the class of labor 
included, but the subjects which are taken up for negotiation 
and' sSttlement, G-reater responsibility for the character, 
skill and conduct of their members should accompany the 
greater participation of trade unions in the governing of 
industry," .... 

Distinguishing between "bargaining associations" - those which 
dealt with unions; and "hostile associations" - those -^hich opposed col- 
lective bargaining, the Commission condemned the latter in the follow- 
ing terms: 

"Inasmuch as the right of workers to organize in any manner 
that they see fit is fully recognized by society and has re- 
peatedly been given a legal status in the decisions of even 
the most conservative courts, there is strong reason for 
holding that these hostile employers' associations which are 
organized primarily for the prevention of organization, are 
not only anti-social but even, perhaps, illegal," 

Legislative E nactments 

The legislative antecedents of Section 7 (a) arc numerous. . Clause 
(l) d.ealing '-ith the right of "self-organization" and "collective bar- 
gaining" traces back to the Clayton Act of 1914, and is found in various 
formulations in the Transportation Act (1920), Railway Labor Act (1926), 
Norris-La Guardia Anti-Injunction Act (1932). Clause (2) prohibiting 
the "yello\T-dog" contract goes back, in essence, even further, to the 
Erdman Act of 1898, and ap^iears in the Korris-La Guardia Act (1932), in 
the 1933 Amendments to the Bankruptcy Act, the Ekergency Railroad Trans- 
portation Act (193'3),- The essentials of both clauses are to be found 

in the Black Bill of 1933. ' 

(*) Report of Anthracite Coal Strike Commissinn, Bulletin of the Depart- 

nent of Labor #46-, May, 1903, p. 509. 
(**) U.S. Commission on Industrial Relations, Final Bulletin, 1915, 

pp. 191-193. 


The Zrdinaii Act of 1S98, ■'"'hich npnlied to inte-'state railroad trails— 
ob:. ttio-i'prrovitied, in Section 10: 

"That- any employer subject to the Act — vho shall reauire on 

e'Toloye'e '6r eny person sefrKin;': em^-.loynient r.s a. condition of such 

e"r)'lo^T::ent to enter into an p.Treen:'ent — not to 'becoine or rernrdn 

?; 'nein'ber of finy- labor organization; or shall threaten any employee 
i.ith loss J 01' r,ha,ll unjustly discriminate e^gainst any employee o:' 

hie membership in such labor organization — is hereby declared to 

be grailty of a misdememor ."(*) 

til this Section of the Act, phrased in perhaps some?;hat more in" 
volv-'o. lan.2,u'age, ve have the earliest forerunner of clause (2), the 
"yello-,~dO;-, cont.rac't" clause, of Section 7 (a).(**) 

The Clayton i:ct of 1914 vaoS h^-:iled by labor as its "luagna Chart?,", 
"becciuse it was believed that it ^-'Ould ercemot labor from the 0,pplica,tion 
of Sherrr.fn Anti-Trust Act, and protect it from injunctions. These er?- 
pecta.tions v-ere based on the follo^'in''; provisions: 

Section 5. - "The labor of ,•' munan^; is not -- commodity or ar^ 
tide of commerce. I'othin.',- contained in the an.ti"trust lars shall 
be construed to foi-bid the exii^tence and operation of labor organ- 

"■ izo.tions instituted for punioses of mutual help nor shall 

such drganir'.aticns or the members thereof be held or construed to 
be illegal combin'-tion;; or consniracics in ref;traint of trade 'onder 
the Eaiti-trur.t Jc-c " 

Section 20. -• "Ko ' restraining- order or injunction shall be grajat.ed 

to rzrj court of the U, S in any case bet'-'een an employer 

and employee . . , , . grov.-ing out of a dispute concerning terns 
or conditions of emplojTnent, unless necessary to prevent irrepar-* 

able injury to property lor \-hich there is no proper 

reiedy at la.v . . , ,ii(***) 

A.lthough the constitutionality of the Clayton Act '-as upheld by the 
Supreme Court in the case of Duple:: Jrinting Press, (****) the exemption 
from injtinctions Fasheld inapplicable. The history of the statute ha^s 
sho- n- nvLicrous attempts by the cmrts to evade its provisions. (*****) 

(*) 30 Sta.t, -±24 c. C71 '(1898). 

(**) l"nis Act ras Ister declared -oiiconstitutional by the Supreme Court 
in Adair v. Uni t ed Stat es, 208 U, S. 161 (1908), as an interference ",'ith 
the employer's "liberty of' contr-act," 

(***) ':-i. U, S. Stat. c. 323, 730. 

(****) I>aole:-: Pr inti ng press v, Dcrin:-. 254 U. S,.(1926). 

(*****) Si^e disctission in Crept -Forthem ?;;■'. Co^ , v, 3ross'^:au , 286 led, 
414 (1920), 



Although established by Presidential proclamation and thus not 
strictly falling within this classification of legislative enactments, 
the National War 'Labor Board, vhich comes at this point in the chrono- 
logical seouence, may be mentioned here. This Board, consisting of 
twelve members, five chosen by industrial associations, five by the 
American federation of 'lab-or, ■ and tvro by the public, vas guided in its 
decisions. by a scries of principles among ■which are found the following 
tvTO, "hich state the principles later found in clauses (l) and (2) of 
Section 7 (a).: 

"Tlie right of workers to org=-nize in trade unions and to bargain 
collectively through chosen representatives is recognized and af- 
firmed. This right shall not be denied, abridged, or interfered 
with by employers in any manner whatsoever, 

"Etnloj'-ers should not discharge men for membership in trade unions, 
nor for legitimate union £.ctivities," (* ) 

The Trsnsportation Act of 1920 called for collective negotiations 
by providing, 

"that all rsilro9,d labor disputes shall be considered and if pos- 
sible decided in conferences between representatives designated and 
authorized so to confer by the carriers or the employees . » » • 
thereof, directly interested in the dispute," (**) 

The l-^.ilway Labor Act of 1826, elaborated on the provisions of the 
Transportation Act. The first three provisions of Section 2 are the 
most im-Qortant in this connection: 

(*) U. S« Bureau of Laoor Statistics, Bulletin Ko. 287 . "National Var 
Labor Board," p. 32, In addition to the provisions cited above giving 
labor certain rights and protection, provisions were included convej'-ing 
roughly parallel rights and protection to eaployers, as follows: "The 
right of employers to organize in associations or groups and bargain 
collectively through chosen representatives is recognized and affirmed. 
This right shall not be denied, abridged, or in.te:ffered with by any of 
the workers in any way '•'hat soever," and "The workers, in the exercise of 
their right to orgaxiize, shall not use coercive measures of any kind to 
induee Trorkers to join their organiza.tions, nor to induce employers to 
bargain or deal therewith." , 

(**) 41 Stat. L, 456, Section 301. Title III sets up a Railway Labor 
Board, Decisions o^ the Board contain significant expressions on col- 
lective bargaining, designation or representatives and majority rule. 
See partic-jlf.rly the Pennsylvania R, R. cases. This section of act 
subseouently "repealed and replaced by the Railway Labor Act. 


"Pirst. It shall "be the duty of ^,11 -arriers, their officers, 
aTentr, and eiDoloyees to exext every re-isonatle effort to make and 
maintain agreements covering-" rrtes of ppy, rules ond working con- 
citions, and to settle all disjiutes ...'." 

"Second, All disoutes "bet-^-ecn p carrier eaad its employees shall 
he considered, end, if possihle, decided '-'ith all expeditions, in 
conference bet^-'een rerirer.ents.tives designated e.nd authorized so 
to confer respectively hy the ca,rriers "Jid hy the employees there- 
of interested in. the dis'oute," 

"Third-, Representstives, for the xnxrposes of thir Rct, shall he 
d.esirgnated by the resnective Dprties in such rar.nner ss n^ay be pro- 
vided for in their corporate organization or unincorporated assoc— 
ia.tion, or by any other mean.? of collective action, without intei'— 
ference, influence or coercion c-ercised by either party over the 
self-organization or designation of reoresentatives by the other, "(*) 

Tnc ITorris-La. Cruard.ia. Anti-In.ji.aiction Act shO'/?s clearly the in- 
fluence of the language of the thiro provision of t"ne Iiailway Labor Act, 
in its definition of -^fhat constitutes public policy, 

""Thereas unc^er prevailing economic conditions, developed vith the 
titl bf governmental authority for ovmers of -oroperty to organize 
in the corporate a:id other forms of ov;-nership association the in- 
6-ividu?l unorganized. T'orker is commonly helpless to exercise actual 
liberty of contra.ct and to protect his freedon of labor, and there- 
by to abtain acce;otFble teras t^nd conditions of employment, 'here- 
fore, though he should be free to 'decline to associate vith his 
fellO'Ts, it is-necessary that he have full' freedom of association, 
self-organiza,tion and designation of reyrosentatives of his o\n.i 
choosing, to negotiate the terms -nd contracts of his employment, 
and tha.t he shall be free from the- interference, 'restraint or coer- 
cion of employers of labor, or their agents, in the designation of 
such representatives or in self-organization or in other concerted 
activities for the pui^pose of collective bargaining or other nutual 
aid of protection. Therefore, the follo'.ring definitions and lim- 
itations \ipon the .jurisdiction and c?uthority of the courts are here- 
by enacted. i'(**) 

On Janviary Ic, IQoS there '-'as introduced, in the Senate and the 
House of the 72nd Congress a bill thf. nunpose of which was to stabilize 
the coal ind.ustry, (***) "-.'hile this so-called Davis-Kelly Coal Stabili- 
zation Sill was never enacted into La?.', it war. .given extended consider- 
ation at hearings held before a speci.aJlj'' apoointed sub-Committee of the 
Senate Committee on kines and Lining, from LCa.rch to June, 1932. Section 
5 of this bill is interesting in that it cont'M.ins a vev^f full statement 
of the principles l^.ter to be e.a'i- -jdied in Section 7 (a) of NIRA. It ..- 
rea.ds in part, 

1*1 44 Stat. L. 577\ ~ 

(**) 47 U.S. Stat. 70 c. It will be noticed th-at the language "inter- 
ference, influence o r coercion " , of the Aa.ilway Labor Act, has here become 
"interference, resfrliint or coercion". It is in this foyin it appears 
in Section 7 [a.). (*=«*) g, 2935 introduced by Sena.tor Davis; H, R. 

75S6, introduced 'o^r Rep, Kelly. Con ;ressioneol Record, Vol. 75, Part II, 

pp. 1758-1354, 


"Licensees and their employees shall exert every repsonable effort 
to malie and maintain agreements concerning vjages and working con- 
ditions and to settle disputes in connection therewith; and in^the 
malcing of such agreements the licensees may negotiate collectiveljr 
through an operators' association or oy representatives of 'their 
Own choosing, and the employees shall have the right to deal col- 
lectively "by representatives of their own choosing (without inter- 
ference or coercion exercised by their employers). No such licensee 
becoming a member of a marketing pool or joint selling association 
shall make it a condition of employment that the employee shall not 
join a labor organization, but the right of the mine workers en- 
ployed by such corporation. to organize and maintain their ovn or- 
ganization and to deal collectively thrsugh -chosen representatives 
shall not be denied or abridged in any way whatsoever. " (*) 

■The Black-Connery Thirty-Hour Bill was introduced into the 72nd 
Congress on Larch 10, 1933. (**) As reported out by the House Coi^imittee 
on Labor, with . substantial amendments, it practically amounted to a new 
bill. In this revised version. Section 7 contains the essential core 
of both clauses (l) and (2) of Section 7 (a). It reads: • 

i'l\Fo licensee shall transmit through the. mails or transport, handJLe 
or receive in interstate or foreign commerce, and no person or 
carrier shall receive- for shipment in interstate or foreign commerce 
any goods, articles, or commodities in the production of which any 
ino-ividual under the age of sixteen i"as employed, or in the production 
of rliich any worker who was a signatory to any contract of.emplojr- 
ment. prohibiting such worker from joining a labor union or- employees* 
orggnization, was employed, or any goods, articles, or commodities 
produced by any person -whose employees were denied the right of or~ 
ganization and representation in collective bargaining by individ- 
uals of their own choosing. " (***) 

(*) 72na Congress, 1st Session, Hearings Before Sub-Committee of 
the Committee on Mines and Mining on S. 2935, Part I, n. 2. 

(**) S. 158, by Senator Black: H. P.. 2867 by Re-presentative Kelly. 
Congressional Record, Volume 77, Part I, r>v. 116 - 173. 

(***) House Calendar, Volume 19, 73rd Congress, 1st Session S. 158 
ReT)ort Volume 24. 


-14- ... 

The 1933 amendments to the Banki-uptcy Act also contain clauses 
directed against the "yello-'-dog" ' contract. Under Section 77, it is 
provided that no judge or trustee having' Jurisdiction of railway 
property in connection with railroad reorganization sh.^11 

"(r) . . . . ch-^nge the wages or '.lorking conditions of railroad 
emiDloyees, except in the ra.qnner -orescribed in the Eailroad Lahor 

"(p) .... deny or in any ''ay question the rij-ht of eimloyees 
. . , . to join the la dot organization of their choice .... or 
interfere in any way with the organizations of emiiloyees, or . . 
. . use the funds of the railroad .... in maintaining so-called 
com-nany unions, or ... , influence or coerce eraTDloyees in any 
'7ay to induce them to join or remain menbcrs of such company 
unions. Gr, 

"(q.) .... require any 'oerai^n seeking emnloyment .... to 
sign any contract or agreement promising to Join or to refuse to- 
join a labor organization, and if such contract has been enforced 
(previously) .... then the said judge .... shall notify the 
emt^loyees that said contract has been discarded and is no longer 
binding on them in any -vay. " (*) 

It has also been uointed out (**) that the cited 1933 amendments 
to the Bankruptcy Act, represent a reversion to the more vigorous ap- 
proach of the Erdraan Act. This Act had made it a misdemeanor for the 
'employer to force the acceutsnce of a "yellow-dog" contract. In the 
La Guardia Act such contracts are siranly made unenforceable. In the 
Bankruptcy Act Amendments Judicial receivers are forbidden to utilize 
the "yellow-dog" contract in pro;oerties under their Jurisdiction, 

Decisions of the Courts 

In the early years of the nineteenth century, American courts 
were wont to follow the English i^recedent of holding "combinations" 
of v/orkers as constituting a criminal cons"oiracy and hence illegal. (*** ) 

(*) 47 Stat_. L. 1481. The Emergency Railroad Transportation Act 

of 1933, was approved on June 16, 1933, ten minutes after the 
NIEA; hence strictl"'- it cannot be considered an antecedent. 
The Act (48 Stat. L. 211) requires, in Section 7a, railroads 
to observe the iDrovioions of the Railroad Labor Act and, in 
Section 7e, those nrovisions of the 1933 amendments to the 
Bankru'otcy Act quoted above, 

(**) Paul E. Brissenden, "Gen-sis and Imncrt of Collective Bar- 

gaining Provision of the Mntional Recovery Act, " Economic 
Ess-^ys in Honor of W. C. iiitchell , 1935, Chapter II. 

(***) Philadelphia Cordwainers, 1806. 



Since the decisive case of Commonwealth v. Hunt in 1B42, (*) the 
courts have no longer utilized this doctrine to "orevent organization 
among T/orkers,. although in a numher of cases the courts have indicated 
what are the legal limits of the use of economic -oressure hy unions. 

In the Adair Case, (**) tne Supreme Court held it was unconstitu- 
tional to make it a criminal offense to discharge a man for union 
membership as lip.d been done by the Erdman Act of 1898. In the 
Eitchman Case (***) it was held illegal for a union to instigate the 
workers in a non-union shcp to compel their employer to unionize the 

In contrast to these decisions limiting the extension of 
organization, is the fainous Tri-City Case, (****) in which a union's 
attempt to extend its organization was found to be entirely legal. 
In this case, Justice Taft stated: 

"Labor unions are recognized by the Clayton Act as legal when 
• instituted for mutual help and la'-vfully carrying out their 
legitimate objects. They- have long been thus recognized by the 
courts. They (labor unions) were organized out of the 
necessities of the situation. A single employee was helpless in 
dealing with an employer.. He was dependent ordinarily on his 
daily wage for the maintenance of himself and family. If the 
employer refused to pay him the wages tha.t he thoijght fair, he 
was nevertheless unable to leave the employ and to resist 
arbitrary and unfair treatment. Union wa,B essential to give 
laborers opportunity to deal on eauality with their employer. 
They united to exert influence upon him and to leave him in 
a body in order by this inconvenience to induce him to make 
better terms with them. They were withholding their labor of 
economic value to make him pay what they thought it was wprth. 
The right to combine for such a lawful purpose has in many 
years not been denied by any court." (*****) 

(*) 45 Massachusetts 111 

(**) A dair v.. United States . 208 U. S. ref. (1908). 

(***) Kitchm an Coal ajid Coke Com-nany v. Mita'iell, 245 U. S. 
229 (1312). 

(****) American Steel foun dries v . Tri-City Central Trades Council , 
247 U. S. 184 (1921). 

(*****) Ibid, P. 209 



Another' im-oortpnt (.''ecision vss tli' t lian'^ed c''o""n 'oy the Sur)reme 
Court in the Texas an^? "c" Orleans ?w ~:. Case, "ere Chief Justice 
Hughes,, rendering the o-ninion of a unanimous court, said: 

"The legality of collective action on the t rt of ermiloyers 
in order to snfegu-rd free choice is not to be dis-outed. It 
has long been recognized that enmloyees are entitled to 
organize for the •^umose of securing the redress of grievances 
and to Toromote agreements with employers relative to rates 
of pay and conditions of work. Congress was not reauired to 
ignore this right of employees but could safeguard it and seek 
to make their appropriate collective action an instrument of 
peace rather than of strife. Such collective action vould be 
a mockery if re-oresentation were made futile by interference 
with freedom of choice. Thus- the prohibition by Congress of 
interference with the selection of re-oresentatives for the 
purpose of negotiation and conference- between employers and 
employees instead of being an invasion of the constitutional 
rights of either, was based on the recoi'nition of the rights 
of both." (*) 

The courts have been sloii^er in coming to tue -oosition of clause (2) 
of Section 7 (a) - prohibiting the "yellow-dog" contract - than of 
clause (l) which affirms the right to organize- and bargain collectively. 
In the case of Coppage v. Kansas . (**) it was held unconstitutional 
for a state to make illegal the use of the "yellow-dog" contract. 
In the Hitchman Case, already cited, the inducing of a breach of a 
"yellow-dog" contract vas also held illegal. 

The opinion rendered in the Tri-City Case shifted the attitudes 
of courts to'-'ards the rigats of labor, and thus we find in the Exchange 
Bakery Case, (***) that the ITew York Court of Apneals, refused to 
issue an injunction to -nrevent unions from inducing the waitresses of 
the plaintiff to break their promises to remain out of the union. 
The court held that sucn promises attached to employment contracts 
terminable at will, were lacking in consideration and did not con- 
stitute valid contracts. 

(*) Texas and IVt- Or leans 'R. R-. Co. v. Brotherhood of Railway and 
Sjteamsjiip i:_lexks, 281 U. S\ 548 (1930"). The E. R.' Co. was" 
chiarged by its employees with trying to replace the trade union 
by a coaroany union, for collective bargaining -Durposes, thus 
violating Section 301 of Transportation Act (1920) and its later 
version in Section 2, of the Railway Labor Act of 1926, which 
provided for the free choice of representatives (see p. 17 above). 
The comnany, refusing to comply with restraining injunction, was 
ordered to disestablish its com-nany union. This order was upheld 
by the Sunreme Court, which held that the attempt to impose a 
company union constituted interference with free choice in 
designation of re-!:)resentatives. 

(**) 236 U. S. 1 (1915). 

(***) Excliange Bakery and Restaurant. Inc. v. Rifkin . 245 I-I. Y.. 260, (19?9). 



Th.e Norris-La G-uardia Act in its Section 3 -nrovicles that such' 
contracts are against nublic policy (*) and "shall not be enforceable 
in any court of the United States and shall not afford any basis for 
the granting of legal or eouitable relief."- The claim lia.s been made 
that this Act is unconstitutional in the .same way as the legislation 
concerned in the Coppage Case. But the distinction is that: whereas, 
the legislation concerned in the Co-ppage Case insistence u-oon 
such contract a crime, the 193^ Act merely made- such contracts 

(*) For the Acts definition of nublic -Dolicy, see -o. 12 above. 



Presidential Messa^"^e and Introduction of Bills 

On May 17, 1933, President Roosevelt addressed a message (**) 
to the Con^-ress, on "Reemployment and Public Construction", in which 
he presented a program of industrial regulation .and public works 
construction, as e, double attack on the problem of unemployment. 
On the ssi:ie day, the National Industrial Recovery Act made its 
first appearance in embryonic form v/itn the introduction of bills 
in the House (K.H. 5664) and Senate (S. 1712) to accompany the 
President's message. (*** ) 

S. 1712 was introduced on the floor of the Senate by Senator 
Wagner, who asked "unanimous consent to introduce a bill to carry 
out the recoi.imendations contained in the of the president, 
just read". K. R. 5664, an identical bill, was introduced in the 
House ^oy Mr. Eouj.'hton, as Chairman of Ways aaid Means Committee. 
Section 7 (a) of these two bills, read as follows: 

"Section 7 (a). Every Code of Fair Competition, agreement 
and license approved, prescribed or issued under this title 
shall contain the follov/ing conditions: 

(*) Tlie purpose of this chapter is not only to show the changes 
made in Section 7 (a) itself, but to indicate the forces and atti- 
tudes producing them. Hence, the remarks of witnesses and legis- 
lators, while carefully selected, are generously quoted and where of 
sufficient interest, are reproduced more fully as Appendices. 

(**) 73rd Congress, 1st Session, House Document No. 37, Congression- 
al Record, Voliiine 77, Part IV, p. 3549, p. 3603. The message reads 
in part: 

"Before the special session of the Congress adjourns, I 
recorar.iend two further steps in our national campaign to 
put people to work. 

"Ily first request is thiat the Congress provide for the 
machinery necessary for a great cooperative movement 
throughout all industry in order to obtain wide reemployiiient, 
to shorten the working week, to pay a decent wag'e for the 
shorter week, and to prevent \anfair competition and disasterous 
overproduction. . . . 

"The other proposal gives the E;:ecLitive full power to start 
a large program of direct employment. A careful survey con- 
vinces me that approximately $3,300,000,000 can be invested 
in useful and necessary public construction and at the same 
time put the largest possible number of people to work." 

(***) 73rd Congress, 1st Session," s. 1712 and H. R. 5664. Congressional 
Record, Volijine 77, Part IV, pp. 3550 - 3611. These bills bore the fol- 
lowing title: "To encourage national industrial recovery, to foster 
fair competition, and to provide for the construction of certain useful 
public works and for other purposes." 


"(;0 ■:~i^ t e;.v)io2'eo& .-"ve tlj:; ri.,i:t to or.anizc 
ir. .£■.::;-, Fill collectively tx.r.on'ii reproF.'iits.tlvcs 
01 tlicir o'Ti choosing;. 

"(S) l..'t no o.-.T-ioyoe ■ rr;. r^o oriO sGcl:iii__, eivi^lo^Tncnt 
ri:£ll oe requiro''. ?.i ?. co:.:Mtioi- oi o:.Tiloj7.iont to 
join any orc-''.niz£.tion or to nefrain from joxi in{; 
r Iroon organization of 1ij.£ o^' n fhoosin^-, an?.. 

"(g) TiiPt cnnlo/crs sli-'-ll cor.-niy vitn tlxo raF.xirnnin 

iio-ar& of la'bor, rninirntiii r?.teG of -ay, ?n" other 

vorM:.. con itions e-i-rovcc. or prcscribec. uy the Prcsifont. "(*) 

• ' ' House Gor.a-aittcc Hearings 

The oillL T/oro referred, to the ?.;iprc-r riht'e 3 imnittccs : K. ?.. 
5664, ^,oin^. to the "rlousG 'iVaysan^ i.icgjiE Committee, S. 171o, loin.;,' to 
the Senate Ccrfhttofi on Finance. The hour.c Co-.i..;ittco heir" its heai-- 
ings first, or hrv 18, i::, an'l "^0, l^^^"; tone fort;, -five -itnesscs 
a-opearea hefcrc it.(**) Of these only four or five concernca them- 
selves ^-ith the labor aspects of the Act; the others -".ealt i-'ith its 
Ic^^al an". ii:'^,ancial arrpects. Those v.'hioso remarhs iB.i. reference to 
Section 7 (a^ vere ;..r. JDenal'. . ".ichhei-; , Senator P.ohert ^. "c'-^ner, Mr. 
Uilliam Oreo., a/;'' !rr. henry I. Plarrim-an. 

A-->nearin.i at the first of these vitncsses, i'.h-. PiiGhtcrgC**) 
statef that vhile for many years he ha'.' "been anc" v.^s still serving 
as counsel for the railroar lafoor cr^-,:anizations, he vas not ro-:'rc- 
senting any -err on or organizP-tion at the hearing, hut a'as pp":earintg 
merely as an in;\ivifii£-l a.t the Co/.Lnittee ' s request. Af-::ec. ^7hethcr 
he thought the interests of em-)loyecE v/ere '-■feqri.atciy .protected hy the 
"bill, hr. hicheerg said: 

"I thinh the organiz-^a laoor :^roii^s thoirisGlvcE v.'ill 
h^.vc to ansT/cr that .^-nosticrL. I fo not '-'?,nt to ir.c.icatc 
ariy comrrlttnent as far as the,; arc ccncornea. i,iy -.-'cr- 
sonal oninion is that t.-c success of this lill acpencs 
frcm start to fi..\ish u^or. the method of its operation 
an-.' mc'.nageracnt; an' viti": i's o-:icration in the s.-irit 
in ^.'hich the Act is , ravn, I thi.d': lahor v.'oulf oe ^roatly 

(*) 73rd Ccn ress, Ist Session, K. "I. ::664 an-: S. 171?. ?:ay 17, l^^ds. 

(**) 7j.i'd Ccn^^ross, 1st Session, ha tion- 1 Industrial Pucovcry , hearings 
on H. h, 56d4 ocfore House Gona.ittee on d>-ys p.siC. ..cans. The vit- 
nosEcs rri'y he classified ?s follo'-s: seventeen business leaders, 
eighteen " uhlic officials, five nriva.te indivi''.u3.1s, one economist, 
one lahor leader, ?■ d o;i engineer. 

(***)loi-"., -y't, 56 -oC. These " co-.^tair^ '.lis testimony on variotis as- 
pects of the Act, throtighout r.'hich are scattered his references to 
matters of lahor interest. 



-irotcctec'.. If ve 'mx- to vritc •?. la'" tlia.t v-oulc. 
coi"T?el ■ co'olc to c.o certain tliin_ s, tii?.t v-oiild 
riricMy set c.ovm a coc'.g, of course, I voulc". su^;- 
jest much more cefinitc anc", inflexible provisions, 
anc". vji^oubtedly the inana£,er interested from the 
oth^r side of industrial rcla.tions v/ould also v,'ant 
a more inflexible or^janization. The whole -ourpose 
of this has been to leave that flexible, to leave 
it to a statement of TJrinciples, asr-urain^ t.ia.t the 
lav v/ould be ac^jnini stored consistently vdth ti:ia.t 

Aside fro:; the above conments and some £,eneral references to the 
subject of raj'.os and hoiirs, llr. Bichberg's testimony contains little 
comment on tr.c labor sections of tr.e bill. It is interesting tlzB.t 
he made no direct reference to Section 7 (a), despite the fact tlmt 
he iTa.d -ilaycd a prominent -:art in its J raf tin,^. (**) 

Senator ',;a£ner spoke at some len£,-th an'" in ^rcat detail on 
the provisions of the proposed measure-. (***) Hoforrinj: to Section 
7 (a), ho saic. tlia-t it provided, 

"Th?t cmTloyees shall Imve the rij^ht to or^-anize 
and barg-ain collectively through representatives 
of their o'vn choosing, v.'hich is an important pro- 
tection for the labor orjjsniz^tion and one for 
which I have been contendin:; for a long; v/hile, both 
iii legislative bodies and also s.t a practicing a.t- 
torney", arid 

"Tlia.t no employee v.dll be req^uircd as. a condition 
of employment to sign an anti-union contract, that 
otitlav/s tjie so-called 'yellovi'— dog-contract ' vliich I 
tl:.inl" we Inave alrc-ady v;hcn v.'c massed the Anti- 
Injvjiction Act, "which is now lav;. It is something 
which ought to be forever wiped out of our economic 
life. It is •u-i-A.nerican. "(****) 

Aft^r tl:e above remarhs. Senator '..a.'^ner did not n&lze any fur- 
ther connent on the snbject of Section 7 (a), imtil the last few 
minutes of his testimonj'', when he was asked the follo':-ing qpiostion 

(*) Ibic. , p. 75. 

(**) In his recent book, Mr. Richberg indicates the active part he 

played in drafting the ITIrA anJ. earlier, the Ra-il^^ay Labor Act of 
19.26 and the Anti-Injunctior. Act of l'^'~3. Donald "ichberg, " The 
Rainbow ", Tew York, 10;7G, '::. 49 - 53. 

(***) Ibid., pp. "1 - 116. His initial statement (pp. 91 -98) is re- 
produce: in fxill in A'lpendix II - A. 

(****) Ibid., -•> dZ. 


■fay Con, ■rcssuir:i 

"■■'ill yov. :-indly tr.ra to ;;aje 7 of tlx- r.ill, line 
21, Y.i-cre it is -r^roviccd - 

" '"lia t no e.'Tiloyce anc. mo one scoki:!^ cr.Tploymont 
sliT-ll be rcq^u.irec. as a Gon':Mtir,r of oirrTlo^Tncnt to 
joip, cny or^-anization. ' 

"In drafting"; that SGntonco, va.i; attention called 
to the fact tli?.t there are m?ny indv-s tries, ^.oner- 
ally c ailed closed irxaistries, v-here the eniployees 
are cffect-aally organized, so th-at they can require 
menfoershi"? in their "Ujiion oefore an ein;-'loycr ""lay 
hiic a nev; iiie,n, anc v/culc" not tiiis clause have an 
effect uoon the closed sho"' situation, vlicre every 
later union Ims heen successful in sccurin^, sxich a 

Senator T.'AGhZR: "It me.i'. I'herc are different vicv;s 
a"bout the.t particular -provision, -?s V.r. J-ichocrg 
InioTiTS, s.nd I thinl' he can exrplffin it more clearly 
tl-^n I can hecause I still ^.OiHC doubts about it 
as to Y/hetiicr tho':c ror s ou^h.t to be in there." 

■'oi^ld be no purios?, of course, 
i:;th of th^ VLiiions in such 


. IZ!;IS: 

; I 




les sen- 


10 Et 




Senator V.\A.Gi:i;?i.: "Oh, noJ I thinl: those v;ho advo- 
cated this provision had in mind that '."hile some- 
times they ■'-oulc not exact the promise not to join 
a \mion, they vill exact a promise to .join some other 
organization v.'ithin the industry, vhich may not be 
ca.lled a company 'ojiion, biit h?-s the effect of it. I 
thinh t>^,t is \.-hat :.;r. 7.ichfDer£' iird in rdnd."(*) 

Ui-. T.'illij.m Green ap'ooarod as a vdtnoss iirmedintely following 
Senator '.Ta^jner. '.Vith his appearance occured the first extended 
discussion, before the ?Io\ise Committee, of Section 7 (a). (**) 
Mr. fro on o;"'cned his remarhs bj' subraittin,j tv.'o amendments, to 
clauses (l) an" (f), of Section 7 (a) , 'lespectively. He su^^;ested 
first, tl'^.t to clause (l) should be added the folloring: 

"And sloall be free fro:.! tive interference, restraint, 
or coercion, of er:.;>loycrs of labor of their a:;ents, 
in the desigiiatio-- of sucli re"'rescntatives or in self- 
organization or in other concerted activities for the 

(*) Ibid., p. 116. 

(**) IT if., -j^, 117 - 13... Crecn'e initial statement is contained 

in A-o-endix II - B. 


"■)LLi''Tose 01 collective "oarjr.inin^ or otlier niwtu^'l 
-?.ic". oi" -protection." 

The e.r.enclek". claviso (l) '^o'alf. then re?-c.: 

"I'hrt ennloyees slia-ll hr'.vG the rit^ht to or,;anize 
a;ir ■bar^ain collectively, t. roiT^jh re-'-resentatives 
of their ovjn choosin,.., anc- c-hr,ll he free froo the 
interference, restraint or coercion of ea^loyers of 
laoor, or their a_ antt-, in tlio ."eiji^:nation of such 
re'riresenta.tives or in self-or^^anization of in other 
concortec. ha-r ,ai"; i.,^ or other mutvial aih or pro- 
tection. "(*) 

Lir. C-rec:'. -^ointec out that th:.s --roposed anencinent {"ic". not inclu.*r.c 
any nov lei;iEls.tion, ov.t "t.s ta.hen veroa.tim frora the yublic 
;oolic;j' of the C;-over:micnt as sot fort.", in tlia ITcrris-L?. Ctmrdia Anti- 
Injujiction Irv/, rhich;: been ;->assei:". h'.' an overv.'heL/iinj, vote of 
Con^;ress v?-. ■: thus ;^a.rt of t'-ie lav; of tr^e lar-h. 

'The seconi". anienc?Jiient ■;ro'j)osec'. ay hi-. Green -a', tiia.t in clause 
(c) the -.voro.s "corj-'any iiiiion" oe suoptitrutec. for the i./ord "orL'aniza- 
tion". The amenc'.ec'. clause rrouli'. thsn reac : 

"'!h~^.t no ciitployee an.', no one see!:in^. ei.nloj'Tiient 
shall he require,'- a.s a cont.itf.on of employment 
to join a conna-iy -oriion, or to refrain from join- 
in: a lahor or r.nization of his own choosin^ . "(**) 

Llr. C.reen stated that it v/as the opinion of the r eprosentativos 
of the Amorica.''. Federation of Lahor tl:j t this amencjacnt vo^ill riTa.?:e 
clear the real mea.nin, and ^airoose of this section of the act. i.ioro- 
ovor, he oelievec. tha.t siich a ciia.n^.e '..-ould er^ress the ;.aii-posc tiist 
T/at in the min- s of the co^.i-ittoe '..'ho •"'rafted the section. 

"Labor hc\s "been faced with thj.s jrohlcra, that 
corporations set ri: i their ov.'n conivany ■ujiions. 
These \"a.ions are the creatures of the ccroora,- 
tion and function only at the '.-ill oi the in.^us- 
trial corpora-tion. I.Ia.n;;' vrorhnrs are reqiiired, 
as a condition of emplo;Tnent, to join a corroany 
ujtdon. V;hen they become nenbcrs of that corp?.r.y tni- 
ion, then the cohoo:.~ation is secure, because it sirroly 
.".eals vitji itself. 

(*) Ibid., p. 117. 
(**) Ibid., -. 118. 


V'o v:ar.t to r'.^roiC. t-i.-^'t voiv thin_. 

"If the ror::Grs a:\^ ■ eivnittcf, to join r. laJbor 
r^iioii it ou, nt to ":e a ircc, inf.e-oenc'.erit li-ljor 
v:,Ao-A, c.:l-^ net a Vu.ion, or a so-crllec". "-ujiion" thro-u^h 
- hicA a corooratio;:. ;n.?.y crcercisc Aill and cor-^plete con- 
trol, not only of its ov-n industrial afiairs, "but of 
tlie economic life anc. social life of the vrorVers. The ^ 
or.anizs.tion v/e in rain'\ is the corroany u,^ion, e-nc. 
v?e shoiiir like thrt this section of :the Act oc 
clear in that reTr<ect."(*) 

I'.x. C reon stated that if the Industrial Zecovery Act \7as amended 
as he iff.s wi':.estintj, labor would extend to -the ;proposed legislation 
its co.,Toletc and hearty ondorr.ement. He earnestly urjjed favorable 
action tr-ion these nroposed anenc'ments, each of vhich v/as rCi^arced 
as of ver;" .,reat importr-rcs to Lauor. 

iir. Green vas cross-ex-auined on the -n-oposed anencjnents by 
two members of the Cormiiittee, Congressman Levjis of :,Laryland and 
Con^.ressaa:: TreadA^a:' of hassachusetts. dr. Lev;is innuired whether 
the effect of the second nroposod amenJanent vould not be, to ::ive 
recor^nition tc a corpany or^ani'zation v-hich C-reen held to be 
not a bona fids ujiion at all. 

Irs. C-;dZi:: "Of course, it exists, as a fact." 

:;r. LI?;7IS: "You thiif^-. that lav.ira.hers should <jive 
recognition to an instigation v.diich many of them 
re^^ard as lacking- i-i ooi' faith and ^-enuineness by 
leaving, this in the Act? I v/ant your opinion 
on that." 

hr. G7:i;:i': "well, ve feel, Kr. Con: ressiran, tlia.t by 
in£.ertin^" the v7ords 'connany imion' for the word 
'or;ranization' Con.jress v.dll he . settinj; forth the 
real purpose of tl;a.t section •.•hich is to protect 
'.vorlcin^ T3eo2ole fror,- being required to a.gree to 
join a connany ujiion ar^ a condition of erarploj^aent. 
As the Senator well says by piittinc that in it will, 
we beleive, effectively of-tlaw the company ujiion."(**) 

Mr. Treadvra,y ashed C-reep^ whether these proposed eracncimentr. would 
secure the \Tnqiip.lified sunport of labor, to which hr. '.'-reon replied 
in the a-ffirxnative. Althou^'h there hex. not been tine to submit them 
to the "oro-^onents of the bill, he believed this -would meet their 

(*) Ibid., p. 113. 


a"-)"orov^l p.lso. Questioiacc". s'oecif icrll.^^, on this noint, he said: 

hi-. C-?Ji]IiT: "I ^onot ::no'-, ovcc-;it tr^S-t i.iv _;oOv". 

f ricnc , Soriator V'3..;;rier Mt ss.i'. - anc. lis is one 

■ of'tha S-Uthors of t?.e "bill -tlip.t amenc'inentE of 

■ ■ . thi r hinc. met, his, a-oprove:l. I Co not ItiOv- Y.'het>:er 

he ■\-ou-lc' . oe :T;illinj to sa- th-^.t ncv,' o:: not." 

Senator ViAGEIih: "Yes, I c'.o . " 

hr. TZIiADV/AY: "I wantoc". to see v.-hetlier it 
■, O'cilv." r.icet the e-.r-roycl oi the pi'o'Tonent^ to 
, incorporate yov-r s\\h,esticns.' in th--^ hill." 

Senator '.TAG-lIZ?:: "3~)cahin,_ only :,or myself, I 
can £!?,:/ tiiT't it is -perfectly satisfa-ctoiy to 

hn. ■TrZiADV/AY: "Yov. are svaficient of an aiitho- 
rit" so that T,'e are willin;;, tc tahe yoiir viev^ of 

I.Ir. Green reverted once more indirectly to the content of his 
second aniencjMent in the closir.;^ minvitos of his testimony, T,'hen as]:ed 

for certain information "by a nerfoer of the Gouuaittce, Con- 

._ressrnan Uatson of •Pennsj'-lvania. 

hr. "..A[rSOr: ■' "Y'cr-. s;^olce of ' conroany. ■laho:- crrar.i- 
zations. V,'hat '.o yo'a uean by the terra 'conTO-?ny '? " 

i.r. C-hEIlI; "I raean coirnans'- union, a cor.Tos ny 
■o-iion is an or^aniza-tion formed at the direction 
of the conTpany and it is officered by soneone 
connected with, the company. It collects dues 
fro" the raenibers."' ■ 

hr. VJATSOr: "IE i t r^onerally adopted i.-\ Amer- 

hy driZULT: "Hot full;' anf, conrilctely, because 
labor t-Cnerally v,'ill not ac":eTtit; hut in. , 
plc-ces T.'here lahor is domin.ated and controlled, 
they force v.-nrherfo- to.beco.'ie ncnoers as a -condi- 
tion of emjployiiient. "(**) , ' ,• , rls.rrinic'.n, (***) rho succeeded lir. Green on the stand, made no rcf- 

(*) ihid., :. i;;-. 

(**) Ihid., p. l.':,.^. 

(**) Ihid., p;?. IPI^ - 154. 



crencc to Section 7 (?) --rn'oYOV. In fact ids cnly reference to the 
labor -sjects of the bill p.-^e-rs to '.-^ve been t/.o follorinc: 

Hr. SIJlLL3Ti;S;^:iR: "iir. Earrinrn, I voulc. lil:c 
to i-.f^t ;,-o-L'.r p'int of viev; or. on.-- or two ouostions. 
An I reneniber, Cenator '..'avncr rna/fe the stp.temont 
t.-a.t he thou£,ht tliis bill was jrir.ia.rily a labor 
bill, to restore emloyuent, tlmt tliat is the ■ 
basic idea of the bill. The recovery of a£;ricu.l- 
tural industr:' ^.r.c. r/i£'nr\iact\irin:.: indiistry is 
es&entirl before \we can have a lar^-:e return of 
labor er.nloyraent, is it not?" 

::r. MiffilMAi:: " I thijo;; they cone sinrnltaneotisly. " (*) 
■ Report of House Con: dt tec 

. The Hour:e Go;xiitteo on Y/ays and heans teri.dnated its hearincs 
on Liay 30, and on hay ?.7j re ovtod favorably on tne bill.(**) Altho-u^h 
not specifical".;. mentioned in the ?.e-iort itself, Section. 7 (a) as 
it c^rne froT. the Comxiitteo «f. tends, contained ths tuo auendments that 
had been i3roposed by President Green.. . S.cction 7 (a) no\7 read as 

"rjverj CTode of Pair Co;netition, agreement and 
license approved, prescribed, or issued ujider 
this title siia.ll -contain tiio follpv/in;; con- 

\1) That employees mvc the ri^nt to or£;anii.e 
and bar,::ain collectively through, representatives 
of their ov.-n choosing, and shv:'.ll be free from the 
interference, restraint or coercion of enrnloyces 
of labor, or their a ,ents. in thq desi^-,nation 
cf 9x\c]i re-oresentatives or in self or' ani-^ation s 
o r in other concerter activitic-;- for tne --nironses 
gJLsojjLeotiVe barc^ alninf- or &the.r- initial .aid or 
'Protection : 

(S) that no ernoloyoe anC no one seel:in£, eKiploy~ 
nent slia.ll be required as a condition of em- 

. ;-'loyr.'ent to join any conn^any union or to refrain 
froi.i joinind a- labor orcanization ef his ovra 
choosing:; and 
(o) tlia.t employers shall conr^ly vith tho maximum 

_ hovtrs of labor, nirduum i-atcs of pay, and other 

(*) Ibid,, p. 142. 

(**) 73rd Con rcr;:, 1st Session, H. ?:e-?ort ilo. IZO (to accompany 
H. R. 375 ). The billfe nvialj&r v.-as cbanced from 11. "^. 5664 to 
H. 3., d.755, ■ • ... 


T/orliir-^'concl tionr-, ?."rp:-ovec. o-' "^rescriued ''i^y 
the r resicent . " ( *) 

SecLion 7 (^-) on the riooi' of t'le Ho'cise 

H. ?L. ":7-;j load hTarried considera.tior- ±:\ the Mouse. Debate v:as 
limited, to oi;;,xat hours, s-nd tooh ple.ce on li^.y Silith and 25tu. Only 
two memlDers addressed themselves to _Sectio-~. 7 (a). Lotli indicated, 
their ap'iroval of its purpotios. 

Con_,rcssr.r.:i Ilelly of Per.nsylvania said: 

":..;■. Cha.irman, thit, vould not he a .neastire for 
indr.strial recovery if it failed to deal with the 
v7orl:ers in the industries and provide adequately, 
for their .jtist ri;^;hts. I r^.vc heard it said that 
thds it not the tiiae to .MS.he any ■ clie..n: iS in labor 
relations, no matter hor' just those chanj^es may he. 
Ihe ar£-Ui-aent is that v.-o shov.ld rait uj";til this emer- 
^ is over before atteniptin:; to establish la.bor 
standards .... I''othin,i could be moi'o illo£,ical. 
This emergency is in -'art, due to the imortance 
of fair wa^:es b^-lancod hours of labor in 
tainini prosperity' in -•. machine a,^e. ITov is the 
best time possible to mal:e sure tii^.t bettor methods 
v'ill preva,il in ti.e f\ 

"This undertahes to secure a.nd preserve the 
ri^';ht of collective action for those vho. invest their 
rau.sclos rnd. mind ?.nd blood and life in indii.stry 
. . . . 'Je are fjivin^' power to employers and era.ployees 
to adjust these, questions and ninety-nine times out of 
a hxmdred they vill d.o it, liutua.l agreements s,re al- 
\7ayE easier to. ma'-.c when each side Iqiows the strength 
of the other. and respects the other. 

"V/'e h^.ve hcarrd • a £:rea.t deal about the evils and 
e::cesscs of organized labor. The enemies of or£;a,nized 
labor have been lar^.ely resjonsible. They liave forced 
rj.iionists to s"oend most of their time and efforts to 
secure the right to act collectively .... la.bor 
organizers hs-ve been foUj: ht by i?.ir means or foul, 
T'hej" liS-ve had to Je^l with s-oies and iacc the attacks 
of s. private police force. They r^ve hs.d to face blacl; 
lists, injujictions and viciori.s obstrv.ctions. It is no 
V'onder that their tactics cou.ld'not be woi-hed by 
soft sneech and gentle ha.nds. 

(*) 73rd Con:rcEs,' 1st Stssion, H. 1. 5735, ?e-iort ^ilSS . Lay 2.' 
1^)55. p. 7, 1. 16 - p. 8, 1. 6. (amencjnents ujiderlined) 



"I./-". Chairm&n, ;vo are hero frr.nlily recoeiiizini' 
ti.c ri^lit of voT:'-3vs to oi.\,aniz^3 ?n: l/arfjain col- 
lectively . • It is 2 1 inliei-ent CTO--_,i^'en ri^'ht, and 
^•rap-tiii;:, it v:itiiout eq-aivocaticn v.lll ^v.t a 'solid 
icujii'ation rjiJ.Gr the strv.ctiu-Q of indv.strial jus- 
tice. "(*) 

Co:v,rcsr..ia7 Conncry of ;.IaEsachiir,?tts made tiic follov/in.3 comment: 

"I certainly agree T/itli tlie -^entle^.-ien. This "bill 
\7ill end ragged individiiaXisin by providing' decent 
vb\i;os anc o^it-lav/in:-, "yollcvv'-dog" contracts and 
Gv/eatsliop conditio. is. "(**) 

The bill, il. ?.. 5755, passed t.'iC Hfmsc on Uey 26th. The amend- 
ments to Section 7 (a) that had beeii incorporated by the Vfays and 
Means Conunitteo vere acce'Tted by the House — ?nd no additional modi- 
fications v/ero made. Section 7 (a) thus cam6 froi: the j-"ouse, carrying 
but two amenc'jiient s - both of rhich lia.d boon pro'oosed b;/ V;illiam C-rccn 
before the Mouse Committee, The bill then v/ont to the Son&.te Com- 
mittee on finance v/hich had already bed^x^m heariiv s o;i its ovm 
bill. • • 

Senate Co..Liittee ycarir.i^'S 

Hearin r.. on S. 1712 and ;■". Z. :.*7C>5 v.-er'^ hold by the Senate 
Committee on rinenee '.:.?.;, ':"., 23, 'CI and June 1, 1"!53 (**) Some 
seventy-five a r^'eared before the Com;:iittce, seventeen of 
whom lia-d al-„:eady 5^ ■>-■ :&red .on the measure before the House V/ays and 
Means Co.ii.dttec. (***=+=) 

Senator T.'a^.nor, appe-arin;; as the first vitness, stated again 
his conception of the purpose of the bill in the follov/ing words: 

"The r?tio:.ial Industrial pLCcover:-' Bill has as 
its si::i<_le objective tne widespread and ^er- 
.■.i£-.r.ent rGemployment ,of vorlicrs' at wages' s^of fi- 
ciont to sec'j-rc comfort "I'lC: decent Irving. Tiiis 
desired end is to bo reached liy a tv.'o-fold pro- 
gram, involving firct, cooperative action within 

(*) Cong-ros'-..".on-,l P.ecord, Volune 77, Part 4, p. 4'320, 
(**) Ibid, p. 4360. 

(***) 73rd Con.rcsE. , 1st STcsion. I>tionrl In^.i-strial Recover:/ 
ricaringf on S. 1712 and H, I., 57V>^, before Senate Comn'.ittec 

on Pinancc. 

(****) Com-^are table of contents of House a:." Senate Co..irittec 



inc'xi.stry encotiragcd hi: 1?.?/ cnC. s-'Xoer--isoC. by 
the President for the protection of the ^Toblic 
?.-p.L secondly, direct Covernment e^nenditures 
for pub lie wo rks . " ( * ) 

3esid«5s rems.rl:ine, in reference to 7 (a), in his rec-?.;'-iit\il?.tion 
of the provisions oftlie "bill, that 

" . . . . the interests of labor are securely 
^up-rJ-Gd a.nd advanced ■uaider the voluntary codes 
<- in this ma.nncr, labor is protected, not only 
from the dangers of the .creator collective strength 
eOToloyers might gain through their cooperative codes, 
bv.t also from the v/age de"^ressin;, tendencies vhich 
curtail consumer demand ?n' precipitate bu.s.iness 
decline and "o^ieriTploynient, " 

Senator '.Tagnor inaa.e no further cetailec' e.--pl?nation or defense of the 
section, as crafted, 

Mr. P.ichberg, (**) tho next vdtness, v.'as s'Jbjocted to repeated 
cross-exe-mination by Sens-tors Couzens arc Core re to the nature of 
the obligations on labor iritplied by Section 7 (a). Senator Coiizcns 
asked whether, ^ ranting,- the right a]ad desirability of collective 
organizatior^ and bargaining, once a cnlisctive agrcenvsnt lis.d. been 
reached, tnis did not :laco vpon labor the responsibility of nain- 
taining its contract, and not going on strike. The Senator vonder- 
ed whether sone such provision should not , o into the bill.. Mr. 
Mchberg, 'rhile affirming the desirability of protecting labor con- 
tracts, said tlia.t he believed it uir.'ise to insert such a provicion 
in the bill. HicIiDerg was also Questioned at length oj Senator 
La Follette as to the natvire of labor ^mrticipation and rcpresenta,- 
tion in the code making process. I,h-. P-ichbcrg a.p'ioai'ed to think 
tliat in?.Sinuch ?.s codes v/ere to originate fron :;ianagem3nt, and in- 
sofar as they dealt only with management problems, labor need not 
necessarily participate directly. Labor role v^.s indicated by 
section 7 (a), giving it the riglit to organize and bargain col- 

"v:hich means that t.ic employee \\'ovlC_ '^^-.yc in 
Ef-ch an industry the right to bai-^ain v/ith. me,n- ' 
a.j.ement as tr the terms or conditions affectin-:' 

(*) Ibid, p. 1. 

(**) Ibid, pp. 22 - rJ4. 




Scr-rtoi- LA. rOLLHTIIi: "If vou ?rc (.T^^ri.r^^_ up e. code, 
let us s?,y to establish ^\'acticGs v/liicli siie.ll be^ 
considerec. fair or vjifair in tlio steel i:i:"ustry, 
c".o you not envision tle.t labor ■.voulc' uc represented 
in drav'in^ up those codes, insofar as they relate 
to v/orhin^' practices, cither fair or in 
relation to enroloyi.ient. " 

liT, P.ICI3IIRG-: "I this visicn of; it and tiiet 
is tlia.t either la.bor vdll participate in the drav/ing; 
up of such codes, or tliat labor v/ill "larticipate in 
the considcra.tion as to v'hetho'r such rodns are fair 
anc" r,£cnicnt v.-ill regard it as desirable to labor participate at tns first sta^e rather than 
the secor.d — it v;o"alc. be cither a choice of la.bor 
participation in t]ie orii'jinal preparation or labor 
participation ir the con: idcratio:: of the codes. "(*) 

The belief that the proposed r.! implied a dictatorial control 
of both industry an-", labor, is reflected in -the .examination of Samuel 
P. Bush, (**) a retired industrialist, \.;hc appeared to urge tlia.t 
some provision for the establislr.-.ent of t"?.£e princr.ples be included 
in the bill to effect a balance vlth Section 7 (a). 

(*) Ibid, pp. 26 - •-:7. Por hr. Hichbei-g't. f-all testimony on 
this moint, sec A-rpendi:: II-C, 

The issue raised is an i.-nortant one. Labor's position v^ould 
undoubtedly / been a stronjer one lia.d the first rs.ther 
tha.n the second method sn.bsequcntly been chosen by the IIPA. 
It is asserted tha.t Secticn 7 (a) '.-ou-ld then merelj'- defined 
the terms of operation of Sectic:i 7 (b), vhich it is claimed 
was the original intent of the Act. (Sec Annals prticlc oy 
Solomon Barhin, cited on p. 3 rbovo) . 

S*ction 7 (b) reads: "The Presi- ent shs-ll^ so far as practi- 
cable, afford everj" opnortunity to er.Tployers and em^?.loyees 
in any trade or industr:' or subcivision thereof v.'ith respect to 
v-hich tno conditions referr-Ji to in cla\ises (l) f-nd (3) of sub- 
section (a) prevail, to esta'Blish by muti^al acreeracnt the stand- 
ards rs to the maximum hours of labor, minimum rates of nay, and 
sucn other conditions of eniploym.cnt as ma.y be necessary in such 
trade or industry or sixbdivision thereof to cffcct-imte the policy 
of tnis title; and the standards established in such agreements, 
Y.'hcn apn roved ly the President, r.lia.ll h-ve tne same effect as a 
code of fair ccr.Tpctition, ap-n^oved oy the President uiider stib- 
section (a) o"' Section {?)." 

{**) Ibid, yp. 160 - 16.3. 


I.;r. 3IjSII: "I 'iie.C. lon^. ex^^ei-icuce i:: inc.ustr;/ ■ 
e-nc". I '.-'ould lihG to adc'.rest. m^^self- to Section 7 
.... If you are rjoin^; to 'lee-o these --irovisions 
in ^:cre, there Itp-e to l^e one thin^; I cE.n see tiif.t 
yov. ?.c.d to effect a "balance and that is to ests.b- 
lish, to state in this measure, ths.t the Auninis- 
trator, the Presic'ent of the United States, shs.ll 
ostatlish certain -re-cie principles." 

Senator CIAFJC; "i,h-. Bush, if you Ixad 8,. dictator 
of industry'' and did not have some such provision ■ 
a J, in Section 7 here, you have pure rerimentation 
of lahor, don't you7 " 

hr. BUSiI: "llo, not necessarily at all. ',7e all 
Inio'.'^ there are sone ver; foolish ind"astrialists, 
and thei^e are some very inteilirent industrialists, 
too. The j-.reat of them aro all ri^ht, and the 
i:rcat of Is-hor is all rij^ht, too." 

Senator CLA.FJC: "I am in accord vith that, 'out if 
you c'on't t_,ive tne lahorin^.. class the :.-i,.,-ht to col- . 
lective hari^aining — " 

I.h". Buth: lie h^.s .;,ot that right noT/." 

Senator CLA.PJ{: "I'ot if this "oill is -'assed and \-!Q h?.ve 
a dictaiorship. he von't have unless you put it m 
the Act. You '-ill then have -pure re:,imentation of 
labor. " 

'..-_-. BUSH: "I don't uncerstand tha.t this Act tahes 
a\7ay the ability of labor to sneal: for itself." 

Senator CLAPZ: "It f'oes vjiless yo\i put- in in there." 

dr. BUSE; "I don't ^mde:•stand .tiiat at all." 

Ser.ator CLABiC: "Iho/c is th'-- v/ay I -ceiCerstand it. 
You set u-^ a dicta. to rshi-o," 

I'.T. BUSH: "I understar.d that,-the C-over:jrnent through 
Eone aji'ency is £oin_. to cstab.lish a minimum vra. e and 
tlia.t labor r/ill have the same opportruiity it Itp.s alv/ays 
had to ash for more tha.n that raininroj-.i if conditions 
;"iropitiouE. " (*) 

iur. Janes A Bi.iery, (*^ representing, the Bational Asrociation of 

(*) Ibid, pp. 160 " 152. 

(**) Ibid, -r:. .^73 - 394. Kis remarhs in some detail, pi. 2ei - 393, 

are re-?rodr.ced in A'-y^enAi" II-C. 


i.'ianufacturers a--:- eared "berore t..e Comi.iittee sti-on^^^ly op-iosi",^ the 
power 01 se-cle.tioA tlnat woui: uc coni'errec Id:/ the Act, ?.n.'. its cen- 
tralization i:-- the ha.::(S of thi A/Jii-iistrator; he r.lsc questioned 
the Act's constitv.tio-.iF.lity. He further protested thrt while the 
cnrployer's ric-its wore not defined tut left to the Ateinistrator' s 
discretion, labor on the other hBJiC. wr.s ...iven definite and specific 
rij^'hts rjidor Section 7 (=".)• 

hr. i:.Z;?.Y: "Thus while er.Tployers as such are 
?.ssured of no -•rotection in the cischar^e of 
their onerous ohli^ations, hut 
th.cir trust \-holly in. the Arministrator, it 
is Eon^:ht to t^'ist tl:*^ -)erdin^ legislation 
into a distinct effort to mold the eni-jloyment re- 
lations of " he United States into a sin 'le foriu, 
to the nanifcst advantage of a "Darticular form 
of cr:'-;anizs.tion. . . . The trade -ujiion is o. 
reco^-nized part of our social life, yet at times 
it ::r-?.nkly sets itself v:-> as a separate an;", dis- 
tinct { ov< arency to control thct-e v:ho hc- 
lieve they can "best advance their own interests 
then throi^-^h other fonns of or^:a.nizaticn -:'.n'.. re- Unory ohjocted that the raeasnu'o as drafted left it to 
the riscretion of the Acdninistrator to transform the whole mcasiire 
into an exclusively Tedera.l control of employment relations. He 
maintained tlirt rt least three times as ma.ny em-^loyers as dealt 
Yfith trade nn.ionc., operated 'onder employee re-orosentation plans, 
and it woiilc. he unwise to adopt s. pro^^ram ti:ia.t would create the 
imoression of seeming to disrupt "satisfp-ctorj' existing relations" 
at a time vdien it was m.ost in-5ortant tria.t "poo' will and 
in^" shordd prevail in omplojoiicnt relations. 

"linally, if this Comrhttco is of the opinion 
that a statement of cnnlo^'ment relations is a,n 
essential condition of codes, a^id a.^reenents, we 
siiomit that, as fair minded men, it shoi^ld be 
stated in terms which not only fairly recognize 
the eq"0£.l anc- mutual rights ooth of euT'^loyer a.nd 
ei.f;^loyoe - of those v/ho desire to rcfx'ain from any 
pa.i'tictilar foiTi of_ Association as v;ell as those 
\;ho desire to associate; hut v/hich recbifnize no narrow anr' 
enclusive relationship out, as it constitutionally re- 
quired, every foiTfi of le; emplo^Taent relations 
rratually satisfactory to the parties. ... "(**) 

(*) Ihid, V. ^34. 

(**)'lbid, ,70. fC4 - 283. i.iinor cli!.npes in pujictLTS.tion have heen 
made here for t;3rcater clarity, Oorjoare Ap'^endiz II-'J. 



Senrtor VJAGLTHJ.: "AnJ. tli-.t if^ yo\.:r o;-':ooEitio:-. to tLis 
'..ill, :. ;.t -/.ot? rx yov. not thii-i': l-aljor is roceivin'_ 
too i>.-e.t Totoction here?" 

::i-, Z'.ZI^I: "On thd co;ti-e,ry, I vant it to receive 
over;' ■.-ec.sona'ble protocticr., uut I rant th? t err^ressod- 
in terras tiip.t are to S'-rloyer anl eooloyee an: 
not a one-r.iled oar a in here tnr t ptten;;ts to Trive 
ovi Gv;; relations into one fox/^." 

lir. 3nery then "^ro'-'oscd that Section V oe deleted, offered as e. 
s'ac5titi".ted an "rnenLinent to he vb/.b to Section T; rhich read a? fol- 
io v/s: 

"Z (e) -In ever. Coc'e of r'ai:.- Coinietitior. in any 
tre-de oi inhisti"; or s'c.hdivisio'. thereof a y; :"o.-cd 
by the ?reside;\t irVcr either suosection (-a) of 
ELUosecti'n (") of sectio" .the n;oYisionr ::or 
tr.e -^rotectio. o.' err-loyoes sh/.!! ircln:''e the follow- 
in. conditins: 

"(i) That eunloyerG an' e.."i:')loyeeE '.rja.ll 

the ri; ht to or_an-ize and bar ;ain collec- 
tively i;. any for::i ir^tnally satisfactory 
to theia tin-ov-.d- representatives of their 
o'.7n choosinti. 

"(',) ii-iat no Ci;v-loyee -"nd no one TreGhin£; e.cnloy- 
Lient shall bo required a.s a, condition of 
eiiT'.lo'aient to .join any le.^'itiinate or^anisa.- 
tion, nor shall any ^ersons be - rccliided 
fron bai- ainin; in^'ividnally for c:n)loy- 

hp, Hi.ier; believed that his a-raencbnen t v.-cnl-f offer the desired 
protection for labor, a.nd v;or.ld -protect adeq-op-tely the eniployer. 
horeover, ..e strtec", it ■.ovj. a.lso /aian^artee the ri[i;ht of tlie v;orker 
to ba;.' ai,-- riir. ivi'",\ir'.liy, a, ri^nt v.dnich, he claiaed, could not be tahen 
away fro.i the Ariorica:;^ ocople, SenatoL- d'a.ynei- ±n renlyin^; denied tlir^t 
there vras anythf.n;^ in Section 7 t'nat de-rived the worher of the ri^ht. 
Senator ore, atter.ptin to clrrify the issf.e, asbed l.r. linery the 
followiri o-^csticn: 

Senator &C:h:: "Is this yov^- noint, ti£.t there 
■ are "ertain ri hts of la-bot cna.ranteed in this 
bill and not entr^nsted to tne discretion a.nd 
yov.'er to the .Auministra-tor, vhile, on tne other 
i^a.r.;". tbi?re are certain fnjidarnenta.i I'irhts of the 

(*) Ibid, n. 


3, :"''-oyers, no u ex'^ressly .'ji".?rP"itced, but 
re co:.ii:iitted to tho erect ion ant r)ower oJ 
b" e A^inin-str^tor? " 

-. Zi.'Z:Ji ":]:i-ctly.i'(*) 

(*) Ibic., p. 2G9, 
93 SO 


In concluding hio testimony, Mr. Emery cited tlie British Trade Union 
Acts of 13P.7, as show in . the "fair ^'fay" of regulating industrial relations. (*) 

Mr. E. L. Michael (***) re ^resenting the Virginia Manufacturers 
Association, a-o-iearer'' "before the Committee, -nrofessing s^'iiiDa.thy with the 
objectives of the Act hut stating his oiDTiosition to certain provisions 
enacted hy the House. Referring to Section 7 (a), ''r. Michael asserted 
that "the provisions of this section -Tlace •'onreasonahle and iiimossihle 
■orohihitions upon the emnloyer". ''^e maintained tha,t the net results of 
the Section would he to destroy, 

"....that confidence (miich) is the essential factor for reviving the 
^vheels of industry - confidence that employment relations existent 
at the time this Act takes effect, mutually and satisfactorily 
esta.blish,ed by and between employers and emrjloyees, will not be un- 
duly disturbed excent by mutual agreement - confidence that such 
relations will not be destroyed by agitation and influence assumedly 
reauried by Federal or State -orovision and authority. No managements 
of industry will willini^-ly be denrived of its right to advise freely 
with its emioloyees as to the minimum wage and the maximiim hours and all 
other conditions of work and -oroduction. ... "(****) 

Mr. Michael argued th^t such existing satisfactory relationshins 
would be dist-'urbed by Section 7 (a), through its intemretation by Govern- 
ment Agencies on the one hand, and b:' labor organiza.tions on the other. As 
regards the former, he said: 

"It is common knowledge that in the Federal and State Labor De-oart- 
ments the words 'collective bargaining' have been universally in- 
temre t ed to_ meanL,collec t ive ba rga ining by and through the organi zers 

(*) The -nortions cited were Section 6, clauses (l) and (2) reading as follows: 
"(l) It shall not be lawful for any local or other -oublic authority 
to make it a condition of the eraplcyment or continuance in employment 
of any person that he shall or shall not be a member of a trade unicn, 
or to iiTinose any conditions, upon -nersons employed by the authority 
whereby employees who are or who are not members of a trade union are 
liable to be placed in any res^oect either directly or indirectly under 
any disability or disadvantage as compared with other emplo.yees. 

"(2) It shall not be lawful for any local or other public authority 
to ma]ce it a condition of any contract made or proposed to be made 
with the authority, or of the consideration of acceptance of any tender 
in connection with such a contract, that any perscn to be employed 
by any party to the contract shall or siiall not be a member of a 
trade union. "(**) 

(**) Ibid, p. 291 

(***) Ibid, PT),397 - 3T' For expounded remarks, See Appendix II - E 

(****) Ibid. p. 570 



of re-^res';-::t,', tiv-s of laj-r^r unions, whereas, vp ,:r-ov- colloccive 
''oar^8,ini-/<, is -irT ^ti ^--c" e--sr3- dr.7 'oetreen er-r^lr-ees rad em !lo7'=TS 
i."i thousr.nd.^ of indiTidar'.l estaolislnments. . . . 2o,.~.e^ u'^o:l "o:,.-t 
oosp'rvations ' nd er-)erie""ce thf^re woM.ld ira- i-dic,c=.l-' "oe established 
the i.-.flurnco of the federal a-.ul $ts;e '"■0V"r:vie:--ts torr.rd the 
coiTrralsio::. of ■r.:io;ii2 tio/. of bhe vaat i.^rjorit-- of eTi.lo -e^s i-. 
industry, who are /.ot -t nr- 3-?:it j.r.i ■x-iz--d, 'ni it v/ould o-^ defunct 
in many os-ses for them to co:-_tir-Ue their e^nrer.sed and de;nonsT;rrt- 
ed prciei-ences and actunl e?:isting ;-:ractiC'~-s of mahin^: vnuturllj'- 
satisfactory a.^ree lents vitli crnlo-"e-s." (*) 

In re._:rrd to the intervir^tatior. of Section v(;:'.). made oy repre- 
sentatives of orga;nized Ir-.bcr, ;:r. Michael said: 

"But in the interpret- tion of this Section ::s, ■ odve re-oute'd 
to labor officials, (**) it is conte--r)lp.ted by them that all 
enr-^loyees in industry -.ust organize into lrj,oor miions, whose 
reprasentr.tives "oro~)or,e 'co nextio-te and conclude rith re;^re- 
sentotivps of ^iven trade industries, agreements as to h.ours, 
v/ai^es, and working condioions for that industry, v'hich -ilan 
in our judgment is i.ivicssible of successful co-.-SMJiunation. 
If such a ;olr-n were 'ih'-sically jossible or succ^-ssful, '."e 
would certainly observe more than 7-10 ;ier cent of era-^-^loyers 
in gainful occu-;.?tions belone'ing to labor or_;anizations 
todc.y. "(***) 

;;r. concluded his cor.tiients by askin, either the elimi- 
nation of Section 7(a) or its modification so that cm^loye-'s and 
e noloycrs would be given "equal ri.hts". Pie recommended that in 
clause (3) of Section 7 (aO* provision should be made whereby em- 
-/loyees as well as employers should comr)ly with the stated condi- 

Mr. Cliarles R. Hooh, (****) -iresident, American Hollin^ Mill 
Co-Tiany, apoeared before the Committee to nresent the viow^TOint of 
the iron and steel industry. 

"Mr. Chairman, I do not -:)resume to re-ir«sent a-.iy ^roup exce-it 
the comoratiun cf v;hich I ha-oicn to be ;')resident. Hov/ever, 
from niiraerous conference's v/hich I have had v/ith larje numbers 
of executives of the stel industry, I am quite confident 
that I represcn: the vievnoint which is very _eneral in industry 
1 day . 

(*) Ibid -. 373. 

(**) Sec footnote to i.Ir. Lamon'o's testimony, p. 54 below. 

(***) 73rd Gonjress, 1st Session ITp.tional In dustria-1 -iecovery Hearinij 
on S. 171? and H.R. 575'S, oefore the Senate Com.mittee on 
Finance p. 3 .C 

(****) Ibid -^^". 383 - 390. Sec A-yoendix II-? for testimony in full. 



"Ue ' some 7,000 jen on oui' payroll. Therefore I thi-^'i I 
reprei5ent £. n-uxioe . of eia jloyees. "(* ) 

i.^r. I-Iook stcted thct he co"ala coMf ic-sntl^r say that the steel 
industry '• s an::ioas cad ^.■illin:^ to do everything in itr. T0'.7er to 
cooDexrtc "dth the president in ni? f-ffortir to incr^je e:! jloy;.ient . 
3u.t , h(c felt it ";as the o"i3li..:c tion of every citizen to c.ll attention 
to the presence or ^btence of provision in the Act that Fov.ld interfere 
r;ith a successful attainment of the desired goal. In tnis rer-..d it 
v/o\:'.ld De unfortun.te he urged, if o,ny lenguai?-e in the :ill -/ould per- 
mit of such an inter jretetion as "OJ.ld endpnrjer "the happ;,'- relationship 
v/hich has existed "bet";een emoloyer j-nd emoloyee in this co:.ntry during 
the past ten vesrs." 

LIr. Hoc': suggssted t";:o arnend .e -ts to Section 7 (a). Of those 
'"hich referred to 7 (a), the first proposeo to replcce the aiaendiMsnt 
to cl,:use (1), nai.iely: 

"and shall he free from the interference, r strpint or coercion 
of employers of l.-bor, or their i^-^ents in the desigartion of such 
representatives or in sell or'pniz^tion or m other ccnc:rted 
ictivities for the Durjos-T.s of coll.: ctive oarTeinin;'^ or otner 
nutuad rid or protection." 

hy the follovrinr cls.use, 

"end ejcn e:_i5lo"/er ;nd his enDlo-r^-.s shell he free froi the 
interf e. ence, restraint or coercion exercised hy either perty 
or oy non-employees as a.eamst eithe:e, in the design-^tion of 
such repreesnte ti\ es or in self or';ani;::ations or in other 
concerted activities for the purpose of collecti' e b.-r£:;in 
ing. " 

In favor of this proposed change, i.^r. Hooh argued that clause (1) 
e/ith the Green amend:,ients carried a prohibition s^^. inst the inter- 
ference "by ino.ustry wita the employee ri^-nt of choice, hut there 
vras no prohihition on those \7ho -rcre not e.ijloyees f ro : interfering 
v.'ita tne "free exercise of the e.njloy: s" of .n estcblisn lent . . . . " 
As : second amendment, ..r. Hoo^e i.edic, tc.c'i ne ••isned to revert to 
the original form of clause (a) before it v.>?s 8,mended: 

"I v;ould stri'-e out the tv."o ^'orcs 'co,;i;j£n"'- union' end - ■ 
insert in piece thereof the word ' organic.: t ion' because 
there is no re. son \/hy the- words 'co-npeny- union' 'e'hatever 
that ma]'' be, should be retained, said em"/ other organization 
left out. l' 

(*) Ibid, 0. 388. Some difficulty is caiused for the ce e ef ul editor by 

Mr. Hook's use of the ■•oro. "represent" three tines in this cuotation, 
each vith a somewhat different emhasis. Presu:-:,ably he means by 
his state ^.ent "I represent a feir nvenbe:: of e^iplo-yees" that he is 
a large employer. Yet in the paragra.oh immediately succeeding the 
q^uoted excerpt, he goes on at some length to describe to the Committee 
that he started £,s a workman and came up through the ranks. The 
reader is left to decide whether he i-'e s tr-^ing to sugeest tha.t therefore 
he "repre ented" also the viewooiit end interests of his eielo'^ees. 
Coioaie his testieiGa3", Ao'oendix Il-r 


It is cr.ite cle.r that the net effect of cdoptm- tne ca^n-es pro- 
posed t)/ iai'. Mooli '.vo\.i-lci. '.vo to n ■■£..te "both of the e ;- ■::d..e-its that had 
b^en oroDOs.-d by . r. Green, c.nC. tn^.t nod been acv^eoted b;/ the House 
Gom:aittee and favorably par.sec. on 07 the Mouse itself. The Senate 
Co-.u:.ittec on Finance ap^iarentl".'" .pcid no att.ntion to the:.e suggested 

The position of the iron rnd steel industrv v;r. r, , clr::ified on the 
follOT'ing d-Ej xiit'n the apoe. :."rnce of ;:r. Hobert F. Leaont(*) on benflf 
of the A:."-'"-ric^n Iron and Stfeel Institute, re pre sent m? abort ^3j of the 
cor^itry's steel induntr;^. V.v. L"raont ststed that due to ujaceitainty as 
to the neenin- of the Icbor clauses of the pro'oosed measure, esoeciairy 
as modified bj- the House s:n6. riven in .- ■~t£te:nent by Icbor 
leaders, the iron end steel iao.ustry felt called upon to stete its 
■oosition clrax-ly with reg,:rd to the^e sections. 

"The industry stands positively for the open shop, it' is 
unalterably opoosed to the closed shop, ior -lany yeai s it 
has been and nor/ is prepared to derl directly- '^ith its em- 
oloyees coll.ectively on ell -c'tters rel^tinr to their e;.i- 
■ plojraient. It is ooDOsed to conducting ne-otiations rec^.rd- 
ing such ms.tters otherrise then with its 0'7n e.ioloyees; it 
is unrrillin- to conduct the:a \7ith outside or- ani:?:.'^tions of 
l£.bor or '.rith individuals not its eaplo-y-es. The industry 
accordingly aost stroigly objects to the inclj.sion in the 
pending bill of an-- provisions '■■hich -ill be in conflict 
'^'ith this position of th^r industr-y, or of any l-ngu:^;e 
which implies thet such is the intent of the le- islation. 
If this position is not protectJd in the bill, the industry 
is positive in the belief thrt the intent and -^urpose of 
the bill crnnot be £cco ..pllslied. " 

To Senator 3.eed's ouestion as to whether in fact, the a^nend'd 
cleusvs did interfere v;ith the open shoo, ur. Lament replied, 

"There is soiae question about it. It is uncertain. It is 
not quite cletr Just '.That the recent -j^iendinents do conteru^ 
plate. " 

Senctor Reed; "It gives the evnoloyee a right to be con- 
• suited through represent tives of his orm choosin^". Isn't 
. . that perfectly consistent with -/our ooen-shop polic"/?" 

;,ir. Lament: "Yes. That statenent by itself is; yes. i.iay 
I just read the section to vaiich I refer ? 

'The anno-j.ncement also disclosed that the redirtion 
v.'ill use the industr-y recovery bill as occasion for 
an organi'^ing campaign. V.r . Green nill outline, a 
pleji to the -meeting for a quick and intensive drive y 

through the country, so that '.rorkers mi;";ht be better 
prepared, as it was expressed, to de.irnd consideration 

in the industrial agreements conte-i Dieted. 

(*) Ibid. >3. -S4 - 395. See Apoendix Il-b for his testino-'y in full. 


'Til-: ..ttitv.:;^? t:": - tod^7 's; ': - " or\-ii- tiona 
-.ere i:. u..r':sC. ^o-si':.vr.?A to the , .tz ::c...'= oy 

:.r. G^rcen c-nC He ^r:- I. H rri;:£ia, Prc^iLci-nt oi' the 
yc. ."ber of Oon.uir:.^ oi tuc Unit;;;. StL.t;;s .htn tn^y 
,.0-nec. nrads ..eiOx'e the 'Ti/s end ..;jas ;,o:;i littee ten 
da/s c.r:o in sa; .lort of thf le; i'Ll: tion. ' 

"Tnc .L t r is tlict thi t -vou] d .he more divt.xhia- to i' 
than lie] 5i-;.l. " (*) 

Lr. Joh:\ L. Levis (**) -.jvsrtd htforo the -' Com-iittee in 
iiis ce.g,.dt-f hoth ;;,3 Presidsixt of the •Jnit d i.ine "or't'cTs of A-nericr 
and 'vice- president of the Arac-rics-i Tec'T^tio:^ of Lr'jor. _x. L^'is' 
state :e:it on behslf of ther.e orgyii-rtions vos one of erf.phctic siipoort 
of Section 7(a). The onlj Ir.Dor r&pr ; ''entp-ti^ e to c,pDesi before the 
Committee, his rcucrl-s ew here caotcd tt l--''pth. 

i.r. Le-.-is: i'i..r. Chrirrjan , i\nL ;^;entle i::i of the Committee, I 
cp'jecM- here to zvia u.") hriefly the vosxtion of or ;anized 1;; bor 
in Aiaerics. iiath re-;,, rd to t:iis i,idu;i cri:l recovery hill, "c- 
stand scucZ-'el;/ hehind Section ?, ;,£ r; jort..c • to the Sen?.te in 
the House bill, es snend: d hy the "-. ys .: nd ...ecns So^auttee. 
It will pl::c- u.-pon the st; tute hoo'-s .? -ood s. :.' decl. ration 
in the form of e. st-. tute thct ^Till .~ive to thr 'vorVers of 
this country so v- rights the s£ ;-j ri-hats lO'- e-i.;o/?::' V-- the 
eiu-iloyt'-rr. c.nd the co: JOixtions th~ ri-nt to or..-.":'iize, end 
to hcrt;ei:: collectively for tn?ir 1;: bor ,:nd to ';.; re or ec-.eittd ■ 
l):/- re :'re cent.- fives of triuii 0"..n choosi-i", in p:;ecisely the ■ 
seup foru £:entle..ien, thct the h-iiiiC-n Iron rnd Ste.l Insti- 
tti.te is reprer>e;;\t.:.6 before t.^is Co; itt-.: this oininr by b- 
fornier a.istin-i\ir:i'.ed Sec: et r,- of ^ow.ercs, h.r. Le." oat c 
repr; srntativ-:- of thi- ir en choo-^-inr. " 

:,;r. L--:v:is r.tated to the Gov; .ittet: that labor's de'L/'.d for th: rimt 
to or^'cnize, ".vaG ashin for the s;-...!e ri^-ht grcvte.! to eiplGy:rs to 
form themselves into tr-.;.'.e o.s'^oci. tions. He choX'.eC. e-.nplo3'ers 'who 
had ovopec', rod before the Goa ■Atter to o'jject to j^C-itinf^' sucn rights 
to labor -vith "hypocris;-". 

"Orycni^ed l,;.bor in '.'.n. ric. -."rnts the ri;.3ht to or rnize, if 
it '".'c nts to or-;ini?e. fve:iy e.i.iloyer her the ri^?;ht to foru 
these trai..e associ. tions cn-j. yet dir;tiv;,xiished gentle- 
men h;,^'£ the 6firont£r3r to co.;" before this Gomattee and 
propose thc,t, eft-r securing these privili? :es for thenselves, 
they will deny to the 'vortjen enga^-ed in those industries the 
same ri;?hts ?nd •orivile;?;es vmich the-y civrO'-ate to themselves. 

(*) As '-ill ;:- r-een from the conte-rt, ..r. L : lO -.t "',. r referring not to 

8. section of the Act, but to e st-teient, presumably from the press, 
•.■•hich he hod before him, and from '.vhich he rei-c . Presume bly this is 
the stttevient to ..uich r.^feren^e 'vs also made by ,..t . ,.;icha-el. 

(**) Ibid, op. -iO-i- - 407. Sec A:pp":'.:i:: II - &H-for testimony in full. 



"Labor in Americc;. is tirec", of such hypocrisy; it ia tirec. of 
"being dealt ■.vitli in suoh •_. ,n :in&r 'oy ;.k'-i v^ho proclaiiii trie pre- 
sent lator relE-tionsnip, ^f ;/8,s done this -lorni;;; "by t repre- 
sentctive of the steel industry here, e.s £. h^ yr- str.t^- of 
&ff>,irs e;:isting, and a hrpy condition. A uc i i-vho Cc n sej 
thct lator relation? i--. the le.?t t^n ^e^rs in A^.3:"ic.- v.-sre 
he.p'y,- as an opti-.uist tlic t dwell" in a rerlm to -'nich I crniot 

\.lT. Le'.;is claimed that if A:aeric£n labor v;as to make its co.i- 
tribLition to the recovery program it nerded cooperjtion, re.ther 
than opposition from the eiployers. 

"Labor in America-, or^-anized labor, is tr^rmr to ixintain ^n 
ecuiliorii.i.ra ox our G-over-: .cnt in this tirai' of stress snd in to cCco.iDlisn that taslf: it is entitled to the friendly 
cooperation and siipport of every Americn T,'ho "believes in 
mcdntaining that eopj.ili"brivj7i so that our :^ation raip'ht endure, 
end it cannot be raaintcin d ^y follov;ing the le^^islc tive coiu'se 
of c.ction suggested here "by Icrrge er. Dloyirs of la'bor in the Iron 
c.nd Steel Industry, and ZTetional Associction of la-ufacturers to 
keep from labor those rights rrhich the Masters of iidustry arrogate 
to the iselves. 

In closinr, ilr. Lenis i:diG:"ted Itbor's endorse :^nt of the P.ecovery 
Act, rnd itr, intention to i ight any cult t ion of Section". 7 (a). 

"C-entle:.ien of the Committee, I vnxst not talce more time. 
I appreciate your hcste. I ner^l^'- i.'ant to say in conclu- 
sion that organised labor in America, spealcing through the 
American Federation of Labor jnd its subdivisions, has 
endorsed the provisions of tuis le'c-isl'. tion. They have 
endorsed it because they tnink there is an em"-r;;;ency in 
the Nation that is ho-orly growing worse. There is a grave 
necessity for the stabilization of our economic end indus- 
trial "jrocesses. There is en impc-rf.tive nec'ssity for set- 
ting up machinery ujider the government for economic coordina- 
tion and regulation of processes of industry and Icbor 

"Labor will protest any eraasculrtion of Section 7, jnd it 
says furtnermore thct industry has no tiling to ferr in a 
modern rationalized labor rela.tionship such as c^n be set 
up and administered under t"he provisions of thi'r. Act." 

Senate C0i-:mittee 1-i.eoort 

The Sena.te Finance Comiiittee Hearings concluded on June 1, 1S33. 
The Oommittee reported favorably to the S nrto on June 5th. (*) In its 
reiort the Gom-.ittce indic-ted the ajnend^its it hrd i "^ to Section 
7 (a), as it appealed in the House 3i]l: 

( * ) C ongr e s s i onal record, "olv.-v 77, p.-rt 1) , p. -^±990. 

9 350 

"Youj 3oi.riitte:. lu? ins rt c. <; pro iso in S.ction 7 ( ) xn- 
cic tinr th?t it is not intended to cornpel s ciisjige in en- 
istinjj s; tisf : ctory i-el,r'.tionships, "betv.-een eraployees and em- 
ployers. A further condition has been inposr.c. th: t no em- 
pl03'-ei;"s and no one seeltin-; er.-.Dlojment shall 138 re.uired, e.s 
a. condition of e:i:ilo:-:o;nt , to refrein fro-.Q or-^tr.izinf: or 
assisting a Ic bor or.'r.rni-ation of hie O'.n choosing. The 
House 3ill is ].iriited to r.vfra.ining frora '.joining' £ 1 bor 
or:'-Tni Action of his ovm choosing. "(*) 

TTith the ci.iend^nents proposed b^ the Senfte Pinence Comuttee, 
Section 7 (c) at tnis st;. .e read as follO'"s: (amendments underlined) 

"Section 7 (a)- - '^ach code of f ir oo ^petition, r,'5;ree ;ent 
and license r ooroved, prescribed or issued UJidfr this Title 
shall the -'ollo', inp conditions: 

'(1) That employees shall hj- •■ e the ri.-iht to orfja-ii^e 
and bcrgain collectivel" throu h reorescnt^.tives of 
their O'.vn choosrn^;, and shall je free fron the inter- 
ference, or cot: cio '. of eiplo^-e s of 1; bor, 
or their cY:e;its, in the /.esi;:!; tion of sv-Cii repre- 
senta.tives or in self or,-a:ii''. tion or in other cone rtsd 
activities for the purpose of collectiv', b; r-: min,?: or 
other mutual aid or protection, provided, That notnin," 
in this Title shall ut construed to coiroel a change in 

e::istinf,- st 

;,ticf cctory relationsnivs betueon tne emoio-yecs 

c^nd erijloyc 

u's of ;.;v," jarti^ular ^lant, firm or corooration 

shall hsve 

the right to orgrni'^e for the jarpose of 


bar. cining '..ith their e.ijloyor js to '.".'ag'TS, 

hours of labor, and other conditions of er; iloryTaent ; _ 

(2) That no eMoloyee and no one seelzing emploj^nent shall 

be reouired, as a condition of e-.iployment , to .join any 

company xinion or to refrain from joinin^-, or "..nixing or 

assisting a If bor organization of his ov:n choosing; 

(ri) That employers shall comjl3- -ith the ms::iraun hours 

of labor, m.ini:.iVL7; rates of pay, and other conditions 

of em.jloyment , approved or pr scribed by the President.'" (**) 

(*) 7;;.rd Congrest:, 1st Session, Senate Report o. 114, p. 3. 

(**) 7r>rd Congress, 1st Session, Gelend.-.r go, 150, H.Z. 575.5 
(l.e-ooTt To. Hi:) p. 10, 1. 4 - p. 11, 1. 3. cf. Apoendix 
I-B, 8. It "ill be noticed the Committee su^ge'^^ted t':o 
minor carnT s in l?.n-a, ge. The und- rimed 'vords replace those 
crossed out. 


The emendnent to clfuse (K) had "oan projos'^d "by Senator Cleric 
of ;;issouTi; the araendment to ul3.use (2) "by Senator •A'alsh of Massa- 
chusetts. It '.7ill te seen there-fore that while the Coanittc-e took no 
action on the amendments proposed 'by llr. Emery, iJr. Hook and Ur. Lachael, 
it did inse:. t a oroviso intended to meet the ocjections of these gentle- 
men that Section 7 (a) as prssed "by the House, v/ould cuse the disrup- 
tion of "e::isting satisfcctorv relationships ■betv/een e:vployers and 
e.nplo^-ees. " Senator TJalsh's auend;:.ent strengthened Section 7 (a) some- 
what' from lahor's viev/point; Senator Clark's ar.endment strengthened the 
emolo^-er's position. The former v;as rccepted v.-ithout cement; the latter 
provoked extended deorte, ■Thich resulted in its rejection. 

Debate in the Senate 

The Senate deli: ted the 71'ilA measure on June 7-5. (*) 

The t',7o auend ents to Section 7 ^,a) proposed "by tiie Finance 
Comn.ittee had "been voted upoi ?nd adopted, when Sen. tor ITorris asked 
for a reconsidera,tion of txie vote adopting 'the first of the tv.'o amend- 
ments given ahove - tl.e "enistin- Sctisf:ctory relatioiships" einendisnt 
- on .the grounds of having been unrvoidably absent drxing the vote, 
althov-gh he h8.d been we.tching for the anendmsnt throu'hout the dcj. 

Seno.tor irorris expressed the b:li-:f that this aiend:''.ent should be 
rejected, lief rrinn to his earlier enpeiience on . the Judicirxy Com- 
mittee v/hich had under consideration the Anti-In.jVJictiOn Act, he stated 
that has committee had lound thct one of the greatest evils it had to 
provide against was the so-celled "coi.ocny imion". The intent of the 
present amendment as he interpreted it, 'vs to^^e such comp;ny 

"This OcrticulcT provision in the Dili, Section 7, reestp.blishes, 
almost in the identical language of that Sill, the right of em- 
ployees to organize in ■u.nions of their own without rn;'' coercion of 
and kind from anj'- source. However, it edds a proviso which I thinlc 
comes very near to destro:'ing, if it does not entirely destroy, the 
effect of the Isiaguage 7;hich preced s it. This is the proviso 
the.t. I am seeking nc" to strike out. I ha^- e no fault to find with 
the language v:hich preceds it, but the proviso, after giving Irbor 
the right of self organization, the right to be repr sented in 
disputes by an organization of its ov;n choosing, tnen imDorts this 
Iciiguage into the bill; 

i''proviJ_cd that notning in tnis Title shall be con- 
strued to coripel a, change in enisting satisf actorj'- 
relationships between the employees and employers of 
any nen-ticulcr olent, fir i or cor-orrtion, except 
that the enDloye s of any prrticulrr pl..-t, firm or 
corporation shall have the right to orgcni-e for the 
P'orpose of collective bargaining '. ith their e iployer 
as to reges, nouro of le.bor and other conditions of 

employment . ' 

(*) The deorte is reported in jonjrrssiov-l record, "olume 77, Part 5, 
v.Miously, betvreen p. 5151 and p. 54:34. The deb:,te on the existing 
Sc-,tisfactory relationshi os ('do. 5279-5284) is reprodu.c;.d in Ap"oendix III, 


iiTlio.t looks fcir on its face, :.;r. Fresi ant; I thin:: if ""e 
■■ere tr-ri^aiT- to - ceo Kliph Tv-ht.t, jt firr-t "bl-Lisli v.-o^cJ-d seem 
is so\:i£;ht to be, ccco .: jlisiied, all ^■e v.'o^' ha- e to do woii.ld 
'oe to strike it out as it is sir- •■-'j i:i tlie preceding word- 
ing. ... I think the oroviso is r. direct blo'^^ at or;^,. ni-red 

Senator >Tossis' att:c'-- on the amend.:ent -.Lounc 'irracdiate support 
in Senator Gosti:;.:.:^ -no, st-ti'^ that h" sii. ■x , .;_ the "criti^;! appre- 
hension of the cble 3e-- tor iro:-i ";ebr^-.ska", asked vrhsther the lc.n- 
gur. e of the oro' iso iii.-rht not .•; inter ^ret d cs axfimina that all 
e"istin^ rel. tier sin js vifcre, i-i ■:.-.■■ :,t, sj tirfr.ctor-/. 

Senrtor 31;. rk, th'; ori^i^inal proponent of the r lendne^nt, ao-t! ro^;e 
in its defense: 

"i.r. President, I '^'ho-ald like to v.:-r to the Senator frov.: kebrrska 
thc.t , iii -'.Tf o^ji'iion, this proviso v'oes -lot hrve ::tj such effect as 
he is rttrikuting to it. The ■;)ro"vic^o ■■.'as cdiopt d "bj the iiei -;iinoa.s 
vote of the coirnittee. L.r. ..icnbr-g, one of the authors of the Bill, 
e'ell-k;:ov.'n as one oi the lea'.. in?; l.bor lee^.-ers ^nd a represents tive 
of lubor unions, v;a's present and not only ac..£ oted the aniendiaent 
but he sE'Lid he tho^u.£ht it './a^ ver^/ bencfici 1. . . G-e:ieral Johnson, 
'/■fho has been deeignated as the Administr tor of the ."Bill, ".'as "Dre- 
sent £nd s;:.ic' that he tho-a.;ht the addition of the proviso ^Tould be 
..lost oenefi^i 1, ^-C. tha't he co'".sidc-rec it ."i e-;ceedi igl." constructive 
cae.ic.eient. »{*'<■) 

This dexense ere-- froi.i Senator '.Tneeler the follo";in.r conient: 

"iur. Presicent, I concar in the st.te-,e-:t \rr the Sens tor fron 
kebr>.ska vith ref.^renc^ to the .iroviso. I sr. utterlj?- a.r'zed to 
he8.r it stat:c. that Donald P.ichberg, the attorney, had s: id this 
amendment "r.oale". be satisf c ctor-/ to lebor. As .a mj.tter of f- ct, if 
the ejnendi.ien't is a^'OTtec, Lsbor yets nothing under this section of 
the 3ill becjus. , as the Se^nator froii Febrf. ska has declared, the 
laboring men ■.lio belon^ to a co^-;oa " a...iion do not dare to say their 
so'a].s their ov/n. They woivld "not to cone before axi'j coin- 
nittee of the Congress of the United. St;t s rnd say to that com- 
V:ittee that conditio?i3 ',7er-; net s.etisfactory - labor conditions 
in their .)f rticaler industry '.-ere -'.ot s tisf,- ctory. "(***) 

(*) ibi.;, -:. 

(**) Ibi'.', .. 
(**) Ibic, _> 



Senator "■agner rr.s -the ner.t- to rail;.'- to the smjort of 
Senrtor ITorris: 

ix. "»7AG-"~-i: "Tlie -roris enployec are 'existing srtis- 
ffctorj re].ations.'xi-o ' . The 'vord ' rel^.tionsuip' is an 
tll-enor.: cing word and incluvles nourf of ifbor, v&ffs, 
•■nothods of emjloyraent, etc. I feri-, anc the :.iore I 
reflect the :ore 'the ferr grovs, that it nay "be .. e- 
."li.rded as a nullification of the other provi-ions of 
the Jill -hich outlav the 'yello", -dog' contr..,ct." 

lir. TJK-IZL"^: "'./hy, of conrce." 

la-. "AG-l'Zxl: "This m.y "be a legaD.izr tion of that con- 
trect. I :iii not sure a':^oa.t it, 'out th'vt is ny appre- 
hension. " (* ) 

Senator Clarh's citation of ..r. Iiichberg as hcving aporoved the 
oroviso, made the.t gentleman the center of the discussion on the Senate 
floor for so .e y.iinutes. Senator ".'heeler, having expressedhis e.stoaish- 
uent that Ur. Hichocrg, as reor tentc tive of la"bor, could have approveo. 
it, Senetor LeTollette rose to correct the statement that 5.ich"berg had 
aa^e.i.hd before the Coiiniittee as a Ir.oor representative, inasuuch as 
Hichberg vas not then acting in a reprise.^tr■tive cf.pccit"'-. Seaator 
DluX'i reolicd the t in cuoting ;;r. Sichb rg he ha."- cited aim e^s a lss.cing 
l,..bor lc''-"er v;ho spoke from the viev»"point of labor. At tais point, 

Senator Long joined in to s?"- th£.t --/hile it true ,.':c . Pachberg h^^d 
rendered notable service to labor £s en cttorney before fne Interstate 
Corrasrce Coin.-!ission, the present matt'ir v/as, h:. "oeliev-L-, outside his 
experience. Senator """heeler repe.-ted a;ia"e-:ent that ;;r. l.ichberg, 
as sjn. eJole la'jyer could h-jv.- -poroved this 'oroviso, and concluded tho.t 
fne only e:-role.nation the.t ;'r. Sichberg had not given the ^natter 
c reful fhought sni. con = id-r tion. 

Senator Long indicated his o-roosition to th'^ oroviso, dee^^lng it a 
legitimization of the corivoany tijiion; in tn: folio- in.'^- ••or-".s: 

"I happ-..n to knov;, ^ ad I thin'- '::.o:.:e of us ':no';; ^"ho un'er- 
stand tra:"-e unions, the/': the wosi inicp-.itous practice ;e 
have had to contend r.ith is th~ ::on pra:" unio:;. It is rn 
organization that is set Uj to "si event c union is not 
controlled b- the ao-.ipa:.v". . . . If ':e -.rr poin to atts rpt to 
s.:frgurrd the Irbor anion let us not iut c spider in the 
soup and make impossible the very thing the.t •.7e ar^" tyring 
to acco a.-l^sh. " (*^0 

The progress of the de"oate found Senators Costigan, T. gner, "neeler, 
Lonp;, PuObinson of Inu.iana. end Bone rallying to the support of Senator 
i-'orris' opposition to the "eicisting-cetisf ._ ctory-rflationships" clruse. 
Senrtors Cl:r':, rLctings and King defended the a;.i£nd. :ent . The l.orris 
grouD opposed it on a n-ju.roer of proiuics; thrt it 'ould ::.elze desirable 
labor cnjng s difxicalt, thtt it strenpthen the co:nan-- r.nion, thft 
it .oi;.l- tsnc to jerjetaat- e::isting "pello —"og " coat rccts, c.n t.ic.t it 
(*) I"jid 1. 3280 
(*■") Ibid, p. J2ol 

really "/or.ld giv- Irbor little or nothing. Sen. tor Theeler delivered 
sone. ± reiTur'^s on this scoi-e. ",7Hi;EL~xi: "It v/ould seem that the vun^ite v/e seek to put 
these codes into operction for the ourpc^,; of .;;-ettin,5 iDetter 
conditions for lalDor, for the xu-Dose of ,'etting "betttr --cy-rs 
enddrxorter hours or an"thin.'^ of th.;,t sort, "^e then provide 
thc^t 'nothing in this title shc-11 'jo construed to conpel s. 
change in existii^f; rel;.,tions. ' If that 1; ngu.f,ge remains in 
the Taill, lalsor gets nothing vrhctsoever oxit of the till. Lien 
•.."ho e.V'i '.'.orking for a co'..i.ian- sjid '.vho oelong to co-iroany unions, 
pcrticularly, ^7here conditions c^e hcc., not go "before 
ar.-/ co.i.-ittee, not go before any orTc.nization or any 
'bod.y and say 'v.-e \7rant shorter hours or. 're '."/ant to do this or 
that'. The3r will be compelled ^oir their emplo^rers to go 
"before co'iraittess end say conditions .are st tisfr.ctory. 

"¥e have had excHples of that before congressional com;.iitteQs, 
v^here conjanicrS i/ould "bring their employees before the covT.iit- 
tees, T..,.;"ing their expenses and '.There the emploj'-ers '.vould say 
to the committees that conditions "..•ere absolutel-/ all right, 
thf't they v.-f-iteo. this or that, when '.re .knov.- as;: matter of 
fe,ct th-;t they Mere not their ov/n agents "but vere merely 
s"pealcii.g at that time for the compa'ni'" irhich they re"presented, 
"because"' they Ira&u if they c id not do it, they '.vould ^oe put 
out in the strerts and tueir t.uvfs .and children vould have to 
go without food and -.ithout cXothin,g. 

"Let us not try to fool the '."orking men of the co-ontry by 
outti"hg in s provision of this kind. Either we mean to 
better their conditions or leeve them .just as they ere today. 
If '.76 mean to better their conditions, then let us reject 
this amendment. If we -.ean to leo,ve them in sviec.t shops and 
'.York them ten and t elve hours a, day, then lea'vo the ejiiendment 
in the bill. 'But do not go ""tjack and tell your constituents 
thrt yo\i voted to lerv' the provision in the bill becsuse you 
V thought you "vere voti'ng for the rights ^nd interests of 

Americ n la"'oor. . . I submit that this section, if '7e 
really '.vant to protect Irbor, shcald be stricken frori the 
bill. >'(*) 

Senator Hastings re :arks v.-ere aldres'sed more to the interest 
of the Act as regards labor, rr.tner than to the cxnendnent itself. 
He appeared to belLeve th?t the prpnps^c m. .-.sure -""ould e:-ercise .rn 
insufficient control over le.bor as compared to the close control 
to be meintamed or.r e..nlO"^-c:rs. 

(*) Ibid p. 52S1 



Senator Zing dise.greed -ith Senator Morris that the;iG. 
me.-it \.'ovdd vitirte the ob.jecti"es of Section 7(i:) end destrov 
the rights of It^bor. On tne contr-ry, he rr-; .e.'., the cmencinent 
v.s intended for the further orotection of lahor. 

hr. KI7&: "It '.7as :.r/- understf nding "hen the ainendnent \.'rs 
offered in the committee th;.t it ' r for the purpose of 
affording protection to Irhor to restrain efforts that 
might he rnao-e by employers to interfere ^^ith employees. It 
'.."e.s designed also, as I understood, to respect conditions 
rdiere the relation Det"..een the employee and e'aployer v/as en- 
tirely satisfactory. The section 2,s a '.7hole, including 
the amendment nor; under considsi'e.tion, prbperl;'- interpreted 
as I helieve, is designed to permit employees to organize 
and "bea-gain collectively through repr.-. sentativss of their' 
ov;n choosing and further to provide that they shall he 
free from interference, restraint or coercion u'3on the part 
of their e:jjloyers or e^nv of their pgents or a.iy other 
person. . . . Under this orovision, it is obvious that if 
a plent is unionized, ths emolo^fer Mgy not interfere '.-ith 
such ■'anion organization or restrain or coerce in sjiy wey 
the members of such union. The e_:;jloye:s rre free to main- 
tain their mion, free frOm any interference of any kind 
at the hands of the employer. The anendment also -orovides 
that the en'oloyees shall have the right to organi:7e for 
the pui-pose of agreeing uion T.a,r;es, of Irbor end other 
conditions -of ej.Toloj'-ment. In other 'tords, the whole spirit 
of the section, as sjnended, as I interpret it, is to afford 
the grec^tect possible protection to labor and to give em- 
ployees rjirestrrined unrestricted rignt to organi-re and 
to collectively bargain cs to r;ag.;s hours of lebor, etc."(*) 

This is a rather e:-:t re ordinary statement. As tne oreceding 
pages have suggcst'd, the amendment originat:;d as c concession to 
the reprerentc ti". s of industrv- v/ho v.'ere uiers'y about the implicp,- 
tions of Section 7 (a). Yet Senator :":inf: '.vould hrve he' it appeex 
th^ t it had been offered for the greater protection of labor, against 
the interfe.ence of employees. But- Senator Torris and his associates 
~ould see:: to have mace it cler.r that such protection as the a.;.;endment 
mi^iit afford, "-'oii.ld be the protection of com'oany ujiionism only; thus 
destroj-in^, in 1: rge part the intent of Section 7 (a) £s seen bj- 
organii-ed labor. 

Sen.jtor Hobinson of joined forces -.".-ith the ilorris group, 
inquiring vhetxier it 'jould lot-be ths let effect of the committee 
amenduent to'ze ths "j/ello^rr-dog" contract. Senator ITheeler did 
not think so, btit Senator IJorris did. 

(*) Ihi^., 


; .r. ITOi^SIS: "i:r. Precic-.nt, it c--. is to le oeri'ectly clerr 
thr.t it rairht te co "asoo. if tlicrc is I'-n rrree ent novi e"- 
irting rith f.. oo-ij'ny '\:iG:i th. t h::-? I'v \:i;i.". of a conti'.-r.^t, 
and they v;ilL sa;" it is Sc-tim ;. .tory, i.."hicli tho .^ 'ill., : nc' 
es'oecially in. theFe tii.ies rlif.n to lose s-.. io > of 'lost r'n:'- '.ind 
'lecMS ^t; rvr tion for the fe.riily. It inc.y 'jc the Me.ns, Tvhere 
one e:;ists nov;, of •continuing; a. 'yello'7-dog ' contract," SOLI. 30ir of Inaianc: "That is Trecisely what I '.t,s .-^-et- 
ting a.t. It ■. 'ould oeriait coercion to 'be applied by the em- 
-jloyer in tiMes like the-c Vifhich "'ovild sinpl"/, in the net 
effect, mean^; the ■'yellovv-c.Ot';' contract. "(*) 

Sen:..tor Bone W£.s the l.-st roeLksr to spec-lc upon the anendrnent. 
He, too ffvored its rejection. 

iir. 3071: " President, fro'i r so:n;^\-hat lengthy ex- 
perience with oi-j^cni^ed Isl'Or, &s'sel for a labor or-;^ation, I r n cc.ipelled to agree vholly with the Senator 
from Kehra-ska (iir. Torris) end. \:ith the remarks just :.iade 
oy the Senr.tor fron Lontena, {'l-T. "^neeler). ... It seems 
to me the lcn;uai?,e in the bill, ;. side iro'" that in italics 
vmich is the coniiaittec a,;,iendu-:nt - is eiuole to orotect e.iir 
reEGonable em.'loyer and I thin'- it is ^^oing to b.-- a tragic 
blunder if vc, in the enc;ct;ient of so-c lied ' 5ro,/;^_:res3ive 
legislation' "lako its to labor all over the country 
thr t v/e are no- trying to henper . theve orgaii^ations which 
so far, ha a been the only bulwark of labor in i.iaintaining 
decent standards of Icbor : ni decent a'oi'king cono.itions. 
For that re;. :-.on, I o-n rrholly in sympathy T;ith the effort 
of the Scictor froii "eon:, ska to strike tnis jro' ision out ... 
I do not s:f:-''c idly aboi-.t this. I have hao long lye^rs of 
experience v/ith the problems as attorney for thc?e gro\DS, 
?nd I ]:nov the dis. dventage under -.'hich l:bor '.Torks all the 
tine, .-ud in these tragic rnd tryinf: ti ■'.eF' it is going to 
be inif intel - h?rcer- for labor to get a squ.":.-' decl because 
of tne econo lic oressure v.hich co-ncls tli.m to st: 7 on the 
job -hether conditions are loir or not. "(="") 

Senator Bone's olei- concluded the discussion on the oroiosed 
amendment, v;hich ■.v.s then pat to vote. The r;..v'nd:ment v/as def'.ted 

by a vote of forty- six to th irt-r-one -.: ith_ nine teen non-voting. ( ***) 

(* ) Ibid p. J283 

(**) Ibid, p. 52S'3 

(***) Ibid, p. 5do-i. Inr.s.rach s the distribution ox votes gives a 

roigh inde:: to the .vaj/- the Senators stood on the trrde union corn- 
pans'- union issu,, it is reproduced here: YEAS: Austin; Bailey; 

Lanldieed; Barbour; Bsa-kley; Carey; Clark; Dickinson; Dioterich; 

Teas; &eorrr ; Goldsborough; Gore; Hale; Harrison; Eastings; Herbert; 

Ketn; Key-es; King; Lewis; Logsn; '.^etc-'./if ; Pcttorson; Heed; P.obinson, 
.Ark.; Shepp, rd; Stei-er ; Stepaens; VsJidenberg; TJhite. Nays: Ad? -.s; 

Ashurst; lachnan; ;j!l,. ck; Bone; jr,.-tto''; ?;ro'7n; 3ulkley; 3/rnes; 

C:-P..'er; Gon:.i.; ll;-; Ooolids-e; Costiran; Cutting; Dill; Duffy; "rickson; 

Hatfield; Kayden; Jolmson; LaFollette; Lonerg£\n; Long; ilcAdoo; 

iicCarren; hcC-ill; Lairphy; iTsel-y; iTorris; T'-'b; Overton; Pope; l^eynolus; 

Hobinson, Ind. ; Zussell; Schall; Shipstecd; Smith; Thomas, Utah; 

Tho .pson; Traaiiiell; T'^aings; 1 ■::■ I'vys; !7agner; 7alsh; Tneelcr. 

. OT '/GTi: G; 3ori-'h; Bulov/; 33'rd; Cara'""ay; Coysland Couzens; Dale; 

Davis; T'letchcr; li''rc?,ior; Gla-sa; Ksndrick; j,;cr[ellar; hclkry; I'or )ec'":; 
S860 Pitt :an; Thc:.ias, 0':1 -nom.'. ; Tov;sond; "alcctt. 

Polloving innedirtelj- upon th5 re.jectioa of the "existing 
Sc,tih;frctor7 rel; tionshi-ps" a"^eV .---t, Se-.toi "Ivjl-rr oropos' :. 
aiiotlicr r le^Ca-^nt, the purpose ol ••l.iah '; s to )ut ,:n end to 
the rjr-rciticf of ctrike-brealci-.-'r. The pro--)o::-:6. e.aenduent, -nich 
;t>:.5 to -pp-. r c.s clc^so (4) oi Sctioi 7 (■ )". ^^rd rs fol'^ovs; 

I'Avid (4) thct emplo'y-rs shzll ict trc/isr^brt, or pssict in 
tra,- sporting eupio:,'-ee-- f ro :i o i'^; 3t_,t-, covr.ty, cit/ or 
place to ciother for the purpo-e of t. king the plrce of 
raen out on strike." 

In explcr-.ation of i.i" proposed riendjaent, Senator YJheel'!r had 
the follo'vinp to r>c'j: 

"Let ssy to the Senate thct th-? reason vi)y I propose to 
tdd this clause is "becau'e of the feet that when the Senate 
ordered the investigation, for i-o.rtjnce, upon which the 
Senjtor fron ITe^./ York was : n;..i .'r, into the coal strike in 
pennsjlvani. , found the sitx^tion to e-ir.t; I-jiT;edi£.tel7 
vhen there was difficulty h-.'/t -een thf •a3n r,nd their em- 
ployers, the great corl co.; snies -ent dovrn South and brought 
trainloECs of negroes uo to Pen^splvani:-., shipped them in by- 
box ceJTs and kept then therd, living rl;.iost ii slaA/ery, one 
might saj.', and takipg the place of those v.'hits men; :ai other 
words, using those ne.'^roes iierel/ £s 
Of course, when the -i.-hite men returnea to "ork, cs t.iej cid, 
cgreeing cfter a vrhile with their e ::ilo;^rrs, those negroes 
:."ere thrown out of e^n ployment and ou-t of the com lunity. 

"The purpose of this eiaend.ient is prevent that 
sort of practice oy gre^, t organiz. .tions of wealth throughout 
the country. In co'.i .r.-jiitie-s where s'lich pr-actices ere ind\-LLged 
they only br- ed disorder and trouble; and it see.ns to me Vihen 
org£ini-cd. ce :,ital is going to get the opportii: it ; s and the 
privileges which it v/ill get \inc er this oropi03-d law, thet it 
ought to be '.villi IT to -ia]':e a p._rt of its code the r cree/.ient 
that in the eva^t it iic s c. dirrgree^e \t -.itii its;, employees 
f-nd the enaloyees ce-ase to T"or'- te'iporerxl-, it "'ill not 
bring into thet co- i.iu.-ity sw: rus of strike-breakers from 
cc.tside con ...liti " s. Th- bri-gi\g in o± strike-b'rea^'i rs nas 
''oeen the chi-f soui'ce of bloodshed and riot in pretty nearly 
every co: ro. -it," ''.her^ there have been labor troubles: Tor 
th:t recson, Lir. Presicent, I hope this aijendnsnt will be 
c.dopted. "(*) 

T*) Ibid, p. 3284 ' ' ' 



Des^:iite Sen.-itor '".Oieeler's earnest pier? in its su^oort, this amend- 
ment v;a5 likewise rejected. (*) 

•i^ little while later, Sen:' tor Byrnes of Soutii Carolina offered an 
amendment, the intent and iiaplication of which are of ■rreat interest. 
It was intended to arrec.t the trend of unre.-;^lated increase of 'work as- 
signinent in the textile ini";astry, a -jrotlem more faiailifrly knovn as the 
"stretchout". Senator Byrnes' ai..ien(jaent -irovtoseO the introduction of the 
words "maxiiiiuiii machine load of eai/loyees" to be inserted' in clause (s) 
of Section.? (a), which as ajiiended v.'OLild read as follows: 

"Section 7 (a; - (3). Tha.t emolo3'"ers shall com:::)ly with the maximuin 
hours of laQor, minimum rates of pa-'", raaziiiiuin machine load of empl- 
oyees and other conditions of employment ap::)roved or prescribed by 
the President, " 

the saiiie phrase to be inserted in the rpiro iriate -:)lace in Section 7 (b) . 
The aiiiendment was acce"3ted vdth variou;-, other amencuiients, and the bill 
passed the Senate on June 9 and then v/ent into conference. 

Section 7 (a) as amended and passed by the Sen<?te, and as it came 
into conferece, reaO as follo'Ts: (the nuiabers in brackets are the num- 
bers riven by the Sena.te to its s":)ecific amendiaents, the underlined v/ords 
replacin™ those crossed out) 

"Section 7 (a). Every code of fair conroetition, at'i'reement and license 
approved, "orescribed or issued under this title shall contain the 
followin(3 conditions: (l) tha.t employees shall have the riht to or- 
ganize and bargain collectively throU(_':h representatives of their ovm 
choosing, and shall be free from the interference, restraint or coer- 
cion of employers or their agents in the designation of such repre- 
sentatives or in (19)'^ self or.'":anizatio n or in other concerted acti- 
vities for the 'ourTJOse of collective bargainin,;; or other mutual aid 
or protection; 

(3) that no employee and no one seeking eiaployment sh-ll be required 
as a condition of em;-loymsnt to join any coagpany union or to refrain 
from joinin_:;, (2)) o r.;anizin,-: or assisting a labor orgeaiization of 
his ovm choosing; and (3) tl.- t em;,)loyers shall cora;oly Y/ith the max- 
imum hours of labor, miniuiuia rates of pay» (21) ia aximuia machine- 
load of em-loyee s end other (22) con ditions of em-:il o,-',''merit ap'oroved 
or •orescribed by the President." (**) 

(*) Ibid p. 5-284 

(**) 73rd Congress, 1st Ses^^.ion, H.H, 5755. In the Senate J-one 9, p. 11, 
1.9 - 23. Cf. A-o-.endix 1-3. 10. 



rrom Conference to Law 

In conference, Senf.te amendments (lO), {20), and (22) v/ere re- 
tained, "but amendment (2l) was dro'Toed,(*) 

The National Industrial Recovery Act went frn;n conference to the 
President of June 14, and v.-as approved "by hin at 11:55 on June 16, 
1933, In its final form, as it becaiTie -jart of tlie Idxj of the land, Section 
7 (a) read: 

"Section 7 (a). Every coc'e of fair competitif-in, agreement, and 
license ap":rov8d, ;orescri'bed, or issued under this title shall con- 
tain the f ollovnn,'^ conditions: (l) Thot employees shall have the 
ri.-^ht to orgcinise and "bargain collectively through representatives 
of their own choosin-^, and shall "be free from the interference, res- 
traint, or coercion of employers of labor, or their agents, in the 
designation of such representatives or in self-organization or in 
other concerted activities for the purpose of collective "bargaining 
or other mutual aid or protection: (2) that no employee and no one 
seeking employment shall "be required as a condition of employment to 
join any company union or to refrain from joinin^j;, organizing, or 
assisting a labor organization of his o^m choosing; sjid (s) that 
p.miployers shall comply v;ith the maximum hoioi-s of labor, minimum 
rates of pay, and other conditions of emploj-Tnent, approved or pres- 
cribed by the President, "(**) 

(*) 7ord Congress, 1st Session, House Report No. 243 Conference Report, 
p.l Jime 10, 1933, Amendment (2l) which was dropped in conference, 
was, it will be recalled, 'Senator Byrne's attempt to rCi^^ate the 
stretch-out. In view of subsequent developments the elimination of 
this amendment ap;Tears to have been a serious mistake. The failure 
to satisfactorily adjust this problem led to continuoxis friction 
between textile employers and teictile v/orkers culminating in the 
textile strike of Seotember 1934. 

(**) Public - Kg. 57 - 73rd Congress 48 Stat. -L.- 195-21"), Chapter 90 




The precedin£: chapter has shov?n the of Section 7 (a) of 
the HIRA 3S the Dill made its journey through the Con,^ress. It has 
teen se^n hoF the section was strengthened from the labor viewpoint by 
the acceptance "by the House of tne two amendments pronosed before the 
House Committee on Ways and Means, and how this labor-strengthened 
measure was able to withstand the attacks made upon it by witnesses ap- 
pearing before the Senate Committee on Finance, and on the floor of the 
Senate, in the debate on "existing: satisfactory relationships". 

«?ith the p.-ssage of the Act on June' 16, 1933, after the Congression- 
al discussions of the preceding month, the meaning and significance of 
Section 7 (a) as it was finally enastad, was thought to be entirely 
clear. But the resistance of certain big industries, and the conflict 
of opinion between various -oarts of the MA organization itself, re- 
sulted in a constant stream of elucidation and interpretation as to the 
meaning of the section. 

Early Interpreta t ions 

It has been suggested in Chapter I .that Section 7 (a) was intend- 
ed as a channel for the attainment of all t:ie labor objectives con- 
tained in the Act; but most specifically, for the first of these, name- 
ly: "To induce and maintain the united action of labor and management". 
In su-ooort of this view may be cited the first interpretative allusion 
to Section 7 (a), that contained in the statement made by' President 
Roosevelt on the day the Act was oassed, outlining the policies of the 
National Recovery Administration: 

"This law is also a challenge to labor. Vfoi-kers, too, are 
here given a new c ha rter of rights long souprht and hitherto 
de nied. But they know tha t the first move expected by the 
Nation is great coop er ation of all employers ^ by one single 
mass action to improve tne case of workers on a scale never 
attempted in any nation. Industries can do this only if 
they have tne support of the whole public and especially of 

their own workers A Labor Advisory Board a,poointed 

by the Secretary of Labor will be responsible that every 
affected group, whether organized or unorganized, is fully 
and adequately represented in any advisory capacity, arid any 
interested labor group will be entitled to be heard through 
representatives of its own choosing." (*) 

(*) NRA Bulletin #1. "Statement by the President of the United States 
of America Outlining Policies of the National Recovery Administra- 
tion," June 16, 1333, Government Printing Office, ',7ashington, 1933, 
pp. S-3. Underlining inserted tby the writer. Qf General Johnson's 
radio broadcast of June 25, p. 5-.; below. Confirmation of this 
viewpoint is found in General Johnson's statement of July 7 as 
follows: "The policy of the National Recovery Administration 



4 Ho'7 the Ffitional 'Recoverv Adnin,istration intended to interpret 
t-.-' "-oni-*-''-- "ction' of labor and manafrement " was sugr^sted three days 
l-iter, on Juiie 19, 'vhen General Johnson, as Administrator, issued 
NEA BiJ-letin IJo. 2, the puriDOse of which was stated in the opening 
sentence as follows: "This bulletin is. intended to inform all trade 
associations, industrial and labor groups ho^7 to proceed to secure the 
benefits of tne National Ind istrial 'Recovery Act." Para^raohs (5) and 
(6) of this bulletin state tie -oosition taken by the Administration 
witn regard to tae labor provisions: 

"(5) The Act. requires t'lat certain Drovisions found in , . 
Subsection (a) cf Section 7 shall be included in every 
code and therefore no aoplication for the approval of 
any basic code will be received which omits or modifies 
these mandatory provisions, which are as follows: (Sec- 
tion 7 (a) tuen quoted). 

"(6) It is not tne fanction of tne_Jj a^ojiaI jRec£ve£y _ , , 

Adi ainibtr ation To "orescribe what shall be -in- tiie_c odes_ 
to'_o£_guo"r!iitt ed by a £sogia tjjQns_g_rL groups. The_in,i tia^ • _ 
tive in all s.-icn natters is extje cte d to come from within 
the ino"u"it rT "Itself! Neither is it the purpose of the 
MflT-ni stratiorrTo"'c'om"oel tne organization of either in- 
dustry or labor. Basic ;Codes containing provisions 
respecting m^xximxm hours of labor, minimum rates of pay, 
and otner conditions of employment, ^^hich are in- them- 
selves .satisfactory, will be subject to approval , al- 
tii en iz', conditions may not have been arrived at by 
collective bargai n ing. " (*) 

The above statements indicate what the Administrator felt was to be 
labor's share in iJRA. First, it was clear that Section 7(a) itself was 
to go into all codes. Second, its nrovisions were not to be modified. 
Third, it is clearly stated, tnat the initiative for the formulation of 
codes was to come from '--ithin industry itself. And fourth, it was im- 
plied that the drawing of the codes need not neceessarily be a joint 
orocess betvreen industr.y and labor, to receive ad.rainistrativp aoorovp.l. 

In a press conference on follo'"ing day, Junp 2^, General 
Johnson made it quite clear tnat not only v/^s it not necessary for a ; 

Footnote cont'd. 

respecting txie rignts and obligations of both organized and un- 
organized labor is based on the declaration of "oolicy in Section 1 
of tne Act itself, wnic.i clearly stated the objectives of this 
legislation, in part as follows: 'to induce and maintain \anited 
action of labor and management under adequate government sanction 
and supervision. ' N^anifestly the purpose of the Act is to create 
and oreserve harmonious relationships and to prevent industrial 
strife ano class conflicts. " 

(*) MA Bulletin lIo.2,"basic Codes of lair Competition," June 19,1933, 

C-overnm.ent Printing Office, Washington, 1935, — pp. 2-3. Double under- 
lining- General Johnson's; single underlining, inserted by the 



proposed code to be the iDroduct of joint bargaining bptween labor and 
industry, but it wns in fact net expected that labor should com@ for- 
ward with its ovn proiDOsals. (*) 

The annoimceTnent of June 19, and the above comment at this raress 
conference brought a strong protest from the Labor Advisory Board, 

(*) NRA Hlease Ko. 5, June 21,1933. A complete set of NRA Releases 
is to be found in liRA Files, This interpretation, as well as General 
Johnson's conception of tne somewhat passive relation of Jhimself as 
Administrator to labor's objectives, are to be found in his answer to 
the following /questions: 

Q,, "Will there be any attempt to organize men in non-union 

A. "Section 7 takes care of that, but also it must be put 
in the code. I have said this consistently and to every 
one concerned and the A.F. of L. agrees with me that this 
Administration is not to be u^ed for unionizing any industry." 
v^. "How can you have a fair code in the coal industry without 

A. "If the men lorganize, tnat is all right. Ky job is to 
sit here in an impartial way. I have no initiative in this 
thing. This law has given men the right to bargain col- 
lectively. There is no argument/ I have a law to execute 
and I am going to execute it." 

Si,. "If in a certain industry where few men are employed, 
they organized to take advantage of this Act and presented., 
a code, what would you do?" 

A. "The employees present nothing here. The codes are -ore- 
sented for the industry by the employers. If they do not come 
in they cannot get the benefits of the Code." 

General Johnson's comment "the Administration was not to be used for 

organizing labor" should be compared with his statements in Bulletin 

No. 2, that it was not the purpose of the Administration "to coKioel 
the organization of either industry or labor." 



which held its first mentinr on June ??, 1'jZ7).{*) 

At this same mei=tin,-'", Secretary Perkins outlined wh-^t she con- 
sidered to he the functions oi' the i3oqrd; to offer assistance to both 
the organized and unore'anized, to encourage oreani^^ation hy sending 
its memoers out into the field. ".Thile, therefore, it was the 
Administrator's interpretation tnat it was not the purpose of the 
Administration "to compel the organization of either industry or labor," 
or "to be used for organizing labor", it was Secretary Perkins' inter- 
pretation that it was a purpose of the Administration to invite and 
encourage the organization of labor. When General Johnson joined the 
meeting, Secretary Perkins called to his attention the fact that com- 
panies were writing to the Department of Labor for copies of company 
union olrms. "when the question was raised as to the formation of new 

(*) I-Jev Yo rk Times of June 23, 1934, reports as follo-^s: 

"Jo hnson's Hint of Hands Lff on Collective Bargaining Draws 
a Protest . 

" Johnson cal l ed to t ask oy ais own L abor Advi sory Committee, 
headed uy c3e cretary Pe rkins. for hands off attitude toward collec- 
tive bargaininr: in nego tiatinr" fair comp etit ion codes . 

"Labor's prot?st against recovery plans registered by the 
Administration's own Labor Advisory Committee, was directed pri- 
marily at the announced intention of General Joiinson not to re- 
quire collective bargaining- in negotiating the fair competition 
codes. C-eneral Johnson said in one of ais first pronouncements 
that basic codes might be approved i^vea. though they vere not 
agreed upon vdth labor oprgaininir collectively. He said that 
the right of labor to treat as a group in these agreements with 
industry would be recognized but vras emphatic in the statement 
that the Administration did not propose to unionize or otnerwise 
organize labor for this purpose. G-^neral Johnson was called into 
the meeting of the Labor Advisory group today and was understood 
to have made some concessions regarding the encouragement of col- 
lective bargaining?. The committee decided informally to consti- 
tute itself not only as an advisory group to General Johnson, 
but also as an agency to be ever on the alert to protect the in- 
terests of labor. " 


company unions, Johnson'said that wns "out". He stated that the Labor 
Advisor;- 3o-^rd :^nc the Indubtrial Adviccr^^ Eoarcl should s-et together 
on tuis ist-ue. (*'' 

Ge"icra,l Johnson's statPinents na to m'^jiner in i-.hich coder, were 
to Of?' d=:velopeQ were Eao'oleriented by a speech of I'udley Gates, 
Assistant Acrcinistrator, on June 2?: 

"Lir. Gates at the outset clarified t'.?G Tnisconceptions which 
maJi; business men have carried to Wasain^ton with them when 
the _■/• have ccne to discuss codes -• f or their industries. The 
governnent, ne declared, has no intention of tellina; industry 
what it mu£t do — the initiative ttust Troceed from "^ituin 
industr" itself. ITor does the Adrainistration contemplate 
price fixing as part of its functions. " (**) 

Apparently the protest of tne Lauor Acvisorj/' Board had its effect, 
because the next day, ^c find Genpral Johnr.on usin^' sonewh'^t firmer 
language. Fnereas at ;nis press conference on Jun'=' 20, he had said: 
"This la^ hr^s ■■^iven men the'f- to bargain collectively," on June 23, 
he stated that "Section 7 (a) makes manc^+ory the ."i :ht of labor to 
bargain collectively." (***) 

Over a nat.ion-'.'^ide net-'"or-.:. General Joh-,.son broa-dcast on June 25, 
a talk on the NEA, in the courte of which he had the follow'ing say on 
the subject of the relatione of labor and management under the new Act: 

"In tile f irtt ol^'Ce there aas recently been unfortunate and 
ill-formed conjecture that there is some mutual fear be- 
tween labor and industry which has slowed up the preoaration 
of inc-.ustrial a.greements for submission to the President, 
Un the one hand it. is said that lauor has to rush to organize 
and submit collective de'iands before industry submits any 
agreement. Ln the other it is said ind.ustry should rush to 
form coir.oany unions. Both sayings are wrong and both are 
very 'iiirmful. 

"T-ie law is cle-ir, ariu it is tne liw that governs. Under 
Section b (a), it is trade or industrial associations or 
groups, and not combinations of trade labor groups which 
have oe^en as/ied to say in their first or basic agreements 
wha,t the whole Inrrustry -oroDOses to do about hours and '-ages. 
Before any such agreements can be ao. proved , there will be a 
public aearing, and, at that hearing, labor will have a full 
and -unrestricted right to oresent its case. Furthermore, 

(*) Diary of Dr. Francis J. Jaas, former member of Labor Advisory 

Board. ¥ot publicly available. 
(**) xHU. Release ITo. 7, June, 22,1933. 

(***) NDA Helease .■o.lO, June 22, 1933. 



tne law stjecif ically reqaires that everyone of tnese agree- 
ments contain a covenant to recognize collective "bargaining 
and not to require imen to join a company union as a condi- 
tion 01 employment. There is therefore nothing to be gained 
by haste for either side and certainly the rapid orgahi/ation 
of a cor.pany union, would gain nothing if the puroose is to 
require men to join it as a condition of employment, because 
tha.t YTOuld be in violation of the law. 

"This law says that one of its objects is 'to induce and 
maintain united action of labor and management under adequate 
goverrjnent ■s.anction and supervision. ' Agreeing on hours and 
conditions of labor under adequate government supervision 
should hold no fears for the fair minded industrialist. On 
the otner hand, the Administration is required by the Act 
to obtain a fair deal for labor in any organized industry. 
It is net the function or tae nar-oose of the Administration 
tc orgpjiize either industry or labDr." (*) 

This intenoretation of the relation of tae roles of labor and 
industrjT- appears again in a statement of General Johnson, made a week 

"I look to tnis new industrial self-government to be self- 
policing. '.Ve had a somewhat similar experience in exacting 
the draft law during the war. ' The basic thing here is that 
these industrialists agree among themselves as to the accept- 
ance of a code. If there are violations there will be com- 
plaints. If, for example, it is complained that men have 
been fired because they joined a union, and that is brought 
to us, and upon investigation it is found to be true, the 
government could step in and withdraw the company from the 
benefits of the code. If complaints of coercion are brought 
against a union, tnen under Section 4 of the Recovery Act, 
we weld nave to investigate that," (**) 

Here it is iauicated tnat tne government will intervene to punish 
patent violators of Section 7 (a), whether tney be from tne side of 
labor or of management. It was less clear, however, to what degree the 
Administra.tor was prepared to extend the supoort of tne government to 
giving the type of positive content to Section 7 (a) that labor believed 
it definitely implied. • 

Donald Hichberg's remarks in an early address that "we are not 
trying, to -unionize labor oy federal command" (***) sounded a note of 

(*) IGIA Release TJo. 11, J-une 25, 1;?33, Compare last line with 
footnote, p. 5^ . 

(**) MA Release Ko. 28, July 3, 1933. 

(***) XRji. p.elease 'rlo. 30, July 6, 1933. 


-56- . 

war-..l which v^as elaborated more fully b'^ Gener-^l Johnson in a 
statement issued on July 7. In the phrasinc, this statenent also shows 
the attem-ot that w"s oein,^ r^.-.Je to ao-'ear not to side with either of the 
forces of labor or mana^'iement. Referrin.? to communications "oarDort- 
ing" to come from trade unions and industrial concerns SDonsorine com- 
pany unions tnat IfKA benefits co-'uld be secured only through nerabership 
in their reboective organizations, the statenent says: 

"."Both st'.tPMents are incorrect and such erroneous statments 
of tne Act and its Administration tend to foment misunder- 
standing and discord it is not the duty of the 

Administration to act as an agent to unionize labor in any 
industry, and as has been repeatedly stated, it will not so 
act. It i£ the duty of tap Ad!ninistra,tion to require the 
incl'-^sion in codes of the mandatory conditions of Section 7 
and to see these conditions are complied with, and it will 
perform that duty .... It is not the function or the 
pur"30se of the Administration to organize either industry 
or labor. " (*) 

It appears from tins statement that the duty devolvin,s: upon the 
Administration was merely one of seeina; to it that Section 7 (a) was 
included in drawing up the codes. Not only was the Administration 
not going to act as an agent for tiie organization of labor, but it 
was not going to tip the scale in the interest of collective bar- 
gaining as against individual bargaining: 

"Labor in any industry has the right to organize and bargain 
collectively; the law also recognizes the right of individual 
workers to bargain for their o^n conditions of employment." (**) 

It v/ill be sefMi from all tr.e foregoing that the NRA Administrator 
believed t^iat the position of iJEA with respect to Section 7 (a) should 
be one that raignt be described as a policy of "im.partial enforcement". 
He Delievec it V7as not the function of IIRA to give any consideration 
to 7 (a) that vrould be partial to either labor or management. The 
NBA maintaineo tnat it was not vathin its nurposes to organize either ... 
laoor or management; that wljile it recognized the ri.-,ht to workers to 
bargain collectively, it would not deprive them of tue ri.ent to bargain 
individually. nVhile it was the Administration's function to see to it 
that tne Drovisions of t'ae Act were enforced, such enforcement should 
be entirely "imoartial". 

If it was believed in the first months of the NPlA that, 

"it IS txie duty of tne Administration to rpquire the inclusion 
in codes of the mandatory conditions of Section 7, and to 

(*) ^IRA Release No. 34, July 7, 1933. 
(**) Ibid. 



see tuese conditions are complied' ^vith, and it vrill perform 
that duty," 

it was soon to be l?nrriPcl tiiat tue performance ox tnis duty was less 
simple than its enunciation. 

In tiie first ul-^ce, the NTIA encountereo. considerable resistance 
in critical instances to its performance of the first part of its 
duty, the requirement of the "inclusion in codes of the mandatory con- 
ditions of Section 7", in the form set out in the statute. In several 
inst.ances, important industries made attempts to place their own in- 
terpretations upon Section 7 -(a). The outstanding examples of such 
efforts ^'"'ere the iron and steel, the bituminous coal, and the automo- 
bile industries. In the second place, the process of determining; what 
the "mandatory conditions of Section 7" actuall:/ meant was a protracted 
one, accompanied by almost every conceivR,ble form of delay and contro- 
vers;/. Third, the whole matter of assuring that "these conditions are 
complied Fith" v/as to prove a task of enormous complexity and difficul- 

Proposed Industry Interpretations of Section 7 (^) 

The "Open Shop" Isaue 

One of the first attempts at interpretation of 7 (a) which devel- 
oped into a controversy, was trie effort made oy the iron and steel in- 
dustry so to ronstrue 7 (a) as to g-aarantee the "open shop". The 
attitud.e of the inaustr;/ on this question had been emphatically stated 
by Mr. Robert p. Lament, daria^ the hearings before the Senate Finance 
Committee. (*) 

'.Then this industry brought forth its proposed code, it contained 
the following provision under Article IV, wnich dealt with "Hours of 
Labor, Rates of Pay and Otner Conditions of Employment": 

"Section 2.- The plants of tne industi-y are open to capable 
workmen without regard to their m,embership or non-union mem- 
bership in any labor organization. The industry firmly be- 
lieves tnat the unqualified maintenance of this orinciple is 
in the interests of its employees. 

"For many years the members of tne industry have been and are 
now prepared to deal directly with the employees of such mem- 
bers collectively on all matters relating to their emplo^/raent . 
The principles of collective bargaining under which certain 
members of tne industry/ have dealt with their employees are 
embocied in Employee Representation Plans which are now in 
force at plants of members of the industry generally. The 

(*) See p, li7 aoove,; and Appendix II - where kr. La.mont's testi- 
mony is reproduced. 



funaamfintnl principles of L-ucr. plins are set forth in 
Schedule C, annexed hereto. It is the belief of the industry 
th-^t t:ie method of collective bargainin'^ set forth in such 
plans provides for a day-to-day adjustment of all matters 
relating to th" emplovment of employees in the industry and 
at the same time issues to such employees a knowledge and an 
under standin.'. of the conditions of the business of their 
employers .whicn otherwise they woiild be unable to obtain; 
that such principles should be maintained; and tiaat the 
ri.rhts cf the employees and nembers of the industry to bar- 
gain collectively through reoresentatives elected or appointed 
and acting in accordance ''dt ; such plans v^ithout interference, 
restraint or coercion of any sort', should be preserved and 
protected. "(*) 

Schedule C, e-.tiMed "Fundamental Principles of Employee Re-oresen- 
tat ion plans'', are referred to in thie orcoosed Article IV. Section 2, 
provided for the rlection of representatives by secret ballot, the 
election to be helci on the employers prendses, the representatives 
to be chosen from among the emnloyec-s. Such representatives were to 
discuss 7fith tne managements' representatives at regular intervals 
matters of mutual interest; if tnere was a disagreement on a Question 
of "hours C' labor, rates of oay, and other conditions of employment", 
the matter ■■',:■,£; to go to t ;p head of the concern for final decision. (**) 

Organized labor strenuously iDrotested figainst the inclusion in 
tae code of Article IV, Section 2, Schedule C. Such inclusion, in 
its view, would mean the fixation in tne industry of the "open shop" 
and the "company union". Its leaders prepared to fight for its re- 
jection, 3i\c vriith Viillian G-reen acting as la.bor adviser on the code, 
presented a brief, outlining the basis of its opposition. 

The brief (***) argued tint the oroposed ciianges should be 
stricken > f rom tne code for two reasons: Firat, because tney would 
be a violation of tne Act; second, ttiey viere economically unwise. 
The first set of reasons was neld to be sufficient grounds for their 

It V7,?s argiiea tn- t Article TV, Section 2, anc the accompan3''ing 
Schedule C — — by requiring employees to_ select their representa- 
tives from ,a group designated by ' the employer; to conduct their 
elections in a place, designated by. the employer — -his premises; and 
by making appeal oossible only to the. employer, who has final deci- 
sion, ra,tner tiian to .an imn'^rtial ag^nc;/ — • w-i.s in conflict with 

(*) NKA Release. 'jTo.. 51. D, July 15,. 193o. 

(**) Schedule' C is given in Apoeudix IV. 

(***) The text of the brief ap^iearc in tue American Federationist , 
S.e-otember,. 1:.;53, no. 914 -92Z. 


the Y/hole tenor an' spirit ofthe-Act. TVircie ;^rovisionG v/ere alleged to 
constitute a vi 31-:^ ti , . )f Secti v.- 7 (-) Dy cooriving the \!OTl:eTz ii. the 
steel xn--astr:- of the choice of'i r-e-irenent- tive? , fr' ; froir, 
", coercion or restr.d t". The 'b"ief citec'. in support of 
its poEici:a, tjie resuios of i.s c ..r.v :.3g of the oV'inion;:- f so;.!e tv-enty 
acacemic eirorrt-^ i" the fiel.C of i.ifuc trial rel;~.ti.0Ta3 

On July :~.'9, jurt ti-o (."'..lyc. ^irior to the ocfjin-inc of the hearings 
on the Co..e, in the co^.Tse -^f an inte-'view, C-enero.l Jolmson the 
foliova.-^.; equivocal st-vte'-.ent : 

"As I understand it, an open shop is a "lace vhere any r.van 
Tirho is competent and whose services are desired rill be em- 
played regardless of whether or not he "belongs to a union, 
Tiia.t is vhat the law sa^/s. The stitute cannot he qualified, 
. . . the lav; clearly states tliat fo.ere sliall n:>t he any re- 
quiren.ent as to vdiether or .vot a man belongs to a union. Is 
anything clearer than tliTit needed? 

"I want to say again, it does not rnahe any difference vdiat 
anybody puts into a code; they ca:.not change the statute "by 
putting so'ietning into it. If t -.ere is a conflict "between 
the code' and the st-tute the code will "be received with 
those word?, "but it v/il ; "be con^'ideved rs tho-L-.g"n they were 
not in it." (*) 

G-enere,l Joiinson here see:s to sugr'est that m.odifi cat ions in the 
language or neani.ig of Section 7 (a), such as "ere at '.empted in the 
proposed code, will not he accepted 'by t'xic Administration; hut at 
the saiie time appears to find the Toosition t^hen ''cy the industry 
not in conflict with the meaning of Section 7 (a). 

In this complicated situation — m.arl:ed "'c;" sharp disagreements 
and great tensior.s — the hearings am' negotiations dragged on for 
several weeks and on several crucial occasions 'oerilously near 
complete hreak-down, Finc-.lly, the industry agreed to drop the par- 
ticular sections tliat ha. - been objected to Article I"V, Section 2 

and Schedule G 8,nd when the code, was finally approved on August 19, 

Section 7 (a.) a.npeared intact v;ith no mollifications of any kind. 

The "Meri t _Claus^e Contro ver sy 

A second atteuipt was- wade to m.odify Section 7 (a), in the proposed 
code submit ed by "the a.utomobile industry, 'rne industry proposed the 
following addition to Section 7 (a): 

"In accordance v/ith the foregoing provisions , the eRiployers in 
the autom.o'jile industry propose to continue tlie open shop policy 
heretofore follovred and under v;hich unusually satisfactory and 
liarmonious relations vdth employees have been maintained. The 
selection, retention and advancement of employees will be on the 
basis of individual merit, without regard to their affiliation or 

(*) NBA xlelease Ko. 156, July ;-39 , 19?3 


non-^ffilirtion ■.-.•ith any labor ^r ^th?:-- ii;j .rii-ration." (*) It vdll 'be 
otservec". h?" the a;3--^roacli of tn" autorriotiile in'".uctr;' to -'ar:'. the ::n':"ifico,tion 
of Section 7 (a) c'if:' ered from th:„t of tae iron a.Ki steel industry. The 
latter encxivoure " .to lint. i:l:e justification for its ; esire to iiave the 
open shop in the. lanf;ai;.£;e of the Act, itself. The automotile industry on 
the othrr nanr" nerely indicated tnat ~,hey were proposing to carry on their 
custo'.;,..ry policy of .tne o'^en shorj. 

This proposed r.cdltion vra.s interj}reted \jy or^-anizei la'Dor as "bein,?' 
a cimlienge to its interpretation of Section 7 (a) which ha,d p-^evailed 
in the outcoMe of the earl'er controversy over the iron and steel code. 
Again, there was a vigorous i:>rotest "by laTaor leaders - - - and deipids upon x^.."A to have thir a ditijn reraovsd. Under pressure durin^j; Che 
negotiations the langu;'.,ge of this provision was several times modified 
and revised to reo.d as follo\'s: 

"(citation of Section 7 (a) ). U-ic'er tnc forego i .;:; nrovisions,- 
ei.iployerr ..'a,^' continue tn' open shon po''..ic;;' unc'ev v;hich the 
selection, retention, and v wucei.ent of emplopcs will be on basis of individioa.l erit without reg.ard to their affiliation 
or non-ah'fiiiation with an,.' labor or other or/jani nation," (**) 

This revicet. version was still objected to uy labor v;hi oh broir^ht 
furbhe.L- pres.^'ure to bear on I-IIlA. to Iiave this passage removed. This 
time labor's protest was onl'^ partially succes'^iv.l. At the public 
hearings on Aijgust 18, 1933, the NSA took the position tnat no references 
to the controversial issue of the open she- were to be incorporated in 
codes. (**■*) Tflaile not entirely excised, the clause in the code 
as finally a -■roved as an icn to Section 7 (a) i;i the follov/ing 
substantially e'.iasculated fona: 

"Without m a,ny wr.y attei^pting to qualify or modify by interpretation 
the foregoing requirements oi the iJ.I.R.A., employers in the inhistry 
may exercise their right to select, retain, or ai.'vance em-^loye s on the b?si: 
of individnaJ merit, v^ithout regard to their e..u-ershi'? or non-menber- 
shi -- in any org?ini?ation" (****) 

(*.) Article VI 6, Proposed Code of Pair Competition for Automobile 

Industry, submitted by the National Autom.obile Ciia:nber of CoLinerce , 
Inc. ITew YorL- City, July .?S, 123Z, 

(**) "Code of Fair Coi.ipetition for Automobile Manufacturing Industry, 

containing suggested revisions v/hicn the Code Committee of the II.A. C. 
of C. intends to recom 'end to the C-uanber for approval." 2nd revision, 
ITIiA Tiles . 

(*=**) National Industrial Recovery Ac'ministrj.tion , Hearings "^n Codes of 

Pair Practice and Cor.petition, Automobile Hearings, Au ust 13, 1935, 

(****) i^THA Codes of Tain Comioetition, Volume I, p. 2£5, Code Ho. 1? 


jl - 

Even in this attenv.otad form the clnuse was still objected to ■by- 
organized labor, 'vho citad in justification of its apprehension, the 
demands that were registered immediatel;' by other industries to have 
the merit clause incorporated in their codes. (*) Labor protest was 
vigorously, expressed through the Labor Advisory Board "hich pointed out 
that it had only approved of its inclusion upon the condition that it 
was in no way to qualify Section 7 (a), nor constitute a precedent for 
its inclusion in other codes. (**) Sinultaneously with the approval of 
the code by the President, the Board announced it vrould oppose any future 
modification of Section 7 (a). (***) A few days later the board issued 
a formal statement indicating that the basis of its opposition to the 
clause lay in its belief that the terms "efficiency" and "merit" had 
freouently been misused, to serve 

"as a screen behind which employers opposed to any organi- 
zation by their employees have intimidated and eliminated 
wage earners favoring organization. The term as applied 
has left the sole determination of miat constitutes effi- 
ciency or merit to the employer without adequate appeal by 
the worlfffien who have been discriminated against." (****) 

The bitter controversy that had been provoked by this clause led 
G-eneral Johnson, himself, to the conclusion that it should be prohibited 
from ajiy future code, although it would have to stay in the Automobile 
Code, due to a personal promise, made in "an inigusrded moment." (*****) 

"Coll e ctive 3,"r.^;ainin.':" in Co al 

The third significant attempt at modification of Section 7 (a) was 
made in the .bituminous coal industry. Here the situation was peculiarly 
complicated by the fact that one part of the industry, the central com- 
petitive field, had long dealt with the u^iion, while the other sections — 
the Appalachian, Southern and Western Pennsylvania regions — had always 
opposed the union. The role played by each group in the negotiations 

(*) Such requests were received from some thirty codes before the end 

of AUigust, 1933. KBA Release Ho. 585, August 31, 1933. 
(**) H. Y. Times , August 27, 1933. 
(***) IT. Y. Times. August 29, 1933. 

(****) HHA Hele&se No. 585, August 31, 1933, Appendix V. 
(*****) M.Y. Times , September 7, 1933. General Johnson in the " Blue 
Eagle " says, (p. 238): 

"The final submission of the Automobile Code was 
made to me in Detroit. In that case I made such a slip as I suppose 
might be expected of anybody in such stress. Tiie code contained the 
famous merit clause. To my mind it doesn't mean anything. l\iobody can 
agree to modify or amend a law or a statute. But the President was deter- 
mined against even the appeartince of doing so. I read this one hastilj^ and 
■said I would approve it. The code was submitted on that condition. Later 
I saw that it was inconsistent v/ith this phase of the President's policy, 
but I could not throw it out and keep my word. It is in there still. It 
has never raised a question of dispute, and it never will, because it is 
meaningless. But if I had it to do over again, it vrauld not be there." 


- 62 - 

that dragged on from U^io months until the code was finally approved on 
Septemlier 18, were thus very difficult. The first group was entirely 
willing to deal with the union, the United Mine Workers, and thus intro- 
duced no obstacle in the form of proposed modifications of Section 7 (a). 
On the other hand a number of such modifications were atte}npted hy the 
second group. The following is the proposed additions of three of the 
largest associations of operators! 

"The foregoing requirements shall apply to each employer 
in his relation to his own employees, but no employer shall 
be required to deal jointly vdth other employers, or with 
representatives of any employees other than his own and 
any collective bargaining shall be on behalf of only those 
employees participatin;" therein, the employer being equally 
free to deal separately with any other of his employees not 
so participating. 

"It is a condition of this code that no person shall be re- 
quired to join any labor organization to retain or secure 
employment or to receive the benefits of this code and the 
right of every individual to refuse to join a labor organi- 
zation and his right to bargain either individually or 
collectively with his fellow employees, free from inter- 
ference, coercion or restraint of any labor organization 
are hereby expressly recognized." (*) 

Again, organized labor, through the powerful voice of the United 
Mine Workers, expressed its opposition to the inclusion of these pro- 
visions. This protest vvas successful in having the provisions with- 
drav/n and replaced by an "individual merit" clause; any further con- 
cessions were indicated by the Appalachian operators, as being impossible. 

Thus the lines of opposition were sharply drawn with both sides 
refusing to budge. The tension was further increased by applicable 
principles of law, and giving expression to interpretative constructions 
of Section 7 (a). (**) 3-radually, and especially'' with the establish- 
ment of the system of regional boards for the settlement of disputes 
locally, the practice grew up for the Board regularly to make such 
Section 7(a) interpretations. This practice received official 

(*) Mim.eograph copies of proposed codes of Southern Coal Control 

Association, the Sm^okeless and Appalachian Coal Association, the 
Y/estern Kentucky Association, N3A Files. 
(**) The first occasion of the sort was in the case of the Berklej'' 

Woolen hills, in which the Board ruled that Section 7(a) required 
an employer to deal with the representative selected by his employees, 
regardless of whether these representatives were fellow employees or not, 
I-N.L.B. 56. Decisions of the National Labor Board and the National 
Labor Relations Board vdll be cited in these pages as H.L.B., N.L.R.B. , 
respectively. Numerals preceding and following such symbolic notations 
will indicate volume aiid page, respectively, in conventional fashion. 



ap-^rDV?.!, in z'oe Oi\ er ;f ::.ece- !C'.-r I'.i, (*) 1933 vrhich rrtifieC. 
tlie v^ri^r . .cts ;f ; o ■:/■:., la £1.11, 'luri-^: the ^ j.even tnonthc :f its, ihc l^ar.- .ux-\.'.e . '..-'■■■.': l';>6 :.ccisloiis. 

When the xlational JaVoit rielati--v.s Bo:.- v? ci-e'T..ed to replace the 

l^iiti.nal L-a'bDr oiar-^, the first .'.eciri -i it .ifC. to r.val3 was v-rhethsr it 

w:; act .sl - inecltor;,- or j-u£:icial c-.-.acity. In the vorc:.s of its first 
cliairiinan, i-.r. Ll^ycl K. G-ri.rris^n: 

"As /e: revie-.-ed this histjrv (llatiomJ L-bor Bo-a-d) in the earl"/ vreelrs 
of Julj 1&21, anc- worhec. oyer the c.ocViet of nearly a htuiclrec. tinfinished 
caoec inherite" from the Wa,:ner , v;ita new ^nes coninc in dail"-, 
it quito clear th\t we co^.ilc'- not ret as "both ne>-'.iator and judi^e, 
■There vas nit tf e; and a .mediator vh'r suggests compromises, can- ot also 
"be -^ ;jivV;e •.'ho s.p lies principles, V/e must he one )r the other. If 
we were to he nec'ii.tors onl?', r.-ost ^f the cas'^s hefore us voulc' reiTtain 
un'is-osed of, ior they could not be settled by .?if;reement. Me were 
uir.vil'-ini;: to -^oass these cases by, beca.use Section 7(e.) vras the la\7 and 
we na'd been ret n;-. to bring e.bout complia.nce with it. Therefore we 
deteri.iinec' to sit as ;jud£;es and not eng-^^e in mediation, 

the rr.-dd spread of or:^^ation am rn.::; the Appalachian miners, a 
unrest ,:.nd the Outbrea'': -;f a Etri;':e in the Penns3'"lvania coal fields, Tor 
a \7hile it seemed tlx-ot the onl: result of the negotiations v.'culd be a 'dde- 
spreo.':" coaJ strihe, but ohis threo-bened outcor.e \.'as averted and a compro- 
mise ar:.-ivec\ at. A code "as n^,re.cC~. uon and submitted to the President, 

Article V (") " this coc-'e. cont-.ined the ;rrovisi ns of Section 7 (a). 
Article Y (b) re:d as follov.-s: 

"In tne subi.dssion or acceptance of this code the interpretation is 
a-'-3yte( of the require; oents tronscribed in the f orcpoin/;,- paragraph 
(a) fr j ■. Secti :n 7 (a) of the national in.^ustrial Recovery Act, which 
was jointly ajrounced by theA-hainistr- 1 ;r 'SiC^ Generol Couiisel of 
the hati }nal Industrial Tlccovery Administration, .rn August 24, 1953, 
a co-oy of v.'hich is att.- cried to this code as Schedule B," (**) 

The- Jjint Joh-nson-?dchbarg inter iretotion referred to, and which was 
attached to the -rro'-osed code as Schedule h, was practically identical with 
Genero.l Johnson's radio braodc^st of Au/-ust .J3. It was objectec. to by 
organized labor in tne p-ersons of YiTilliam C-reen r.nd John L. Lewis, The 
followiag st'-tement by the President, on September 18, 1935, aiop^eared in 
Ms Eo'.ecutivc Or ' r a; ^roving the code: 

."Because it is evi^'ent t:not attempts by those submitting codes to 
inter-iret Section 7 (r) of the hational Industrial Recovery Act h.- ve 
led to confusi-:n an."' misunderstanding, such interpret.ations should 
not be incorporate^ in codes of fair competition. Therefore 2ia.ragro,ph 
(b) of Article V lAUst be eliruinaGed without by this exclusion indic: ting 
disa.^^-roval in any way ~f the joint st.otement of the Ai-hninistrat or 
and General Coijiisel of the Ifeti -nal Recovery Administration which .la.s 
been ...ttache'- to the 'co-'e as Schedule B and was incorporated by ref- 

(*'i For this joint interpretation, see :^'.6d '^"elow^ 

erence in said para^r .:">h ("b) of Article V." (*) 

Tlie lie ailing; of Sectirxi 7 (■ ■) 

T-ie i = Eues oi the o^-er. sho-'^, tlie ''incividu'.l .erit" clcuse, and 
collective uar£ inii-'.g r'dse-- in thr^ co'orse of "A'le crntroversies reco-dii&ed 
above, placed a new renponsibility ya. thn i'lA and its then principal 
officials. General Joiins "m :.,nc Mr. Richberg. This vas to define for the 
country at large just ./hat the provisi'-i's of Section 7 (a) implied. Some- 
what later, vdth the creation of the National Labor Board, this became 
the chief preoccupation of that board and its successor, the first National 
Laoor delations Board, But before the Wation3,l Labor Board began to 
function in such a capacitj-, the Wik had to assarje the responsibility of 
malcing the official inter;:ret:.tions of Secti"n 7 (-' ) . {"-■*) 

General Joh-.iEO;i aATeiAptec" "oo ma.he sone of there interpretations in 
a radio on Augast i-lZ, in which he \;ent into these matters m 
sone (***) 

"One cause of'oute is s certain obscurity about ^ne section of tMs 
Act. It is neces..:ary to Soate the officio.l interpretation and I tah'e 
this occasion to uo so. It is a.s folJ. oi-.-s: 

"The plain r'eaning of Section 7 (a) cannot be cha.n.2:er' by anj' inter- 
pretation by anyone. It is the function of the Ac'jHinistrator and the 
courts, to ap'oly and to interpret the Ioav in' its adraini strati on; and 
no one else con this fuio.ction p-n^-' no official interpret" tion 
can be circu oscribed, affected or foreclosed by anyone writing his ovm 
interj-retation into any code or •o.greeinent. Such sn interpretation lias 
no place there and cannot be permitted." 

Having, indicated tliro.t the function of interpretation belonged only to 
che couxts.;anu to hxi'self as . d-ministr otor , General J^liaoson once more 
stated his rejection of tne claiv.s of both l:,bor and industry, to favored of -rg-nization: 

"The 'w'ords ' oncn shop' ^md'clo^ed sho-o ' are not used in the law, 
•^,nd co.n: ot be written into the law," 

Reiterating the language of the Act, he attempted to give definite 
content to the collectiv: bargaining clause: 

"Th.e Is.v; reouio-es in coiles and agrcem.e±its that 'employees sloall li£<.ve 
the right to organize and bargain collectively through representatives of 

their 0¥m choosing.' 

{*) llhA Codes of ■^•air Competition, Voluie I, :>. C.14, ^.^i-roved Coc'e Hq, 

(**) In f,.ct tne relation between NRA am-, the ifetional Labor Board was 

never clearly defined m this matter of r'^sponsibility and authority 
for iOrdoing such interpret -.tionc. The result '-as a continuously 
recurrent conflict ^jetween these two agencies. See Chapter V, 

(***) :'RA -Release Uo. 463, August 24, 1933, NRA Files 


"This can mean onlj'^ one thin^:, viiich is that employees can choose 
anyone they r'csire to represent them, or they can choose to repre- 
sent themselves. Employers lil-.ei^isv.e can moke collective bargains 
\7ith orgrjrii?:ed emrjloyees, or individual a.e-reements with those rho 
choose to e.ct individually; provided, of course, that no such col- 
lective or individual a Teenent is in violation of any State or 
Federal lav, 3ut neither employers nor employees are required, 'bY 
la,\T, to agree to any particulp.r contract, phether proposed as am 
individual or collective agreement," 

A clear definition of what constitutes the "interference, restraint 
or coercion" jjrohibited by clause (s) is found in Texas and Hew Orleans 
E^ilrOFX- case. 

■ "The law provides that employees shall be free from the interference, 
restraint or coercion of employers in the exercise of their rights 
established by the law. The conduct of employers which is here pro- 
hibited has been defined by the Supreme Court in the case entitled 
" .T« & N.O.R,R . V. Brotherhood of Itailway Clerks , 281 U, S. 548, 
The r"alings of the Supreme Court lay down the la^ which governs the 
KSA. " 

It is the enforced membership in company unions, not the union it- 
self, that is prohibited: 

"Under Section 7(a)', employers are forbidden to reo^^uire 'as a con- 
dition of emplnjonent' that an employee shall either 'join a compaJiy 
union', or 'refrain from joining, organizing or assisting a labor 
orgajiization of his own choosing'. The law does not prohibit the 
existence of a local labor organization, which may be called a com- 
pany union and is composed only of the employees of one company. 
But it does prohibit an employer from requiring, as a condition of 
emplojTnent, that any employee join a company union and it prohibits 
the maintenrnce o-f a company 'union, or any other labor organir^ation, 
by the interference, restraint or coercion of en em-oloyer," 

The IJPJl is prepared, to conduct secret elections if a dispute arises: 

"If there is any dispute in a particular case over who the re- 
presentatives of the employees of their 0'.^ choosing, the NRA x-iill 
offer its services to conduct pji impartial investigation, and, if 
necessary, a secret ballot to settle the question," 

but will not decide as to the desirability or validity of a specific con- 

"The KEA v-ill not undettake in any instances to decide that a pai^ 
ticular contract should be made, or should not be made between la\"r- 
ful representatives of employees and employers; or to decide tha.t 
a contract which has been lawfully made should not be enforced," 

A significant indication of General Johnson's belief as to what con- 
stituted proper NBA policy as regards Section 7 (a) is contained in his 
statement on the occasion cf the resignation of Mr, Dudley Cates as 



Assistant Acininistrator of NRA. ivir. Gates found himself opposed to the 
existing lator policy of the l^iHA, believing it should encourage the re- 
placement of craft unions by industrial unions, which should be respon- ' 
sible to .^'overnment^ (*) General Johnson in his statement said: 

IStr Gates' statement discloses a theme ^-'hich many of here entertain: 
that', T'ith an industry organized vertically, the logical labo.r or- 
gaaiization is vertical also ipith overhead control in labor'as re- 
sponsible to government as it is in industry and that craft organi- 
zations 'is obsolete. The difficulty in passing from theory to prac- 
tice is that the law says of labor organizations tha,t they shall 
be of the -"orkers 'own choosing'. I early deterriined that it was 
the function of the ITFA as prescribed by the st?/Gute to maintain 
an attitude of perfect neutr-^lity, to lend its e lf to no one theoi-y 
but to execute the law . Mr. Gates quite recently -'rote me that he 
thought existing trgde unionism obsolete, and thrt he had set him- 
self to stop it at 'everj?- turn'. Obviously, that attitude is in 
violation of the law which we were both sworn to enforce. " (**) 

This statement of G-eneral Johnson had already been seized upon a.s - 
sn e;:cellent description of his interpretation of correct NRA policy 

with regard to Section 7(a) "to maintain an attitude of perfect 

neutralit;'". This statement also reflects one of his earliest declara- 
tions — "I have a law to execute and I ajn going to execute it". But 
his further- reference, that E?Jl would "lend itself to no one theor;'-" 
suggests his gro-ing -recognition that "executing the law" was not a ^ 
simple, clear-cut task, but one involving a conflict of numerous "rights" 
interests and pressures. 

(*) Ke'.,- York Times . August 51, 1933. 

(**) HEA Release No. 602, September 1, 1933. The above quotation can 
be found in Lorwin and T/ubnig, Labor Relations Boards, Brookings Insti- 
tution, 1956. p. 76. Underlining inserted by the writer. 



TH:^ Ilv iPL^^n NT-iv TIGlI Off SECTION 7 (A ) 
TH-^ LAdO'^. boards 

It has iDeen observed that Section 7 (a) vs.5 inserted in the NI2A 
as a means of realizing the -ounDOse "to induce and maintain united ac- 
tion of lehor and manasement "under a^Teq^iate governmental sanctions and 
supervision." (*) 

In spite of the end desired, the traditions of conflict betv7een 
labor and raanagemDnt that have existed in America, and the further 
fact that the inclusion of Section 7 (a) in codes was OJ=ide mandatory, 
no provision was msde in the Act itself, for the setting xnr, of mach- 
inery to deal with the conflicts that inevitably were bound to arise. 

The wave of strikes that swept the country in July 1933, during 
the TDroraotion of the PEA made the creation of some such machinery aM 
immediate necessity. The National- Labor Board, established on August 
5, was the first of a congeries of boards that were set up during the 
years 1933-35, to settle the dis-outes arising between labor and manage- 
ment under the operation of the ITSA. The boards differed as to their 
TDurooses and authority. Some were established to settle "Labor com- 
TDlaints," others to settle labor "disputes," some in fact did both. (**) 
Some were set up Tender the KFuA.; others were independent of it; the 
status of the National Labor Board wrs never entirely clear, until the 
Board was abolished, Our concern here is only with the handling of 
"labor disiDutes." Jor -ourposes of classification, we may consider 
these boards as falling into the three general categories Of "general 
boards," "siDecial boards," and "cO'3e boards ." (***) 

By "general" boards are meant those whose activities covered the 
labor scene in general, and which laid down TDrinciules whose applica- 
tion was equally '7ide. This grouo would include the National Labor 
Board and its successor the National Labor Relations Board. (****) By 
"special" boards are meant those bo;'rds set up for special industries 

(*) NIHA Title I, Section 1, Declaration of Policy. 
(**) The, distinction made by NBA between labor complaints and labor 

dis-outes is as follows: "The term 'labor com-olaints' refers 

to a complaint alleging a violation of the labor provision of 

a code; the term 'labor disiDute' refers to a situation 

where a strike or lockout exists or is threatened or to a 

complaint which because it -Dfimarily involves Section 7 (a) of 
NIRA, may lead to a labor dispute." NHA Bulletin No. 7. "Man- 
ual for the Adjustment of Complaints," Government Printing Of- 
fice, Washington 1934, p. 5. 
(***) This classification is one based on scope of activities rather 
than on the criteria of authority or ourpose suggested. The 
code boards were essentially "special boards" set up under codes. 

(****) The present National Labor Relations Board, successor to the 

identically named board mentioned in the text, ad though legally 
an independent creation, is in the tradition of these "general" 


~6g- ■ 

"but independently of WRA jurisdiction such as the Petrole-um Lator Policy- 
Board, the Longshoremen's Board, the national Steel Lahor Relations Board 
and the Textile Labor Relations Boa-ri-C*) 

The "code" hoards, also attrched to specific codified industries, 
were established within the codes and under lIRA's jurisdiction. Some 
seventy codes provided for the establishment of labor coraTolaints com- 
mittees, and/or industrial relations boards, (the former the machinery 
for handling "complaints,'' the latter, for "disioutes" ) ;■ about twenty- 
five were functioning at the ezioiration of WA. The better known of 
the industrial relations Boards, were the original Cotton Textile Na- 
tional Industrial Relations Board, the Bituminous Coal Boards, (Nation- 
al and Divisional) the Automobile Labor Board, Construction Board, and 
the NewsToaper Industrial Board, etc.(**) 

The various i??rou-os of boards for the settlement of Section 7 (a) 
disputes described above have been referr-^jd to as the "labor boards 
systera".(***) If it be' considered, however, that a system is defined a,s 
the "orderly combination or arran^em-nt, as of -oarts or elements, into a 
whole," it must be recognized that the various boards ponstituted a very, 
bad "system," or more precisely, no "system" at all. The situation was 
one of confusion and of overlapping authorities, functions and purposes. 
The inter-relationship of these boards cannot be understood if they are 
considered ' as the product of a logical plan. Rather they must be viewed 
historically as ag'encies created in haste, to meet the exigencies ■ of a 
rapidly shifting set of power relationships. 

The National Labor Board 

The National Labor Board was established by the President on Aug- 
ust 5, 1933 upon joint recommendation of the Industrial and Labor 

(*) The Petroleum Labor Policy Board '7as in a special category. It 
was attached to the Petroleum Code, but the lotter, though nego- 
tiated under NRA was, immediately upon approval, assigned for ad-' 
ministration to the Secretary of the Interior. The Labor Policy ■ 
Board was thus independent of the NRA and under the jurisdiction 
of the Petroleum Administration, The other boards mentioned 
here were established under authority of Public Resolution No. 44, 
June 19, 1934 along with the N.L.R.B. 
(**) A word should be said about the Labor Advisory Board, which has 
frequently been incorrectly thought of as a part of the galaxy 
of boards described ahove. The Labor Advisory Board had no dir- 
ect relation to the settlement of labor disputes. It was one of 
the three advisory boa.rds, the other two being the Industrial 
Advisory Board, and the Consumers' Advisory Board. The function 
of these boards was to represent the interests of labor, industry 
and consumers, respectively, before the Administration. 
(***) Lyon, Leverett et' al. The National Recovery Adiiinistratio n Section 
by L. Lorwin, p. 466, and Lor?rin and Wubnig, Labor Relations 
Boards , Part III. 


Advisory Boards. (*') The President followed the Boards' recommenda- 
tion both as to personnel and powers. (**"* 

The definition of the Boards' powers, as contained in the state- 
ment of the advisory boards, and as approved by the President, reads 
as follows: 

"This Board will considei*, adjust and settle differences 
and contx'OVersies that may arise through differing inter- 
pretations of the President's Reemployment Agreement and 
will act with all possible dispatch in making known their 
findings. In return, employers and employees are asked 
to take no disturbing; action pending hearings and final 
decisions. This Board will promptly proceed to establish 
such central and local organizations as it may require to 
settle on the ground such differences as arise in v.arious 
parts of the country." (***) 

(*^- General Johnson in his "Blue Eagle from Egg to Earth", p. 209 

says: "At my suggestion, some months later the National Lator 
Board was created and also at my suggestion, Senator Wagner was 
appointed its chief. It was set utd indeDendently and not in 
connection with the Department of Labor." The General does not 
mention thft the hoa-rd' s relation to I^IHA was not as clearly de- 
fined as its rela,tion to the Department of Labor, a fact which 
caused much difficulty during the life of the board. To whom 
and when the General made his suggestions he does not say. The 
record shows that the creation of such a "board along with sug- 
gested personnel, was recomiaended in a joint statement of the 
Industrial and Labor Advisory Boards to the President on Aug- 
ust 3. (Minutes Industrial Advisory Board, NRA, August 3,19*53]. 
See Ap'nendix VI-A. This statement was drawn up as a result of 
a jioint meeting of the two boards to discuss what should be done 
about thi? growing industrial strife. Father Haas of the Labor 
Advisorj'' Board seems to have been the first to recognize the prob- 
able necessity for some such bi-partisan board, the creation of 
which he proposed at a meeting of the Labor Advisory Board on 
July 9. ^ 

(**) The original personnel of the Board, numbering seven, was as 

follows: For industry: Walter C. Teagle (Chairman of the Indus- 
trial Advisory Board\ Louis Kirstein, Gerard Swope, for labors 
Dr. Leo 7/olman (Chairman of the Labor Advisory Board"), William 
Green, John L. Lewis; a,s impartial chairman, Senator Robert F. 
Wagner. The board was reorganized in February 1934 and its num- 
ber increased to thirteen, as follows;. Senator Wagner, Chairman, 
Clay Williams and L. C. Marshall, Vicc-Chaii^man; Henry S. Dennison, 
Ernest Draper, Pierre S. du Pont, Louis E. Kirstein, Walter C. 
Teagle, for industry; George L. Berry, William Green, Dr. Francis 
Haas, John L. Lewis, Dr. Leo './olman, for labor, 

(***") National Labor Board, Decisions, Part I, also Appendix VI-A 


-70- ■ ■ ■■ ■ "^ ■^:;-; 

This vague and rather uncertain grant of power w-'^.s a serious source 
of difficulty and confusion. The Board w s never quite sure' Qf its own 
authority nor its relation to the boards subsequently created under KRA. 
The pressure of events caused the Board to asstune powers and duties that 
had not been expressly granted to it. For example,' it dealt with "dif- 
ferences and controversies" e,manating fron NRA. codes as well as from 
P3A agreements; {^"^ although authorized to "consider, adjust and settle" 
differences, it undertook the task of adjudication, as well as that of 
mediation and conciliation. The uncertain definition of the Board's 
functions caused its authority to be challenged by em-oloyers, and its 
jurisdiction to be questioned by agencies more definitely under KHA. 
control. Threatened with a loss of prestige and influence from such 
sources,' the board had to be strengthened three times m its less than 
oiie year of life. 

■ The board's rjowers v/ere re-defined by three executive orders (**) 
That of December 16, 1933 approved the past actions of the Board, and 
specifically gave it jurisdiction over industrial disputes whether aris- 
ing under PRA. or under IPA. The order of February 1, 1934, e3;pressly 
empO"jered the Board; to conduct elections of employee representatives 
for cQllective bargaining; to follow majority rule in these elections; 
and' to refer resisting emnloyers to KRA Administrator for "appropriate 
action". This last provision was modifiea by the executive order of 
February 23, 1934, so that offenders were to be referred, not to the 
Administrator, but to the ComiDliance Division of the IIRA ahd/br' the 
Attorney General; and, with an eve to strengthening the Board's position 
vis-a-vis the NHA, the Compliance Division was instructed not to review 
the findings of the Board. 

Th& National Labor Board started its career auspiciously by its 
successful mediation of the widespread strike in the Be'-';e County, 
Pennsylvania hosiery mills. This settlement, (*^- "i o.- . ir'-zt 11^-1933 
by an agreement la.ter known as the "Reading Forr.i.-.l^.'' !-■ , ..•; ■^.: -.e-d four 
points which liccause standard N.L.B. policy; (l) Vjc na.^bic ilar strike 
was to' be . immediately called off; (2^ striking o;i:^l')ypes were to "be 
reinstated without prejudice; (S'* an election wa^ to oe held to des- 
ignate employee representatives for collective bargaining piirposes, these 
representatives to be authorized to negotiate collective agreements with 
the enployers; and (4,' vorkers and employers agreed to submit differen- 
ces 3,rising unuer vhe s,r;Tee,iiient to the !;iational Labor Pcara. 

(*"^ Note, ho'-ev-'T. m^ ■- '•f-'\-:i^n (l^) of P:Ji. prc-.'Io'.d .' cr con- 
formity v;iv. "- ':]',\ : (a'l -of NII-iA. 

(**^ Ho. ^511,^.- 16, 1933; No. ^58^, February 1, 1934; 

No. 6612, February 23„ 1934. For te:.t ,. of .these orders see 
Appendix VI-A •■• r, • ■ ■ - • .;;■ 

(***) ERA Release No. 285, Au.-ust 11, 1933. See ApT3endix VII 



In tho n'^xt fe-- months by the use of this formula the National 
Labor Beard r'-s successful in settlin-; v.iany c.isputes originating in a 
wide range of in.aistries and involving huno -eds of thousands -of workers. 
This success carried tnrough the difficult month of October, 10o7. — 
a month of much inaustj'ial strife — into Novcabcr, when difficulties 
began to arise, culminatiig in a crisis in December with the challenge 
to the Board's authority presented by the' Budd and'weirton cases. (*"* 
The President endeavored "to raeet this situation with his order of December 
16^ ISo^, strengthening the board's po^^ers. yith the continued "de- 
fi.ance" of the coraiDanies involved in the weirton and Budd cases, and 
increasing emoloyer resistance dijiring December and January, the bocard ■ 
was on the verge of complete breakdown. This led to showing by the • 
Presidential orders of February 1 and February 23, 1934, respectively. 

These two orders the first giving the Board specific authority to 

conduct elections, and by majority rule, and the second, confirming 
the Board's independence by denying the LIRA Compliance Division the 

right to review the board's decisions gave new life to the waning 

powers of the Board. 

One result of the issuance of these orders, however, was to pro- 
duce a sharp conflict between ILL.B. and NEA, in their respective in- 
terpretations of the moct question of elections. The announcenient of 
the February 1, 1934 order was supiileinented by what was subsequently 
alleged to be the "unauthorised comments of a subordinate official", 
the effect of which was to suggest th-ttthe G-overnment had taken a 
Tjosition of oxyoosition to coraoaiiy unions . (**^ 

(*) Em-Qloyees of Weirton Steel Company, charged t.ha.t the company was 
"coercing" them into voting for a company union at elections. 
Under tDressure, the company stated that its interpretation of its 
strike settlement, was th ^.t the election of representatives was in- 
tended for an employee representf.tion plan only. The Budd Mfg. 
Company had refused to coranly \dth a decision of the Philadelphia 
Regional Board, calling for settlenent of strike, on condition that 
all workers be re-employed and an election be held under the nation- 
al Labor Board and the national Labor Relations Board. Some 
twenty regional boards were established. Lists of these are to 
be found in the vol^junes of the oublished decisions of the Board. 

(**) These comments, contained in IT3A Release ITo. 3 '70, February 1, 

1934, read as- follows: "The President's order is a direct result 
of the growing tendency on the part of industrial managements to 
build up 'company unions' in their plants. The unions are oper- 
ated by employees' representatives chosen by the employer rather 
than by the employees themselves. Frequent charges that such 
company unions are not representa,tive of the- workers, but are 
dominated by the management, have been made. Typical among such 
cases are those of the Weirton Steel Company 'fend the Budd Company 
of Philadelphia." " ' 



These coinneats evoked a storru of orotest from industrialist organ- 
izations, which led to a joint statement on Febnis.ry 3, 1934 by Gen- 
eral Johnson and Lir, Pachbcr^, intended to clarify the meaning of the 
President's oraer,(*) 

In their statement, the e::ecutive order of February was interpreted 
as providing merely "a method" for the selection of representatives by 
majority vote, but not "restricting or qualifving the right of minority 
groups or of individual employees to deal with their emioloyer separate- 
ly"; the statement also recalled th.'.vt "Section 7 ,(a'( permits minor- 
ity a,s rrell as majority groups to organize, select representatives, and 
bargain collectively." 

The efi'ect of this interpret-ation was to legitimatize a multiple 
svstem of representation tiy recOf^jnizing najoritv, minority, and individ- 
ual repvesent.ation and br?.rga.ining. This oolicv, which h; s been well 
c-^^illed one of "pluralism", (**''' v7ould permit the parallel existence of 
several collective aio;refiments, the actual terms of which might con- 
ceivably vary greatly. This Johnson-?.ichberg interpretation thus ran 
directly count'.r to the policy th t -Drevioasly had been developed, by 
the H.L.B., namely the majority rule for the election of rexiresentatives, 
who would speak for all of the emrloyees in the unit covered by the 
election. The K.L.3. took an e;-rly op':iortunity, in the Denver-Tramway 
Corporation decision (***) dated March 1, to come ou.t openly for the 
majority rule, thus st nding squarely onoosed' to the Johnson-Tlichberg 
position. . . • . 

The National Labor Board ''Jas greatly encovjaged by the suD"oort 
given it in the afore mentioned tvro February orders. An internal re- 
or^^anization took place, and the decision was made to push vigorously, 
the fight on the Weirton c'.se. Simultaneously Senator WaiZjtier intro- 
duced his Labor Disputes bill (****') the ouroose of which was to put 
the Board on a permanent statutory jniiia. The Board's "comeback" was 
evidenced, by a series of importrmt decisions following upon the Denver 
Tramway esse. (****=^•^ pij^^ ^Yi^ Board's moijuting prestige was struck 

(*) RRA Release No. 312t, l''eov\x:>rj 4, 19o4. See Appendix VIII 
{**) Lorwin and V/ubnig, op cit, p. 269. 

(***') 1 II.L.B. 64 

(****) 73rd Congress, 2nd Session, S. 2926, March 1, 1934. 

(*****) Hall Baking C omr any, March 8, 1934, 1 iM.L.E. 83 affirmed the 
right of a. union to be recognized a.s a. party to collective 
agreei.ients. Hou de En..?:in eering Cowoany. March 8, 1934, 1 
K.L.B. 87 held an eraoloyer is obliga.ted to deal with union 
official even if he withholds identity of people he represents, 
Republic Steel Corporation, March 16, 1934,1 IT. 1. 3. 88 denies 
th't a conr^nny union established orior to enactment of Sec- 
tion 7 (a^^ c; n impair ri4^ts created by Section 7 (a\ 



a fatal blov/ hy its failure to make an adjustment of the automobile 
controversy, ''.'hich w. s finally settled on i;arch 25, 1934 by the interven- 
tion of General Johnson and. President Roosevelt, '^'he settlement fail- 
ing to provide for elections, ignoring the majority rule, granting 
minority representation and establishing the Automobile Labor Board, 
was squarely in conflict with the policy developed by the iT.L.B. and 
seemed to put the IPA Johns on-Richbjrg interpretation in the "saddle." 

The succeeding months witnessed a steady evapora.tion of the author- 
ity and prestige of the Board. During this period there occurred the 
strikes of the Toledo auto workers, the Minneapolis truck drivers, the 
San Erancicco longshoremen aad the threatened general steel strike. 
TJhile the N.L.B. participated in the settlement of these strikes, its 
role was a minor one. On June 19, 1934 Joint Resolution llo. 44 was 
oassed as an emergency measure and a substitute for the 'Jagner Labor 
Disoutes Act; this resolution ,(*'> erapov/ering the President to create 
boards to investigate labor dis"outes and conduct elections, fore- 
shadowed the end of the National Labor Board. Officially it e^noired 
on June 29, 1934, with the creation by the President of the National 
Labor Relations Board as its successor. (**'' 

. ; The National La bor Relations Board 

The National Labor Relations 3o-..rd (***) followed pretty much the 
lines of interpretation laid dorn by its predecessor, (****^ although 
it carried further the interpret.-..tion of "Section 7(aV The life of 
the N.L.R.B. vas a much less difficult one than thf t of the II. L. 3., 
for a variety of reasons, the most significant being the more ex- 
plicit definition of its powers and jurisdiction, the substitution of 
a board of three impartial experts for a bi-partisan board, the elim- ■ 
ination of jurisdictional dispute with ;,:RA, and the handling of the 
problem of certain "difficult" industrial fields by special boards 
set ur> under the stune resolution. 

The Special Bo ards 

This leads to a brief consideration ox" these "special" boards, 
all of which except one were created un. er authority of Public Res- 
olution llo. 44. The one exceiotion is the Petroleum Labor Policy Board, 
which enjoys a peculiar status fjF its own, being independent both of 

(*) The text of this resolution is leproduced in Appendix VI-B 

(**) Executive Order IIo. 6763, June 29, 1934. 

(***) Reference here is to the first board having this name, not to 
the board identically named set ud under the National Labor 
Relations Act of 1935 (Public No. 198, 74th Congress, approv- . 
ed July 5, 1935"* . 

(****) See statement by Chairman Lloyd G-arrison, quoted on p. 79 


The NRA. and the M.L.R.B. (*) Established directly under the Petroleum 
Administration, and tacked "by the authority of the Administration, the 
board proba-bly has had freer scope for its activities than any of its 
follow boarcis. 

As to the other special boards: The National Longshoremen's Labor 
Board (**) was established for one specific purpose, namely, the set- 
tlement of the Pacific Coast longshoremen's strike. 

The National Steel Lator Relations Board {***) spent it first six 
months in endeavoring, unsuccessfully, to bring atout agreements be- 
tween the emijloyers who defended the existing status of employee re- 
presentation plans and the trade imions, which insisted upon elections. 
These efforts proving unsuccessful, the board turned to the hearing and 
disposition of Section 7 (a^ cases in the inoustry. 

The Textile Labor Relations Board v/as created (****'> by the Pres- 
ident pursuant to the "»'inant Report (*****) terminating, the textile 
strike of September, 19o4; its attention seems to have been largely 
directed toward settling the issues of discrimination which arose as a 
result of that strike. 

The Code Boards 

There remrdns for coasidcration, the third group of labor boards, 
the NPuA "code" boards,. Like the IT.L.B. those can be best understood 
when viewed historically, &s the products of a process of accretion, 
rather than as a planned system. The story of the II.L.B. is the story 
of the fluctuations of its pov^ers with respect to the social-economic 
factors, with which it had to deal. One of these factors was the TRk . 
itself; and the story of the "code" boards is an account of the- struggle 
for suprGraacy that took between these two agencies. 

The somewhat vag'ae grant of powers th- 1 was given to the N.L.B. 
uioon its creation caused uncertainty not only as to the scope of its 
authority, but also as to its rel-ition to various N?A agencies, such as 
the compliance boards and the industrial relations boards. 

The first of these industrial relations boards was established on 
August 9, 1933 under the first code aporovod by the NRA, that for 
Cotton Textiles; it was created primarily to handle the "stretchout" 

(*"> As provided for uiider the Act of creation of the N.L.R.B., the 
other joint resolution boards are under its final jurisdiction. 

(*>*) Established Jmie ---6, 1934 by Executive Order No. 5748 

(***"> Established June 26, 1934 bv Sxecutivo Order No. 6751. 

(****") September ?6, 1934, by Execiitive Oraer No. 6858. 

(*****) Text of the report appears in the New York Times, September 28, 
1934. ' . ' 



Problem in that induntry. Tho boc.rd soon found itself handling all forms 
of disoutes arising \7ithiri the industry. A month later, n. group of six 
industrial reif.tions bourds (crdled Coal Lfbor Boards'" was established 
under the bitujnincrus coal code. Certain elements within ITRA. ur>];ed 
the expansion of such industrial relr tions bo:.rds, out nothing much 
was done along these lines on a,ccount of the general state of \incertain- 
ty as to the demarcation of jurisdiction betv.'een the 'JIIA and the U.L.B, 
An initial definition of these jurisdictions is contained in the Pres- 
ident's order of December 16, 19b3, i*^ giving more detailed s-nec- 
ification of the pCTers o:"" tho N.L.B. By granting the S.L.B., dis- 
cretionary -oc/er for the considerc tion of dis;outes th."t might be hand- 
led througii other chan.iels, it rilaced final jurisdiction- outside of, 
rather than within, the !JF!A. 

The adOi-)tion of this Dclicy rbsnlted in the susnension of any 
active program of establishing additional inaustrial relations boards 
under the codes. ITevertholess, the NUA continued to study the whole 
question and formulated a tentative policy that v/as announced on Jan- 
uary 22, 1934. (**) This Dolicy rested upon the distinction between 
"labor conrplaints" and "labor disputes", air -^ady referred to. The 
procedures outlined provided -for tT/o cha.niiels for the handling of com- 
plaints, and. t\v0 for the handling, of disputes. Cohwlaints 'were either 
to go thro^jgh the regulf^r comoliance machinerjr, or could be handleci. by 
the industry, where an acceptable machinery was set ut) for this pui"- 
r)Ose. Labor dispute-s were to be handled by the code industrial re- 
lations boara, if such a board (***) existed, in its aosence the matter 
was to go to the ap-oropriate regional board of the I'.L.B. This state- 
ment of procedures seemed to sug^'est thrt complaints would "be handled 
entirely within IH^L, ' and disputes both within and ^/rithout. However, 
the matter was further coiaolic'ited oy the provision th/ t complaints also, 
where not s3.tisfactorily settled, should ^^o to the apprOToriate regional 
board of the ilational Labor Board. 

This policy did not contribute much to the clarif icatioa of the 
conflict of the jurisdictions of the ifetional Recovery Administration 
and the National Labor Board. On the contrary, it may be. said to have 
confused the siturtion further. On the one hand, it trensferred to 
IT.L.B., ultimate jurisdiction over complaints rhich may have developed, 
or threatened to develop into disoutes. On the other hand, it nibbled 
away at. the jui'isdiction conferred upon tne _r.L.B. by the order of Dec- 
ember 16 "to continue to adjust all industrial dis'nutes". The confusion 

i*^ Section 2 (a"^. See Apoendix VI-A 

(**") In IIHA Bulletin Ko. 7. "I-ia-n unl for Adjustment of Com-3lain ts, 
"ashington . " 

(***) In fact, where such boards were established, they incic entially 
had jurisdiction over labor complaints as T'ell. 



would seem to have been only increased by the terras of the t',vo executive 
orders of February 1 snd February 23, 1934, which further emphasized the 
jurisdiction of the N.L.B. over disputes bv specifically grsntin^T the 
board the rli'ht to conduct elections, under the majority rule, and by 
removing from the IIEIA Compliance Division the ri;--;ht to review the deci- 
sions of the N.L.B. (*) 

In this stalemate situation, no active effort '''as made by NRA to 
set up additional "code" industrial relations boards. However, there 
was some sentiment on the part of the Labor Advisory Board in favor of 
the creation of such boards. Katters cf^me to a head with the automobile 
controversy. The settlement concluded on larch 25, 1934, through the 
intervention of the President, withdrew the jurisdiction over disputes 
arising in the automobile industry from the N.L.3. and transferred it 
to the Automobile Labor Loard, under the IIRA. This action seemed to 
indicate thpt from then on, ElA industrial relations boards would play 
a far more important role in the settlement of labor disputes than ths 

Responding to this new turn of events. General Johnson on March 
30, 1334, issued Administrative Grdi^r X-12 (**) which called for the 
immediate setting up in every code of machinery for the handling of 
"disputes" as well as "com-olaints". These industries whose codes provided 
for the establishment of such agencies were insti'oicted to carry out these 
provisions; the others were ordered to establish such agencies. Encourage.d 
by the order, a number of such boards were established. But this number was 
relatively small, due to the initial active opposition and later reluctant 
willingness of the Labor Advisory Board, the vpv'- agency that had first 
supported such a program. The opposition of the Labor Advisory Board was 
based upon the belief that while a program of slo"' developments of such 
boards was desirable, a wholesale multiplication of such agencies would 
hurt more than it would help the interests of labor. 

The final stRge in this game of "battledore and shuttlecock" oc- 
curred with the developments consequent upon the passage of Public Reso- 
lution No, 44. (***) Under its authority, the President created the 
various "special" boards to which jurisdiction over Section 7 (a) dis- 
putes in specific industries was given. Thus the power to handle disputes 
was once more taken away from jJElA and given to the National Labor Rela- 
tions Board, and to the "special" boards, over whieh the N.L.R.B. had 
final authority. This new situation made it necessar-,'- for the NRA to 
modify the policy of Aiministrative Order X-12, '^hich it did in Adminis- 
trative Order X-69, on July 29, 1933. (****) This new order really 
amounted to a reversion to the earlier NEA policy announced in 

(*) See Appendix VI-A 

(**) NRa Release No. 4152. See Appendix VI-A 

(***) Public Resolution No. 44, 73rd Congress. E. S. Res. 375, 
June 19, 1934. 

(****) NRA Release No. IX-3 



1HA. Bulleti:! lln. V, out rrith uhat appears to ''le even fv,rt'ier curtail: I'^nt 
of tue ran^p of iIRA' s discretion. 

' t;ie 'beginning of I-SA' s second year there loegan to sF.erge senDlaiice of order from the conflision of the la'oor "board's set-up. 
Under Public Ilesolxition To. 44, the rational Lahor P.elations Loard, and 
the various "s-oeciaJ." hor.rds i.Tere given more clenj.'l3'- defined areas of 
jurisdiction. 1-y the terras of Ad:-inistrativf- Crder X-S9, th'? scope of 
the code indiistrial relations hoards i.7aG ncdified to avoid over-lapping 
Fith these "joint rpsoTation" "boards. 

But although the re!nJ.ation of industrial relations "by G-overnnent 
Agencies pui'sued a snicother coujrse, the cordflict of ju.risdiction per- 
sisted. The e:?:ecutive order esta'iJlishing the ITational La"bor Relations 
Board had conferred upon it rrhat vras generall"^ interpreted to "be dis- 
cretionar3' -^ov,'er of review and settlement of G.isoutes not satisfactorily 
handled "b}' otner agencies. (*) In t"ne fanov.s Jenr.ings case, the "bo-rd 
fcond its a.jLthority to intervene in "code" industrial disputes c"nal- 
lenged (**) "by agencies of ITIA.. This ner; conflict het-.'een "."PlA aiid a 
non-UEA agency nas resolved ""o-^ t"no President's curtailing on January 32, 
1935, the right of the u.L.Ii.3. to cla,in eit'her origin,al or review 
jurisdiction over disputes, xfneve there ^.Tere appropriate "code" indus- 
trial relations "boa.rds, jiossessing tae pc-::er of "final adjudication". 

AlthoxLgh this only specifically renoved the ne'^rspajjer and "l:ituni- 
nous coal codes from the jurisdiction of the ZI.L.R.3, , it presented a 
serious "'olon to the Board's prestige, 'jhicn suffered a^iother hlo'.'' ten 
days later, \i'n.eii its jurisdiction \7as removed from the ?ut"omo"bile in- 
dustr;;- "bjr fne President's renev/al '^'^ "t'-^P Autoric"bile Code on Jaiuoaav 31, 

(*) See Ap'iendi:: "VI-B. Section 4 (c) reads as follo'^s: "The national 
Lahor Relations Boards nay decline to ifcaice cognisance of ajiy 
labor disputes where there is ajiother ;ieaais of settle:^ent pro- 
vided for 'oj a.greement, industrio,l code, or Ian i.Thich has not "been 
utilized," The ■n'nr-se — ""^-ir:^'' decline to cognizance" vcs in- 
terpreted to carr;.'- o;^- indication the ri;pit to t,a-;e cognizance, 
if it so desired. 

(**) 2 1T.L.3. 1 - 12. Beau S. Jennings vas disc'narged fron t":ie eni^loy 
of the San rrnaicisco Call Bulletin. -le hrouf;ht the case "before 
II.L.E.B. alleging discharge for union activity. T'ne Board decided 
in his fa,vor and ordered his reinstatenent. The Sa;i FraXiCisco Call 
Bulletin failing to comply, the ".T.L.R.B. Vurned fhe case over to ITBA 
Compliance Division, for Blue iaglo removal. The Sompliance Division, 
insteaxl of follorring the Board's instruction as rras custonar'"- procedure, 
referrec the matter to the l'!e'.-s-oa;oer Industri?.! Board for instructions. 



The foregoin.5; acco'ont ha,s indicated the severrJ. shifts that oc- 
c-oxTP.a in Presidential policy :vith regard to the ins.chiner3'- of Section 
7 (a). The initial direction .of this policy was tor/ard the repeated 
strengthening of the iTaticnal La-lDor Boards over against the Katinnal 
Secovery Ad^iinistration. With the ' automobile settlenent this situa- 
tion xi&s reversed in favor of lulA.. The series of ne'j hoards ushered 
in hy Puhlic Resolution ¥-0. 44 neoait the transferral of power had" 
again to non-ERA agencies. This grant of peer vir.s in turn curtailed, 
and 17RA. restored to relative supremacy, oy the cutcone of the 
Jennings Case. 




Tiis "goi.Zi oi' L/.;7" o? sbction 7(a) 

Interpretations oi Section 7(a) have ''oeen of t'vo kinds: "aeinini- 
strative",'and "ouasi-jucicial" interpretations. The first embraces 
the interpretations of the iiTport of Section 7(a) made "by General 
Johnson as Administrator, ahr. Donald Richberg as Counsel, respectively, 
of KRA. This position of "perfect neutrality" has 'been discussed at 
lenf^th in an earlier chapter. The second includes the "oody of interpre- 
tations of Section 7(a) that was developec" oy the "quasi- judicial" labor 
"boards machinery descrihed in the precediny chapter. This body of de- 
cisions has freouently "been referred to as representinj;; the significant 
developnent of a "co:mon lavr of Section 7(2')". 

T'ne nalcinv of these "ouai- judicial" decisions vps not conceived to 
"be a part of the functions oi tne S- tional La'oor Joard, at the tiie of 
its creation. The Board v/as e:.roo'.7ersd to "consider, adjust and sttle 
differences and controversies", and its efforts for the first busy month 
of its er.istence ^ere devoted to the ".'ringing about of settlenents 
through nediation, a function r,v.ich it performed -7ith considerable suc- 
cess. The question ?-rose as to nhat polic";" the Board should follor: 
r.'here it "as unable to secure ?.gree:.:ent, and it T;as decided that the 
3oard r.'ould render a decision, containiny its findings of facts and re- 
coni.iendetions as to steps to be follo'-'ed to settle the controversy. 
This led to the stating of the 

"This conclusion v/as strengtliened by the Executive Order 
creating out Board, v.'hich provided thr.t our findings should 
not be questioned by any other agency of the 
govern-ment. This meant that ne ^-'ere in a position to fur- 
nish, by a series of opinions, a riuch needed clarification 
of the meaning of Section 7(a). Altogether our Board 
handed doun 23^ written opinions follo'.7ing closely the 
precedent contained in the 13b opinions of the National 
Labor 3o?-rd. 

"The effect of the E::ecutive Order '-'as nov to concentrate 
in our ovn Board the e::clusive interpretation of 7(3-)". (*) 

The 370 decisions handed doun by the t'70 Labor Boards cover a uide 
ran ;e of subjects, of varying degrees of significance. These subjects 
nay be considered as falling into the general categories of matters 
directly relevant, to Section 7(a) interpretation, and "obiter dicta" 
called forth ''oi'- situations Tsresented to the Boards. (**) 

(*) Lloyd i:. Garrison, "The ilationra Labor Board", Annal s, ^.leric a.n 
Academy, of Political and Socia-1 Science liarch, 13jo p. 13S 

(**) Detailed classifications of principles folloned in decisions are 
to be fov:aL in a'o-oendices X-A and X-3 



Ip_as.iuch pz tlie 'Sectio'i lip.) decisions the":selve;: natiira.lly derive 
their autliority fron the lan'\ir';e of the Act, a consideration of the 
phraseolof;:" of Section 7(^-) of ITIRA. uill su^^ji-^st a '.Torhaole "basis of 
classification of the decisions of the t'TO Joards. Section 1(b), 
clauses (l) and (^) it ^-ill he recallec",, rerds: 

"Ever" code of fair co;:petition, a/^reenent, and license 
approved, prescrioed or issuec' under this title shall 
contain the follo'Tinj condditions: (l) Tha,t e'.iplo;/ees 
shall have the ri.'jht to or,;anize and -tiar-'-ain collectively 
throuf;h representatives of their o*7n choosin'";, and shall 
oe free fron the interference, restrrint or coercion of 
enployers of lahor, or their agents in the desi;:nation 
of such represents.tives or in self-or£;ani2ation or in 
other concerted activities for the purpose of collective 
"bar "lain in;: or other uutual aid or protection; (2) That 
no enployee and no one seeking; euployient shall he reqviired 
as a condition of enplo;":i,snt to join any conpr-n- union or 
to refrain fron joining;, or-;:;anizini', or assistin ■ a laoor 
or^-anization of his ovn choosing." 

In interpreting this section, therefore, the Boards had to ans'jer 
such questions as the follo'Tin:":: 

1) V/hat does "the right to organize a.nd "b?.r';ain collectively 

2) H017 shall "representatives of their oun choosing" he 

3) TAiat constitutes "the interference, restraint or 'coercion of 
enployers or their agents"? ■ 

The Hi-ht To Bargain Collectively 

Another '-riter has called attention to the fact that the National 
Lahor Board in approachin^g the prohlen of interpretation of the phrase, 
"ei-iplo^rees sha,ll .have the right to organize and hargain collectively" 
had the choice of t^vo possihle interpretations, tnus: 

"It uight have heen saic- that the st£.tute nerel:^ protects 
rrorkers in their right to organize for the purpose of ef- 
fective hai-gaining vrith enployers or tnat the statute re- 
quires a,n enployer to oargain collectively '7ith erxployees 
and reach r n agreement -.'ith then. Under the first inter- 
pretation, the right to organize is the important fact, 
and the natter of collective hargaining is an incident; 
under the second, the enployer' s ccat-/ to ns.he collective 
agree:ients is the important fact, and the right to organ- 
ize is an incident. As -'ill he seen fro'i the su":'senuent 
discf.ssion, the Lahor Borrd has tended to rdopt the second 
inte-::n-)retation. " (*) 

(*) See IT. H, Spencer, Collective Bargaining Under Section 7(a-) 
of the national Industrial Recovery Act, University of Chicago Press, 
1S3?. Chapter III. 


- 81 - 

There seems to "be some evidence, however, that the Board's choice of 
possible alternatives was in fact foreseen "b.y the Senate in its discussion on 
the "existing satisfactory relations" .amendment, and that the Board in choos- 
ing the second of the atove-mentioned alternatives, followed the course sug- 
gested "by the action of the Senate in the course of that de'cate. (*) It will 
"be recalled that this amendjuent to Section 7(a) after passage by the Senate, 
was reconsidered at the request of Senator Norris, and after a heated de"bate, 
was defeated "by a vote of 46 to 31. The wording of the proposed amendment 
ran as follows: 

"Provided, that nothing in this title shall "be construed to compel a 
change in existing satisfactory relationships "between the employees 
and employers of any pai'ticular plant, firm, or corporation, except 
that the employees of any particvilar plant, firm or corporation snail 
have the right to organi^ie for the p urpose of collective "bargaining (**) 
with their em-nloyer as to wages. Hours of la"bor, and other conditions 
of employment." 

It vifill "be noticed that the underlined, phrase reads: "the right to or- 
ganize for the purpose of c ollectiv; bargaining ". Foreseeing the possibility 
that such a piirasing might vitiate a strong interpretation of Section 7(a), 
Senator Costigan on the Senate floor asked to have the words "and bargain 
collectively" substituted for the words "for the purpose of collective bar- 
gaining." (***) This was agreed to by Senator Clark, original proponent', of 
the measure. The requested change was made unnecessary by the subsequent 
rejection of the entire amendment on the grcands that it vjould destroy the 
value of Section 7(a). It tmis appears that it was the intention of the Sen- 
ate at least, that the grant of right of collective ba rgaining was a primary, 
rather than a subsidiary purpose of Section 7(a). The National Labor Board 
in making the employer's duty to malte collective agreements the important 
fact, seems to have acted to carry out the int'en''/ions of the Senate. 

The Meaning of Col lectiv e Bargaining 

Basic to. the Board's interpiretation, v/as the doctrine that the concept 
of collective bargaining as written into Section 7(a) implied a "mutuality 
of obligation" . 

"Tlie collective bargaining envisaged by the statute involves a 
quality of obligation - an obligation on the part of employees 
to present grievances and demands to t"he employers before striking, 
and an obligation on the pJart of the employer to discuss differ- 
ences with the representatives of the employees and to exert every 
reasonable effort to reach an agreement on all matters of ■ 
dispute. "(****) 

(*) See pp.Al,,48-' and Appendix III. 

(**) Emphasis supplied, see above page ,.1 

(***) See Appendix III 

(****) National Lock Company case, K.L.B. Decisions, Part I, p. 19, 

In the published decision, the wording is that given above. An 
examination of the original decision, signed by Senator Wagner, 

indicates that the phrase was intended to read " involves 

a duality of obligation ". Through a t^rpographical error the 

v/ord "duality" appeared as"quality". The case cited in this chapter 
is to be found classified in greater detail in W. H. Spencer, 
op. cit. 


Having held that Section 7(a) places en ohligation on the employer 
".... to exert ev".vy reasonahle ei'fort to reach an agreement on all 
matters of dispiito", the Eoa,ri (*) has in a numher of decisions in- 
dicated tThat such e.n ohligation involves. There are a nurnher of 
elements in its interpretation. 

In the first place, representatives are to he recognised. The 
employer iiust not refuse (**) to receive at reasonahle hours(***) the 
representatives of his employees for collective hr.rgaining purposes. 
The representatives are not rsouired to disclose the names of those 
whom they represent. (****) Bnploj^ees may choose anyone they wish to 
represent them (*****) j this choice need not he limited to individuals 
hut may also include org^jiisaticns. (******) j^n employer may not re- 
fuse to receive the representatihe of his employees, simply hecause 
he helieves thair demands are unreasonahle .( *****'**) 

Secondly, . harfiaining; must he in "good faith". This means that: 
there is sn ohligation on the employer, "tender into negotiations with 
an open mind, to match -unacceptahle proposals vrith o.cceptahle pro- 
posals, and to exert ever;' reasonahle effort to reach an agreement 
binding for an appropriate term" . (********) A mere vrillingness to dis- 
cuss demojfids vrith emoloyees does not fulfill this ohligation. (*********) 

Thirdly , the legitimate suhjects of collective bargaining are not 
merely individual grievances, hut include "wages, hours and has ic 
T/orking conditions". (**********) 

ITourthly, it is the -dutj'' of the employer to carry on the hai'gaining ' 
process as described above, with the object of arriving at a bilateral 
agreement. (***********) Behavious indicating overtly the absence of 
such an objective has been held to be a violation of Section 7(a) . 
^****:c**>i!****^ Koviever, the obligation of the employer is not only to 
bargain collectively when making an agreement, but to do the same be- 
fore terminating or modifying an agreement . (*************) While a 
breach of agi-eement does not of itself constitute a violation of 

(*) The tern "board" is used here to apply to both the 

National Labor Board, and its successor, the National 
La.bor Relations Board. Source of decision is indicated 
by the symbols N .L .B . and IT .L .E .B . I'he latter has no 
reference to the present statutory board of the sajne 
. najne . 
(**) A. Roth & Compsjiy,IT.L.B. 75 (1934) 

(***) Ira \;ilson S: Sons Dairy Company, !T .L ,B . 15 (19S4) 

(****) U.S.L .Battery Corj:oration,ll .L .B . 5 (1934) 

(|*****^ ^^ Roth (£; Company, cited above 
(******^) -^^2_i Eak-ing Company, 1 h .L .B . 83 (193'i) 
(**=x****^) 3_ Dresner Sons, 1 1t .L .B . 25 (1934) 
(********) . Eagle ?.ubbfcr Company, 1 " .L .H .E . 55 (1934) 
(*********) Atlanta Hosiery Mills, l.IT.L.R.B. 144 (1934) . 
(**********) Houde Engineering Corporation, I.N.L.R.B. 35 (1934) 
^***********^ K.oude Engineering Corporation, cited above 
^ ************) Consolidated 3^ilm Compajiy, 2 II .L .E .B . 16 (1934); 

S.Dresner Sons 1 K.L.B. 26 (1934) 
(■***=i<****,:**:^*^^ Columbia Iron Forks Company, 1 :t.L.R.B. 152 (1934) 


•O •!— 

Section 7(a), a ra,viid succeGsi'm of cfeiiif-iTig afcreemsnts ma" be evi- 
dence of lack of good faith in tax^'aininr. (*) The fail\u-e to reach 
an immediate agree).ient does n-'t co?\Gtit-ate evidence of refusal to 
"barf-^ain collectively. (**) 

Finally, the Boa.'^d has held that the -undei'standing arrived', 
as the result of the "bsa-ii^ainini^ process should hs considered a formal', 
agreement which will govern the relationship of the parties for a 
definite period (***); nlthovi^h not compulsory, it is strong: ly de- 
sirable that such agreements tahe a written form. (****) Agreements 
arrived at cannot 'be put into effect through the channels of in- 
dividur.l contracts, since tliis T/-ould defeat 'the \7hole purpose of col- 
lective "bargaining. (_**^**) 

The Election of r-eoresent;.tives 

Since Section 7(a) provided that emploj-ees should have the right 
to organise and "bargain collectively, "through representatives of their 
o\7n choosing", it "became necessary to devise a means for the selection 
of such representatives. The Executive Order of Fe"bruaj'y 1, 1334, em- 
po'jered the 1I.L.B., to conduct elections v;hen reauested "by "a substantial 
number of employees, or ar^y specific group of employees". (******) 
Public Res'olution ITo . 4--1 empowered boards created under its authority - 
in this case the IT.L.H.B. - to order pjid conduct an election "T'hen it 
shall sp'peai- in the public interest". (*******) 

The iT.L.R.E. has included in its ov-r, intez-pretation Of "the 
public interest" the authorization of the earlier E .L .B . to conduct an 
election if requested bj'' a "substantial number of employees", and in 
one case has held that the req\xest of some eight hundred of a total of 
thirty-seven hundred eligibles has constituted such a "substantial 
number". (********^ 

The Board's interpretation of "the public interest" assumed that an 
election had been requested by the voters. Where an employer has granted 
union recognition and has given evidence of bargaining in good fs,ith, 
the Board will not order an election merely to serve union purposes. 
(********:)!•) ^ election has been held to be in the public interest if 
it v/ill tend to allay friction caused by co:;.petition of tv.'o organizations, 

. T*) Globman Brothers, Inc. IN.L.H.B. 153 (l9o4) " 

(**) • Boston Mattress Companies, ii IT.L.H.B. bl (l9o4) ; Qordon 

Balrery Company 1 H.L.R.B. 102 (1334) 
(***) Eoude, cited above; Bendij: Products Corporation, 2 "T.LJl^B. 

100 (1335) ' . . 

(****^) national Aniline and Chemical Company, 1 K .L .H .B .114 (1834) 
(*****■) Edward E. Caldwell Company, 1 h.L.E.B. (1934); Los Angeles 

Railway Cor^poration 2 1M.E.B. 6c (1334) 
(******) Executive .Order #658(^, text of which appears in Appendix "VI-A- 
(*******) Public Hes. ITo . 44 Sec. 2 - Text appears in Appendix ITI-B. 
(********) 'Eondix, cited above. 

(*>^*******) Omsiaa and Council Il;iffs Street Railway Co., 2 N.L.r..B. 48 

: . . (1334) 



v/hose comparative strength is not knoTTn. ( *) Consistently, the Board 
ha,s. held it to be n,£;ainst the pi-iblic interest to holf. vjn. election 
which it is believed would Cc.use friction ajid dissension. (**) It 
has repeatedly held that an election \fhich ■..'ill prevent or settle a. 
threatened striate is in the pvblic interest. (***) 

Determination of those eliir;ible to vote in an election was 
another puzzling problem the Board had to solve. Where there has been 
a campaign of discrimination end disclia.rge of union employees, an 
election held at the tire ^.'hen the controversy has reached a head, 
would not adequately meet the "needs" of those fho had been dis- 
charged; however, one could not consider eligibility as extending to 
all former employees. The Board has tended to follow the principle of 
considering eligible all those employed ;-,t the tine the controversy 
over self-organization arose, e::cepting those who mry- have dis- 
qualified themselves b;^ illegal activities. 

The Loard ha.s indicated the difficulties involved in the selection 
of an appropriate date for the determination of eligibility. (****) 
TJhere there had been a strike, the board usually aclected the last 
payroll preceding the strike, (*****) Tjiit e::tends eligibility to those 
who may have been discharged for lonion activities. (******) ';iJhere 
there ^.ppears to have be:^n interference with the employees organization 
activities the Board I'lr.s chosen a date prior to such interference. 
(*******) Wliere there is no question of £, strike involved, and where 
there appears to be nc evidence of employer interference the Board has 
declc-red eligible to vote all those on the payroll on the day of its 
election order. (********) I/here there is involved the .complicating 
factor of seasonal lay-off, the Board has designated the date on which 
the petition for elections ha.s been filed a-S the appropriate one for 
determining eligibility. (*********) 

The ballot is .formulated to meet the circtmstances of the specific 
sittxation, Usus.lly it mal";es provision for employees to indicate their 
choice between the outside man pjid the company union, as their repre- 
sentatives, although sometimes the third choice of individual bargaining 
is also indicated. Even tho-i:igh the Board may disapprove of the par- 
ticular method b;- -s/hich any company tuaion has been broijght into 
existence, or conducted, it h;-.s al^'ays m,?.intained the right of such a 
union to appe.rT on the ballot (***.******]) ^nd has refused to deny it 
such a ri;ht at th'^ request of the -imion. (*^=*********) 

T*) Firestone Pire end itubber Co., 2 i:.L.HJ>. 291 (1935); 

Steiner Selcater. Corp., 2 r.L.h.3. IIC (1935) 
( **) Bendix, cited above 
(***) B .I.^Goodrich Company ■iT.L..l.B. 131 (1934); Firestone 

cited above 
(****) The Kohler Company IT.L.?l.B. 72 (1934) 
^ *>****>) national Loc]: bom^any H.L.Pl.B. 15 (1934) 
(******>) USL Battery Corporation, '2 lT.L.n.i>. 5 (1934) 
(*******) Kohler, cited above 
(********) American O-?:: Leather Coviip,any 2 1T.L.H.B, 82 (1955); 

Bendix cited rbove 
(*********) B .P. Goodrich, cited above; Tircstone, cited above 
( *****:(=****^) Firestone, cited above 
(st!**********^ Kohler, cited above 


The Board, has frequently had to face the issue of deciding v/hat 
constitutes the "appropriate employee unit" for collective "bargaining, 
where there has been a controversy "between competing groups as to 
v;hich constitutes the representative unit, The "Board has usually held 
that the representatives of a given craft constitute the appropriate 
unit for "bargaining purposes Y/here that craft has "traditionally" 
"bargained for men"bers, or where it has -peculiar pro"bleriis requirihg 
special representation. Thus, the Boprd refused to recognize for 
separa,te "bargaining purposes, an organizr.tion of motor coach operators, 
who "had' previously heen represented jointly with the street car con- 
ductors of the same city. (*) On the other hand, in another case, the 
Board accorded the right of separate recognition to a group of metal 
polishers and "b\^i"fers, un the ' grcjuids of slrill, separation from other 
employees in the plant, and cuncern v/ith health end. wage pro"blems 
requiring special consideration. (**) • 

The pro"blem presents itself in pjiother form where an employer 
operates several "businesses, or widely separated "branches. In such 
cases the" Board has held t"nat the vrarliers in the sepajrate establish- 
ments or "branches constitute suita"ble units for the purpose of 
collective "bargaining. In one such case the- Board, in granting the 
separate right of hargaininf-^ to two "balceries operated "by the same 
company in the same city, pointed to their physical separation, their 
definite a.rea3 of service, seprrate "majiagenent, sjid separate products. 
f ***^ 

The Interference of Employers 

Section 7(a) provides that enployees shall he free from 

"the interference, restraint or coercion of , . 

emp.loyers of lahor or their agents, in the desig- 
nation of such representatives or in self-organization ■■.. 
or in other concerned activities for the puipose of 
collective "bargaining or- other mutual aid or prortection." 

Hence, the third main line of interpretation of this section "by 
the Lahor Board was the definition of what constitutes the "interfer- 
ence, restraint or coercion" on the part of employers with any of the 
privileges conferred on employees "by the statute, namely; (l) choice 
of representatives, (2) self-organization, (3) other concerted action 
for the purpose of collective bargaining, (4) other concerted ac- 
tivities for the p-'trposes of mutuiil aid. or protection. Host charges 
of interference that have come before the Board have dealt with the 
first two of these categories. • ' 

(*) Board of Street Hallway Commissioners of the City of Detroit, 
et al. 1 H.L.R.B. 123 (1934) 

(**) Indinna Brass Company 2 1T.L.R.B. 127 (1934) 
(***) Gordon, cited above 


The interference by employers with these statutory rights has taken 
a wide range of forms. One eraployer granted an increase in wages, giving 
the company Tjnion credit for obtaining it, jast prior to an election which 
Was to determine whether the company union or the outside union was to re- 
present the employees. (*) In another case, a representative of the em- 
ployees was ejected from the premises when he approached the management for 
purposes of collective "bargaining. (**) In another ca-3e, the management of 
a company prevented the workers from securing a place to -hold a union meet- 
ing. (***) A case has even arisen where the beneficiaries of a customary 
practice of a petty philanthropy-free kindlinf; for employees-was restricted, 
as a result cf a labt^r controversy' - to the members of a company union, (***■ 

While an employer may be within his rights in advising his employees 
as to the meaning of Section 7(a), and even in attempting to persuade them 
to refrain from joinin;^ a labor organization, the exJiibition of hostility 
towards the union iias been held as an interference v;ith the right of self- 
organization. (*****) Tlie calling of workers into the office and subjecting 
them to a cross-exaiTiination as to the union activities cf tiemselves and 
their fellow workers (******) has been construed as interference. Tlie of- 
fer of economic inducement to refrain from union activity, such as a better 
position, or an actual cash inducement, was aeld to be a serious form of 
interference. (*******) 

One form of employer intei'f erence had been engaosd in so widely, that 
its specific prohibition was made a part cf Section 7(a) itself, via clause 
(2) , which reads; 

"(that) no employee and no one seeking employment shall be re- 
quired as a condition of employment to join any company union 
or to refrain from joining, organizaing, or assisting a labor 
organization of his own cho ; sing. " 

(*) Houde, cited above. 

(**) Josephs. Corcoran S"noe Company. I.H.L.3. 73 (1934) 

(***) United States Smelting, Refining and Mining Company Case, 

1 N.L.R.B. 33 (1934) 

(*=c**^ Case appearing before Chicago Regional- Labor Board 

(*****) Patrick, Incorporated. 3 NLRB 30 (l':;34) 

(******) Q^j^l pici^ Manufacturing Company, 1 NLRB 161 (1934) 

(*******) In a case appearing before the Chicago Regional Labor Board. 


This clause obliged tJi.e Boards to define the tenn "company union", 
and to determine -ujider what circumstance it plays a role of interference 
with self-organization. 

'iThile employers nave attempted to distinguish employee representa- 
tion plans from the things called "company union" in Section 7(a), the 
Board has considered an organization, \n which membership is limited to 
the employees of a single employer, to be a company lonion as defined in 
the statute. (*) But regardless of whatever distinction may be drawn 
between an employee representation plan and a company union, the utiliza- 
tion of either in a manner that interferes with the organization activities 
of employees, constitutes a violation of Section 7(a). 

In a number of cases the Labor Boards have found violations of clause 
(2) of Section 7 (a). They have been either overt interferences, such as 
endes-vouring to secure promises of vrorkers either to join tne company union 
(**), or not to participate in the formation of an outside union (***); or 
more indirect forms, such as restricting membership in a group insurance 
plan, formerly open to all employees, to company union members only, or dis- 
missing workers who would not join a company union, pursuant to an alleged 
contract with the latter, which provided for a closed shop out else. 

■|;Thile the Labor Boards have not passed judgment uoon company unions, 
per se, and have, as noted, (*****) refused to deny t _era a place on the 
ballots used in elections, the Boards have criticized the utilization of 
such organizations in ways thought to interfere with the workers' rights 
of self-organization. The active inspiration and sponsorship of such or- 
ganizations, and the grant to them of support has been considered as con- 
stituting such interference. But the source of "inspiration" is not al- 
ways easy to locate; moreover, it ^s difficult to draw the line betv/een 
encouragement of company organization that is a legitimate expression of 
the employers' self- interest , and interference, In the matter of financial 
or other support, this issue is clear. Fnere grants by the management to 
the company union of company time for •'anion purposes, posting privileges, 
use of premises for meetings 'and financial remuneration, (******) while 
similar privileges are derived to the outside union's representatives, has 
been held as constituting interference. 

(*) Tamaqua Underwear Company. 1 10 (1034); 31y and 
'Jalker Dry Goods Company. 1 K.L.H.B. 94 (l9.j4) 

(**) Danbury and Bethel Fur Company. 1 N.L.H.B. 195 (1934) 

(***) Jersey City and Lynd:-iurst Bus Company. 1 N.L.R.B. (1934) 

(^****) Tamaqua, .cited above. 

(*****) See Kohler, cited above. 

(******) Kohler, cited above; B. F. Goodrich, cited above. 


Discrimination is probably the most frequent form of employer inter- 
ff^rence witii self-orr^anization. It is found expressed in a variety of 
forms, including lay-off, demotion or transfer, forced resignation, or 
discharge. The last-mentioned is the most frequent form. The Labor Board j 
have held that by implication, from the language .-'f Section 7(a), the dis- ' 
charge -..f an employee for \ininn activity constitutes discrimination, and 
is a violation of the statute. (*) Tne Board's action in regard to dis- 
crimination usually had two phases, first, the determination as to whether 
there had, in fact, been discrirainati in as alleged; and second, when dis- 
crimination was establisiied, the securing of appropriate redress. 

A worker charging discriminatory dismissal had to be prepared to offer 
circumstantial evidence substantiating that charge; such evidence rnust tend 
to show that no basis for his dismissal existed other than union activity. 
(**) Filers employees .lave failed to show adequate evidence of dismissal 
for union activity, tie Board nas not upheld the charge of discrimination. 
(***) Evidence ',f employers' lostility toward membership in a union has 
been accepted as an indication of suc.i discrimination. (****) But where 
an employer has laid off both iinion r.tnd non-union men, demonstration of an 
earlier hostility to t^ie uniTn, does not warrant tlie conclusion :f dis- 
crimination m 'specific case. (*****^ 

Fnile Section 7(a) does not prohbit a selective oolicy of lay-off, 
(******) the laying-off or discaarging hf workers without regard to their 
seniority, and replacing them with inexperienced workers has been held as 
evidence that discrimination has been practiced (*******y. Dismissals 
which were preceded by a constant '.larassment by employers of their emplo:/ees' 
effort at self-organizati n, r w..i8re employees ware "spotted" while attend- 
ing union meetings and subsequently dismissed, (********^ ,-.j. wliere workers 
were given a caocie cf qu.tting eitier the union or t!ie company (*********) 

(*) General Cigar Company 1 N.L.3. 71 (1934) 

(**) Vyn St::ra.^e Transfer. 1 II. L. if. 3. \'^^:2 (1934) 

(***) Century iJllectric Cojuoa,ny. 1 79 )1934) 

(****) :'arry Abels I/Iachine Sliop. 1 N.L.P..3. 113 (1934); Emory Bird 
Thayer Dry.^oods Company case. 1 N.L.±^.3. BS. 

(*****) Bassett Eurniture Company, 1 N.L.^-l.B. 93 (1934) 

(******) Carl Pick, cited above. 

(*******) Kavmcer Company - 1 iLL.?..B. 60 (1934) 

(********) North Sliore Coke and Cliemical Company - 1 - I'J.L.H.3. 167 

(*********) Wernig Ex-oress Company - 1 - N.L.R.B. 51 (193'^) 



have been held tc bo clear cases oT discriminatioii." 

Wiere sivoni; jpre sumption, if not conclusive evidence, of discrimina- 
tion exists, tile eaiployer is asked to explain his conduct; if ne cannot 
do so on other grounds, it is concluded that there has in fact been dis- 
crimination. (*) A similar ccnclusion has been arrived at where the ex- 
planation offered was obviously unbelievable. {**) Such a case was one 
in wliich the emplo /'er gave as a reason for dismissal, tne lack .of work, 
while at the sa:Tie time he was employing new men for tue same work. (**=") 
Nor does the ability of the employer to point to a past record of col- 
lective bargaining serv^ to controvert Inference of discrimination in 
specific instances. (****) The presentation of employment records by the 
employer in justification of his discharge of an employee alleging dis- 
crimination las been held as insufficient evidence, in the absence of com- 
parable records of other employees. (*****) Insolence, provoked by the 
employer's attack on the union, is not a proof :f non-discrimination. 
'(******) Also, the suspected nidical sympathies of some emioloyees do 
nc5t constitute a legitimate basis for their discharge. (*******) 

Another form ox employer interference that iias cvne to tiie attention 
of tie Board is the resort to lock-cuts, shutting down a department, mov- 
ing the business or closing it permanently. Uiile in one case v/here work- 
ers charged t.-at tne management had closed a department to prevent their 
organization activities, the Board found that the closure was based on 
sound business reasons (********) in aether case where a concern moved 
from one city where it had a collective agreement v/ith the union, to a 
nearby city w ere it resumed operations vHth new employees, the Board 
held this to be an interference with self-organization. (*********) \Tnere 
a company has closed its plant in response to a drive for organization 
among its vrorkers there has been little tliat tie Board, would do in the 

(*) Ira "Jilson j; Sons Dairy Company 1 IT. L. 2.3. 15 (193^-) 

{**) Trenton MilT s. Inc. 1 - N.L.R.3. 139 (19.34) 

(***) Hazel Atlas Glass Company - 3 -'1J.L.R.3. 40 (1934) 

(****) Pacific Gas and Electric Company - 1 - N.L.3.S. 170 (1934) 

(*****^ Emery Bird Thayer, cited above (1934) 

(******•) Wabash Fibre Box Company - 1 - IJ.L.H.B. 147 (1934) 

(,.=.:****+) Charles Pfizer :_": Company, Inc. - 2 - ll.t.:.^.B. 13 (1934) 

(********) Kohler, cited above. ■ ■ : ■ 

(********=*') Liaujer Parlor Frame Company - 1 - N.L.H.3. 20 (1934) 

(**********) Bear Brand hosiery Company 2 il.L.H.B. 67 (1934) 


T"'ie Is?ue of I.fe,1orit,'/ Rale 

One issue tliat came befoi'e t^ie Boards, altlicut;^! not iiiiinediately im- 
plied in Section 7(a), was of fundrTHiental i.Tiportance m its interpretation. 
This was t'.e question of the juris licatin of the "freel-^ chosen representa- 
tives" in the conclusion of agreements. Were their agreements to "be bind- 
ing upon -jnl/ those who selected then leaving minority groups free to con- 
clude separate agreeiAentsT Or were tne a^'ree/asnts conclusel "by re- 
presentative :f t;..e ma,jor:'-ty to apply to all employees? 

This question jf "raaj'-r.-ty rule" hecr-'jiie a storm centre of controversy 
and virj.'z t-.e central issue of so ae f the Boards' most famous decisions. 
Labor leaders insisted that uiajority agreement must bind all employees; 
industry leaders insisted on t-ie rit^it of separate agree.aents jy minorit'es. 
The legal status of the matter was furtxier complicated by the bewildering 
shifts in the power relationships of the various agencies char;5ed with the 
administration of maustrial relations durvng tlie fir^rt yyar of the NBA, 
with tie resuitint:.: uncertainty as to w/iure ultiaiate pjAtaority resided. (*) 

The Labor Boards .lave held taat 

"the re"ore?entatives selected by the major.. ty -.f the 
employees v;ithln a given pla.nt, are the sole collec- 
tive bargaining agency for plajit or department." (**) 

This principle was first at-ted o-/ the Kati:nal Labor Board, in the Denver 
Tramway Case, on liarch 1, 1954. (***) It v;as empiiatically reaffirmed by 
the National Labor Relations Board in the famous I-Ioude Sngineering Cor- 
poration case on August 30, 1934. (****) 

A brief review of various factors surround .ng this last decision 
of the Board, will 'indicate some of the s .urces of fcie controversy that 
ro^^ed around its interpretation. Section 7(a) itself gives no clues as 
to the validity of the majority rule interpretation. The first Labor Board 
enabling act, tie Executive Order of December 16, 1933 (*****) is silent on 
the subject. A first statement of the majority rule ap ears in the Execu- 
tive Order of Febjruary.l, 1934, wiiich states by implication tiat the re- 
presentatives selected by the majority are to represent all the employees: 

(*) Of. C:.a-3ter V. 

(**) ilaticna-l Labor Board, Principles Pollowed in Decisions, See 

Appendix X-A. 

(***^ I „ iJ.L.B. 64. 

(****) K.L.R»3. 35 

(*****) Ho. 6511 See Appendix VI-A 


"Tliereaf ter t .e Board -s-ial:. punli'-li-pror.ptle.y tj.e nrmes 
of tliose r3"pr : ^entativgs w.^c are selectei "by. .tie v .te 
Ox at 1 .-; a major Lty cf t.e eraplovo ^s votint,, an'l 
have "been t:\ere"by designated to represent all fae em- 
plcye?s elit^lble to pa.rticipate in such an election 
for t-.e purpose of cul'.ective 'barsainini; or other 
.iratual aid or protection in tieir relations w:* th 
their employer." (*) 

In response to tno storr.i :f protest aroused by the of the • 
Executive Crder of February 1, 'leneral Johnson and Donald Richberg 
issued the joint statement already referred to, in wixioa ;they set forth 
their "pluralist" interpretation, of the ri;-;.-t of minority ijroups to 
deal with tl.e employer separatel.y. Tni s statement, in part read: 

"1, The Executive Order provides a met-iOd whereby any 
specific group. of employees or all tue employees rf a 
plant or of one employer may select, by a majority vote; 
representatives clearly empowered to act for the :ujgority 
in tieir relations with their employer, 

"2. This selection of majority representatives, does not 
restrict or qualify in any way txe ri^^ht of minority 
groups of employe ;S or of ndividual employees to deal 
with their employer. 

"3. Section 7(a) affirms the right of employees to 
organize and b.'<,rgain col.lectively through representatives 
of th-eir own c^ioosing; and such concerted activit-es 
can be lawfully carried on by either majority or m.inority 
groups, organizaing and selecting such represeni^.itives in 
such manner as they see fit. Also, in afiirming fhis 
-. right of collective action the law lays no limitation 
upon individtial actijn." (**) 

This meant a flat conflict of interpretation on t.ns point between 
ITRA. and the n'.L.B. Tlie disinclination of the N.L.3. to yield its posi- 
tion was indicated by its coming out openly for the first time for the 
majority rule on the first suitable occasion, after the NRA statement. 
In the Denver Tramway Corpora tio n Case decided on March 1, 1934, the 
Board said: 

"It is the decision-of the iTational Lobor Board that the 
■ Amalgamated Associati-.n^of Street a.nd Electric Railway 
Employees was selected 'by a majority of those voting, 
both as the agency through which the employees of the 
Denver Tra;nway Corporation would collectively bargain 
with the management in negotiating an agreement and in the 
settlement of any disputes which may arise between it and , 
its employees. Any agreement reached in conformity witli 
this dec^.sion mast apply alike to all employees of the. 
company." (**'* =) 

(*) Executive Order #6.580. Par. 7, Cf Ap-.endix VI-A 

(**) IGA Release #3125, Eebruary 4, 1934. See Appendix VIII 
where tiis interpretation is reproduced in full. 

(***) 1 H.L.B. 64 

■ -92- 

Tliis conflict of interpi-etation Det';een ILL. 3. and. ITM r.'as a-oparently 
decided in frvor of the IHA. and a serious "blon struclc at the prestige of 
the r.'.3., D-- the President's intervention in the autoraoMle sit'-oation, in 
v.'hich the majority rule rs ignored. One of the terns of settlenent vas 
that groups were to he ■oro'oortionally retoresented in the -process of "bar~ain- 
inj. (*) --.... 

It is not ver;- clerr from the legislative record of the ne~t ferr 
raonth.s, jrif't v;hat rras the intent of the President and Congress. On the one 
hand, Congress too:: no action u-",on the T/agner Labor Disputes Bill, (**) 
which expressl}'" ap"olied the najorit;" rule to all induptrj.'' entering into 
interstate commerce; on the other hand, Congress did enact the raajoritv rule 
in -oassing the revised ?Lail'7e,y Labor Board -^ct. (***) public T.esolution To. 
44, passed b- Cogress on June 13, 1934, authorizing the creation of various 
boards, has been held to contain the najorit;' rule by implica.tion e.t least. 
The uncertainty is further increased by the fact that while the President 
when he appointed the rational Steel Labor Hela.tions 3oo.rd (****) on June 
28, eiroressl";'" embodied the majority rule; but on June 29, in a^ipointing the 
national Labor Relations Board, he made no mention of it. 

One of the first things the newl:^ cheated National Labor delations 
Board fo^Uld it had to do, ves to decide what its attitude on the majorit;.^ 
rule worJd be. The issue presented itself in the Koude Engineering Corpor- 
ation Case. The situ£'tion v;as e::amined into e:;amined into exiiaustively; in 
the words of its charims.:: - "'"e devoted tc nc other case so much thought 
and discussion as to this one." In view of v^ha^t wa.s conceived to be the 
intent of Congress, the precedent of the T-'a.s Labor Board, and the Hailroad 
Labor Board, the evidence in this sT)ecific case, and what appeared to be 
the logic of the situation, the Board affirm.ed the 'principle of the majorit3'- 
rule. Tlie rationale of its position has been v-ell and sv.ccinctly stated by 
I.Ir. Ga.rrison, a.s follows: 

"'Tlie majority r-ule starts v'ith the conce-otion of a 'bargaining unit,' 
which, as the rational Labor ?.elations Act later stated, may be the 
'employer unit, craft unit, plan ■'juiit, or other "onif, to be deterr:.ined 
in each case, according to the circ-umsta-nces, bj' the board. A unit is 
sim"-)ly a particular group of employees whose occupations £.nd activities 
are so similar that it is logical, pra-ctical, or customary'- to specify the 
terras of emplo'.'ment of all of them in a single collective bargaining 
o^groem.ent with the enplo^'^er; e:;am;ole: a pla.nt (lihe the Iloude CorapanjO 
with hom'ogeneous operations perfomed by semishelled workers, and no 
sliarply defined crrfts, dei^a-rtments, or s^^eciali^-ed groups. Por such 
a unit isnot practice,! (as the 'loude Company conceded) to have aiiything 
but a. single agreement regri.ilating the hours, tho wages, and the working 
conditions of all for a soecified period; jo'o. ccjinot give one group one 
hind of c.greement and ?!,nother group another vdiere both are doing the 
same sort of v.'ork. TJith whom, then, SDuld the emplo^'-er negotiate and 

make the agreement (assvjiii';" that a-n agreement can be reached) where a 

(*) K.Y. Times, Harch 26, 1934 

(**) 73rd Congress, 2nd Session S.2926 Larch 1, 1954 

(***) 48 Stat. L. 2S4 

(****) E:;ecative Order "Jo. 5751, June 28, 1934 



majority'- of the emplo^^ees in the unit are represented by one or.r^ani- 
zation and the r.inority h-^ another? 

"The comnon-sense answer is, ''ith the majority organization. And the 
practical conscouences of not nailing this the rule are ohvious. The 
emplo3"er uho does not vrish to reach an pgreemcnt r/ill confer sejoa-rately 
i7ith the rival organizations, rd infinitum, pla:/ing off one against 
the other and declining to contract T,'ith either hec.^Aise the other hs.s 
not yet "been fully heard from. I.Ioreover, if he is finally prepared to 
grrnt a rage increase' or some other favor, he will choose to promulgate 
it through the weaker organization (typically a company union) in order 
to lessen the prestige of the stronger — a suhtle form of interference 
with the self-organization of the men. Therefore,- if it is desirable 
to encourage gen'oine collective bargaining and the mailing of collective 
agreements, the employer's responsibility to negotiate with the majority 
organization alone must be fined. Tha.t these ends are d.esirable, as 
promoting indxLstrie.1 peace and economic and social welfare, was the 
central and ex.Dressed assumption of the Recovery Act, and the main pur- 
pose of'^ Section 7(a). (*) 

'Jiaile it still renains a source of controbers;^ the principle appears 
to have received legislative acceptance. The Boards decision v/as announced 
on Augu-st 30, 1934; the majority rule was embodied in the Executive Order 
creating the Textile Labor Relations Board on September 26, 1934 (**) and 
again in the rational Labor Relations Act passed oh July 5, 1935. (***) 

( *) Llo"^d X. Garrison "The national La.bor Boards" Annals, American 
Acaderr^ of Political and Socip.l Science , Llarch 193S - p. 138 

(**) Sriecutive Order To. 6858 

(***) ?u.blic. i'o. 198 - 74th Congress S.195S 



Appendix I - A 

('.'ith page references to Con^rsssional Record - Volume 77) 

May 17 Message from President (H. Doc. 37) to House, 3603; to 
Senate, 3549. 

H.R. 5564 and S. 1712:. To encourage National industrial 
recovery, to foster fair competition and to provide for 
the construction of certain useful public -.vorks, and for 
other pur'ooses. S. 1712 introduced "by Mr. Wagner; referred 
to Coimaittee on Finpjice, 3550. H.R. 5664 introduced "by Mr. 
Doughton; referred to Coi ittee on Ways and I.eans, 3611. 

May 18-20 Hearings on K.R. 5664 before Hoiise Committee on Ways and 

May 23 H.R. 5755: To encoiirage Uational industrial recovery, to 

foster fair competition, and to provide for the construction 
of certain useful public \7orks, and for other purposes; 
without amendment. Reported favorably to House from Com- 
mittee on Ways and Means (Report i'lo. 159) Referred to the 
Comi'.iittee of the -.hole House on the state of the Union, 4062. 

May 25-26 K.H. 5755 made special order of business (H.Res. 160) 4188- 
4198, debated in House 4201-4234, 4293-4374. 

Amended and passed Plouse, 4373. 

May 27 H.R. 5755 Read in Senate; referred to the Committee on 
Finance, 4406. 

May 22, 26, Hearings on S. 1712 aiid H.R. 5755 before Senate Committee on 
29 , 31 and Finance 
June 1 

June 5 H.R. 5755 Reported favorably -jith amendments to Senate from 
Finajice Committee (Report No. 114), 4496 

June 7-9 K.R. 5755 Debated in Senate 5151-52,-84, 5227-53,-55,-72, 
78,-89, 5349-63,-77,-98, 5402-11,-54 

June 9 Amended and passed Senate, 5425 

Senate names its conferees: Senators Harrison, King, George, 
Reed and Keyes, 5425 




J^ 10 House n,3jnes its confereer,: Representatives Doughton, Ragon, 
Samuel Hill, Treadv.'ay, and Bachrach, 5538 

Conference Report submitted in Senate, 5620: in House 
(H. Rept. 243), 5S92. 

June 12-13 Conference Report debated in Senate 5764, 5834, 5849, 5853; 
Agreed to, 5861. 

Bills exnmined and 'Signed, Senate 5863 - House 5919 

June 14 H.R. 5755 Printed as Senate Document Ko. 76, 6020. 
Presented to the President, 6047. 

June 15 Presidential approval of H.R. 5755 reported to House, 5198. 

June 16, H. R. 5755 signed by President - 11:55 A.M. 







in trod uced 



73rd Congress 1st Session PI .a. 5664 . In the House of 
Representatives , Ma;* 17, 193- >, Mr. Doughton introduced 
the following "bill; which xias referred to tile Committee 
on Ways and Means a:id ordered to "be printed. A Eill to 
encourage national industrial recovery to foster f'lir 
coTtpetition and to -provide for the construction of 
certrdn useful public -vorks and for other piorposes. 

7Srd Congress 1st Session S. 1712. In the Senate of the 
United States, May 15 (Calendar day. May 17) 1933, 
Mr. r/agner introduced the follo'ving hill v/hich was read 
tvdce and referred to the Coirimittee on Finance. A Bill 
to encourage national industrial recovery, to foster fair 
corrrpetition a:id to provide for the construction of certain 
useful j-ublic \:orks and for other mrposes. 

Comraitt ee 


national Industrial Recovery. Hearing s h a fo re t he 
COiH.iittee on Ways and Ivleajis, House of Repr esent-.tives, 
7Srd Congress 1st , Sess ion on H.R. 56S4 . A Bill to 
encourage ITational Industrial Recovery to foster fair 
co.T.petition, and to provide for the construction of 
certain useful Fuhlic Works and for other purposes. 

Union Calendar ilo. 42. 73rd Congress 1st Session 
H^.R. 5755 (Report 2io. 159) . In the House of Repre- 
sentatives, May 23, 1933 Mr. Boughton introduced the 
As follov/ing hill, \.'hich v/a,s referred to the Committee 
reported on Ways and Means and ordered to he printed. M,ay 23, 
to 1933, Committed to the Committee of the Wliole House on 
Plouse the State of the Union and ordered to he "orinted. 

73rd Congress 1st Session House of Representatives. 

Report i"o. 159 . IJational Industrial Recovery Bill 
House May 23, 1933. ComiVdtted to Committee of the v.fhole House 
Committee on the State of the Union and ordered to he printed. 
Re'por t Mr, Boughton, from the Committee on Ways and Means, suh- 

mitted the follov/ing Report. (To acco.npaxiy H.R. 5755) 



73rd. Conijress 1st Session, H.3. 5755 . In the Senate of 
the United States Mar 15 (cpjendar d'ay !'.:a7 27), 1933. 
deferred to Coirinittee on Finance. 



National Industrial Hecovery. Hearings "Defore the Committee 
on Finaiice, United States Senate, 73rd Congress 1st Session 
on S. 1712 and H.R. 575 5. Bills to encourage National 
Industrial Hecovery to foster fair competition, and to 
provide for the construction of certain useful ru"blic ViTorlcs 
and for other purposes. 


C-lendar ilo. 130. 73rd Congress 1st Session H.R. 5755 
As (Report iJo. 114) In the Senate of the United States 
Reported iiay 15 (calendar da^s Uaj 27), 1933. Referred to the 

to Co.a'^iittee on Finance May 29 (calendar day, June 5), 1933. 
Senate Reported ty Mr. Harrison '.vith aiiiendment s . 


Calendar No. 130. 73rd Congress, 1st Session. Senate 
Report Ilo. 114 . llational Industrial Recovery Bill. 
Senate Hay 29 (calendar day, June 5) , 1933. Ordered to "be 
printed Mr. Harrison, from the Com.Tiittee on Finance 
su.trnitted the follo-dng Report (xo accompany H.R. 5755) 


73rd Congress 1st Session H.R. 5755 . In the Senate of 
the United States June 6 (calendar day, June 9), 1933 
Ordered to "be printed --ith the amendment of Senate num"bered. 



73rd Congress 1st Session. House of Representatives . 
Report ITo. 245. National Industrial Recovery, June 10, 1933. 
Ordered to be printed. iv5r. Doughton, from the Committee of 
conference, su"bmitted the follo-./ing COITFSRBJCE REPORT 
(To accompany H.R. 5755). 


73rd Congress 1st Session Senate Document Mo, 76 
As National Indiistrial Recovery Act. H.R. 5755 
agreed to An Act to encourage National Industrial Recovery to foster 

in fair competition and to provide for tne con<=truction of 
Conference certain useful puolic -.'orks and for other purposes as 
agreed to in Conference. 


(Public - No. 57 - 73rd Congress) (d.R. 5755) 

All Act, to enconra.^e national industrial recovery, to 
As foster fair competition and to provide for the constr-action 

Ijatv of certain useful pulDlic vrorks, aiid for other -purposes. 

Approved, Jiuie 16, 1933, 11:55 A.M. 





Senator Wagner - Kr. Chairman anC /^entlerAcn, this "bill is essen- 
tially an employment neanure. Its o'bject is to "brinj:; auo\\t an increase 
of cm--)loyT:cnt at a level of Y/a^^es v/hich will afford a standard of living 
in cGccnc;; a,nu co-ifort. 

The methods of accomplishing this object are, first, throiogn co- 
opcracive action within industry itself, and, second, "by direct Govern- 
ment c:r3e:idit-ure on public works. 

I believe, too, that in addition it is going to improve a,nd 
strengthen the ethics v/ithin industry itself by doing away with the 
sweatshop, the kind of competition which' has been tearing down industry 
and v/hcrc in sclf-c"efense frequently they liavo been required to reduce 
v;a^,eG below r standard of decency. 

In tlv.t v/ay it is going to have not only r. great economic effect 
by increasing pvj^cliasing power, but also a t_ro.:.t social effect in giving 
the worker a. v/age v;hich, will permit him to live in decency, something 
tliat he feels and I feel he is entitled to under our economic system. 

The first title of the bill is devoted to tiie. stimulation of em- 
ployaent throio^.'h private cooperative effort. The declaration of policy 
sets forth the existing national eraere;ency vdnich has '"iroduced v/ide- 
spread unemployr.ient and disorganization of industry and is undermining 
the standards of living of 'the American people. It also osfablishes 
the cons'titutional bases iraon which "title I of the bill is erected. 
Constitutionally, title I is founded uoon the interstate commerce clause 
anc t'nc genera,l v/elfare cfeuse o'f fiio Con.stitution, The L.eclaration of 
emer^enc;' 'bears uoon both of t'liese constitutional grounds* Obviously, 
the conditions proc'uced by the emergency affect the general welfare. 
It is eq-ua.lly plain that by reason of the emergency many com.mercia.l end 
industrial ;:'ractices — and I think this is iniportant, gentlemen — by 
reason of the emergency, many coraiaercial aiic' industrial 'practices become 
a 'burden uoon interstate commerce v/nich in normal timeswould perhaps not 
be so regarded. 

That is w'nat I mean by ;;;^iving us a much v/ider area uiider emergency 
legislation in w'nich the public welfare is affected. Lastly, the 
declaration of policy establishes the standards v;hich serve as the guide 
to the qi;3,si-lcgislative authority which is delegated to the 'President, 
These standards are the elimination of unfair competitive practices, 

(*) 73rd Congress, 1st Session, "i'ationg.1 Industrial Recovery I-Iea-rings 
on >'.H. 5664 "beforo riouse Ways and I 'cans Coi-UTiittee , lls.y 19, 1933, 
pp. 91-98. 



the roc'vLctior. av.C relief of ■uiaGi.'.plo y'lcnt , ti.e irrrorovc. .cnt of ctaiO.s.rrls 
of In'Dor, the rcha.'bilita-:io;i of ir.Custrj'', xic. the conservn.tio:i of natural 
re r-o'cirGcs • 

Tile aAithority co. if erred "by the- "Dill is centralized i:i tlic Presi- 
dent. He is i,ive'A the power to desi?inate or create the 3£;enciGS tlio.t 
' to "be used in carrr-inj'^ out tho pi.u-poses of the title and to dole- 
■'jatc his functions to such officers inr. a, -ents as he ir.ay designate. 

As to tne aethod: The piu-poscs of the hill ;?ore carried into effect 
thro-u^:h five principal methods — of coiu'se, I realize tli3.t in many 
respects I arn repeating wliat has hcen so much more aoly presented al- 
ready hy the Director of the Budget, kir. Douglas, and Mr. Hichber^, 
But tnore is no otlier v/ay of raahinf: a lof-ical i-'resent^.ticn, it seems 
to r.Le. 

As I said, the purposes of tne hill aro to ho carried into effect 
throu;-jh live principa^l i.iethod.s: 

.?i r s t , Vo l\iei ta.r ;>" codes. 

Second, Volu:itary a^:reements — tlitit is, rithin in'-.ustry, of 

Thirf?, Lii^ited codes — t'na.t i-, limited in two ways; hours of 
lahor and wages. 

Joiu-th. Coches iv'ipose''- hy the Fresidcxit. Those are whxtt we might 
co,ll tne compxilsory codes • 

Jifth. The method of. liconsinii,, which, perhaps, will only he 
used in eztrer.'ie causes, I am sure tliat that is so, 

"dow, t/.is is , £:entlcnen: The emphasis of the hill is 
u.pon t'.ie voluiitrn-y co^'os; industry £:ivcn an ou'^ortunity which it has 
sou/hit and I thin': is entitled to, to .povern itself wherever they in- 
itiate such self govei'nment. 

Section 3, of the hill p^uthorizes any trade or industrial asso- 
ciation or /ITU :oi to preipare 3.nd suhrait to the Presic-ent for approval 
a code of fair competition vdnich is intended to {rovern competitive 
practices within the trade or industry represented. The trade or in- 
dustry is thus ^;ivcn the opportunity to exercise its ewn initiative in 
formulating its standards. Approval of such a code is conditioned upon 
the follov/ing findings — t'lia.t is, tjiese findings must he in the nrop- 
osed code: 

Jirst. Tiiat the a.ssociation or grou'o ai-'jiiits eo^uitahly to memhcr— 
ship all ^vho a,rc engaged in the same trade or indiistry. 

Second, Tiiat it is truly representative of the trade or industry 
for which it spealcs. 

Thir^. iho.t the code nresentec will not promote a monopoly. That 
is a very important protective feature of the hill. 



Pourcth. Tiv^t it vill not C'TresG or -' iccrir.iinatc a;,'ainst snail 
enterprises. As a '.;iattcv ox f^ct, my viovr is th,n.t t as 1)111 ir- more 
protective of tic snail c'.tor;-^rii3es , ";jcc'-usc t'nc lar^'je ones rc.rely 
need'. j';overnncnt". 1 riv i' '. : t ircction. 

Fifth, T>ia,t employees sluill :iav.; tlie right to or, ani^ie ai'id tar- 
^ain collectivclj/' throti£;h rc"-rcsentatives of their o^^n choosing, v;hi oh 
is an imports.nt protection fo--* tne lator org?.nicatior. and one for v/hich 
I have been contending for '^. lon^^ Vihiile, both in legislative "bod.ies and 
also as a, "■Trrctici:.,-;: attr.rncy. 

Sixth, That no em^Tloyce will he required as a cor/ition of em- 
ploy. ,nt to ciii^'n an antiunion contract, Tlia.t outlaws the so-called 
": ollow-dog cor.tract," which I thinh we Kavc already when we iDassed. 
tne anti-inj'U-nctio;. a,ct, v/hich is now lav;. It is something which oioght 
to ce iorever Vifipec'' out of nur econoyiic life. It is un-Arierican, 

S>'-VGnth. That the employers will comply vith the riaxircimi hours 
of labor and minim-um wage of pay and standards for other working con- 
ditions a.p":rovcc' or prescribe' b;; the president. 

Eighth, That the code will tend to cffccti:i/:,te the policy of the 
title . 

V'hen such a cod;/ is ap-iroved. it becomes effective for the entire or industry or subdivision thereof to which it applies, ""here- 
a.fter the cod.e avu''. any s.ctivr.. nmplying v/ith its ;'"irovisions are exempt 
from the provisions of the antibrust lavrs. Of coiirse, v^fithout th^t 
provision the bill vnuld be absolutely a more gesture and ineffective. 
This cxcnrption, it should oc noted, is not a general one, but is 
limited to those acts which arc i:.- compliance with the requirements 
of t ic cjc.e, 

iTov.', gentlemen, there are certain santions, because this law, 
like lavi's of like character, bccoiics ineffective without santions. 

Violation of r-ny of t'lie provisions of a code by p,.nyone engat^ed- 
in intersta,te co'-a.icrce or in biisiness affecting interstate commerce 
constitutes an unfair method of cora-nctitio-i. It may be enforced first 
by a crir'.inal "proceeding. Tao bill malr^^s the violation of any ora- 
vision of the code a misdemeanor ''Uiish^ble by a fine of $5C0. 
Seco:i>riy, it may be enforced 'by an injuLiction proceeJ'i v., in the 
Federal conxts, similar to tne cease and Resist provisions of the 
Federal Tra'de Co^nission Act, 

As to the agreements: Section 4 authorises tne President to enter 
into and a "rove voliii.tary agrecrients relating to a trade or industry. 
These a reemcnts '.leoC. n:t apply to an entire trade or industry and Co 
not bind any except those -vvho arc " arties to the a,greement. Every 
agreei.ient, however, is subject to all of t .e conritions recited with 
rcsoect to codes except those ..aving refer: .•.cc to th.e ■^-embershi;^ in 
tra.dc a,ssociations or grou^is. 

As to the limited codes: A limitoi.. code of fair comnctition is 
Dne dea.ling solely i.vitli iiaxiTiu^. hours of labor, miniinan rates of pay 


ano. Mcriiin;3 conditdons in a trade or industry. The proposed act pro- 
vides for s-o.cli linited codes v.iiere perhaps for some reason or other a 
general code of ftdr competition raaj'' not l)e necessary, or it ma^r te 
had in addition thereto. 'Then, of course, it hecomes oart of the gen- 
eral code. 

Codes imposed b-' the President: In addition to the po'irer, to ap- 
prove codes and make agreenents, the President is authorized to pre- 
scribe codes ■.rof fair corapetitioii in an3'' trade or industry where for njiy 
reason tl.-^ trade or industry crnnot or mil not ocoperate in the prepara- 
tion of a voluntary code. Izy oxm prediction is, there will not "be many 
of those causes, hut it is a necessary provision, it seems to me, to raalre 
this act enforceahle. 

As to licenses: The President is further autho.rised to license 
"business enterprises v.-henever he finds it necessary to maJ-e effective 
a code o-f fair competition or cii agreement or otheririse to carry into 
effect the policy of the title. The "bill provides for puhlic notice 
and hearing "before a trade or industry may "be suDjected to license. 
After a trade or industry has been sii"bjected to license no one may en- 
gage in or carry on such .trade in interstate commerce or in transactions 
affecting interstate comnerce vithout first o"btaining a license on penal- 
ty of $500 fine or S months' inprisonment or "00 th. 

There rre cover completely, it seems to me, the constitutional "^"b- 
jections that may be urged, because the license siiall oiilir be issiied 
in cases rrhere the industry either is engaged in interstate commerce or 
is so eni^ajed as to be a burden upon or B.ffecting interstate commerce. 
That field, as the -attorneys v'ao have been studying the trend of decisions 
on -these social and economic questions v/ill tell you, is getting to be a 
field that '.76 can reach more easily; the area is increasing all the time. 
That should be so because of our economic interdependence of the States. 
Somebody suggested the other dp^- that there is hardlj^ a commodity fhat 
you can taJce, that is manufactured in an.y State, which, when you separate 
its ingredients, j^ou will find that three-fourths of the ingredients of 
the manufactured articles ha.,ve cone across the border in interstate corj- 
merce. I thinlc that this very thing is going to broaden o-ar concept of 
what nay be reached b;"- Federal legislative acts in regulating our eco- 
nomic life. It is bound to be so, because of our economic interdependence. 
lederal legislation affectiu;- our economic system cannot be, it seems to 
me, effective unless it has universal a;pplicati0n. 

The la'orr provisions mentioned under voluntaa'y codes are equally a 
part of tlie codes imposed b]'' the President by agreements and licenses. 

The bill raalres tiie follornng provisioxis respecting the determination 
of hours, wages, and labor staaidards: 

A. TThere the ri-^ht to collective bargaining prevails employers and 
emploj-ees are'given the first opportunitj'- to agree upon maximuia hours, 
mininux: rates of pay, and otaei' working conditions. That is, those mutual 
agreenents can only be recognized where these rights of labor to collec- 
tivel;,- bargain prevail. Wlien such agreement is approved b^' the President 
it a,cquires the character of a code. 


-ic'3 ■ 

B, Where no a-.-Teeraent can be rcacliGcl or has "been ai^proved, the 
PreGi.;\i:t is r.uthorizc',''. to i-wec-ticatc an-." to prescribe "by wr.y of a 
liraitcL. code- or 3.s "oart of r>, ^er.cral coco the standard of hours, vfagos 
and conditions. 

Of coiirsc, in those cases, i-i his investi£;;a.tion he Kust take into 
c/rnsideration the locality, difference in the cost of living -in certain 
localities, and otncr natters which enter into a. determination of hours 
and wages anc. conditions, with which we are all. familiar. 

This bill coes out of effect at the end of two years or sooner 
if the President declares t'.iat the e ler^^'ency lia.s ended. 

Section 2 (b) authorizes the President t^ establish a. industris.l . 
planning' and research a^-ency to aid in carrying out his functions under 
tne title, Tha.t is a ver;^ iinportaait provision of the act, although it 
has not been eniphasized, I am a :jrea,t believer in tliat IdLnd of research 
work, the collection of accT;jra,te statistics uoon which to base action. 
You cannot come to intelligent conclusions in our economic life without 
ample information and statistics. 

Also, may I em.pli£-size here tliat I thinh this bill is important as 
the first steptov/ard tiiat which the libera-ls of t nc country h^ave been 
preparing for It wa,s a. part of the platf'^rm of the 1912 Pro- 
gressive Party, najnely, the necessity of r. national planned economy. 
Until we liave that, I venture to say tliat we are not going to' an 
orderly orga^iized eccnonic system, A good deal cf the chQa,s and dis- 
organizp.tion from which we arc suffering now is due to this of 
planning. As a niatter of fact, I thin]:: the greater pa,rt of it is due 
to tiiat. Of course, sone of it has to do with thio intcrna,tional shocks 
th^.t we Imve suffered from. ' lut I thinl: -^rima-rily it is due to the other 
cause tioa.t. I have ;nenticnod, because heretofore vre have survived severe 
cconom.ic de-oressions in other countries, that '.id not affect us at all. 
But with o, properly planncc economic system, we coulc'' withstood the 
shocks froiri adoroad, We ha„ve got plent;'' in the midst of all tMs starva- 
tion tlie.t ?;e are witnessing. It is a parad_ox. And the explanation is 
thj.t we have not Iciovn how to pla.n. 

Section 6. (c) directs the lederal Trade Commission, upon the re- 
q.ueGt of the President, to maJce such investigations as ma,y be necessary 
for the purposes of this title. 

Section 9 (a) confers upon the President the power to make rules 
and regulati:ns, which, of course, is a ver^'' important feature of this 


Section 9 (a) authorizes tne President to impcsc fees for the 
filing of liceiises or codes. 

Section 9 (b) authorizes the President co modify or cancel any 
action taken by him under the title. 

Section. 8 provides tlmt this act sh^.ll not be construed to repeal 
or modify the Agricultural Adjustment Act, 


Wow, there arc somo geiier^il consiflcraoions t : v/hich I v/inh to 
direct Lag .i.ttoi.t"' o.-. of tho onunittce. This "bill makes cxiTlicit tii'c 
principle th^.t all O-jisineGs is aficcted v/lth the public iiitercst.. I"erc- 
toforc vc Ixwc, e:;ce;)t in the field of public utilities, relied upon 
compotition .-^lonc to protect the puolic interest. In order' to -preserve 
competition Coii{;/res3 ho.s at varioii.s times since 1390 p-^ssod a whole 
g.TOiuj of statutes, commonly referred to as the antitrust laV^fs, This 
hill is not intended to divert us from the purposes of thiit Icgisla-tion, 
It is intended ti supplouent it. 

The purpose of tnc present hill is not to a.holish competition out 
to lift its stfir.dards and t: rr.isc its plane so as to eliminate destruc- 
tive practices, Ui^fair practices, competition in the reductio:: of I'/ages, 
and the lengthening of hours. In other vrords , efficiency, rather th^n 
tn.c ability to sv/cat lahor and uidcrmine living:'ards, will he the 
determining factor in "business success, . 

• ThroUtVh the coo'ocrativc action made possihlc'anc lawful under this 
"bill indxistry may f vr the first time effectively ''o many of the follow- 
lu^, things: I am not going to read them all, lir. Chairman and gentlemen, 
hut industry, as you knovi, "nas attempted, to ;)rovid.e for market resesrch 
and analysis; coopcrjitive ma.rl:cting and sales promotion; product re-^ 
search; development of sound intra-indus trial relations; hudgcting; sim- 
plification and standardization. 

But, of course, vath the law a.s it is to^-'.ay they' heen dis- 
couraged in tha.t sort of activity. And for another rca.son, that they 
could reach no definite conclusion or agree upon no particular con- 
clusion as to prodfction and hours of la'bor, ^-'ithout viola.tion of the 
anti-trust, ITov; they can do tncsc things crfcctivcly the 
provisions of this "bill so a,s to nake o real contrihution, in m.y opinion, 
to progress, ' 

In a.ddition, they may engage in n"amerous other cooperative devices, 
subject to the a;^3-oroval a,nd supervision of t"nc President, 

At the present time it is freqiiently the person with the loy/est 
inc'ustrial standa,rdis who determines the standard for the entire indus- 
try. The purioose of this :aeasure is to make the hest judgment, and the 
highest of the industry govern its competitive a.ctivities, Thjit 
is very importavit and we must a.ccept it a,s true. It largely accounts, 
in my opinion — and I a,m sure tnat t]ie memhers of the coi.imittee are 
cogni7.ant of it — for tho tremendous support vdnich is "being mohilized 
t'nroughout the coimtry for this legislation-. They sec in it at least 
a hope tl";a.t this cutthroat competition which has heen dragging us dov/n, 
red.ucing o'^jr standa.rds of living m.ay he for all time eliminated, and. we 
may ^,o ; .long n a higher standard of living. Tkat vdll he a gr a,t con- 
tribution tov/ard the "iia.;o-'"incss of t"ae American people. 

As I nave said, the p-'jTpisc of this /leasurc is to nake the hest 
judgment and. the highest ideals in the industrj^ govern its competitive 
activities, replacing the now low standard of swca.tshop, cut-thnroat com- 


- 105 - 

Title II has to do with public v/orks. The purpose of title II iz to 
create direct arid indirect e.iiployment for several million men and women 
throuf^h the launching of a $3,300,000,000 puhlic coni^truction program. 

In 1930, Federal, State, mid local public construction amounted to 
$3,357,000,000. In 1931 it fell to $2,960,000,0'X). In 1932 it fell to 
$1,880,000,000. That is a drop from $3,357,0'..0,000. 

It is ODvioua that a great deal of construction work normally carried 
on by the States, counties, suv^ ra\uiicipalities as part of their regular 
program of development has been suspended and that, largely by reason of 
the fact that funds could not be obtained for the purpose. The accumu- 
lated deficit in public construction for 1931 and 1932 alone amounts to 
almost 2 billion dollars. That has had a tremendous effect upon one of 
our major industries, the construction industry of the country. You can 
easily see how that must have dragged us down. To that should be added 
the public construction that would normally be done in 1933. It is ob" 
vious that there is a vast reservoir of necessary, useful projects wait- 
ing to be done. It should be done nov/, when costs are low and for the 
more importpjit reason that as many as two-thirds of the 2^ million con- 
struction workers are out of employment. Think of that. In the con- 
struction industry alone two-thirds of ?,}■: million workers are out of 

Tile degree of uneraplo^/Tnent in some of the industries supplying 
construction is even more intense. Por instance, in the manufacture of 
brick tile, and terra cotta, on January 15 last, the Bureau of Labor 
Statistics reports that the number of em.ployees averaged less than 20 
per cent. Just think of that — upward of less thar 8 per cent of the 
average for 1926. 'Ihat is a deplorable situation which we cannot look 
at with complacency. 

The program contemplated by the bill is In general language set 
forth in section 202. Special provision is made for construction on the 
Federal-aid highway sj'"stem for which an am.cunt not in excess of 
$400,000,000 may be allocated, to be apportioned to the several States, 
three-fourths on the basis of the Federal Aid Highway Act and one-fourth 
on the basis of population. Of course, these funds need not be matched 
by the States. 

The construction program may be prosecuted by the President through 
the Federal emergency adm.ini strati on of public works, or through such 
other agencies as he may designate. Here again, authority is centralized 
so as to avoid delays Tmich have thwarted previous attempts to relieve 
unemployment through public construction. 

The bill authorizea the President to engage in the construction 
directly, to make loans, or otherwise finaiice such construction upon 
reasonable security, • and to make grants to States, municipalities, and 
other public bodies in an amount not exceeding 50 per cent of the cost 
of labor and materials employed upon the project. 

I am sure that Congressman Vinson is persuaded now that we have in- 
creased tremendously the rea over which loans may be made by the President 
or the administrator to municipalities. Then, we have removed the 


-10 6- 

limitation as to self-linuidation. As tae bill was intended, and as I 
?!m sure it rea.ds new, it embraces any -Dublic vrorks of a miinicir)ality, 
State, or subdivision of p State or the Federal Goverrunent. There is 
no limitation at all excerit the discretion of the President or the 

In order to make available the maximum nuraber of jobs in connection 
with the construction -orograra, the bill -orovides for the 30-hour week 
UTDon all -orojects constructed or financed under the bill. It also 
provides for the payment of wages sufficient to provide a standard of 
living in decency and confort; it prohibits the use of convict labor 
and confers a preference unon ex-service men with dependents. 

Funds necessary for the construction TDrogram ere to be raised 
through borrowing by the Federal Governinent, and -nrovision is made 
for the. imposition of a snecial tax to -nay interest and i:irinci"Dal. 

Of course, that is a great auestion ur)on v;hich I cannot enlighten 
the exDerts of this committee. I cannot enlighten the committee upon 
that question, because I have no -oarticular views, but I do aDTDreciate 
the necessity of imposing some tax. I think it is absolutely essential 
that we impose a tax to amortize these bonds, in order that there may 
be no Question as to their sale at this time. If there were a failure 
to sell bonds, it would be a most unfortunate thing, and might cause 
another recession. 

l-Iext, we have, together wi"th industry, included a -orovision in 
the bill giving industry a clTance to cooDerate within itself, and to 
organize within itself so as to do away with cut-throat com-netition. 
Then we provide for a large -oublic works -orogram, which directly 
or indirectly will easily -out 3,000,000 men to work. Tnen that is 
done, you know what it will mean. In a short time those men begin 
to purchase necessities, such as clcthee, shoes, and other like things, 
and that, in turn, will lout another million or two -oeoTDle to 

Therefore the upward turn mill undoubtedly come. I have slept 
with this subject for years, and I am persioaded tiiat this will be the 
thing which will serve to tjrime the.t)ump and that will begin to 
sustain the upward movement for the absorption of the unemployed. 
Of course, I am one of those radicals who believe that some day the 
right to work will be recognized as the right to live is recognized 
today. We are going in that direction nov.'. Otherwise there is no 
reason for organized society at all. 

The -Dcwer to enter uoon new construction under this bill, or 
make loans or grants, v;ill terminate at the end of 2 years, or 
sooner if the President shall declare the emergency ended. 



The President is futliorizecl , hovever, to continue to issue 
funds to a borrower TJrior to January .?3, 19P.3, under the terms of an 
agreement entered into tjrior to the dnte of terminption of the 
President's -power to make loans. In other words, he may -oay install- 
ments UTDon the loans actually made ^rior to the exDiraticn of the 

The rest of the ma.tter I have here I vill not go over, because 
it is in ex-olana.tion of the details of the bill, and I am sure 
that you are all familiar -^/ith that. 

The Cioairman. ''^o^ much further time do you '"ant, Senator? 

Senator Wagner. I h'ave finished, Mr. Chairman. 




Mr. Green. Mr. Chainaan and lionora'ble members of the com- 
mittee, I am very pleased to come here this morning at yoiir in- 
vitation and sutmit to you the views of ls.hor regarding the pro- 
posed industrial recovery act. 

First, may I paj^ a just compliment to ray good friend, that faith- 
ful puhlic servant, Senator Wagner. I knov/ he must he happy, as his 
friends all arR, hecauBe he apparently sees his hope o,s practically 
realized. He h?,s almost stood alone for a nujn'her of years in fighting 
for unemployment relief, and for the estahlishraent of a more sound, 
modern economic order. While some have faltered hy'the v/ayside in 
giving him support, he has "been li]:e a voice in the 'Tilderness, urging 
upon Congress tjc enactment of legislation that would, in operation, 
drain our pool of unemployment, and I know that is the purpose of this 

Lahor appreciates, more than language can eyprpss, the very fine, 
devoted loyal puhlic service Senator Wagner has rendered. 

I desire to suhrait the following amendments, Mr. Cha,irman, to the 
Industrial Recovery Act, trusting that these amendments will meet with 
your approval and "be accepted. 

After the \/ord "choosing" in line ?r , page 7, insert the follow- 

And shall he free from the interference, restraint, or 
coercion of employers of lahor, or th^ir agents, in the 
designation of such representatives or in self-organiza- 
tions or in other concerted activities for the purpose 
of collective bargaining or other mutual aid or pro- 

The amended section would then read: 

That employees shall have the right to organize and 
bargain collectively through representatives of their 
own choosing, and shall he free from the interference, 
restraint, or coercion rf employers of labor, or their 
agents, in the designation of such representa,tives or 
in seif-orgaaiizations or in other concerted activities 
for the p\rrpose of collective bargaining or other mutual 
aid or protection. 

This amendment does not include within it pny form of new legis- 
lation. It is a verbatim statement taken from the declared public 
policy of the G-overnment as set forth in the Korris-LaGuardia anti- 
injunction law. Congress adopted this declaration by an overwhelming 

(*) 73rd Congress. 1st Session, National Industrial Recovery , Hearings 
on H.R. 5654- before House Uays and Keajis Cormiittee, ilay 19, 1933, 
pp. 117-121. 


-109- •■ 

vote, when it passed the Horris-LaGuarc.ia Act. It is not"; a part of the 
lav; of the land. T7e ask, lator a.sks, that it he included in this 
emergency legislation. Labor helieves it necessary in order to con- 
firm and emphasize the guarp.nty of . the right of organization a,nd of the 
exercise of collective "bargaining. 

I an only refreshing your memories, memhers of the committee, when 
I call your attention to the declared puhlic policy of the Government 
as set forth in the lIorris-LaGuardia Act. That, it seems to me, is a 
declaration that has "been accepted and is in effect and can "be in- 
corporated in this legislation. There ■dll "be no departure from 
policies heretofore pursued; we are not asking that something new he 
incorporated, "but that we lift out of that declared puolic policy this 
section and include it in this emergencj'' legislation, for the reason 
that lahor will then feel hetter satisfied that its right to organize 
is really guaranteed, and that it will he permitted to exercise free- 
dom of action in that direction. 

Also, on line 23, page 7, we sviggest that you siihstitute the words 
"company union" for the word "organization" appearing at the beginning 
of the line. 

It is the opinion of the representatives of the American Federation 
of Lahor that this anendjuent would make clear ajid definite the real 
meaning and purpose of this part of the act. 

I think, if I could interrogate the committee who were engaged 
in drafting this section tha.t they would admit that they had in mind 
the pui'pose expressed oy the xvords I have suggested as an amendment 
to this section of the act. 

Lahor has heen faced '.'ith this problem, that corporations set xip 
their own company' tmions. These unions ate the creatures of the 
corporation, and. function only at the will of the industrial corporation. 

Ilany workers are required, as a condition of employment, to join 
a company -union. Wlien they become members of that company union then the 
corporation is secure, because it simply deals with itself. We want to 
avoid that very thing. 

If the workers are permitted to join a labor tinion it ought to be 
a free, independent labor union, and not a union, or a so-called "union", 
through which a corporation may exercise full and complete control, not 
only of its own industrial affairs, but of the economic life and social 
life of the workers. 

The organization we in mind is the company union, and we 
should like tha.t this sectioii of the act be made clear in that respect. 

If the industrial recover'/- act is amended, as herein suggested, 
labor will extent to this proposed legislation its full, complete, and 
hearty endorsement. 



I am firnl^'' of the opinion throii'di the exercise of the 
authority vested in the association of employers and groups of em- 
ployers, and the further exercise of the controlling power vested in 
the President of the United States, the 6-hour day and the 5-day v/ork 
v/eek can hecone estahiished and operative in the principal industries 
of the Nation. 

Obviously the hill confers upon the President of the United States 
most unusual, "broad, extraordinary povrers. Labor is thoroughlj^ con- 
scious of this fact. Jiistification for such a proposal is found in the 
existing emergency, because it is emergency legislation it is quite 
proper that such extraordinary povrers he vested in the president if 
econonic recovery depends upon the exercise of such unusual poner. 

The puhlic-v7orks progrsjn, provided for in the act, coght to he 
amended so as to include the errpenditure oi a sui.i not less than five 
billion of dollars. If a public-v/ork project in rrhich $5,000,000,000 
was ejcpended in carrying forr/ard public improvement and public work 
in every State, city, to^n, and section of the Nation was launched 
simultaneously, industr/ would be revived pjid indiistrial recovery would 
be constructively promoted. The public-works progrsim will supplement 
the development of industrial activity vrhich is bound to teke place 
under the inspiration of the legislation provided for in the Industrial 
Recovery Act. 

I7ith the amendments wiiich I herein suggested accepted and in- 
coi-^orated in the bill, labor gives unqualified support to this pro- 
posed legislation. Along -ith its friends, it ha,ils this suggested 
legislative step p,s a definite advance toward economic recovery. 

There is just one other point that I desire to touch upon in ex- 
pressing my opinion regarding this section of the proposed legislation. 
I should like th-3 cominittee to understajid that the suggestion I am 
offering is my personal suggestion. It is not original with me. It 
comes out of discxission that I have ha,d with men who have had a wide 
experience not only in the personnel sections of large corporations but 
in the industrial sections as well. 

The real objective sought through the operation of this proposed 
legislation is to strike fairly and squarely at the heart of un- 
emplojonant ajid econonic ITliat Senator Uagner desires to do 
and vfhat his friends hope to realize and what Congress, I thinlc, wishes 
to see is this: that the pools of unemplo^Tnent be drained so far as 
possible wherever these pools exist, lot it be in the most remote 
community or in the largest city in the la.nd. In other v"ords, we are 
trying to tacld.e through this legislation this dreadful scourge of un- 
emplojinent tho,t hp.s so afflicted' the Nation for almost 4 years. 

If that is the case, then why not develop a usef-al public-works 
progran in every State, city, incorpora,ted village, and hamlet within 
the Nation? The virtue of such a plan a.s tha,t is to bring employment 
into the cities, and the villages, and the tovrns ra,ther tlia.n to take the 
■ujieraployed from the villages and the towns to some remote section where 
some Federal project may be carried on. Under that tjIsxl you preserve 
frmily life. You benefit ever]^ merchant, every industrialist, every 



professiona-l citizen. You t'-'e the ^7or': to the comm-unity rather than 
talcin'- the men who are idle in the coimnunity out into some remote section 
to carry on fl<jw'i--nontrol w^ric, reforestation, soil-erosion T/orl:, and 
ro3.u >inil flin,,. 

It' tl-Ose -oremises are sound, Y;hy not use this money appropriated for 
piiVjiin T/'>-clrs in this way? Let the authority of the President he exercised 
so that outrjght grants from this appropriation v;ill "be made to any cit.:' 
cr tovm in the cvontry that 'will develop a useful puolic-yrorks prograin, 
a project that can he appro red hy the planxiing authority ap-;)ninted oy 
the ?cdora] G"V'.'i-nmont, 

Instead ?f making the grant of 30 percent to many imnsoverished cities 
where taxes are now so high that it would he impossihle for tne city to 
even raise 20 percent more to match the Federal grant hy an eoual amount, 
make them an unrualified grant; prepare your prcgra.n, send it in, and 
utilize it to put the people to work in your city' e,nd /our town. 

It seems to me that that is a siiggesticn that can be well considered 
"by this coiTii'nittee. 

If I may malce a personal rccum-aendation along that lino, it wciJd he 
to amend the section hy striking out the 30 percent grant and simply giving 
the President authority to malco an outright, complete grant for the purpose 
of tal:ing care of any uscf"al, riuolic-vrork project in any city v/'ier-j the 
commimity is willing to &rigina.te such a Duhlic— works project £-nd ca.rry it on. 

As I say, the mone •" out of v/hich to pay this must come frr. n the tax- 
payers of the nation. Everyhody roast contribute in this great emevQencj, 
--Ihy not let us use the money collected from the fejTiily, T.'liicn is t'le "ation, 
to help every unit of .the family in every city and town and hamlet a,nd 
villa e throu^liout the Ifcticn? 

I know that that v/ill oe a departure from the old ;^nlicY of imposing 
costs for local improvenents upon the local community. But this hill in 
itself is a departure fnom the traditional polic"' which the people of our 
Goverrjnent have alv/ays pursued, and if v.-e are to strike at the heart of 
unemployment, direct .and straigiit, and drain the reservoirs, the pools of 
unemplo;"ment wherever they are found, let us talze the money there a.nd give 
the idle work in their own homes. If we are going to spend this mone^ cein 
we spend it in any better way? 

I ajri glad to offer these suggestions for your considera:;ion, I thiif- 
this last suggestion is a very meritorious one. I realize that the Federal 
Government can exercise control over these public-works projects. They can 
prevent any unnecessary project being launched, through the authority that 
they hs,ve; thej"" can see that the plan comes up to specifications, and it must 
meet the- requirements of the planning board, v/hoever or whatever that may be. 
It must be a, worthy, CGrnmendaMc public-works project. In that v/ay you will 
have all the toArns and cities active. They v/ill s,ll be ready to start 
something. Ycu will revive hope. You will put peoTDle to work at home 
vmere they will spend the money v.dth a merchant in their heme town, in their 

Gentlemen, I have completed my statement. 


Seantor LA 70LLETTE: "i'.ir',- I direct your attention to section (b) on 
page 4? Thy v-o-jld not labor te included in lines IS to 14?" 

I.:R. HICHBEHG-: "3ec,-?^use the code, as a matter of fact, Senator, -Tovild not 
te made as a code affecting labor participation. It v/ould be a manage- 
ment's code concerninfc operations of management in the industry, as I 
understand it." 

Senator LA EOLLETTE: "I understood that these groups are required to be 
truly representative." 

Mr. HICK3E3G: "That is true." 

Senator LA ECLLETTE: "Does not that contemplate that labor is to be 

Mr. RICH3EHG-: "The contemplation of this prrticular section is, I think 

although it is not so stated that the code of an industry is ordinarily, 

as far as it's practices are concerned -Tith the management of operations, 
to be represeotative of management. 5u.t in that code there is a require- 
ment that the employees shall have, the right of organization and collect- 
ive baTgaining, v'hich means that the employees rould have in such- an 
industry the right to bargain Vv'ith the management as to the terms or con- 
ditions affecting labor." 

Senator LA ECLLETTE; "I am very ..mch interested in that point, because I 
have given some consideration to the establisliment of some kind of planning, 
and do I understand you to say that in requiring that these groups that 
are to be formulated are to be representative that you do not contem- 
plate that labor is to participate in or to have representation in those 
groups in formulating tne code?" 

Mr. HICI^ERG: "I vould say that insofar as tne code only dealt -ith 
management problems, as to marketing or production, it ^'ould not necessarily 
follovr that there v:ould be labor representation in there." 

Senator LA EOLLETTE: "I understfind that if you have some particular phase 
of a code, but if you are drav/ing up a code, let us say to establish 
practices v/hich shall be considered fair or unfair in the steel industry, 
do you not envision that labor '.Tould be represented in drav.dng up those 
codes, insofar as they relate to vorking practices, either fair or unfair 
in relation to emplo^.Tnent?" 

(*) 75rd Congress, 1st Session, ITgtional Industrial Recovery . Hearings on 
S. 1712 and H.R. 5755 before the Senate Finance Committee, May 22, 1933, 
p. 26-27. The passage referred to '^oy Senator La Eollette is the last 
sentence of Section 3 (b) of the Act, and reads as follov.'s: "The violation 
of any provision of any such code shall be a misdemeanor 'Uid upon conviction 
thereof, an offender shall be fined not more than $500 for each offense." 


Mr. PJCHBSRG: "I h.;\ve this vision of it, and tht,.t is that either lahor 
vdll participate in the drc--.'ing up of such codes, or that lahor will par- 
ticipate in the consideration as to v/hether such codes are fair, and 
perhaps management '-ill regard it ns desirahle to have later participate 
at the first stage rather than the second." 

Senator LA FOLLETTE: "Certainly it is v/ithin our -^.o^i'er to require that 
under this hill, is it not?" 

Mr. RICHB3RG: "It is '.lithin the po\,'er of the Senate to require such 
representation as to make this code representative of the industry*" 

Senator LA EOLLETTE: "And is it not possible that in formulating these 
codes, as they relate to practices or otherwise, in employment, 
that lahor would not "be represented in dr<..wing up those agreements?" 

Mr. RICKBERG: "I s:\y it -ould be either a choice of labor participation 
in the original preparation or labor participation in the consideration 
of the codes. Unfortunately there is such an attitude toward labor in 
m.any industries that perhaps the easiest practical method is to work 
out a labor correction code, which is a code of what is unfair rather 
than original labor participation. In some instances they do those 

Senator COFJALLY: "A sort of veto po-ver." 

Iv'"r. RICHBSRG: "Mo; not a veto power. May I make an illustration of 
the so-called "railroad bill" which is now before Congress, in which 
labor organizations there fought for participation in the planning. It 
was objected to on the part of inanagernent, but an amendinent has been 
considered by the committee concerning those plans to give representation 
to labor up to a part of the planning, ^^'hat is not a veto power, but it 
is a consideration." 






MS. EMERY: What nay be incl.ucled in codes of fair competition or 
permissit)le agreements is not defined in the "bill "but rests in the dis- 
cretion of tho adninistrator, upon the meaning '.Thich may be given to 
the tern"fair competition" in the li;;ht of the objectives of the mmeasure. 
This goxterality is subject to one specific and definite exception. By 
Section 7 (a) every code, agreement, or license mast contain ■Cfitt.nin 
conditions with res"occt tro employment relations. 

In tho bill as introduced this roqi'-ires employers to recognize 
the right of employees to organize and ba,rgain collectively through 
representatives of their orm choosing and not be required as a condition 
of employment to join any Organization or refrain from joining a labor 
orgo,nization -^f their ova choosing. Employers, are further required to 
agree to observe marcimura hours of labor and minimum rates of pay and 
"orking conditions prescribed b" the President, By an act made in 
the House bill the em-oloyer and his agents are required to refrain from 
any interference uith o;r coercion in the orgcjiization -^f labor and the 
employee nay not be required to j^in "a company uni*n.-" 

SEITATOR TTAQTFH: In reference t-- th'- sc three prorisi^ns, y^v. have 
in mind the so— called "yellow -d'"g contract"? 

ME.El-LESY: I have in nind the throe pr~ visions which are inserted 
in Secti-n 7, 

SSTATOR GEORGE:. Y ur io siti'n is that those provisi-ins must affirm- 
atively r.opcvr in each one of those pro'.'isions? 

MR. EilERY: Yes, Sir. These radst' affirmatively appear. 

SKiTATOR lAGflER: Are not th^se three conditions merely the establish- 
ment of i ri^ht t~ the -"-r.-er; that is, if he cares to exercise it he 
he shall have the right of c-llective bargaining, and then the other , 
thing, which Cangress has already done'; that is, t" outlaw the yellow-dog 
contract in the IT orris Anti-injiincti n Act? 

MR. El.lfeRY: That is what is described an act which has \7ithdrai-'n 

from enforcement in the Federal dourts the -o^vfer of injujjctioa 

(*) 73rd C'~ngress, 1st Sessi-n, Ns-tional Industrial Recovery Hearings 
.on S. 1712 and S, R. 5755, before the Senate Finance Comnittee, 
May 29, 1933, pp. 283-301 


SMATOR WAaiEZ: Tell, it says the' c ntract is one against public 

113.. Si.lEZlY: Thus, ','hile erffoloyers as such are assured of no pro— 
teetion in the discharge of their onerous obligations, "but must -olace 
their trust vrhollj/ in the administrator, it is sought to twist the 
pending legislation into a distinct effort to mold the einx)loyment 
relations of the United States into a single form, tc the nanifest 
advantage of s. particular form of organization. This neasure of 
dealing vdth the nost fundamental rights of emplo^'^ers and employees. [I 
Their relations throv.ghou.t the depression have been marked by a 
mutuality of good Trill, sympathetic understanding, sa.crifice, -'hich 
have been its narked cha.ractertistic. That there have been exceptions, 
T7hich all industry desires to seo corrected, only erapliasizes the rule. 
But the essential facts and principles of American eraoloyment relations 
rest upon rights of libertj'- a^.d agreripents the,t caniiot be ignored. 
They have developed upon the theory that everj- man is entitled to 
bargain, individually or collectively, for employment on conditions 
mutually satisfactory to the -oarties, rather than undertaice 'hj 6.isregard 
of fact and right to force them into one form of relations with trade 
unions, Han]^ manufacturers deal i-'ith such organizations. 

Probabl"/ three tines as many have operated over long periods 
of tine under employee representation plans, including many forms 
of mutual benefit charactertistic of the most intelligent evolution 
of the employment relation. To make the pending proposal a means 
o£ disru.pting long-established relations and require their reorganiza- 
tion into a single form which ignores the most fiindamental rights of 
both parties '^ould engender discord, controversy, and bitterness when 
it is most important that our em-oloynent relations shouldi be character- 
ized "oY good will, justice, and understanding. 

The trade union is a recognized part of our social life, yet at 
times it frankly sets itself up as a sepirate-^and distinct governing 
agency to control those who believe they can best advance their own 
interests through other forms of orgajiization and relationship. To denj" 
them the right to .continne :to do so is violating Lincoln's famous 
declaration, "llo laan is good to govern a ma,n withoiit the other's 
consent," It ntcst be, moreover, clear from an examination of the 
pending bill that the assurance of fair e^Dloynent relations does not 
require the provisions of Section 7, for Section 3 provides that the 
president may condition and code submitted to him to as'iure the protec- 
tion of the employees. He nay, m.oreover, modify or su.spend the operation 
of such code. If it does not -provide that protection, he may further 
assure it tlirough regulation, and, again, where s' satisfactory agreement 
as to working conditions exists in any plant or industry, he not only 
possesses full power of investigation but he maj'' specifically'' prescribe 
hours, wages, and working conditions as he finds it necessary to 
effectuate the objectives of this bill. 



Uoreover, tl\is conraittee mur.t perceive that as the hill is draftp-d 
it is vfithin the discretion of the administrator to exclude from any 
code, provisions req^j.ired to he incorporated ^-ith respect to employment 
relations, and thiis to transform the whole measixre into a Federal 
control of emplo^n-ent relations in every local field, to the exclusion 
of every other fea-ttirc. 

Finally, if this comnitteo is of the opinion that a statement of 
employment relations is essential to condition codes and agreements, 
Yjo submit that, as fair-minded men, it shoud he stated in terms which 
not only fairly recognize the equal and imitual rights of "both employer 
and employee. Of those who desire to refrain from any particular form 
of as ociation, as well as t'-iose who desire to associate. To recognize 
no narrow and exclusive relationship, hut, as it constitutionally 
required, every form of legitim.atc employment relations mutually 
satisfactory to the parties. 

As the right to associate is the right not to associate. The one 
is as essential as the other. Anti-religious wars have heen fought 
upon that principle. 

Furthermore, if it is determined to establish controls over 
employers, it must he obvious that, to the same extent, it is essential 
to the execution of the measure that similar controls be established 
over em-oloyees. If freedom is contracted as to the one, it must be 
correspondingly contracted to the other, or either, by violating 
the terms of regulation, maJ:e impossible the performance of the obliga- 
tions created for the oth^r. Both tmst enjoy liberty of action or each 
must be subjected to reciprocal restraints. 

Above all, nothing cou.ld more cortainlj'" jeopardize the success of 
the experiment than to create the impression that the measure eontemx)lated 
disruption of satisfactory existing relations and stimulated continuing 
agitation for the reorganization of employment relations. Nothing 
could be more certainly calculated to bring -lOn certainty into the whole 
field of industrial production. It is not a fujiction of the Federal 


• -IIS- 

I Gubmit t- t;ie coiumttee, first, that tlie President p:ssesses 
■under the bill the power t _i erudition any code or a;;reement that niay he 
offered for his aTooroval, or tnat of his representative, to adeqioately 
protect ail of the rights of employees, "because he may add any condition 
to thsm, prescrite any condition that is necessary for their protection. 
That is vritteu iat the third section of the hill, so th^t when you 
come CL^Y/n to tht srventh section of the hill, as I say, you loave supplied 
three essential conditions v/hich nust he in every a^'Vjreer'.ent , and they the only three e-jsential cnditions in the hill, 

SE"JATOR 'SOEE: Do they all relate to labor? 

KR. EIviERY:. Yes, Sir. 

SENATOH REED: V/ill you ;oermit an interrirption at th^-'.t -ooint? I real- 
ize th-se wh^ come in late .Ti,ay Cij oiir question compel you to go 
over the sarne ground twice, as I read Section 3 of this hill, in its 
requirement for of fair competition, it does not at all exclurle 
and impliedly includes the selling' price of the products of the 'jroup 
who maliG the a-;,reeuent, the territory v/ithin which each may sell, tl-jie 
amo^unt of business tioat each may do, and it is conceivable th^at a group 
might ma]:e such disposition of business o.:^. to effect prices in that way, 
and with the ap'oroval of the President it becoi.ies a c:de of law for that 
indus'ory, the violation of i.7hicli is a crim.e. Is th.ot correct? 

l-R. EMERY;: ■.-.'loat can be put into tliat code, Senat-.r, is highly indefin- 


SENATOR WAC-ilER: And you Irnow as a matter ;■! fo.ct when it comes to a 
question f mfair competition, tiiat is "ne of the objects behind the 
bill, that tae competitio-,-'. today is the cause of the low v/ages whicli 
are beino; p.vid at the present time and the long hours of labor. Those 
are the tv/o elements ifrhich have brough about this unfair competition, 
the GVifeat shop methods, which laave drag^,ed dov^n the whole economic 
structure, ooad it is that sort of thing we are addressing ourselves to 4 
and it is not fair to stop something that /nay be done. We are pre- ■ 
serving competition, or, rather are v;e putting it on a basis of effici- 
ency tather than exjoloitaotion. 

MR. EMEHYf I wish that were stated in the bill. 

SEl^ATOR "'AG'oER: You cannot -out every word into the bill. Everybody 
l^aowG it except those v.'ho are n:w Sottcm-oting to c njure these ima^-lnary 
arguments in orf'er to defeat it, 

hR. 3VlZhY: Y'e not conjuring' up any imagioiary arvruments, 

SSiTATOR 'VaGHER: "Te have hiad conferences, Ilr.r^nery, \;ith you, and I 
thinl: it vfas pretty definitely stated the purposes v/ere oehind the 
bill, an., tliat the thing was t^ lift up and to prevent this unfair c-im— - 
petition a.nd this cxploits-tion of labor, a od that y/ill put competition 
on a, '..ecent basis, for the smaller as vi/ell a.s tne large, and my 


-11 s- 

ovm viev/ is f^t this is ^i^inr: t^ Velp tlie sviall tuni^-ess na:i as acjainst 
t-ie IrT'-e business .nan. It i? , Diiv; t: cive the snail tusmess nana 
cianceT'^e cause the h^urs ri laDor and V78,;,es Iiave :-t t-. be :.ractically 
tne saiiie in t-.c same c:)PJiiunitv. 

SEhATCH KEED: If I raav resiii-ae a, rin, I vi:vlC. li;-e t^ c-mplete my 
thought. ^Te hive -been" sitting, here i^r several c'.ays listening to repre- 
sentatives .of the oil industry vc^.e this s vrt of thin- for tneir indus- 
try, a-o-o-intment -f a diet-tor b- have the poi,ver t - fix prices ano. regu- 
late c"onPoetiti:n, and they are frazil: enou^.^ to tell us tliat their r-itive 
is t^ raise the -orice of oil fro:_i ics o^resent 1^- level t- manufacturers 
of Pennsylvania and elsevhere vho favor txiis "oill about a dollar a 
barrel. ' I liave been s^vproached by a £;oGd rany because in their minds 
it is an indirect way of repealing the v resent ant-trust laws, and I - 
Y/ant to lonov ho ■',7 tliat stril'es you. 

hH. EiERY: I vant t: by perfectly franjo about it, as t: wliat we assuned 
v/as .'.-oinr,- to be tl^e effect -f this Measure. ?/e assumed th^t one of the 
causes -f tne ".resent '.epressi-n v:as deadly do'-'nward spiral of prices 
and va.-es, which h^.s completely der-oralized t..e normal exc>ange_ of ^£,'Oods 
and services amon,' our population. In other words, 's men -^n tne ladder, 
they foucht with all tne means they had, they exit prices alon£; until 
conditions becaxDe such that t.iey were unable to pay labor, and the result 
was a deadly d-o^vnward fall in -rice levels. The effect is t:iat you can 
do tv:o thine:s. You can cnipsl corpetition to tne death, on the one 
hand, onif liave rerulati-n -f con"oetiti^n under ap;3ropriate conditions. 
We believe nen can oe i:rced to firiTi ojr^amzations in industry; tliat y^u 
can cause an effective : .easurc of competition f.iiit will ■ revent the nost 
destructive element t;iat :iits our crnsumin.- power a;id tl-;at is Itw -a-ses. 

SEllAYOH HZED: I never heard of a pool in any industry tna.t did not put 
up as a T-retext t/.e claim tliat they wanted t -• keep prices hi^^h enough 
to pay ;;ood v/^ges. 

SEiTATOS wACCEH: Vou never had 'ir.ver-.rnent sujervision. Tliat is where 
public protection c:.;."ies in. 

IQ. EIv'IERY: I cT- sui-e y-u will a, ree with me th t one of the^most dis- 
astrous features :f this de-oressi::i has oeen that steady deadly com- 
petition that demoralized business, and every industry was overburdened 
witn debt, a^ad c^uld n-t .;et the money to sustain them until we -ere 
all browht doMi to that level. So far as the people I represent are 
concerned — and re say it with as much interest in those to be pro- 
tected as others — that the j-ianu.fact-'orer who sells below cost is as 
mculi a liability or more so t/ian as asset. 

SZHA'I'OIl hEEE; A'.id if you establish a system ^f this kind, or like 
th^t in Germany, youi- cxire is worse thiat 7 ur disease. 

MR. EMERY: Tne cure here is tlmt --u are after a reasonable araoimt of 
regulated competition between -oarties, but they must depend upon the^ 
administration of tne bill. One thih,o certain about the bill is that 
the acho-iini strati on must, if it is retained in the form it is now in, 
regulate working conditiors and employment conditions and wages as now 
prescribed in tne bill. Those are things he must do, and whether he 


does a-nything else C.c-pencls in iiim. 

SEIIATOR ■.TAGl'lCIl: And t'n&t !<? jmu- -;p;- ^siti-jn to this "bill, is is nst? 
Dd you n-t tliinh lator is rcceiviiie' too .reat pr;tectijn here? 

i.iH. K3i?uY: On thn cntrary, I v'ant it t- receive every reas::na"ble -on- 
tecti jn, -"but I want that ex?-'ressed in terms t lat are fair to employer 
and employee aaid n-t r me-sided &ar.;:ain here that atterniits to drive 
our emjoloyaent relations int ^^ z-.^e form. 

SaiATOE '7AG1TER: You say you v/anted a mutua,lity there? 
im, E;-"ERY: >^es, sir. 

Si::IATOn VaGili:R: All re are sayin/; is tliat if the laborers so choose, 
tney nay Darcain collectively. Tlia.t is a tloe court has said they 
nave and txiey ;iave u.Vneld c.ntr. cts for collective baroaining, and the 
only thin^, v;e say is if they care to assert it, they ha,ve that ri.'^.dit to 
collective bar^ainin.. "'id if they do not they can deal otherwise with 
t.ieir errrolo, "ers. 

iS. SiiErLY: They -.0 n.t need any expression here. I ivo.nt to su4::est 
tills as an anendnent that would ejg^ress thot in fairness. I rec'^mnend 
it to tne Senator, and he is a ve-''y fair man, 

SEuATOE ■.VAGITEH: dou did not nind my interrupting; y-iu,did you'? 

IE, LjZRY: Kot all, Senator. You never interrupt me without profit. 

Ue^sw^cest that Section 7 is not essential in order to afford the 
protection which you c.esire, because you couJd amend Section 3, which 
is the section which controls codes and a/^reenents; and if yju did 
a-oend Section 3 and stri]:e out Section 7 and add the follov/infj, you 
would adequately -protect labor ?nd tae employer in fair terms 'tnat would 
recotinize the ri^i^dits of each, and it would read as follows: 

^.ddition to Section 3: 

(e) In everv cod.e :f fair c -.mTocti ti o.i in o.ny trade or industry 
or subdivision tnereof a'-^rovedby the President under either subsection 
(a) or subsection (d) of this section the rirovisions for the protection 
of employees siifill include the following conditions: 

(1) Tloat eirrplcyers and employees cliall have tie 
right to organize and bargain collectively in any 
form mutually^ satisfactory to tnera throui'^'h repre- 
sentatives of their o\-/n choosing, 

(2) Tliat no employee and no one seeking employment 
snail be required as a c">ndition of employment to 
join or refrain fron joining any legitimate organ- 
ization, nor shall any persons be precluded from 
barraining individua.lly for emrlojonent . 

You cannot take away from tne people of the United States the right 


f:-3a the ass :f .-•;.-■.?-',,■.%,,.,„„ ,- di-^se, "because t-A?.y the 
H,ht t: 0.. ain ^:^^;l^,^^,^ ..nn;, the s.aU e^,l.,ors. 

ments t.ut er.Tj.loy less tVa'. 100 people. 

S-A:^. riCr^::: is the.e anythl.,: in ohis oiU »hi=h te;:es aw fr.>» .a 
. ?r>ot;iir*l the .ij.t t, v.arcain „lth Ms e™l,;,erj 

■ n. I]' UPA'I Yes. 
g-j-^--iQ_,- tt_^.3:t;p,: "'3',-;? 

■, ^ ^ %,- i-.TP-.-p-^ce ^'P'" Iv-r iInplic?tio^l. 

S-IIAJOH YIAduIi: I '' : n:t see '^ere. 

, -4. ■ ,-^,, T -- '-'-rai'-'. Sp:iP.t--r, you have n:;t 

■-^. E:I;^Y: I v-ili -cerx. It . :: j ou. _ I <^ rai-, 

read yur --n ^iH. It i^ in ^ecui.n 7. 

. _ .-,«.v^ --r t^e- I ^-^nU loio^' which 3ne ym have 
" '^. "'T.'Vi': I J-T^'«''3 rep., s. .;iaa,. -- ^-c- --Ftpr ■'ou lia'- it, 

^. last; I read ,nc.__ After»rcs i^ -=,=-; ^1 St u'a; al.e. 
it v/os teiea Dver the r.rose ahc » '■-^'^^:-"/"' , „,„.i.,„eel a representoi Ion 

;srsstSa:L:^."^:v:«2;eL, ,^ e^^io..^.. 

s5:i;^,;-n7tL;:-«'tJ^r«:^e''St£iS Sisne.: the. .h,.i. 

haVe the sane ..i-tection as otherv/ise. 

,- .^ 4--ii^ -qii "^''^t! ca:--riot workpeople 
SE-TA^OH VIAdTSR: Y.u caan-t sav uo t.iis, - -^- 

iHileso y3u eir^loy t.iis laan." 

'■■R. :2-Z:Ci: Ko, Sir, TJliat is the ^-;^pTsite7 

S'^"7A~'0r. "TAG-Yril: "v"liat is it? 

^ i--'-i^v' irii T-' i-i -'rde-'' t'; wTrk here. 
,.. .... T^^v. v^.^. rill liave 'o : j-in tne laoox xlii ... i- -■^>- 

a lai3:r ir^anization? 

^ T x, ^e-prt his ri.^ht t. 'belong tD it, "but 
m, :1MS?-Y: You arc carefvd t, .asseit .iio xx,,-ib 

not the c';ntr;ary. 

^. 4.^,--,,i- 'HP cnr 1 'in a lc\'bor -fcion if he 
SEYA^OR ^i.£TEH: E. ym ^^\f ^^-;,;V- ^^^^ ,-,e p.iiey which C:n^ress 
wishes? t:iG -.nly thin- is ^\^^ ^J;^?^^^;^ ^.^ ^^ thine; is tlmt this 
has declared aad put on tne s atuxe ^--; .^^^i;,,;,,, Provision ym 
sa-s y-unrast oe iair. ?nat ^^ ^ ^e el-.i. S ^^^ IsO^orers 

:^-,. s= ^out,Tho o^- -ti^:-"'. ve'S'the ric^t t. har,,ain 
desire t- oarfam collectively ,■ - J- -— . o-^''- 


collectively. That ic, all it c"-?es, 

SEl-IATOR GOES: Is this yotir p^int , . tlu-it t_iere are certain rights of 
labor ^-ua-ranteed in this "bill anJ. n~t entrn.sted t . the C-iscretion and 
povrer pf the a. ninistrator, while -n the ~ther aancl there are certain 
f-juidamental ri;';;;htG 3f the er.iployers, mt expressly ^if^aranteed, 'out are 
corimitted to the discreti::! and power of tae aclministrator? 

LiR. KHRY: Ex-ictly. 

SLImATOFl ld]SD: Have yju prepared an arnendnent to ca.rry this out? 

h'H. ]iJ.IZHY: les, Sir, That is, -nly with respect to that subject, -.1 
raised other questions here oefore you cajne in. Unfortunately I did 
not have tne benefit -^f your oresence to call aot-ontio:-. 'to. : 

I liave only one- other Matter. I just v.'ant in tliat connectionj 
if I may, to call ;; our attention to this, oecause all we are saying is 
tliat this should te a fair equation and fair to hoth ^oarties, :and for 
all thini^s, do not vrite anything into this act tliat operates to create 
a discord and ureal: any long estahl i shed relations mutually sat isf rectory 
to h^th sides. If it stimulates t^iatliind of a/dtation, then any ^ain 
in t.:e objectives at v/hich thir is aimed is frustr-^.ted at tie start. 

SEITATOH &OEE: In speakin/.; of equation, would tliat in your judgment in- 
volve licensin;;,' labor organizations as v;ell as employers? 

k?.. ZliEHY: I said,, ;Lf you arfe goin,<,- to enroloy coercion to compel the 
einployer to abide by a policy set u:.-^ by the administrator, -"ou iiave to 
have similar cntrol over employees. If you say to the employer, "You :■ 
must observe the walges and hours set up here," 'what is his x)rotcction 
if he enters, as he must, upon c-^ntracts and agreements, and then 
he is bO be c nfronted at so e sta^e if his c'ntract with new demands, 
new requests for lon/^e- or shorter h:ojrs, or whatever they may ''oe , ¥liat 
protection ha,D he? ' ; 

SirJATOR CO'TALLY: I thoui;ht he •■ vas . ■- rotected by tlie protection all of 
2"ou have, t: jack uo the price some way. . .... 

Mh. SlvItlSY: It is easy to jac]c up the price, bi'it it is iiard-. to market 
the_^:ods a.t that time, 

SEITAT'OH GOHE: The contract you liavo in mind is where a contractor or 
manufacturer a^-^rees to manufactiire an article at a certain -^rice t-- be 
delivered six r.ionths afterward, fixinjj the price in tae contract. You. 
raise b.Le p_oint if labor should demand an increase in vages, ?;laat would 
be the effect on the manxifacturer? 

ilR. EMTPuY: I'.^icse arra-ngenents vdth re^,arc" t : b:. th v^ages and hours are 
subject not merely to de.:is.nds on the ->.ort of the wor?:ers. It i.iay be 
entirely justified, but they are at all times Uiider control and discretion 
of the administra-tor* ,,.He himself may cliange these at any time, lie may 
modify the a.greements and he niay suspend ■'.hem, and as I pointed ouo a while 
ago, as long a,s thiat license clause remains in' there, lie has the power 
of death over it. He can confiscate his property and drive him into 
exile if he does not obey his orders. lS7o dictator in the world has the 



pjwer t.iat lies iii iii-r.t license cl3,ar:.e. 

ST'AIOr. '"Ad'Ex'.: Have 3- ^u strsngthened t\e bill with yonj- provision? 

. ^L. ELIERY: It xn-^c. ; rep.tlj- ip^ir-^ve it, would ""li s-orpport it if v/e 
put t.:;3C in? 

?I]I"AI'0:; '"AG-'T]?.: It is ecraally difficult to "-newer citlier \"ay. 

]■?.. J.'. ~-?.7: I just want to call your atte^itijn in regard- to t.ia.t to the 
fair vay, cecause it is ~'ftern referred to. Talce ou3.- British brethren 
?ver tncrc. ric , is the way they make prrvisior. in themr fundamental law. 
This is from. the. Trade ITnion Acts of 19?,7, which is the c :)nt rolling-, 
statute in relation to trace "■anions in Prea^t Eritain, 

SSTA-TO:^. CrOhL: Eow Im,^ in tlxit act? 

HH. EjZEPY It ^ccit.iies a-, out ■'■ printed pa^ es, 

SEllATCH v-CId:: 'Till yor. put t:r..t in the r-cord? 

'.'3.m ':2l'S::l'Ii I sliiill be very f-;lad t" c'.o co, I f. ; ""t h^ave it with, mc , 
but I have it at c:o 'ffice, I vmild lihe tD read these two sections. 
Section 6: 

(l) It slmll mt be lawful f r o.ny l^cal :v 
■ ther 'o.iblic authority t: ::iahc it ?. condition 
of the .cmployaent or continuance in errroloyment 
:f any pcson that he sha.ll or slia-ll not be a 
y.-.enber of a trade vnion, or to 'in^ose any con- 
ditions upon pcrs.:ns eraployed by the authority 
whereby einployees who are ot ".lio are not r.iembers 
of a trade "anion a,re liable t > be placed in any 
respect either directly :r indirectly under any 
disability' .r disradvanta^^e as corpared with other 

(3) It sh-^ll not be lav.'ful for any local "'r other 
.'oublic authority to riahe it a condition of .-^.ny en- 
tract mare or pro2oosed to be ; 'ade v/ith the ruthority, 
or of t,.:C conoiderotion of acceptance of any tender in 
corinection with such a contract ,. tivat any ~-'erson to bo 
entployed .by any party to the contract shall or shall 
not be a., ncmber of a tra,re fiiion, 

H'iiey ^p very far in thot act., hou see t;iat trade unions arc recog- 
nized, Y'u will see all or,'po,nizati "ns , both CT:fr;oloyers ' a,nd emploj^- 
ees', ho,ve only the oeneficient side but they protect the fpncral public 
in that res'oect. 

SE::ATOd GOEZ: Tho.t was passed after the general strike? 

■-?.. ELffiEYj Yes, oir; and it lived throU(^,-h the labor adininist.ration thjo,t 
held -ffice for 2 years, v.'ithout the sli;ohtest modification, 




lill, LII.3HAEL; Af.'iain, I repeat, that confidence is tne essential . 
factor for revivin,^ the vheels of industry — confidence that employ- 
ment relations e::istent at the tine act takes effect, irxitually 
and satisfactorily estahlished 'by and botncen employers and employees, 
T7ill not "be luidully disturhed except "by mutual agreement — confidence ■ 
that such rela-tions 'vill not he destroyed 1)3' agitation and influence 
assumedlj' required by Federal or State provisi"'n and authority, llo 
management of industry rill willingly hn deprived of its right to 
advise freclj'' with its employees as to the minimu.m -'ago and the ma:<;imujii 
hoxirs and all other conditions of ^7ork and production, which the 
business will afford or -oerrait, especially with a provision where it 
maj- ho hailed into a district court because of. an alleged violation of 
"interference, restraint, or coercion" as such conferences would 
undoubtly be interpreted or charged b"'' some representative of a 
labor organization. 

It is common Icnnwlcdgc tho.t in the Fodcral and State Labot 
Departments the words "col"'cctive bargaining" have- been universally 
interpreted to mean collective bargaining by and through the organizers 
or representatives of labor unions, '-'hercas vg know collective 
bargaining is practiced every day between employees and en-o?oyers in 
thousands of individual establishments. 

Suppose, as provided in Section 2, the President shov.ld designate 
the United States Department of Lrbor, and v.dth the consent of the 
State labor dejbartment, to o^dminister all labor provisions of the 
proposed act? Based upon past observations and experience, there 
would immediately be established the influence of the Federal and 
State Governments toward the compulsion of unionization of the vas* 
majority of em;;^:iloycos in industry, who arc not at present •unionized, '■. 
a.r'd^ it would be difficult in many cases for them to continue their 
e:qiressed and demonstrated preferences and actual existing practices 
of making imitually satisfactory agreements with craiDloycrs. a 
condition would instantly cause apprehension £i.nd confusion, instead of 
the confidence so nccesT.ary for improrrcmLnt of pr Sunt conditions. 

(*) 73rd Congress, 1st Session, 1-Ia.tionr.l Industrial Hccovery , 
Hearings on S. 1712 and H. R. 5755, before the Senate Finance Committee, 
May 31, 1933, pp. 379-381. ... 


., -125- 

It is true that omplo^'ccs no'-; possess and havo al'Tays had the 
rirht to or^janizo and bargain collectively, and the inclusion of such 
provision in the act confers no nev? privilege, except "by inference and 
the interpretation as reputed to 'have "been e:cprcssed before the T-Iouse 
comnittec by officials of labor and similarly expressed in a recent 
speech in ITeTi York. Such intororctation is, of course, contra,ry to the, 
•nrovisiop.s of subsection (b) of this section, rhere omploynent conditions 
:r.r.,: be established by rratual agrcecents betvrecn employers and cnployees, 
By.t the balance Df this clause (1) as norr Tirittcn virtuall3' s^ays that 
the em-nloycr siiall not be poriaittcd to take any action to protect or 
defend his organization and business from an;'' ill-advised attempts to 
brrak do'Tn existing agreements anC. morale Thich has ^^roven most rraccess- 
ful i:- operfttion to the large ma^-ority of American e-iployecs and 
en-:)loy..;rs alike. Smpl6yers arc not seckin.;?; controvoraies occasioned by 
such interpretations, end they vrant to contribute all their thought and 
effort and m^ans to the successful operation of this act. B'o.t in 
the interpretation of this section, as above reputed ,to labor officials, 
it is conterrjlatcd by then tho.t all employ^^es in industry must organize 
into labor unions, nhosc re-oresentativcs .propose to negotiate and 
conclude with representatives of given trade industries, agreements 
as to hours, wages and -working conditions for that industry, vhich plan, 
in our judgement, is imoossible of successful consu-nraation. If sach 
a plan were physically -oossible or s"uccessiul, tto T7ould certainly o 
observe more th;-n 7 to 10 percent of cn'ol^yces in g-: inful occ^'.ipations 
belonging tolabSr orf.'anizations today. 

Appointed by the late President ■ITilson as a mcr.ber of the 
national YJar Labor Boo.rd, during the great rrar, I had opportixnity to 
observe for 13 months the operation of just such a license as is pro- 
vided in this clause (l), and -rhile endc^avoring to render a service to 
my country at T7ashington, organizers -nere sent, and -orcpared and sub- 
mitted on behalf of some easily influcneed employee^, to^ that Board, 
a complaint of alleged gricaances a,gainst -rac and my company. ITeedless 
to say, the complaint --as dismissed, ,as the complaints •'^ere not sub- 
stantiated, Furthermore, our plants have never been closed one day 
in the past 35 years on accorjit of labor controversy, Employers have 
no f^ar of the ultimate effects of thesejinterprctations, lrj.t they wish 
to avoid the loss of time to themselves and their enployces in contro- 
versies or litigation, ^here t'.-icj have no" established the machinery 
'"hereb;/ the representatives of employees at frequent intervals meet 
^uth the rv-pr'-scntativcs of mcjxagement and disci'.ss and settle all 
questions rrith respect to hours, ■',7ages, cjid working condition?. 

Durin'i the -oast 3 years of depression no one can su.cccssfully 
challenge or ctiticise the sjnnpathctic interest and substantial 
sacrifices that the majority of employers have manifested in the 
sustenance of their employees and their families in industry, whether 
the;' have heretofore operated as closed union shops, or as open shops, 
"^hcre union s-nd non-union m.en have_ la.bored together. T7e hold no defense 
or tolerance for those employers who have sought to e:qploit their 
employees in an;' manner whatsoe^^er. The;' should and will r^-ceive their 
just condemnation, Fortvinatel;/, the;'' con-^ititute a ver;- small minority 
of American emloyers, 


But these statements and appeals arc nadc for the pur-oose of 
maintaining those cordial and-muttual relations rrhich should and do 
ohtain today in the majority of American industry \7here employers, in 
addition to pajincnt of highest prevailing uages, have voluntarily prov- 
ided pension systems tornhich emrjloyecs have not contrihutod, where they 
have cstatlished group insurance for the sole, 'bonefit. of employees and 
their families, where they have provided accident and health relief 
provisions in addition to those provided hy compensation lans, and all 
of vrhich provisions have proved groat blessings to millions in this 
period of distress and unemplojTiicnt. As 'before stated, employers do not 
seek or desire any ad-^antage or disadvantage over their eirroloyecs in 
carrying on under this proposed legislation, "but they ask terms 
under which they are expected and required to cstahlish msicimum hours 
of work and minimum' wages and wholeheartedly seek to rehabilitate 
industry and s-orcad employment and relievo distress. 

If, as aboTo indic'^.t cd, it is ;or.oposed to pro"."ide Federal and 
Sta.te rag^l^'.tion 'jy pjid through labor organizations, of al]. cn"iloyment 
conditions, with prohibition of cmpo3''crs' consideration, e:cpr.:-ssion 
or action, against what he ]aiows to be impossible or o-opressive con- 
ditions, then the purposes sought to be accomplished will be defeated. 

In vie'- of these actual conditionsand practices, wc ask cither 
the elimination of this section ar its modification, so that employees 
and employers arc given CTjual rights in their future conduct. In clause 
(3) of this subsection, provision should be made whereby crar)loyoes as 
well as employers shall comply with the conditions therein contemplated. 

As stated a.t the outset, emoloyers will patriotically and 
earnestly sup-oort the woi-kable and possibly successful objects of this 
legislation, and these remarks and appeals arc offered solely in the 
interest of harmonj^ and progress for your uost earnest consideration 
for' whatever thby may be vrorth. 


AF?Si:3IX II - ? 

LIS. HOOK: Lir. Chnir'ir.n, I do not -orrnauic to r-prcsont an;'' ;'^oup 
c::c ^it tho cori^oration of v.-hich I hory:)Gn to be president. Kove-.':'r, froifi 
niirav:ro-a5 conferences rhich I hare had. v/ith l;:.r3C niiiiitiors of c::ocatives 
of tlio steel indiistr;'', and v^ith nanii-f^-ctiircrs in otliur lines of industry 
I an qMite confident tlvt I ropr;.';>ont tlic -.-icrpoint 'yiich is very gen-; 
eral i i indvistry to dry. 

7e lia-/c sfi-ie 7, COO men on our -irrf roll. Therefor.. I thinl: I repre- 
sent, a fair nnifoer of crToloyces. The weight tiir.t 2"ou gi-.e to uhatevcr I 
night saj'' vill ID'C dettrnined "hy 7"our oiiinion as to v.'hethcr or not I ai,i 
qualified and competent to spor,;-: v.'ith vc s-)^ ct to the ma,tters rhich I am 
going to call to z'oa-j: attention, so in passing I siinply r/ant to say to 
you that I have •^■pne throu,.jh the ranJ.s of the employee class, if you 
may term it fm^t. In oth.r rrorc'.s", I started 35 years ago as an office 
boy in the st'jel indvistry, rad ho.-.e gone thorough the various positions 
in the operating division first, and then in general charge ''f the 
affairs of the coKT3cn.y. As a worker I s-oent a year and a half v;or'iing 
Sunda'"s r.:id uz-n: ' nights vrithout compcnsati'-m in ordv.r to become pro- 
ficient in '. s]:ill cd job, Icno'/n as a "roll t-arns^r", so that at one 
time I --as in the ranks of the slnlled ror'-:er. Therefore, it seems 
'7ith this bacl:gro"'Jnd I can pro-ocrly come before you end. present the 
vicrrooint vrtiich I --ish to rir^jsent. 

Realising that your time is IxHitcd, and that you liave rcxjuosted 
\7itnosscs to be brief, I 'Till mo„h-e this just e.'r; brief as possible, 
and instead of reading this ver;/" short statement at the end of Y,'hat I 
have to say, I rrill reod. it p.ovr and then ^ explain several of the state- 
ments '■•hich I h?;.c ;.i£ide pnd retire. 

The corporation i-^hich I re-nr.- sent and, I tlxin": I may add, the vast 
majority of all induBtria.1 coroorr tions in the United States, arc in 
h^^arty sjTipatlxy "ith the objects of the proposed legislation. Judging 
from the e:q)ressions of the chief c::ecutives of tteel com^';anies rep- 
resenting not less than 85 per cent of the prodv.ction of the country, 
I can confidently' state that this industry is anxious and \7illing to do 
everything in its poncr to cooperate nith the President in his efforts 
to increase enplo^rmont throiigh 'the encouragement of business volume and 
the fair distribiition of available ^7ork, 

(*) 73rd Congress, 1st Session, national Industvi. a l Hccovory , Hearings 

on S. 1712 o/nd K.H, 5755 before the Senatt. Finance Committee, June 1, 1933, 

K)v-, 380-589. 


- 128 - . 

He would "be a poor citizen indeed who did not "brin^^ to your atten- 
tion provisions or lack of provisions in the act which would militate 
against a successful accomplisliment of the desired objectives. 

I think we must all a?ree that never was there a ler^,islative pro- 
posal of such magniture, so all embracing, and with the delegation of 
such tremendous pov/er and authority as is contemplated in the "bill 
under consideration. Therefore, it should have the most careful, calm, 
and thorough consideration before the wording of the bill is given final 

In our opinion there was never greater need for the most careful 
consideration of the form of organization and personnel of the adminis- 
trative body. The success or failure of this most commendable experi- 
ment will depend as much upon able and fair administration as upon the 
sound, coordinated, and cooperative effort of industry itself. 

This statement is meant to imply no lack of confidence or faith in 
the fairness or ability of the President, but the character of support 
which he receives will determine whether his shoulders will support the 
burd-en which has been placed thereon. 

There are two things which I wish particularly to bring to youx 
attention for your careful consideration: 

First. The happy relationship which has existed between employer 
and employee in this country during the past 10 years, and particularly 
during this period of great personal and corporate suffering should not 
be endangered by any wording in the bill which would permit of misinter- 
pretation or imply a privilege on the part of the employer or on the 
part of those not employees of a corporation which it is intended they 
should not have. I am quite sure _ that it is the desire of Congress as 
well as the President to recognize the right of employees to bargain 
individually «r collectively and to belong to or not to belong to labor 
organizations as they choose, and that where collective relations exist 
or are established, they should be in any form which is mutually agree- 
able to the parties, and in which their respective representatives are 
designated without interference by either party or by those not con- 
nected by eraplojTnent with the industrial corporation in. whose plants 
the questions. of ho-urs of labor, rates of pay, and other working con- 
ditions are under consideration. 

I offer for your consideration ■'onder section 7: 

(a) The following in substitution for the present wording in 
the bill: 

1. Taat employers and employees shall have the right to bargain 
collectively in any form mutually satisfactory to them, through 
representatives of their ovrn choosing. 



2, TliP.t no cinr)loyec and no one seeking em"oloyment shall "be 
required as a condition of em-3loynent to join or to refrain from 
joining a logitimo.te labor organization. 

Second. The prine objective of the act is to increase employment 
in the industrial plants of the United States and there'bj'' caUse a narmal 
ercchange of go-^ds and services amongst the citizens of this country. 
In our' opinion the much hoped for results to he secured from. the. 
enactment of the legislation will not he accomplished unless the 
President is given authority to make such I'egulations as are necessary 
to protect American made goods and JLmerican \7orkman against the influx 
of foreign-made goods produced under lahor conditions and r/ith vrage 
rates and other conditions not coiaparahlo -ith American standards. 

With reference to title 2, it is our opinion that the nost 
equitable method of taxation irj to sprea.d a 1-point menufacturers 
sales tax over our industries. 

THE CEAMviAlI . Thmik you very much. 




IIH. LAIiCITT: I am appearing for the American Iron & Steel Institute, 
representing about 95 percent of the steel industry of the country. 

Because of a lack of cleameGS and definiteness in the so-called 
lahor 'clauses of the ITaitional Industrial Recover^'- Act, and douht as to 
the meanin:^; and intent of sone of the changes made in the hill since it 
nas intriduced in the House, and in.vierr of the recently Tridely pub- 
lished interpretation of a statement concerming these sections, and 
fearing that silence norr mi^ht he later misinterpreted, the iron and 
steel industry has thought it necessary to clearly state its position 
Tfith reference to these sections. 

It makes this statement i-ithout any antagonistic f-eling of 

The industry stands positively for open shop; it is unalterably 
opposed to the closed shop. I'or man;' years it has been and nou is 
prepared to deal directl;/ 'vith its employees collectively on all 
matters relating to their emploj'ment . It is opposed to conducting 
negotiations regarding such matters otherrrise than nith its otto employ- 
ees; it is ■unvrilling to conduct them nith outside organizations of 
labor or '.7ith individus-ls not its employees. The industry'' accordinglj'' 
lapst stroggly objects to the inclusion in the pending bill of c-W 
provisions vrhich -ill be in conflict -ith this position of the industry, 
or of any langaage vdiich implies that such is the intent of the leg- 
islation. If this position is not iprotected in the bill, the industry 
is positive in the belief tha.t the imtent and pur"oose of the bill cannot 
be ac:;omT>lished/ 

SMATOR PEED: Do you thin': that the provision in the bill 
requiring consultation nith representatives of the em"olo3''ees does in 
fact abolish the oi3en shop? 

kil^. lAiiOilT: I don't qi\ite get tliat. 

SSLTATOH 3ZZD: I get your point all right, that you do not nant 
anything done in this bill that vrill do acway vrith yoviT open-shop policy. 
Do you thinl the bill as it stands does that? 

(*) 7ord Congress, 1st Session, ITr.tional Industrial Recovery , Hearings 
on S. 1712 and H, R-, 5755, before the Senate Eincnce Committee, 
June 1, 1935, yp. 394-395. 



I'O.. U^.iOlIT: There is sone questiin r.TDout it. It is uncertain. 
It is not quite cl>ira- just -'hat the recent aunendnents do contenplate. 

TKE CI-IAIPJilAlI :. You are tcT.cin.g a-oout the House amendments? 

IvQ, LAI.SIIT: The House amendnents. 

SZTATOxi EE3D: It .ive^ the einr)lo"ees a right to he consulted 
through representatives of his 0wn choosing. Isn't thi.t perfectly 
consistent rith y->ur open~shop p^^licy? 

MH. LAlvimT: Y'is. That st'.tenant, hy itself is; ,yes. May I just 
road the section to which I refer? 

"The a-n-'-oiJiicenont also disoloccd that the pederation ^ill wse 
the ini^ustr;" recovery bill as. occasion for an or^rxiizing campaign. 
Mr. Green vrill outline a plan to thv: mooting for a quick and intensive 
driv^- thro-.ighout the country, so thr^t -"crj-ors might he hetter prepared, 
as it --as eri-iressed, to demand consic^eratir^n in the industrial agree- 
ments contemplated. 

The attitudes talcentod'ey ''oy the tro organizations \/cre in 
marked contrast to thc' statements made .V lur. G-reen and Henry I.Harriman, 
President of the Chariher of Commerce of the Unit-'d States, uhen they 
joined hands hefore the TJays and Leans Com:ittee 10 days ago in support 
of the legislation," 

The f'.ar is that tint -ould he more disturhing to industry t'liDzi 




MR. LEWIS: fir. Chairman and gentlemen of the committee, ' I appear here 
to sum up briefly the position of organized lator in America vrith re- 
gard to this industrial recovery "bill. We stand squarely "behind Sec- 
tion 7 as reported to the Senate in the House 13111, as ainendod by the 
Ways and Means Committee. It will place upon the statute books a 
good safe declaration in the form of statute that will give to the worh 
ers of this country some rights, the sajae rights now enjoyed by the 
employers and the corporations, the. rigVit to orgajiize", and to bargain 
collectively for their labor, and to be represented by representa.tives 
of their own choosing, in precisely the same form, gentlemen, that the 
Affierican Iron and Steel Institute is represented, before this committee 
this morning by a former distinguished Secretary of Commerce, Mr. La- 
ment, a representative of their own choosing. 

This neasure came from the House of Representatives largely as 
an agreed measure on the part of labor and industry in this country, 
industry speaking through the United States Chamber of Commerce,- the 
National Association of Ivlanuf ?.cturers and their various subdivisions, 
and labor speaking through the APierican Federation of Labor. 

Mr. Hajrriraan, President of the United States Chamber of Commerce, 
appeared before the Ways and Means Committee of the House and unqua- 
lifiedlj'- endorsed every provision of Section 7 in this measure. 

Till CliAIRHAN: As now inthebill? 

N21. LEWIS: As now in the bill. 

SENATOR GEOP.GS: In the House bill? 

Iffll . LEWIS: EecR.use he was there, following iCr. G-reen on the stand, 
when the so-called "company union amendment" was recommended 'by Mr. 
Green and later adopted by the Wa,ys and Means Committee. 

SENATOR GEORGE: You mean as in the House bill? 

MR. LEWIS: As in the House bill. Now according to press reports, Mr. 
Harriman has addressed a communication to this committee in which he 
expresses the fear that Section 7 will violate the true principle of 
the open shop, an afterthought, doubtless brought to his attention b;?- 
some of those irreconcilable units of industry who, with their last 
breath, vdll oppose any recognition of labor by the extension of any 
privilege to labor. 

Mr. Lament appeared this morning for the iron and steel industry, 
and stated that the Iron a.nd Steel Institute, which represents 90 to 
95 percent of the producing units of the steel industry, likewise 
stands for the open shop. That carries the implication that the open 
sho'o is an institution or a policy whereb'^ the employees of the steel 
(*) 75rd Congress, 1st Session, N ational Industrial Recovery , Hearings 

on S. 1712 and H. R. 5755 before the Senate Finance Committee, 

June 1, 1933, pp. 404-407 


industry can at will telong to a -anion or not telong to a union, as 
they choose, and that the employers are protecting the principle of the 
open shop ajid the right of employees to either telong to a union or not 
belong to a union. 

There is no open shop in the steel industry as represented by Mr. 
Lamont. There is no right to belong to a union in the steel industry. 
It is a misnomer. If any shop exists in the steel industry, it is the 
closed shop, closed to the man who wants to belong to a union. Ke can- 
not v;ork in the steel industry if he belongs to a union, and the best 
evidence of that fact is that in the steel'"plants of the United States 
Steel Corporation today there are no union men. There is no icau vzho 
dares say he belongs to a union. Hay? Because the secret-service bu- 
rep.u and the intelligence department of the Carnegie Steel Co., the 
American Sheet & Tinplate Co., the ifetional Tvibe Co., the American Bridge 
Co., all of the units of the Steel Cornoration, re-oort that man and he 
is irmediately discharged, if he attends a union meeting, or if he gives 
voice to a sentiment that indicates his desire to belong to a union. 

TliTit is the kind of open shop tliat exists in the steel industry 
which I.:r. Lamont comes here his mornin- and pleads vrith this comnittee 
to mainta,in in the future. 

SENATOR PJJfcD: Is that similarly true of the mines? 

m. LEI7IS: It is true of the National Mining Co., the United States 
Coal & Coke Co., the Fricke Coal & Coke Co., the Tennessee Coal & Iron 
Mines. It is not true of the United States Steel Co., in Illinois and 
Indiana, where they deal with the union. And, Senator, in that instajice 
the Steel Corporation deals fairly with its employees, where they do re- 
cognize the iinions in those mines. 

SENATOR REED: How about the iron mines? Are they organized? 

hR. LEWIS: They are not. Senator, and a man cannot belong to a union 
in the iron mines for the reason that the secret-service department 
would report hin, and he is immediately weeded out. 

There is no open shop in the steel industry. It cannot be perpe- 
tuated because it does not exist, cjid it is beside the question now" for 
the iron and steel industry, which last week, through a speech to the 
Iron Institute in New York, told the American people the iron ajid steel 
industry was assisting in good faith the industrial recovery act, to 
now send its representatives here to sctittle the legislative ship through 
the opening of the sea cocks in Schedule No. 7. 

Organized labor in America wants the right to organize if it wants 
to organize. Every employer has the right to join these trade associa.- 
tions, ajid the enactment of this bill will make it almost mandatory upon 
every substantial employer of labor and producer of commodities trans- 
ported in interstate commerce to join an organization for his protection, 
and through this legislative enactment there will be a closed shop to 
emoloyers and industrialists in this country in every trade and industry, 
and yet distinguished gentlemen have the effrontery to come before this" 


coraraittee and propose that, after securing these T^rivileges for them- 
selves, the]^ will. deny to the worlanen engaged in those industries the 
sejae ri.-hts and privileges which they arrogate to themselves. 

Lahor in A^aerica is tired of such hypocrisy; it is tired of heing 
dealt v;ith in such a manner ty men who proclaim the present labor re- 
lationship, as was done this morning by a representative of the steel 
industry here, as a happy state of affairs existing and a hapx^y con- 
dition. A laan who can say that labor relations in the last 10 years 
in A-nerica were happy is an optimist that dwells in a realm to which 
I cannot ascend. I refer him to the millions of workmen who have their 
standards of living degraded and their conditions of em-nlo;mient taken 
away from them, their hours of labor unduly lengthened by the arbitrary 
actions of employers, who merely posted their wage schedules upon the 
bulletin boards and told them to take it or leave it. They had no 
voice in determining those conditions. They had no privilege to even 
express their opinion as to whether the -oolicy was good bad or indif- 
ferent. " o , , 

■ I have here the figures of a coal company in Harla;i County, ¥. Va., 
that vdthdrew from the recently formed Ai'palachian Coal Sales organi- 
zation that was formed to raise the price of coal in that area, because 
they foiond it was more profitable to undersell the pool price, 'by re- 
ducing the price of their labor and lengthening -their hours, and this 
statement shows they are running their mines now an average of from 12 
to 15 hours a day, and the average per day worked underground for those 
men is 13 hours, and the average com-pensat ion received is $2.25 daily. 

They are making it impos-sible for the sales crew to function and 
they are making it impossible for their labor to live and endure, be- 
cause no mpji can work vuide-rground 13 hours a day ajid continue to main- 
'tain his health. 

This legislation, gentlemen, is intended, in the words of the Pre- 
sident, to correct the attitude of that coal operator and that employ- 
er, v;ho is the man that is dragging down industry — correct his atti- 
tude so tha,t the producers in that field may be protected sgarnst his 
discriminatory sales policy and influence him so that he will give his 
labor a reasonable day's work at a living wage. That is the purpose 
and the intent of this measure, and it cannot be accomplished in Ame- 
rican industry by emasculating Section 7 upon the petition of men who 
come here to maintain a medieval relationship in labor. 

A^ierican labor occupies a unique position in this country, because 
in the ver;r essence of things it must stand between the ra.pacity of the 
robber barons of industry of America, ejid the lustful rage of the Com- 
munists, who would lay waste to our traditions and our institutions with 
fire and sword. And the one is almost as great a menace as the other. 

Labor in America, organized labor, is trying to maintain an equi- 
librii-u.1 of relations in industry, and trying to maintain an eqtiilibrium 
of our Government in this time of stress, and in order to accomplish 
that task it is entitled to the friendly cooperation and suprjort of every 
Americpja who believes in maintaining that equilibrium so that our lation 



inight endiire, ?iid it cannot "be maintained "by folloviing the legislative 
course of action S'u^-?;ested here "by large erayloyers of lator in the iron 
and steel industry, and National Association of iiianufacturers, to keep 
from labor those rights which the masters of industry arrogate to them- 

The only parallel to this situa,tion, and this suggestion made here,, 
that noT7 coraes to my mind, is the action of the Scotch Parliament in 
1654, T.'hich enacted a statute which said that the relations between the 
employee frnd the employer were those of master and servant, and that no 
servant would he permitted in the mining industry to leave the enrploy- 
ment of his aaster without the ma,ster's consent. 

And again, they passed an act giving to the Scotch mine owners the 
authority end. pov/er to go out upon the hjTrays and public highways a^nd 
apprehend a.ll rascals and stout v?,rlets and im-oress them into service. 

Perhaps that is the kind of ajiendment to this hill ths.t the steel 
indr.strj- would like to have, the oower to apprehend n;en ajid impress them 
into service of industry and keep them there under the conditions they 
impose uroon them. That is not a, fa-T cry. It does not require anj' great 
stretch of the imagination. 

G-entleuen of the committee, I must not ta]:e more time. I appreciate 
your hrste. I merely want to sa.y in conclusion that organized labor in 
America, speaking through the .American Federation of Labor and its sub- 
divisions, ha.s endorsed the provisions of this legislation. They have 
endorsed it because they t hink there is aji emergency in the Uation that 
is hourly growing worse. There is a grave necessity for the stabiliza- 
tion of our economic and industrial processes. There is an imperative 
necessity for setting up machinery under the Government for economic, 
cooerina-tion, and regulation of processes of industry and labor relation- 
ship. Let there be no "moaning a.t the bar" when f/e put out to sea on 
this great axlventure; let there be decision on the part of e,11, and each 
will be treated according to his inlierent rights, and every American 
engaged in industry, whether he is a member of the American Iron & Steel 
Institute, the President of the National manufacturers Associo.tion, or 
the hujablest employee in your Edgar Thompson Uorks, Senator, he shall 
be accorded by this great Government of ours the equal opportunity- to 
do those things that are inherent under the great privileges of Anerican 

Labor \iill protest any emasculation of Section 7, and it says fur- 
thermoi-e tha,t industry has nothing to fea,r in a, modern rationalized la,- 
bor relationship such as can be set up and a, dministered under the pro- 
visions of this act. 

Those enployers who "ooint with fear, apprehension, and alarm to the 
ajnencj-ient, referring to com;oany unions in Section 7, need not be alarmed. 
There is nothing in Section 7 tha,t v/ill destroy the company union as it 
now exists in any plant. If the employees of tliat plant want to remain 
members of a company union, all there is in that is that the Bethlehem 
Steel Co. cannot, as a condition of eraplojnnent, force those employees 
to join a company "anion, or discharge them or penalize them if they refuse 



to do so. Tliat is all thers is in the comoany union 'oroposition, vrhich 
was inserted in the "bill "b;/ action of the feys " and Means Committes of the 
House . 

Gentlemen, I thanlc yoti for your consideration c^nd hope you will give 
these matters serious consideration, because these remarks come, as you 
must understand, from the ideals, objectives, and of Ic'.bor, and 
right from the heart of American Labor. 





THE VICE PRESIDENT: The Clerk will state the comnitte 

THE CHIEE CLERK: On losge IC, line 13, it is -orcriosed to insex-t 
the following proviso: 

PROVIDED, That nothing in this title shall ce construed to ccn- 
■pel p. change in existing satisfactory relationships "between the em- 
ployees and employers of any -osrticular plant, firm, or corporation, 
exfiept that the employees of any particular plant, firm, or corpora- 
tion shall tove the right to organise for the piorpose of collective 
"bargaining with their empilcyer as to -rages, hours of la"bor, and other 
conditions of emTjloyraent. 

I.'iR. NORRIS: liv. President, in the first place, I want tc thank 
the Senator from Mi'ssissipT)i for agreeing to a reconsideration of the 
vote where"by this amendment -as adopted in ray a'Dscnce, although I 
have been trying to" ^atch it as best I could during the entire day. 
I think Senators realize, most of us — all of us, I •oresurae — 
especially when we commence the session of the Senate at 10 o'clock 
and continue until late in the evening', the necessity, unless one is 
very discourteous, of being called from the floor man:^ times. During 
ray temporary absence this comiaittee amendment was, I think, agreed to 
as a matter of form only, thcri:! being no debate on it. I regard this 
amendment ps a very ira-Qortant one, and I hone I may have the attention 
of the Senate in the brief time I shall occu-ny in discussing it. I 
think I shall ask that a roll call be had on this amendment. If I 
can be assured of tha^t , I think it will probably'- shorten the debate 

i;IR. HARRISON: Mav I say to the Senator if that is his desire I 
shall be glad to cooperate in getting a roll call and having an expres- 
sion of the Senate on this iDrorjosition? 

IvLR. NORRIS: I thank the Senator. 

Mr. President, I am interested in this subject, because for 
several years the Judiciary Committee, at the time I had the honor of 
being chairman, had under consideration the so-called "anti-injunction 
bill" dealing with the labor problem. The committee held extended 
hearings on that bill. • Erom those hearings and the long consideration 
given the measure we found that one of the greatest evils we had to 
provide against -'-as the so-called '"cora-nany -onion." This amendment, as 
I understand and interpret it, legalizes such company unions. 

Every man who has studied the question of injunctions in labor 
disputes and the labor subject generally will, I think, agree_ with me 
that it is one of the great evils that must be met in the settlement of 
the labor problem. We thought we had net it in the bill which 

(*^ nn-^grcssional Record, Volume 77, June 3, 1933, pp. 5279-5284. 


finall.y resultedfrom oar long consideration anc is now on the st-^tute 
books, and that in l-ibor disputes we had made it imoossible for a cor- 
poration -"anting to u'e r down hea^aly uoon labor, and in effect, .aider 
the guise of a union, tomake it iraoossible, as a oractical matter, for 
labor to be represented by org-^sniz '^tion of its o^n choice, to acco^^.- 
jlish such a puroose, 

Thit oarticular provision i i the .:ill. Section 7, reestablishes, 
almost in tue identical language of that bill, tn^-- right of emiDlo^'-ees to 
OTfianiye in nions of their o-"n witaout an,y coercion of qny kind from 
any source, Hov^-ever, it adds - p/roviso which I think comes verv near 
to destroying, if it does not entirely destroy the -ffect of the l'3,ngua,ge 
which ^recedes it. This is the oro'^iso that I am. seekinf no to strike 
out. I havo no fault to find with the lA,ngaage w"-.ich orecedes it, but 
the proviso, after giving labor tne right of self-organization, the 
right to be represented in disputes by an organl^-ition of itso/7n choice, 
then imports this Language into the bill: 

PROVIDED, Th-^.t nothing in this title shall be construed to com- 
pel a cnange in existing satisfactory relationships between the em- 
ployees and employers of any particular olant, firm, or corporation, 
except tiiat the employees of any particular plant, firm, or c orDoration 
shall n-ve the right to organise for the purpose of collective bar- 
gaining with their employer as to wages, hours of labor, and other con- 
ditions of employment. 

That looks on i^:s face,. f:r. President, I thinl'" if we 'ere 

trying to .accomplish what at first blush it would seem is sought to oe 

accomplished, all we would have to do would be to strike it out, ■-■'S 

it is already in the precedin.^ wording. 

m, C0STIGA1«J: Mr. President - . 

M, FGRP.IS: I yield to the Sen-^tor from Colorado. 

tlR, COSTIG-AK; Is there not amibiguity in the e:qDression "existing 
satisf ;^ctory relationship"? 

IvER, KGHRIS: Oh, yes; there arr- all kinds of opoort"unities there. 

Iffi, GOSTI&AK: Might th^t language not oerhaps be regarded rz af- 
firmm. that all existing relationships ar^ satisfactory? 

iv'IR, NCRRIS: Mr, President, in many of these cases the conditions 
which are not satisf -ictory will a'^pear to be satisfactory on their face. 
One of t}ie methods that caoital h-s De'en using for years to destroy labor 
unions is to organise unions in tlie individual olants. The employer 
pays for the onion; he furnishes the money; he controls '"hat union as 
completely qs a man controls his own child. The emplo.vees know that 
to go against the orders of that kind of a union, naid for and maintained 
by the employer, means dismissal; it means th«t they will lose their job. 
So if t e~- were asked whetner existin,? conditions were satisfactory they 
Tfould say "yes", because to say anything else would me-n tnat they would 
lose their jobs. There nre numerous instances, all the wav from New York 



to California, '-'here tnis method has been adopted by corDorations "vhioh 
'■'■intei to orohibit their employees from joining a \inion, 

Loreover, ¥r. President, a union of laoorinr' men, t' c<= ef- 
fective must not oe confined to tne "'orkers in one olant, but muiit t=ke 
m its Bcope and under its jurisdiction all olants eng''.fi;ed in the same 
industry. Ei'-oerience hat demonstrated that that is the only effective way 
by wnic.j the laboring men may organise. I think the oroviso is a di- 
rect bio at organised labor. 

G-^'ine honest oeoole, a '-P'^at 'nanv of them, b-lieve 'n-^-t- there ooght 
to be no such thingas organized labor. If their vif^r be the- correct 
one, then we ought to stiike o.j.t this whole section and st-'- nothing 
about it; bat if we are jroceeding on the modern theory, whichhas been 
aoproved all the way from tne Supreme Court doi-n, at le'^st in exnresGions 
of sympathy for tne laboring men,- then we ought to orovide that the lab- 
oring men saall be, permittee to organize in their o"-n wav iiithout ^n^r 
coercion, without any influence from their direct erauloj'-ers, ant? that 
they shall be oerraitted to select representatives of their own choice to 
reoresent them in controversies- which they imist continually meet i^'ith 
organi:^ed wealth, I do not think .there is a. Senator here but who believes 
that the right thing t' dp and .the, necessary thing to dn, if '^e -^re to 
protect l-bor, is to get a'^'aj'' from the comoany union. 

Therefore, ir. President, I hope tne Senate will strike this 
proviso from the bill, 

IviR, COSTIGAl'I: Mr. President, rharing i"he critical atjurehension of 
the able Senator froit Nebraska as to the committee amendment, may I say 
to the Senator fron Nebraska that I am further concerned over the fact 
that certain language in line 7, on oage 10, of this section differs from 
similar in lines lb and 19 on the same oage? It is orovided in 
line 7: 

That employees shall nave tne ri ht to organise and bargain col- 

In line 18, following the ambiguous reference to "existing 
satisfactory relationships", it is provided that the employees "shall 
have the right to organise for the paroose of collective bargaining." In 
order that this language may be consistent, the language in lines 18 and 
19 sho .Id provide that the emoloyees "snail "have the right to organise 
and bTg-^in collectively. " 

Otherwise it may i^ell be argued in' tne courts that where it is 
claimed that tne relations of employers and emoloyees are satisfactory, 
tne limit of authority permitted to the emoloyees is to organi'^e for the 
mere purpose of bargaining collectively witnout any provision in the sta- 
tute inviting the fulfillment of tnat puroose. 

Ivra, CLARK: Mr. President, I should like /to. say to the Senator 
from Nebraska that, in my opinion, this uro'dio does not hav« any such 
effect ?£ he is attributing to it. The proviso was aiopted by the un- 
animous vote 0+ the comm.ittep, 1 r. Eichberg, one of the authors of the 



bill, v?ell knoi,Yn as one cf the leading labor la-yers and a leading rap— 
resentative of labor unions, w-s present and not only accepted the amend- 
ment Oiit said he thought it was very beneficial to the bill. He siiggested 
only the inserti'on of the word "satisfactory" in line 2 of th<= proviso. 

General Johnson, who has been designa,t?ed as the administrator of 
the bill, was present and said that he thoiaght the addition of the aro- 
viso vfoald be. most beneficial, and that he considered it an exceedingly 
constructive amendment. The right of the emoloyees to be free 'from co- 
ercion, to be free to organi2e iri the way in which they may see fit for 
collective bargaining is specif icpHy ,-uarariteed in spction 7 orior to 
the proviso. 

The only puroose of the amendment, the only ourpose of the 
insertion of the proviso, w^s to clarify aad state in the bill what 
was the consensu's cf ooinion of practically every '"itness who ao-oeared 
before the committee. It was not contpnc'ed on the Dart of a.nybod];- that 
it was the purpose to compel tne employees to organise in a "oarticular 
w^y 3gainct their '-^ishes. On the other hand, it was the puroose of all 
concerned to' guarantee to the employees the right to organise i'n aay way 
in vrnich they might see' fit and to guarantee the right of collective 
bargaining. That is What is done by Section 7 as it no^'' stands with the 
proviso contained in the committee amendment, I no-oe the motion of 
the Senator from Nebraska will be voted down, 

MR, COSTIGAM: Mr. -^resident, may I ask the Senator from Missouri 
whether he would nave any objection to the! substitution, 'in lines 18 and 
19 of the words "and oargain collectively" for the ournose of collective 

.MR, CL"UlK: I will say to the Se n'^ 'tor that , ^s I recall it, when 
I offered tne amendment it w-is in the form in which he now suggests it. 
It was changed at the suggestion of Mr, Richberg. 

liRm COSTIGAK: It w^^.s not my fortune to be in the committee meeting 
at the time. 

tion.T; So far as I am personally concerned I have no objec- 

i II.'. f'vol :.;r^ Unless tnere is objection I offer the amendment 
which I h.'^'A- ■jus-': stated. Is that satisf a.ctory to the Senator from 
Nebraska? ' ' ' 

IviR, KGRPJS: I am, sorry, but my attention 'was distracted at the 

IviH, GUSTIGAll: Is the Senator's motion to strike oat the proviso? 

MR, liORRIS: It is not a motion to strike, because thp question is 
on the adoption or rejection of the committee amendment. The way to strike 
it out is to- vote "nay." 



13, '.VHEELER: 'Tliy does not the Sen^^tor :f'm Color-ido -^At until 
after tie ^-^otion to atrike is c ecided? 

FE, CL.ffiK: Te do net h^ve strike it out. The qu.-:^stion Ic uti tKo 
adoption or rejection of the committee amendment. 

■ B. COSTIC-AN: I will 'vitndra''' the amendment for the oresent. 

Hi, '..HEELER: kr. President, I concur in the statement made b'^ the 
Senator* from Nebraska with reference to trie proviso. I am utterly amazed 
to hear it stated that Donald Richberg, the attorney, has said tliis amena- 
ment would oe satisfactory to labor. As a m.atter of fact, if the amend- 
ment is adopted, labor gets nothing under this section of the bill, be- 
cause, "s tile Senator from l;ebr--iska has declared, tiie laboring men '-'no 
belong to a company union do not dare to say taeir souls are their own. 
They TOuld not dare to co>,.- before iny committee of the Congress of the 
U-.ited Stp.tet and say. to that comittee tnat conditions "^ere not satis- 
factor-../, tn-t labor conditions in tneir particular industry were not 
satisi -^ctory. 

When we had the coal he-^rings we found that very situation to exist. 
It will be found, for instance, in tne railro-o. comoany anions, f'em.bers 
of those anions do nr.t dare to writp in here to r^rotest afrainst co edi- 
tions unlcs. tnev request SFcrecy ■■'ith rfference to it. That is true m 
every section of' the country. I uve in i-.y files letters comolaining , 
about l=bor conditions, o^t saying, "My name must not be used, because 
if it is usee' I "rill lose my job." 

MR, vjAGyER: lir. President, "dll tne Senator yield? 

THE PRESIDING OF 'ICtE: Does the Senator from Montana yield to the 
Senator from. New York? 

Ii'iR. ■&:EaL£?.: I yield. 

MR. WAGNER: The words era-iloyed are "existing s.atisf -^ctory relation- 
shin." The word "relationshio" is an all-embracing word and includes 
hours of labor, w.^es, methods -of e '^sloyinent and so forth. I fear, and 
tae more I reflect the m.ore the fear grows, that it may be regarded as a 
nullification of the other pro isions of the bill which outlaw the 
"yellov'-dog" contract. 

MR. WHEELER: ".'"ny, o"' course J 

y:R, 7/AGNER: This may be a leg.^li?ation of that oontract. I am not 
sure about it, but tnat is my aoprehension. 

ivR. CLARK: l.r. Presiuent, where does the Senator find anything in 
the oro.uso that could possibly be construed as a legalisation of the 
"yellow dog" contract? ;/e specifically outlaw it in terms. 

m, VtAGNER: The proviso is, "Taat notning sn^ll be construed to 
com:)el a C:iange in existing satisfactory relationships." If the par- 
tic-.alar industry is following the oolicy of employing only those who 
will agree to join the company onion and mpke that a condition of 



einploy^-pnt, it may be that this section will be construed as lesralizing 
sach contracts, at least so far as that Darticular industry is concerned, 
because that is the existing relationshi-o .and it would be intenreted 
as continuing that existing relationship, 

MR. CLAHK: In the very next paragra:ih it is oro^-ided soecifically 
that nr eTployee shall b" required as a concition of emtjloyment to join 
any company union or refrain from Joining, organising, or assisting in 
the organization of a labor union. 

ME, "vVAGJN'ER: I understand the other side of the argument, but it 
does cast doub^" upon the provision, because i-'e say "provided nothing in this 
title shall ue, construed to compel a change in existing satisfactory re- 
lationships." It nay lift th^t situation right out of the oill and say 
that those relations shall continue. 

i'/JE, Vffi£EL£R; I do not think there is any question, for instance, if 
we have a situation where there are long hours of labor, that the bill 
is intended to cover that situation. If it is going to gi-^e the labor- 
ing people of the country anything at all, it is for the purpose of short- 
ening hours, giving better wages to employees throughout the country. If 
that it not tne p.irpose of the uill, if that is not what the bill is in- 
tended to accomolish, then the laboring people of the country hive been 
grossly fooled in their support of it, 

MR, LA FOLLETTE: Mr. President, will the Senator from Montana 

IviR, ¥ffl££LER: I yield. 

iviR. LA FLLLETTE: Some little time ago in the 'debate a statement was 
made tha.t Mr, Ricnberg was representing labor organizations in his presence 
during the sessions of the committee. I wish to correct that state-ient , 
because Mr. Richberg made it perfectly plain, afte- he had Deen invited 
by the chairman of the committee to sit in during the time the committee 
was in session, that he was not acting in any representative capacity 
for any l^hor organization and that he had not so acted in his partici- 
oation in assisting in the drafting of tne bill, 

MH, CLARK: Mr. President, I would like to say to the Senator from 
"Visconsin that if I created the empression that Mr. Richberg said he 
was before the committee representing any labor union, it was entirely 
inadvertent on my oart. /hat I did say was that 'Mr, Richberg is one of 
the leading labor lawyers and one of the leading labor representatives 
in the United States, and that is unquestionably true,' I was siraoly 
illustrating the fact that he spoke from the viewiDOint of labor* 

1/ZR, LONG: Jir, President, who has the floor? 

THE PRESIDING OFFICER: The Senator from Mont-^.na ha& the floor. 

MR, LOlV'G: 7/ill the Senator from Montana yield to me? 

MR, WHEELER: I yield. _ ' ■ 



IE. LONG: Kr. Richoerg is. a railroad Ic-.tor^ attorney, wno has been 
oefore t •e Interstatp Conime.ce Commission ver:/ aaeqaately protectiag the 
ri.ntc:. o^ labor. is Deyond the scooe of his emplowpnt, if I onder- 
st.and it. I haopen to kno-7, ano I think some cf as kno- who ^anderstanc" 
tr-de ^^onions, that the mor-t iniqaitoas oractice we h-we hac to contend with 
is the cOFpany anion. It is nn organization the^^ set uo therasel^es. It 
is an organii-ation that is set uv to prevent a union that is not con- 
trolled by the coinoany. Ttiey iiave tueir socImI functions worked out in 
connection with it. They give dances in which the emoloyers oartici- 
pate. They go through that kina of thing ^ind m^ke it ^ matter of imTDOssi- 
bility for a labor union to pviat cth< r than a coc^aiy union. I" "'e 
are going to attemot to safeguard the labor union, let us not out a spider 
in the soup and maice im-oossible the very thing that -Te are trying to ac- 

IvIS. W-t'tLKV.: I r. President, it is inccnceiviblo to me that I'^r. 
^ichberg, bein^' an aole l-\i\7/-er, would for one moTient sanction a oro- 
vision o> this'kin;^. oein.^ written into tne bill if he had given it any 
consideration atall. It ^-/ould seem the minute we seek to r)ut these 
codes into ooeration for the purpose of getting better conditions for 
labor, for the ouroote of getting b tter v/ages and shorter hours or any- 
thing ol that sort, we tnen provide that "nothing in this title snail 
be construed to compel a change in existing satisf -^ctory relations." If 
that languaee re-iains in the bill, laoor gets nothing what3oev.= r out of 
the bill. Hen who are working for a company and who belong to company 
unions, -o-rticularly '.-here conditions are b^^d, dare not go before any 
committee, daie not go before any organization or any body and say, 
",/e want shorter hours or we want to do this or that." They will oe 
comoelled by their emoloyers to go before committees and say conditions 
are' satisf --ctory. v;e have had examoles of tha^ before congressional 
committees where cora.;anies would bring ttieir emoloyees before the commit- 
tee, r>aying their exoen&es, and where tne employees would say to the com- 
mittees th-rt conditions were absolutely all risht, that tney wanted, this 
or that, -hen we knew as a matter of fact that th£y were not their own 
free =-?-ents but were merely soeakine at tnat time for the company which 
thev represented becaAise they knew tnat if tney did not do it they would 
De pv^t out m tnettreets and their wives -.nd cnildren would have to go 
without food an- .jerhaps shelter." 

Let us not try to "fool the workintTm^n of the country by putting 
in a provision of this hinn. iitaer we mean to better their condi- 
tions' or to leave tnem jsut ab tney arc today. If we mean to better 
their conditions, then let us reject this amendment. If we mean to 
leave tnem in the condition in whicn they are today, if we mean to 
keep tne-m in swe^t 3ho.)S and work t lem 1^> -nd 12 hours a day, then 
tne' amendment in th- bill, nut do not go b-^ck and tell your consti- 
tuents thqt you voted to leave the provisions in the bill because you 
thought you were voting for t le rights and interests of American labor. 
30 not go back and base yo^r vote .pon tnp f ^ct that -T. Johnson or 
somebody else came before the same committee and said to that committee, 
"This is 'Entirely satisfactory to organized labor." 

As I said a while ago, I am .perfectly ama'^ec to hear the Senator 
from lissouri say that Mr. Richberg made a statement of that kind. It 



cannot be po^tfiule, it seems to me, that he, had rend this .lorovision or that 
he har: given it niiy consideration. .; It is inconceivable to me th^t a man 
wno has recresented organised labor as long as he ha,s,, just becaase he 
is going to be taken into the Government service, should completely 
cfiange hir views with reference to the necessity of protecting organixed 
labor, I do not believe, th-it Mr. Richberg would do it; but if ae had giv- 
en thii, orovision careful' consideration, and if ae hac _ given it careful 

■ taought, and then sa. d that it is satisfactory to tne organized labor 
of this country, I -shoala- say there w s som.-tnins' wrong "dth Vr. Rich- 

■berg i-rhea he m=>de that _statpraent. ■ ., 

I submit that this oec^io:-!, if -we -eally '^ant to orotect labor, 
should be stricken fron: the oill. 

■THE rRISIDIKG- LYYI^'AB.: (hr. Johnson in the chair) The question 
is on tht- 'Droviso beginning on line 13, poxe 10, on which the yeas and 
nay^ have been ordered. The clerk will call the roll, 

■f/iR, McNAEY: I suggest the aosence O" a quoriun. 

THE PRESIDirG GF'" ICfiR: The aosence of a c^uorum is sugfi-ested. The 
clerk will call the roll. . ■ 

TEE FEJlSIDING OFFICER:. Eighty-five Senators .have answered to their 
names., A Quorum is oresent. 

IvCR. HARRISON: Mr. President, q oarliaraentary inquiry. Those who 
are in favor of thf^ committer amendment will vote "yen" .and those who 
•oppose it will vote "nay"? Is that correct? 

THE PRESIDING OFFICER: Yes. The question is on the committee 

I.ZR, HASTINGS: Mr, ^resident, I .desire to propound an inquiry 
to the Senator from New York (Mr. Wagner), or to tne Senator from fiiss- 
issipoi (l r. Harrison). I wish to see whether I understand definitely 
wit.i respect to tais amendment. 

If I am correct m ray understanding, ander tais bill the various 
industries nave a right to .orescribe' a code, whicn may oe aooroved and 
must oe approved by the administrator; .and if a cert.ain industry does not 
provide any code, the administrator may himself orovide one for that 
particular industry. E.ach of these codes will have 'vritten in it these 
provisionb set Out in Section 7, giving to Inbor ^he rigrit to organi-^e 
free from rmy interference on the oart of the emoloyer. 

The inq.iiry .1 desire to orODoand is vhether, a-nv^rhere in thir; bill, 
any authority is given to the administrator or to anybody else over the 
employees of these various industries of the N.ation; or is it the piorpose 
of th'- bill to leave the employees entirely free "-o do exactly whnt they "uth respiect to every industry that hn^ adopted a code .inder this 
bill? . . . 

MR, HARRISON: It is not ray construction that the em-ployees can do 


-1^5- ■ 

^. ^-r. An T mqv say thnt the .ontention of tiip lb or 
""f,';';f. v:\"ore h' ;o.Luec Ss that if «-. wouia 
-irrS'! .plov l^l'or. tr..;, would lot o.Ject to certain 

tS ere mnstpd uoon on t,e oart of tho emoloye.-s. 

m HASIIHGS: But it is true, is it not, that tha ,tolni=trator 

-•■^ ?"- " ;j::u;r.Li: io;rorfor;on:s/orto's^rsi.^kSt- 

taatti-ey oerfectly tree ^o ,^^^ ^.r-^^ini-ie -'ith t ip Pnr,lovers? 
ly -T.i t the- olease witn respect tc b-rfeainiat 

to ,oS- -TS: £-ii= -"f4%-i^i^:r--:roS-ti,e 


,^ -rT,PT<;. ¥r ^re-ideat. I did not intend to sa- anything; but 
}m» iOPJ?IS: ^.r. .re.iot^iu, a ^^-tion of the Sena- 

certain Senator, have jast come i'-. -nd I te^r tae q. ..txon 
tor from Dela-are is jast a little misleaamg. 

The m.tter is a perfectly simple one. Section 7 (.) provides 
as follo"s: 

Every code of fair co-ioetition -- 

J. ' ^ Aa ■' -o'V imcleT- this agreement — 
That is what is f oing to op m--'.de, ■ ...o-e, iinae^. & 



It is a ixmitation upon t.e power of tho man -^^Z^^^ ^°^, 
Tart code rrnxst contain these crnditions, an tnen, after that, 
UD what the conditions arc: 

a) em.lo--ees shall have the ^rigl.t to organi-^e and bargain 
collectively tnroagh representatives of t eic own - 

And so forth; ana then it adds a .proviso that they cannot do itJ 
Tnat is the effect of + e pvoviso. 

,„ the. ■--.^!-s,-,^„rr>r:,rfo ^ts zs::?'^:^'^ ir ^ - 

one ot tne groat evils tnat -1-^°°^/^^^ lobor^ — and the question comes 
r"^f tXr'^'^Z^^^^^-^ the oroviso. and we are seed- 
ing to prevent tne adoption of th. committee amendment. 

ivH. KING: lir. President — 

ME. FGK-IS: I -ield to the Senator from Utah. 

■v FTVf. Hops the Senator cm^trae that -^^^ meaning that if a 
■ * : 'It is oet^ fi" . and raav not b^ cn.nged. and must continue 

onj-on existb it is o( T/^ ^i i- - i '^-^ . , 

to - emain? 


IvIR. rOREIS: This oroviso woxxld oretty ripprl^ nean that. 

IviE. KIHG: I do not t lin': so. 

MK. HORPIS: The proviso siys: 

PRCVIDPD, Th.-^t nothing in this title shall be cmstrued to comoel 
a change m existin- s-^tisf --ctory relationships between tne emoloyees 
and employers o-* any 'particalar olant — 

Th-t i;; a definition of q conpany .inion — 

firm, or corporation, except that tlie eraplojrees of any ■oarticul-^r olant, 
firm, or corporation snail nave the right to organize^or the puriDose of 
collective bargaining. 

That is what the conoany does with the comiD,any union. It is or- 
ganized, by the comoany; the expanses are o-id by the comDany; it controls 
the anion jastas comoletely as a master controls a sla-e; nd a mem- 
ber of that company anion is beholden to the men wno ire' o oer-iting the 
plant in vnich he is workin.-. It is a comoany ..nion. T ;^y qre not unions 
of tne ppiployees' own choice. _ney ca net, join a anion composed of roe^ 
eng-5ed m th-t oarticular cr-^ft or business. T-py are compelled to 
Join a com.pany union. It is an o .tl- w in the l-bor world. It is as 
Senators s^nd before tne roll cnll n^re, one of the gre-t reasons'wh'-^r 
labor in its straggle witn capital h-s been so often defeated. It means 
tne destruction of organised labor; and this amendment preserves those 
company unions, 

iViE. HASTINGS: Mr. President, J did not want to g^t into am^ co^^- 
troverf.y or argument with respect to this particular amendment. I 
merely v,pnted to inquire whether I clearly understood this bill. 

I might call th^ attention of the Senator from iJew York ^nd the 
Senator from Mississippi tc tne fo-t that there is a provision with 
respect to railroad labor which gives to a board the right to pass upon 
the: disputes that arise between tne emplo^'-er and the e'nplovee. That 
as I understood has alw-ys been done upon the theory that tho'rqilroads 
being quasi-public corporations, and o'eing used for t.i- benefit of the 
public, the had a- right to regulate t -.era in that way. 

If I understand this., oill, we nave no-^- :"one beyond the railroads; 
we have gone beyond those corporations that serve ti;e public, and we have 
now entered into ,an entirely new field; namely, the field of every in- 
dustry in the country, of every kind. ie are undertal^ing to control them 
onder tnis bill, -md at the same tinie we are . iving labor the right to 
make their own agreements among themselves, with no authority, anywhere, 
in the administrator or any board or anybody els<^-, to pass upon the ques- 
tions that may arise bet'.Yeen the laborer --nd tne employer. 

It seems to me that if we have put all of these .-rioas industries 
m tne hands of one man, giving him 100 per cent control of all of them, 
at t .e s-me time it might be well for us to consider whether he ought 
not to .i? some control over the people that they depend upon to produce 



the things thnt they raanuf -^cturp. 

iviR. KING: Mr. Prpsident, the interpretation nl^ced u^on the amend- 
ment offered by the S'^nator from llebraska is n,ot, in vv oninion, soond, 
and it certainly is not tne construction given to the lanf^uage of the 
amendment when it wps bein^ considered oy the committee. It was my i-nider- 
stgnding when the amendment n^a offered in the committee that it was for 
the pur.inose of affording protection to labor and to restrain efforts that 
might be m=de bv employers to interfere <7ith employees. It was designed 
also, as I u.derstood, to respect conditions where the relation Joet'Teen 
the employee and the employer were entirely satisfactory. The section as 
a whole, including the amendment now under consideration, oroperly in- 
terpreted, as I believe, is designed to permit employees to organize and 
bargain collectively t irojgh representatives of their O'^'n choosing, ajid 
further, to provide that they shall Oe free from interference, restraint, 
or coercion upon the "oart of their employers or any of their agents or 
any other person. Certainly trie language of the section not only re- 
cognizes e:-istinr' anions, anc gi.iard s and 7:)rotects the members of anions 
from any interference or coercion by their eni,jl03''ers or any other person, 
but it alsc recognizes and, indeed, g'^ar.^ntees tne right of employees 
to organi2e and to bargain collectively. Existing anions are ^reserved 
and orotected,. and onion-i to ue orgsni/ed are likewise to be oreserved 
and protected against interference or coercion. In other words^ the 
utmost freedom is -orovided to all employees to form anions or to rpfrain 
f ro ' forming luaions, and '"hether employees are unionized or not they 
=^re to be fre-^ from coercion or interference from emoloyers. 

The language criticized by the Senator, oroperly interioreted as 
I believe, declares that wher- satisfactory relations exist between emioloy- 
er and eraoloyee there shall be no compulsion to disturb such relations. 

Under this p^'ovision it is obvioas that i.-^" a ol-int is unionised thp 
pmploj'-er m.ay not interfere with such union organization or restrain or 
coerce in any way the members of s^ch union.. The employees are free to 
maintain their union, fre;^ from any interference of any kind at the 
hands of tiie eraoloyer. Tr.e anendment also provides that the eraoloyees 
shall have th-- rif'ut to prgani'-'e for the p-orpose of agreeing UTDon wages, 
hours of labor, and ot er of eraT^loyment, In words, 
tne whole spirit of "h^ section, as amended, as I interpret it, is to 
afford the greatest possible protection to labor and to give employees 
unrestrained and tuarGS trie ted right to organize and to collectiyelv bar- 
gain as to wages, hoars of labor, and so forth, 

I do not read into the language of the proi^osed amendment the 
slightest interference ^dth labor in its dealings with its employers. Em- 
ployees may organize or not as they please; they may form unions or 
other forms of organization if t-.ey desire. Any interference upon the 
part of employers with their employees or with organizations now in ex- 
istence or that hereafter shall be organized would come within the 
denouncement of t'ae statute. 

I have, alwa.ys Delipved that labor had the right to organize and 
to collectively with employers. Ky recollection is that I 
organized the first mi;iers' union in my own State, and upon a n'omber 



cf occ^.sions r.r-.ted .v,f: for ujiion la'bor, I 

In our capitalistic system there is much to be said in f.-ivor of 
the organization of l^bor. That labor has derived .benefits from union 
organizatir-ns must b? conceded by all, -^jid I sho.ild vigorously 0T3D0se 
any plan or any legislation that ' -^oulc interfere '^ith the desires of 
the employees. to org-ni'ze anc' tc collectively net to secure qll Ipgiti- 
mate rights and Denefits. 

iv;E. 'vTHiLlLE?. : lir. President, l^t me say that I cannot understand 
how the Senator -from 'Jtali cnn -oat thr-t construction on it, bec-'ase of 
the fa,ct thnt it provides, firs<:, th=nt a code shall oe set ud, and 
the first thing the -ode is going to contain is a provision that the em- 
ployees shall have a right tc organize and bargain, collectively and s.iall 
be free from interference, restraint, or coercion on the part of the 
emoloyers of laDor, Then it orovides that nothing in this title shall 
be construed to compel a change iu an existin- s-itisf cto-y relationship. 

There is nothing in tae :^''irst paragraph , which coalr -oossibly 
be construed as c-rmging e-:istin^- conditions if tney were satisfactory, 
but it simply means that the men themselves shall have a right to go 
out aid organize or join a onion if they see fit to do so. 

The proviso mstefid of orotectine organized laoor, inste-d 
of or^tecting the man who -T'-u-its to join a anion woald simoly in effect 
prevent him from join^ns; a union. Tne prouso would absolutely undo 
what is dqn- in tne - irst p-rt of tne orcvision. 

JiR, CLAEICt i-r. Pres3,dent, I submit to the Senator that the 
proviso woald not do any such tning. The oroviso is that nothing in 
this title shall ce construed to compel a change. Tne remaining por- 
tion of subi3=r;^groo:i (1) h^i& already provided for tie ri^ht to collec- 
tive ..argaming, guaranteeing tnat the em.ployees shall be free from 
any interference, restraint , or coercion. Subnaragraoh (2) -orovides 
that no employee -jnd no one seeking .employment s.iall be required as 
a condition of emplo^-ment to join any company union, or to refrain 
from joining any organization of his o -n -^hcice.. All the oroviso does 
is simply to say t.\at the statute sh=ll n^-t je constraed to oom-oel a ch=nge 
in a satisfactory reLationshio. 

iviS, WHEELEH: Of co^orse; but, at I £aid before, every ra^n in the 
Sena.te, I thinlc, vz-mts to see industry -compelled to give shorter work- 
ing hours. Every man in this body and' ether pody of th'^ Congress 
wants to see these sweat shoos, which in some instances today are oay- 
ing to the women and children workin in some of those Tolaces as low as 
25 or 50 cents a. day, compelled to stoo th^-'t sort of thing. 

If we put this proviso, in, we cannot ore vent tnem continuing those 
practices. What I want is some power in t lis land to comoel them to 
sto'o these -sweat shoos from working women and. children long hours, and it 
cannot be done if '-'o leove this proviso in, -because of th^ fact that 
tney will sim.ply say the working conditions are satisfactory, and they 
will getrtnepoor girl who isirorking loig-xio-ars, for small wages, to come 
forwar. d ajid say that conditions are satisf - ctory. If she does not do 



it, S'le will be thrown oat on the street. 

MH. HOBINSON of Indiana: Mr. Presiaent, is it not true that the 
net effect of this committee a^iendnent woald be to lee"^li7e the "vel- 
low dog" contracts wnorever tney are no'v existin.5? 

!v£R, VilHiELER: I would not be of that ooinion, because of +he 
fact that- the next suodivision pro-'-ides, "that no emoloyee and no one 
seeking; emoloyrnent shall be required as a condition of eraplovnient to 
join any company anion or to refrain from joining, organi^in^, or assis- 
tin;"; a la'bor organization of his orn c loosing. " 

ivER. RCl'Il^rSCLI of Indiana: Even so, if we accent this >iroviso which 
the committee has inserted, would it not nullify the succeeding state- 

iVjR, ^'tELEE: No; I do not think so. That would not be the inter- 
pretation I woijld put uoon it. 

iviR. j'JGKRIS: Mr. President, it seems to me perfectly clear that 
it might he used, if t^iere is an agreement ;io-- existing with a company 
union that has any kind of a contract, and they will say it is satis- 
f'^ctory, which they will, and especially in these times, when to lose 
a joh of most any kind meqjis starvation for the family. It may he the 
means where one e'cists now, of continuing a "yellow dog" contr=ict or any 
other kind of a contract. 

ivS, RCBIMSCII of Indiana.: That is irecxsely "fhat I was getting at. 
It woald permit coercion to oe aoolied by the employers in times like 
these, whicn woald simoly in the net effect mean legalizing the "yellow 
dog" contract. 

ivZR, B01\fE: I.r. President, frori' a som.ewhat lengthj?- experience with 
orcTanized labor, as counsel for a labor organization, I am comiDelled 
to afree wholly with tae Se.nator from Fe:jraska (Mr. Norris) and witn the 
remarks just made uy the Senntor from Ivlontana. (I r. Theeler). 

I know that labor works al>''ays at a distinct disadvantage, and I 
think i"-e are going to nake a very s=id blunder if we in any wise hamper 
the freest expression on tiie part cf organized labor grouos. I knc^ what 
the Se-.iator from Montana says is absolutely true. There are girls and- 
men working in the industries in this country who do not dare to say their 
souls are their own so far as organi'/ation is concerned, .-^nc certainly/ 
we should not h«iiEper them. 

It seems to me the language in the hill, aside from tint in the 
italics, which is +he committee amendment, is amiolp to larotect an3'- 
reasrn.-ble em-oloyer, and I thirJc it is going to be a tr'':?-ic blunder if 
we, in the enactment of so-called "-orogressive legislation ", make it 
aoparent to labor all ov^r the country that we are now trying to hamper 
these organizations which so far have been the only bulwark of labor in 
maintaining decent st-^ncards of laoor and decent working conditions. 
For that reason I am wholly in symoathy with the effort of the Senator 
from Nebraska to strike this provision out, I think there is ample left 
tr' protect any fair-minded emoloyer. 



I CO not sperJc idly alDout tliis. I "I'-ve hrf lonr yeri-s of e-:oor- 
iencp -'itli these'blens ?-.g r.tsorne;- fo": the^e ,f:rov.-jS, anc". I Izno - the 
i '■ "' '-t' ■■" uni'eL' --l-ich Iroor •or'is rll the tine, rnd in these tr:"-ic 
r:a6. tr"'in': ti;:ies it i?., foin/; to he inf.initel-/ harcei- :roi' Irhor t "> fet a 
sauare ('e'l oec'Une of the economic prns^'-tire ■ hich corrjels the"i to sta^ 
on the joh -"hether conc'.itions -re :"r,ir or not. 

i__- X. ..SIDI.'X- 0..'. ICjr.: [jhe ouestion is on r';reein;^ to the connit- 
tee aiiencjicnt .' s c_ ■ended. The /cr.z anf. nays have "been ordered, and the 
clerl: -'ill c-11 the rol-1. 

The result ivas rnnounced - jeas ])1, naj's UG, as follo''s: 

.IILIS - 31 

3ankhea,d •• 
3a,rkl ey 

Biet"'- erich 











he t calf 


hohinson, Ark. 




Vrnc enl)er/^- 





131 ack 





3yrne s 



Coolie"; :e 

Cut tin:; 
Ka.t field 
Loner: ;a.n 
Long . 
. cAc-oo 

.IS - HS 

; cCa.rrr.n 
' cCrill 




Over" ton 



I'-oljinson, Ind. 



Shi'G stead 


Thona.s, Utali 




Van Nu^'s 





3o rail 




Couz-: ns 


. ^cl'.r.T'f 

C^hona.G, OI:la. 

•jo the co!xiittee a'-endignt as ariendec". 


-.3.. ./hLZLL-.: ■ ; ;r. president, I offer an a:iendvient to cone in on 
page 11, line 3» r^ter the -ord "Pre si cent", to insert a senicolon and 
the follo'jing: 

Anc" (-1-) that e -rloyert shall not re.-ns/jrt or assist in transport- 
ing er.cloyces fron one State, covjity, cit-, or -olace to aaiother for the 
'o\xi'3ose o"'" t-~h"in" the ~ri.a.ce of len out on ctri!:e. ■ 


I -il"'. str.te tlir.t the "?urpoGc of tVie : icnC ir-y-t is ci r:!"' this: It 
pvooopec to c-cY- r. ns'": orrr.. ;rr.oV. or ■• ne' • t^v.'jjoct to Ije incerteo in tlie 
Coc''.e. I.M otlici' •7o:\''"., ti.o ".-ill rrovidev. thrt: 

Zvery code o:" co petition, ?2'^'Go.::e:'it , mc ^ icenoe prrorcnrei,, 
^rcsci'ibec , or is aiec. unc.e..- tair. title phr.ll contrin the follo"^i;i.-j con- 

Then folio-- clr-\hez (l) , (?), r :c (3), rnc' I rshed th'-t this 
foui-th conditi'^n -.hell he r.("-ded. 

Let ::e s^r: to the Senate thr.t t';o i-.r:"-.r.n -'h- I -repose to add this 
clntisc is hec.'vjie of the fact that ■•'lien the orde-x-ed the investi- 
-atio-i, "or inBtrace, -jr-on ■■hich the Senrtoi- ;"ro;i hc^ Yorh -:?,£, a, ;ienoer, 
into the corl stril:e in ?e-n;-iS7lvania, '-e found this ritixation to 
I:.i lec.iatc].-;/ "hC'^. there tt dif:'lc\ilt ' het'-'e.Ln tlie nen ar.d their enploj^- 
ers, th.:- '-rcrt cofI corioa.-nies --ent C.:r'n So'ith ar.-'. hro'a.-;ht trainload;: of 
iCearoer v:-r to Pe-nns-'lvania, shi-yaod the.: i-i i-i hor: cars and hej;)t the;-; 
there livin" al-;:ost in slaver-", one li'iht sr;;", anc" tah-in.- the -_"lace of 
those "hite -len; i-r. other Torr'.:-, ■■'- t:\o::e ■:'e;'";roes merely as stri]:e- 
breakers. Of co-art^e "'hen the '-hite 'ion returnee to ^^or];, rs: the;' did, 
a.^reein.]; after r. -fhile -'ith tlieir c-.Toloyers, tliosn he-'"roes - era thro"'n 
out of e-;-.r-.lo;:r:ient aj.irl o-nto the con-u-nitj. 

The ^:.ur-oose of this r-iond-ient ±~ sri ly to rcve-at that sort of 
practice h;" j-^-reat oraar.izations of - -ealth throu-hoiit the countr~'. In 
cor'ij '.unities ■-here such rractices rre indi-.l.-jed the:" on?. - breed disorder 
and trouble; and it see :s to le --hen or"T,nised ca-it 1 is -'join/-; to , ;et 
the op-;ortunities and the privile -op -.-hich it --ill f:et imder this pro- 
■posed ja-7 that it ou -ht to he ■ illin;'-; to :.ia.he a, part o:" itr, code the 
ajjreement that in the event it has a d.i"a.;:ree-,.ient "ith its eirolovcrs 
psaCi the enplo3'ees cerse to -orh tenporrr ilp it -'ill not brir./; into 
that con: lunitj- s'-'a.r.:r; of strihe brealcors froi.i o-u.tside The 
brin^anp in oi strile breakers has 'jeon the chief source o-^ bloo(^shed 
r.nd riot i-n prctt"/ nea:.l-p eve-ry cOitro-nitp -rhere there have been Ipfor 
tro-j.blus. Tor thrt rerson, hr. Freride-nt, I ho'oc this sjienctoent --ill 
be ac opted. 

T.IZ FhZSIDIhG- OZnCi;..: (hr. rTeele"- in the chair) The cuestion is 
on the rnonc/jjent offeree' f-p the Se-nr.tor -fror.i iio; 

The a'-iondMe-ut was re.-ir.ctca. 




The f-uiidanental princi-oles of Employee Representation Plans in the 
Industry pre substantially as follov/s: 

1. There shall not be any discrimination against any emiDloyee 
because of race, sex or creed, or r'ny impairment of or any interference 
with any right of such employee to belong to or not to belong to any 
lawful society, fraternity union or other organisation. 

y. Em":)loyees shall have the right to hold elections of their 
re"oresentatives at least once in each calendar year. 

3. In order to avoid intimidation from any source whatsoever, 
nominations of candidates for election shall be made by secret ballot 
and elections from among candida.tes so nominated shall also be by secret 
balloo. Such nominaiiions and elections shall be held on tne premises of 
the erat)loyer where the employees partici-oating therein are employed at 
times and places in each case convenient for sucn employees and after 
ample notice thereof to them. 

4. The Candidates nominated and the representatives elected shall 
be cnosen from among the employees who shall not participate in the 
management of the business of, their employer. The representatives so 
chosen shall be sufficient in number and from among the employees in 
the different tyoes of labor so that each such tyoe snnll be fairly 

0. Duly elected representatives of the employees sh3.ll have the 
right to hold their meetings without the attendance thereat of any 
representative of tne management of their employer. 

5. Procedure shall be maintained whereby duly elected representa- 
tives of bhe employees may confer jointly with one or more representa- 
tives of their employer at regular intervals, to the end that such 
re-oresentatives shall have full opportunity for fair and unhampered 
discussion vn. th such representative or representatives of such employer 
of any topic of nratual interest. 

7. In Case the duly constituted representatives of the employees 
or committees of such representatives shall be unable to agree with the 
duly constituted representatives of their employer upon any question 
relating to hours of labor, rates of pay and other conditions of eraploy- 


Ai^pendix IV (Continued) 

mant, -orocedure for a^ipeal shall be maintained, — if necessary, to the 
head of si.ich employer (in the case of a cornoration , to its cnief execu- 
tive officer) resioonsible (in case tae em-oloyer sn^'ll be a corporation, 
under its Board of Directors) for the management of the business of ouch 
ernployer, with a view to a final decision that shall be just and fair 
as between the parties interested. 

8. Such plans shall be so operated as to insure to such representa- 
tives of the eraisloyees full i?rotection in the consciGntious roprcsonta- 
tion of their constituents. 


aPFE. PI.. V 


I1;.;'.EDIATE ?:ELE4SS 'ISLE.aSEFO. 5oo 

August 31, 1035. 

LA30?. ADVISORY :^O.VRD S'i'l^-}:lE'fI! ■ 

At the close of -v nieotin^j' uOl.--y of ihe Laoor y.dvisory Board, Acting- 
Chairman '.'ii;'.ir.rn.."',reen issaed tne following statement in o eh^.lf of 'the 
li O'^rd: 

Misrepresent^ition conioels tne La'oor Advisory Ho-u'd to state virhy it 
helieves the Fi.A would court disaster by •■ccentin;; in codes any so-called 
"efficiency" or " indivicu-il uiprit" clauK;3 or other dis.guised anti-lahor 

Tae .-.orrd op'oosed this clause in one code. iTovv it finds it in 39 
other cedes recently svibmitted. Codes .'vre bein,-; r.-vised on the eve of 
hearings iio '^^^t this in. vVheti^-r r.rof accd wita in open shop 
declaration or witn r. discl-'imcr of inteat go modify the collective bar- 
gaining -iDrovisio^is of oiie ~.ecov-.ry .-■.ct, th^; wo-'din-;, generally runs that 
nothin., in tne code "snail Trf-vent th; 'i -lectioji, retention or ,'=idvance- 
ment of any e,.nloyee on tn-; ojisis of his individual .Hv-rit (or efficiency) 
without rej, rd to ais inr~':;i.j. r:i.J o or non-m-mbersnio in a, l^'bor (or otner) 

Tnis cl-'use v/ill rise bO i^l^-gue tnfi 'M-A in the workin,. of any code 
where its insertion is jerrni c oei . 

Efficiency and merit are fine worlsar.d the Board's opiosifcion is 
misrepresented into irrrolying that we would -irotect the inoffici-nt. 
This is the revival of an ancient slander on.or^ani^ed labor. Al&o- it 
signals something more important for the YSA. 

As practical men, v/i on lon^ exDerience of tliis v.;ry clause, we 
know the nrisus!-s to v/nicn " e-j'r.'ici'-ncy" !.nd ".n-rrit" are r-at. 

The hive serv'-d as a scre-n j'"-uind vi^nich cmaloyers ODiDOsed to 
any orgsxxizption cy their ein-oloyces have intiiaidated or eliminated wage 
earners favoring organizations of tneir own. The terms as ar>"?'lied have 
left the sole deterLiiinatioji of what constitutes efficiency or Jierit to 
the omplover without -•deriuate a'OT)eal by tnc worlonen who are being dis- 
criminated F-;-,ains t . 

At the present time evrrywnere in b--sic industries workmen who 
take at face value Section 7a of tae I.ecovery Act are organizing tnem- 
s elves and. asi'lng guidance and sucjort from n.-'tional unions, if those 
men should be systematically discharged, - no matter how efficient they 
had. been for years, - pjid deprived of oneir livelihood because they 
lost "merit" by joining unions, a situation of wide unrest would result 
for vnic.i in;/ ; :'1\A code containing such clauses would be blamed. We fore- 
see tnis clause, excer-oted from the code and -oostcd u-o in factories by 
recalcitrant cm~)loycr3, as if countersigned by the Administrator and 
the President, ; nd pointed to as tne justification for hiring and firing 



promotin^ and demoting, as the enraloyor -olGRses. Among tne industries 
nov/ so keen for this clause are the very ones that in the -oast have 
decimated t'neir la-bor forces to root out union .iieu, all in the name of 
individual ip.prit. . ■ 

?utu:.e victims will hardly forgive KRA because such clauoos arc 
■orefnced hy a legalism about not modifying Seccion 7y. 

The President has warned that attempts to "w.ittle "Way" tne 
effectiveness of collective bargaining will not be tolerated. Congresc 
cverwaelmingly rejected such whittling as is now being lugged into the 
back door of codes. In .the srjirit of the President's declaration and 
of Congress's ac,tion the Labor Advisory Board sets its face firmly 
against the :'Cceptance of any code with this clause destined to defeat 
the .-^ t cainaient of national recovery. 

Members of the Board ■ores^nt at the meeting,, beside the Acting 
Chairm-^n, were John L. Lewis, Pather Prancis J. Haas, John Prey, Pose 
Schneiderm-^n, Jose-':)h Pranlclin and Sidney Hillmfln. 


k L t,I '^ 2 I '-- 11 - A 
zriciJi':C' D OGUiZi'Ts c? t'ij l.jhio vll iA 3c::i jojc^ ' 

1, Statenor/b of T.H.A. tlirouf;!! its InduGtrial anc". 
Labor ii.c".vi sor" Bop.rds, AuTO-st 5. 19o3 . 

"The coTanti"^ in the prist fe-T rreehs has had rcma.rhahle evicerce of 
cooparc.tion in the common cpuse of restoring emplo-'-ment and increp.sin;; 
purchasin-c; -oo\:ev. Industria.l codes are Ipeing- introducjedj considered and 
put into effect "ith all possicle dispo-tch, and the number of firms ?-"'iang 
under th.G President's Re-emilo^nnent Agreement is inspiring';. 

"Tliis ([.'ratifying "orogress ma"- "be endangered liy differing interpreta- 
tions of the President's Re-emplo-nnent Agreement by some emplo:''ers and 

"The Industrial and Labor Adviser-'- Board Jointly a-raeal to all thor:e 
associated '^ith industry, - o'.7ners, managers and employees, - to unite in 
the pi'eserva.ticn of industrial peace. Strilres and lockouts will increase 
unemplc;Tnent and create a condition clearl:' out of harmonjT- nith the spirit 
and purpose of the Industrial Hecovery Act. Throiigh the application of the 
Act the government is sincerely endeavoring to overcome unemplo^onent thrcagh 
a na.tionrricLe reduction in the hours of vori: and to increase purchasing power 
through an increase in :7;'ge rates. This objective can onl]'- be reached through 
cooperation on the part of all those ar-sociated '".'ith industr;^. In order to 
develop the greatest degree of cooperation and the highest t-:qDe of service 
on the port of management and labor, ve urge that all causes of irritation 
and industrial discontent be removed so far as possible; that all concerned 
respect the rights of both enplo3^ers and. cmplo^'^ees; avoici aggressive action 
TThich tends to provohe industrial discord, and strive earnestly and zealouslj'" 
to preserve industrial peace pending the construction and adoption of the 
Industrial Codes applicable to all business, large and si'nall. S::cer)tional 
and peculiar conditions of emplojTnent affecting small employers and others 
whose b"o.siness circiunstajices merit special consideration '.Till be handled uith 
due regard to the facts of the situ.ation and vdth the desire to achieve in- 
crease emplo;'nnent and purchasing oov-er. 

"This appeal is me,de to the sound judgment and patriotism of all our 
people in the belief that even the most vexatious problem can be settled 
with justice and e>rpedition 'There employers and employees act in accord with 
the letter c?jid spirit of the ilational Recovei^'- Act, without fear that an;'- 
just rights will thereb;-- be impaired. In that ws^r only can the Re-eraploj^raent 
Agreement be made to apply with the fairness pending the adoption of the code. 

"To protect every interest, it is the unanimous recommendo.tion of the 
Industrial and Labor Advisory Boards of tl\e i>.tio:ial Ilecover^'- Adjninistration 
that a board to 'jhich differences ma3'- be referred should be created, this 
Board to be made ui^d of the following members: 

"Hon. Piobert ?. Tlagner, U. S. Senftor from Te^/ York, 

Dr. Leo TZolman, chairman of Lfibor Advisor-- Boa.rd 
of r .H.A. 



".Tnlter C. Teagle, chairman of InduEtrial Advif-ory 

Board, II. R. A. 
ITil.liam Green 
John L. Lev/is 

G-erard S\;ope 
Louis E. Kir stein 

"This Board will consider, adjust and settle differences aJid contro- 
versies that may arise through differing inter:Dretations of the President's 
Re-em'olo^Tnent Agreement and will act with all possible disps.tch in making 
known their findings. In return, emplo3'-ers and employees are asked to tske 
no disturbing action pending hearings aaid final decision. This Board will 
proraptlj'' proceed to estalalish such central and local organizations as it 
ra8,y reauire to settle on the ground, such differences as arise in various 
pa.rts of the countr"." 


Walter C. Teagle ' Leo 7olman 

Gero.rd Swope TTilliam Green 

Louis S. Kirstein John Jrey 

David R. Coker G. L. Berr^'- 

XI. I". Vereen John L. Lewis 

Henr;^ H. Heiraann J. A. Fra^nklin 

Austin Finch Francis J. Ilaas 

R. L. Lund Sidnej'- Hillman 

John 3. Elliott Rose Schneiderman 
Hdward T. Hurley 
ilfred P. Sloan, Jr. 
Jajnes A. Lioffett 
Henry I. Harriman 

2, Statement 'hy the President, Augn-ist 5, 1933 . • 

"Of importa,nc9 to the recovery program is the appeal to management 
and laoor for industrial peace, which has just "been sent to me for aooroval. 

"TTith compelling logic, it calls u.;oon ever-f individ\ial in toth groups 
to avoid strikes, lockouts or an;;,'' aggresive action during the recovery 

"It is a document on a par v/ith Ssjnuel Gompers' memorable war-time 
demand to preserve status quo in lahor disputes - and in addition to the 
signature of the president of the American Federation of Lahor it carries 
the signature of every grfea.t lahor leader and ever;"" great industrial leader 
on the t\":o advisoiy Ijoards of the Recovery Administration, It is an act of 
economic statesmanship. ' I earnestly commend it to the public conscience. 

"Tills joint appeal proposes the creation of a distinguished tribunal 
to pass ^:>romptly on any case of ha.rdship or dispute that raaj'- arise from, in- 
terpretation or application of the President's reeraproyment agreement. The 
advantages of this recortimendation arc plain and I accept it and herebj"- a.ppoint 
the men it proposes whose names? v/i 11 carry their own comnenda,tion to the 
countr;,'-. " 


3. Executive Order of Decemljer 16, 1953 (Vo. SSll) 


COi:TirUAi:CE O? TT-IE MTIOrAL u.boz boahd, ztc. 

By virtue of the authority vested in me under title I of . the, ITational 
Industrial ■Recover;'- Act approved J-une 16, 1933 (Putlic To. 67, 73d Cong.)> 
and in order to effectuf-.te the p^irxioses of said-act, it is here'bj'- ordered 
as follows: ■ ■ ■ - 

(,l) The national Labor B6ard, created on Aii^gxist 5, .19o.j, to "pass 
promptlj': on any case of hardship or dispute that may arise from interpreta- 
tion or application of the Presid-ent's Reemployment Agreement", shall con- 
tinue to adjust all industrial disputes, whether arising out of the interp- 
retation and operation of the President's Reemployment Agreement or any 
duly aoproved- industrial code of fair competition, and to compose all con- 
flicts threatening the industrial peace of the country. All action hereto—,, 
fore tolren "by this Board in the di schar,-'-e of its function is hereby approved 
and ratified. 

(2) The ;"jo\-'ern and functions of said Board shall be as follov7s: 

(a) To settle by mediation, conciliation, or arbitration 
all- controversies betv'een employers and employees 
which tePid to impede the iDurposes of the ITational 
Industrial Recovery Act; provided, however, the 
Board may decline to taJ^e cognizance of controver- 
sies bet"/een employers 8,nd employees in any field 
of trade or industry where a means of set-tlement, 
provided for by agreement, industrial code, cr 
federal law, has not been invoked. 

(b) To establish local or regional boards upon which 
employers and employees shall be equr.lly represent- 
ed, and to delegate thereto such powers and terri- 
torial jurisdiction as the National Labor Board may 
de terminer 

(c) To review the determinations of the local or regional 
boards where the public interest so requires. 

(d) To make rales and regulations governing its procedure, 
and the discharge of its functions. 


The TTnite House, 

December 16, 1933. 

4. 5:^:ecutive Order of Febr-gary 1, 1934 (Ho. 6580) . "^ 



3-. virtue of the authoritv vested In ne .n,der title I of the National 
IndJViar.ecove:y Act. approved J^.e 16 133 PuUcooV 7 cone.). 

and in order ^^^^^^ ^^Z^^^;^^ f^ ^'^^^^^ «- -'-- 
I",rSle:Le.\^;vrsLrsif=Uction , a) Of said act ana^he<.ndit.^ 

-SiSorofir:LirhTr:fofr;r^h;lr-jL: SpUed o?prescri.ed .- 
me, in the following namier! 

1 -«never the national Labor Board shall deter=.ine in such manner as 
it se ; fit \hat a ^^^^^f^J^f^^^^^^^^^-^ 

fr-ae-rJTe :^'s:^^ r^B^T^^^^ -ahiftref t^crsr 

ment. have requested, the x.oard *° „°°;t^"^^, j;^-^:^^?^ ..^ or other mut^o^al aid 

^ro.rDtl7 the names of those representatives -^-^/J^^^f -J^;^^^43^,, designated 
;t least a majority of the emplo7ees votxng and La.e l.een^ xet .^^ ^^^ 

to represent all the employees elxgxole J;.^J^:^2'1i' o^otection in their 
the purpose of collective bargaining or ctnei nat^^ ..i.. o- p 
relations nith their einploj-er. 

2. TTnenever the national Laoor Board slaall have ^^^^^^^l^^^^, 

and 4iall have certified the ngjnes of sucn represe-..<.-Di v«b p '*- ^^r'^i -.-^p 

tnd thfreafter upon complaint or on its o.n motion, ^e^ra^^^^^^^^ 
^ ^ch an e^loyer ^ -lined to ^ecogni.e^or^to ^^^^^^ ^, - 

:::tIon 7(1): tS Z.^^l^r. itsle^e^lnatlon pron^tly to the A^Mnis- 
trator for Industrial Zecover-y for appropriate action. 

„ „_ ,,_-,-.-.g a-iG d^^ties herein cor^erred upon the ITational ^^-'-0^^^°^^^ 
ar^ in'a.^tuon ;;: tid not in derogation of. any powers and duties conferred 
unon such Eoard hy any other ir.ecutive oraer. 

j:::ai-a:.ii- b. edossvelt. 

Approval recommended: 
::.S. J. 

The TTnite House, 

i'ehri.iar;- 1, 1S34. 

.r-r 23. 1954 _iZo^-3^1Z-l^- 

Anendnent of E::ecutive Order "-"o. S5S0 of 
Peoruar-y 1, 1934. 


; -l60r 

E;;ecv.tive Order Vo. 65.00 of Pe'bruar'^ 1, 1934 is liereb^ amended 07 
striding out paragraph numbered 2 tliereof and inserting in its stead tlie 
folloning paragraphs ' , •, . 

2. IThenever the national Lahor Board shall find that an employer has 
interfered \.ith the 3oard' s conduct of an eldcti-on.or hcts declined to 
recognise or "bargain collect ivelj/- rrith -a; representative, or .representatives ' 
of the employees adjudged 'by the Boa.rd to have been selected in accordance 
with section 7(a) or has otherv/ise violated or ife refusing to comply v/ith 
said section 7(a), the Board, in its d.iscretion, may report such findings' 
and molze s/rp ropriate recommendations to the Attornej'- General or to the 
Compliance Division of the national Recover-f Administration. The Compliance 
Division shall not revie\7 the findings of the Boo.rd but it sliall have poner 
to talie a'3oropriate action based thereon. 


The TTnite House, 

FebiTia.r?.^ 23, 1954. 



Append i x VI - B 

1. Pu blic Resolution — ITo. 4--': — 75rd Co-y:ress 
(H. J. Ees. 375) 

To effectuate further the policy of the ITp.tiorial Industrial 
Recovery Act, 

Resolved hy the Sen ate and House of Hepreseiitatives of the United 
States of Amer ica in Cor^:<ress asfieinh led. That in order to further effec- 
tuate the )olicy of title I of the national Industrial Recovery Act, and 
in the exercise of the pcvers therein and herein conferred, the President 
is authorised to establish a board or boards authorized anu directed to 
investigate issues, facts, practices, or activities of employerc or 
employees in any controversies arising ■oiider section 7 (a) of said Act 
or v/hich are burd'enin;.;^'^ or obstructin;;;, or threatenin,']; to burden or ob" 
struct, the free flov/ of interstate couimerce, tiie salaries, compensation 
and expenses of the board or boarOs and necessary employees being paid 
as provided in section y of the National Industrial Recovery Act. 

Sec. 2. Any board so establislied is hereby em"oov/ered, when it shall 
appear in the public interest, to order and conduct an election by a 
secret ballot of any of the euployees of any employer, to determine by 
what person or persons' or organizsi:ion they desire to be represented in 
order to insure the ri vht of em^oloyees to or.janise and to select their 
representatives for the purpose of collective bargaining as defined in 
section 7 (a) of said Act and now incorporated herein. 

Por the purposes of sucii election sucli a bonrd shall have the auth- 
ority to order tne production of such pertinent documents or the appear- 
ance of such Yvitnesses to give testimony ix:.'' er oath, as it may deem 
necessary to carry out the provisiins of this resolution. Any 
is'-'.ued "oy such a board under the authorit"'"' of tpis section i/iay, u;orin 
applicoiion cf such board or upon _petition of t'le person or persons to 
whom such order is directed, be enforced or reviev/ed, as the case m.ay 
be, in the same manner, so f?r as ap"ilicable, as is provid.ed in the case 
of an order of the Federal Trade CoLiiais =ion under the Federal Trade 
Commission Act. 

Sec. 3. Any such board, v;ith the approval of the Presirient, may 
prescribe sucn rules and regulations as it deems necessary to carry out 
the provisions of this resolution v/ith reference to the investigetion 
authorized in section 1, and to assure freedom from coercion in respect 
t'.;.- all electi )ns. 



Sec. 4. Any "Terson who shall knov/inr~ly violate any rule or regu- 
lation authorised under section 3 of this resolution or impeae or inter- 
fere with any member or agent of an^* board', establisned under tais reso- 
lution in the performance of Iiis duties, shall be punishable by a fine 
or not more than $1,000 or by imprisonment for not more than one year, 
or both. 

Sec. 5. This resolution shall ceasQ .to be in effect, and any board 
or boards established hereunder shall cease to exist, on June IS, 1935, 
or sooner if the President shall by proclamation or the Congress shall 
by joint resolution declare thrt the emergency recognised by section 1 

of the national Industrial Recovery Act has ended. 

Sec. 5, nothing in this resolution shall prevent or impede or dim- 
inish in any v^ay the right of employees to strike or engage in other 
concerted activities. 

Approved J-caie 19, 1934. , ■ 


Creation of the National Labor Relations Board, Etc. 

By virtue of and pursuant to the authority vested in me under title 
I of the national Industrial Recovery Act (ch. 90, 48 Stat. 195, tit. 15, 
U.S.C, sec. 701)- and under Joint resolution approved J-one 19, 1934 
(Public Res. 44, 73rd. Cong.) and in orcjr to effectu'^te the pdlidy of said 
title and the purposes of the said joint resolution, it is hereby ordered as 

Cre3.tion of the national Labor Relations Board 

Section 1 (a) There is hereby created in connection yith the Bepart- 
ment of Labor a board to be lcno'''n as the National Labor Relations Board 
(hereina^f ter ro'f'e.. red to as the Board), which shall be composed of Lloyd 
Garrison of J'l. ^:-:.j-'..-in,v chairman; Harry Alvin Millis of Illinois, and 
Edwin So Gm:. Lh oi'.-.iassachesetts. Each member of the Board, shall receive 
a salary of' $I:j,'JOJ a year and shall not engage in any other business, 
vocation or employment. Two members; of the Board shall constitute a 
quorum. A vacancy in the Board shall not impair the right of the remain- 
ing members to exercise all the powers of the Board. 

(b) The Board shall have authority to appoint such employees, and 
without re^ re to the provisions of the Civil Service laws, such attorneys, 
special experts, andu examiners ats it deems necessary for its own functions 
and for the functions of such regional, industrial, and special boards as 
may be designated or established in accordance with subsections 3(a) (l) 
and 3(a) of this order. This power, hov/ever, shall not be construed to 



a''athorize--the Board to appoint mediators, conciliators, and statistical 
ex-erts v.'hen the nei'vices oi such person? may be chtained throUi^h the 
Secretary of Labor in accord.-.nce vi'ith subsection 4(a) of this order. 

Original Jia-isdiction of t.-^e Board 

Sec. 2. Tile Boarc is hereby authorized — 

(a) To investigate issues, facts, practices, and activities of 
employers or (^aployees in any controversies arising under section 7(a) 
of the National Industrial Recovery Act or which are burdening or -b- 
structing, or threatening to burden cr obstruct, the frer flow of inter- 
state coimaerce; and 

(b) To order, and conduct elections ^nd or. its own initiative 
to tal:e ote'os t'^ enforce) its orders in the manner proviced in section 2 
nf Public Resolution 44, Seventy- third Congress; and 

(c) "lienever it is in the public interest, to Jiold hearings and 
make findings of fact rei;:ardin.;^ complaints of discriminption against or 
discharge of -em~loyce£: or other alleged violations of Election 7(a) of 
the national Industrial Recovery Act and such p-rts of any code or ag- 
reement as incorporate said section; and 

(d) 1,0 prescribe, with the amDroval of the President, such rules 
and regulations as are authorir^ed by section o of the P^ablic Resolution 
44, Seventy- third Congress, and to reconmiend to the President such nther 
rules, and regulations relatiiig to. nollective bargaining, labor reprp- 
sentation, a.nd lab^r wlections as the President is authorized, to pre- 
scribe by section 10*! a) of the National Industrial Recovery Act, 

(e) U;pon the request of the parties to a labor dispute, to act 
as a board of vol^ontary arbitration or to select a person of agency for 
voluntary arbitration. 

Relationship to Other Labor Boards 

Sec. 5(a) The Board is hereby authorized and directed — 

(1) To study the activities of such boards as have been or nay 
hereafter be createdcto deal witn industrial or labor relations, in order 
to- report through the Secretary of Labor to the President whether such 
boards should be ddsignated as special boards and given the powers that 
the President is authorized to confer by Public Resolution 44, Seventy- 
third Congress; and 

(2) To recomiaend, through the Secretary of iabor, to the Presi- 
dent the establisiUiient, whenever necessary, of "Regional Labor Relations 
Boards" and special labor board.s for particular industries vested with 
the powers that the President is authorized to cpnfc^r by Public Reso- 
lution 44, Seventy- third Congress; and 

(o) To receive frOi.i such regional, industrial, and special boards 
as may be designated or established under the tw« preceding sub-s'ctions 
reports of their activities and to review ^r hear appeals from such boards 
in cases in Y;hich (l) the board reconiuends review or (2) there is a divi- 
sion of opinion in the board or (5) the National Labor Relations Boord 
deems review will serve the public interest. 

(b) The National Babor Board created by Executive fi^rder '^f August 
5, 1953, and continued by Executive Order "o. 5511 of December 16,1935, 


shall cease to exist o.i July 9, 1934; enl each locnl or re;i,lonal labor 
■faoarc., established taider the Authority of section 2(b) of the said Ex- 
ecutive order of December 13, 1953, if it is not desif^nated in accordance 
with subsection 3(a) (l) of this order, shall cease to exist at such time 
as the ilational Labor ?.el'"tiori.s hoard shall o.eteraine. The haticnal Labor 
delations Io?rd shall have authority t.o conhuct all investigrtions and 
proceedinss bein^;? conductec' by boards that are abolished by this subsec- 
tion; and all records, pa-jers, and ;;ro;;erty of such boards shall become 
records, papers, and property of the i-Iational Labor "^.elntions 3orrd. All 
except J^l jOjQO > of the uiiexpendec funds and approprations for the use and 
maintenance of the ITationaJ Labor 3oard shall be available for expenditure 
"bj the 1^'a.tional Labor Relations Poard snd such regional, industrial, and. 
■special boards as may be designated or established in accordance v/ith 
subsections o(a) (l) or 3(a) (2) of this order, Ihe remaining $100,000 
of such unex;;)ended funds and appropriations shall be transferred to the 
Secretary of Labor for tne use of the Conciliation Service in the Dep- 
artment of Labor. All employees of boards that are abolished by this sub- 
section shall be transferred to and become employees of the Ivational 
Labor Relations Loard at their xsresent grades and salaries, but such trans- 
fer shall not be construed to "ive such eni^loyee!:. any Civil Service or 
other permanent status. 

Relationship to Other Executive Agencies 

Sec. 4 (a) The Board is hereby authorized — 

(1) To request the Secretary of Labor to exercise the power conr- 
f erred upon him by section 3 of t_ie act entitled "An Act to create a 
Department of Labor" (c!i. 141, "7 Stat. ?33) to appoint Coi-imissioners 

of Conciliation; axiC 

(2) I'o request from time to time the Secretary of Labor to dii^ 
ect officers and employees of the Department of Labor to render services 
and f^'Jimish information and otiierv.lse to ai'.- the Board in the performance 
of its duties. 

(b) The Board eh'all at the close of each month make, through the 
Secretcry of Labor, to the Presic.ent a report in v:riting of its activi- 
ties and the activities of such regional^ industrial, and special boards 
as have been designated or established in accordance v/ith the recommen- 
dations of the Board under subsections 3(a) (l) and 3(a) (2) of this 
order. Such reparts shall state in detail cases heard, decisions rendered, 
and the names, salaries, and duties of all officers and employees appointed 
under the authority of this order and receiving com-oensation directly or 
indirectly from the United States. 

(c) The National Labor Relations Board may decline to talce cog- 
nizance of any labor dispute where there is another means of settlement 
provided for by agreement, industrial code, or law v/hich has not been 

(c) TTlienever tlie J-^'ational Labor Relations Bosrd or any board des- 
ignated or established in accordance with subsections 3(a) (l) or 3(a) 
(2) of this order has talcen, or has announced its intention to tal-ce, 
jurisdiction of any case or coutroversj'' involving either section 7(a) 
of the National Industrial Recovery Act or Public Resolution 44, Seventy- 
third Congress, no other person or agency in the executive brancii of the 



Government, e::cept upon- the of the l^ational Ijs/bor 3'3lntions 
Board, oi- except =3 othcrv/ise provided in subsection 3(a) (o) of this 
order, shall talce, or continue to entertain, jui'isdiction of such case 
jr controvers7. 

(e) ^.Thenever the National Lahor Relations Bo.ard or any hrard 
desi^^nated or established in accordance with subsections 3(a) (1) or 
3(a) (3) of this order has mace a finding of facts, or i<".susd any order 
in any cac-e of controversy involving;; section 7(a) of the ITational Ind- 
ustrial Recovery Act or Public Resolution 44, Seventy^third Congress, 
such findin,?; of facts and aich order shall (except' as otherwise provided 
in sxxbsection 5Va) (3) of this order or exce;ot as otherwise recoraiaended 
by the ITationcl Labor Relr.tions Board) be final and not subject to reviev; 
by any person or a:5ency in the executive branda of the Government. 

(f) Kothinj'^ in this order shell prevent, iimede or diminish in 
any way the right of employees to strike or engage in other concerted 


rhe r/hite House, 
June 29,1934. 


Appendix VII 


AuEjast 11, 1933. 


The text of the agreement settling the st3:'iker of hosiery 
workers in Reading, Pa., w-s made public today ty the National Labor 
Board. It was the Board's first decision since its appointment by the 

Tlie text follows: 

Agreement between the National Labor Board aiid the hosiery 
manufacturers of Reading, Pennsj-lvania, and the representatives of the 
employees - each agreeing with the National Labor Board but not with 
each other, as follows: 

1. Tlie strike to' be called off iniiediately and the employees to 
report to work as quickly as work is available. 

2. The employees are to retimi to work withoiat prejudice or 
di s criminat ion. 

3. Conditions of work and w ges will be as agreed upon. 

4. Daring the week beginning Tuesday, August 15, 1933, and througl>- 
out that week, employees on the payroll of the last day on which they^ 
worked at each company shall hold a meeting, elect their own chairraan 
by secret ballot, and elect their representatives to deal with the 
management in working out agreements dealing with the relationship of 
eioployees and employer. 

5. Each works will send to each employee on the payroll on the 
last day that he was at work a notice to that effect, " wnich will entitle 
him to be present and vote at the meetin,; aforesaid. 

6. T-iis election to be held under the supervision of the National 
Labor Board. 

V. Any disagreement in interpretation arising will also be settled 
by the National Labor Board. 

8. Both employers and employees a,;ree to accept the decision of the 
National Labor Board as final and binding. 






Appeji_di-"c VIII 

FEBRUARY 4, 1934 Release No. 3125 

National Ercovery Adr:vinistrator Eagh S. Jolmson aiid Donald R. 

Richberg, the Adiainistration ' s general counsel, today issued the following 

joint strtement: 

"Because of an erroneous press interpretation issued 
yesterday of the Executive Order of the President, which empowered 
the National Labor .Board to supervise the conduct of elections to 
deterrainine employee representation in certain cases it is desirable 
to explain what is and what is not covered by the Executive Order. 

"1. - The Executive Ordtr provides a mpthnd wherrby any 
sppcific group of employees «r all the employees of a plant or of 
one employer may select, by a majority vote; representatives clearly 
empowered to act ffr the majority in their relations with their 

"2. - This selection of majority representatives does not 
restrict or caialify in any way the right cf minority groups of em- 
ployees or f^f individual employees to deal with thoir employer. 

"3. ~ Section 7 (a) affirms the right of employees to 
organize and bargain collectively throiigh reprcswitatives of their 
own choosing; and such concerted activities can bo lawfully carried 
on by either majority or minority '"roups, orgmizing and selecting 
such re^orp-sentatives in such manner as they see fit. Also in af- 
firming his right Pif collective action the law lays no limitation 
upon individual action. 

"4. - The joint statement issued by the Administratflr and 
the general Counsel on August 24, 1933, conreming Section 7(a) 
provides an interpretation of this Section, whicii has not been cliang^d 
and is not modified by the Executive Order. 

"5. - Tlie purpose of the Executive Order is to provide a 
dpfinito workable method for the selo'^tion by thft maj-.^rity of any 
group of employees of their representatives who will thereupon be 
entitled to i'^'Co^cnitign rj,;:. tne representatives of the will of the 
majority of tnc employees cU-gible to join in that so3.8>ction. 

"6. - As a practical proposition the National Laber B<'ard 
wf^uld find it impossible to deal with every controversy that might 
arise between rival groups of employees, each seeking to ropr^sent 
a fraction of employee opinion, or to conduct thousands of elections 
30 that every little group of employee's could seloct represontatives 
to represcut every fraction '^f employee opinion. Nor could any om- 
ployer maintain satisfactory relations with his employees through 



luilinited negotiations witia an indefinite moi^iber of employee 
representatives expressing every possible variety of opinion. 
Tile most important question to be solved in carrvlng out the 
purposes of Section 7(a) is to determine who are the representatives 
of the majority of the employees affected. It is for the purpose 
of solving that problem that the Executive Order was issued, which 
in no way excludes the exercise of ricjht by minorities or indi- 

"7. - As has been pointed out frequently the right of 
collective bargaining is not the right to obtain a specific contract 
because a contract must be the result of an agrcbment, and neither 
employees nor employers can be compelled to enter into a specific 
contract. But it is to be assmied that if both eraploj'-er and employees 
are assured that the representatives of the employees have been 
selected freely and Vv-ithout coercion to represent the desires of a 
majority of those affected, then any contract resulting from such col- 
lective bargaining will stabilize employi:ient conditions and produce 
the most satisfactory teiatiqns possible between employer and employees. 

"8. - In so far 'as the stateneht in the press release might 
be read as saying'-that eurr)loyees' representatives in all company \mions 
are chosen by employers it was not so intended as thdre is no evidence 
that such is the case. Nor is it true that employees if permitted to 
act in their •own"free choice,"' m.ay not select a company union (meaning 
local ■;plant union). ■ The -principal purpose of the Order was to insure 
that the choice be free -- not fo influence the choice between any 
particular form of employee organization. 

"HJC-H S. 'JOiHISOr.! 





1"C. X - 1-'', 

1. All industries operatin,--, under approved coc.e'o '.I'^'iicii s jeciiically 
.irnvide for the creation of agencies for the adjiistmeut of individ\ial 
l?bor complaints and labor disputes, will di at el y set up such p-encies 
as rcqaired ay the code unless they have already done sn. 

2. All industries ooeratinj onuer approve' code'^: whicii provide for 
the creation of rn agency to hancle Ishor dispiites excluGively, will create 
such Ex^ncj iminediately, if they not alreauy done so, end in accltion 
will create an r;";ency to handle lahor complaints, 

3.- All inc.ustries o^jeratin3; under approved codes. v/hich provide I'or 
the creation of jn p ency to hrn.'le Isoor complaints exclusively, will 
create such p' ency immediately if they have not elready done so, and in 
addition will create an agency to handle l?bor disoute^--. 

■\ Industries o'^)erating ap .roved codes vh.ich do^ not soeciii- 
cally provide for the creation of agencie:; tr hanule labor di-^^utes nnd 
Ic-bor conrjlaints are rem.iested immediately to jroceed in each ca'^.e to 
create an Ind^Astrial Relations Coinmittee to hanc'le both labor complaints 
and labor di suites. 

5. Industries will he governed bj the irocedure and sxiggested 
standards of F-IA, Btilletin Fo. 7, (Part T'.ree, paregra.phs I, II, an^- III) 
in creatin- these coranittees. All ina.stries which alreaoy liave Industrial 
Relations Couuaittees vdll report iuu.iediatcly to the Ac''a-ninistrator on the 
pers'^nnel, scope and functioning; of the Committee. 


'"u ;h 3. Jolinson, 

l.iarch 30, 135* 



APPEiiDi:: - IX -5 

July 27, 1934 

la3l::i cojiflaiijts Ain) jisput£:s 

3;- virtue of the o.uthority vested in ne uiicler the ilational Inclus- 
triaJ. P.ecover;' Act, I liere'b;'- prescrilie tne fnllc/ing re^jalaticns, suoer- 
sedi;i£; Administrative Order X-12. 

1. Ad'iiiiistrative Order X-13 is hereuy abrocated. 

2. '7it"-i respect to labor C'>;.Tplr.,ints: 

a. Code Authorities that have not c?J.ready done so, are request- 
ed to sao;:it to' tne Ac .""-inistrator for aoproval, plans for the handling 
of laoor co;'iplaints. Until such plan has "been approved, a Code Author- 
ity is net authorized to handle la.hor complaints, vath the er:ception of 
coiTplaints voluntarily registered ^-^ith the Code Authority. 

h. Complaints may he handled 'o-- a hi-partisan coranittee, if 
desired; or, if sach nethod is not depmed x^ractica'ble or desirable, "by a 
coiriitte.e coriposed of inpp,rtial nenfoers. In either event, the plan of 
orgaaiiz?„tion and t"Ue personnel of the coriimittee are subject to ajrproval 
b^r tho Adjiinistra,tor. 

c. In ^n.^Xiy instaacos, it r.lll be foiiiad practical for groups of 
related trades or industries to cooperate in establishing a, single com- 
mittee. In viev of t"ne noter.tial resulting econom^r, efficiencj'', and 
elimination of overlapping, serious consideration of this tjqoe of plsn 
is urged. 

d. If an indi.stry, due to snail size or other good cause, pre- 
fers tliat labor coraplaints s'nould be handled by the Conpliance Division, 
a reqiiest to tha.t effect 'rill be consid.ered axid a decision reached in 
t"ne ligiit of the particuloT fa,cts involved. 

S. With respect to labor isoutes: 

a. This Administrative Order does not nffect boards heretofore 
authorized to deal vrith labor disputes, 

b. Inoustries are not required by "iQA to set uo boards under 
codes, for the handling of labor disputes. Any industr3^ conterrolating 
such s. board should, stud;-' Public Resolution 44 of the Seventy-Third Con- 
gress ar.d the subsequent EKscutive Order 6762 of J'lme 29, 1934, creating 
the "Jationa,! Labor Helations Board and should consult said Eoard a^id the 
Adnini strator. 

c. Cases "neard b" boa,rds heretofore or hereafter authorized to 
deal i:ith labor disputes m,3y be reviev-ed by the National La.bor Relations 
Board in t"ne mtinner provided in S'ud Executive Order ilo. 6763. I-Ioreover, 
such boards maj' be designated as special boards or otherv/ise affected by 
the President acting pursuaiit to the authority- conferred 'hY said Public 
Resolution 4:4, 


Administrator for Industrial Recovery. 


ippii"Di:v x-A 



Ytoere the parties have not been able to settle their differences by 
collective bargaining, the national L.-'Oor 3o?rc. has freqiiently rccommGndcd 
?rbitration. In some esses the Boerd has acted as arbitrator itself upon 
a, joint s"..ibralssion of the disp'ite by the parties (particularly in wa;];e 
dispute cai-es). All arbitration, however, has be in voluntary and based 
upon the joint submission and consent of the jarties. 

Back Fay 

"Vhen an employer has" failed to observe an agreement to reinstate 
strikers by a certain date, the National Labor Soa.rd has recommended that 
he make restitution to those employees, by laying them back wages from the 
date of the breach of the agreement or a reasoria.ble time thereafter. 

Breach of Collective A-creeinents 

The Board has deorecated the breach )i collective agreements, whether 
by employers or em.jloyees. 

Collective Bar gaining ' 

The Board has held that the employees' ri -.-ht to bargain collectively 
imposes a corresponding; di'ty on tjie employer. Cnllective bargaining has 
been construed to requ.ire that the parties ap jroach negotiations m th open 
minds, and exert every reasonable effort to reach an agreement. So far 
as the obligations of employees are concerned; the Board has deprecated 
the calling of a. strike without attempt at negotiations or the presentation 
rf grievances. 

Compaiiy Un ion 

The Boarci lias riile d that' organization is a matter exclusively within 
the control of the employees. It has counselled a, "hands off" policy on 
the part of the employers. It has condemned the initiation of a company 
union by an employer and the .artici jation by him in its affairs, where 
such initiation and participation have, in effect, been an interference 
with the employees' self-organization, or resulted, in fact, in the 
domination of t::e organization by the employer, and where the employees 
have not clearly consented thereto. 

The Board has held that the mere fact that an election of represen- 
tatives has been coiducted iinder an employee representation plan does not 
constitute approval of the plan itself. It has drawn a distinction between 
plans which were fully s'lbmitted tp the -emoloyees for their acceptance or 
rejection, and olans which were imposed upon them. 

(*) Adapted fnpm "State ment of Labor Board Princi-ples Issued to Boards " 

NRA Release Tf4688, April 3C , 193^".; and~ "I T&tional Labor Board Principles 
with Applicable Cases, August ;^, 1953 to'jaly 9, 1934 ". BLRB Release 
#134, A-ugust 21, 1934. 


Disclostire of Ernolt yees' Hame s; 

It is iinnecessary for a collective "bar-slnin-; agency to disclose the 
names of those it represents, when it seeks to har^'^ain collectively ''.'ith 
the employer. 


The Board has rioled that the discharge of employees "oecaTise of their 
imion activities is contrary to section 7 (a). The Board has ordered the 
reinstatement of employees v/hose dischar,<5e it fcimd to have heen discrimin- 
atoi-y. ther f'^'rms of discrimination have heen held imlawfiil or improper, 
such aa ..emotion, I'^ss of seniority status, discriminatory non-reinstatement 
and discliarge for orotest against probahle P.K.A. violation. 


The Board 1:13 s employed the device of an election by secret ballot under 
rj-overnmental supervision '•hen an employer has questioned the authority of 
any individual or agency to act as the re iresentative of his employees, and 
when a substantial number of employees have reqv.ested that s. poll be con- 
ducted. The Board Ims held that an election is a matter which concerns the 
employees exclusively and that the employer can in no way interfere with 
the conduct of an election. 

In certain cases tie Board has restricted the franchise to employees 
on the pay roll of the company before a strike. In other cases it has 
extended eli.^ibility to the employees on the oay roll on the date of the 
election or tlie Board's decision as well as to those strikers v/ho manifest 
a desire to be reinstated, or to those em.jloyees whose charges of discrim- 
ination are sustained. In still other cases the decision of tne Board 
has not specified v;hich persons shall be eligible to vote, but has left 
that to subsequent decision by the Regional Board conducting the election. 
Except for these sp^ecial situations, the practice has been to jeniiit all 
employees (except strictly temporary ones) on the :ay roll on the day of 
the election to participate in the ballot. 

FoTOi of Contract 

The Board lias approved various forms of contract for designation of 
the collective bargaining agency chosen by the employees. In the absence 
of agreement by- the parties the Board has recommended that the collective 
agreement be made by the employer and the employees' agent, whether 
organization or individual, as representative of the employees. 

Interf er ence 

Discriminatory discharges, - Initiation of company unions and partici- 
pation in their affairs, - Restrictions on the qualifications of represen- 
tatives for collective bargaining, - Transfer of work to other factories, 
changes in corporate stricture and tranfer of plants to other cities, - 
•r the shut-dovm of a plant. 



Jurisdiction of the Board 

T'le Jnarc^ st-'^ted its jurisdiction to bo defined b:, the executive 
Orders of Leceniber 16, 1933, aiid of Fcbr-osry 23, 1934, to "adjust all 
industrial disp-.:-te3, whether arising out d'f fhe'-interf.retation. and. operation 
of the President' s'Reem-cloyinent Agi'eelTtent or an^' drdy approved, industrial 
code of fair competition, aid to^ compose fell conflicts threatening tne 
industrial oeece of the country", and the investi^ratiQn of facts surround- 

mg alleged violations .of 7 {&). 
Jur i s dl c t i onr-l I'ds^u-ces 

Trere in the construction of Government oroiects. the conflicting 
labor cr-'sAizstions are unable to settle the dispute by negotiation or . 
are unv/illing to submit the dispute to a bnarcl of arbitration, or w,icre ^ 
tne Jtnerican^ Fee- ration of Labor has failed to adjust the controvprsy,^ the 
employer may then determine which union shall receive the disputed wor.c. _ 

ivlajority F.U-le 

-he re^oresentatives selected by the majority of the employees ^^dthin 
a given olalit or department, nre the sole collective bargainiiig agency 
for the plant or dejartment. 

"Llew Hi,::ht.s"£estP\-'ed on Zmoloyees by Section 7(a) 

Section 7(a) conferred new rights upon employees, viiich cannot be 
impaired by the existence of an organization sponsored by the management 
prior to the IT.I.H.A. -or the' effective date of the applicable code. _^it 
a substantial number ci employees petition the IJational LaDor Eoard or 
an election for the dioice of representatives, the Board will contact such 
an election despite the fact that representatives have already been _ 
selected for a term ^joider a ■plan which they had no opport^jnity to accept 
or reject. 

Eonr- appearance Before 3o s_rd^ 

^he -o^rd has uointed out that tne non-appearrnce of parties before 
the -.iatiorr^l ai.d Regional Labor. 3oards prolongs controversy.^def eats tne • 
ourposes of the II. I. H. A., and malces .. impossible f^^^/^^^^^oard folly 
to ascertain the .ertinent facts. The ioard has deprecated the tendency .... 
of certain employers to apoear by attorneys rather than m person. 

Preferential L ist 

In a ruliiv^- terminating: a strike,- the Board has frequently recon^nend- 
ed that an employer,, if busines. conditions, d. not pemit ^^^^^ J^^J^^^^,^ 
the strikers at once, should place them on a preferential, list and reinstate 
them in oraer of seniority before hiring any ne-^ employees. .he Board has 
.ften ^ii-ged the division of work among em.:.loyeca in order to exr>edite 
reinstatement from such a preferential list. In a n^.ber o. ^^^^^/^ .^^/^^ 
the Board foundthat the . evidence did.,not: .sustain a finding of discriminatory 
dischar..-e, it has .nevertheless. recDm..ende.c:i that remstaxed before 
any new^employees,,,are hired, in oxder, that harmonyand good will may be 
reestablished in the plant. 




The board has ordered reinstatement as a remedy for discharge "hich 
it considered discriminatory. It has frequently recommended or ordered 
the reinstatement of sll strikers at the conclusion of a strike if bus- 
iness conditions permitted. The Board has tended to couch the order of 
reinsto.tenient in mand.atory in cases in which it felt that the 
strike nas Justified and/or that it resulted from a violation of Ian on 
the part of the employer* 

In a, number of these cases the Board has expressed its opinion tha.t 
the stri.hers were entitled to priority over employees hired since the 
strike, Tlie Beard has recommended the reinstatement of strikers as soon 
as possible in a large number of other cases, ^'dthout using mandator3'- 

"Re-ore sent at i yes of Their Gvn Choosing ". 

Employees may select any re-prerentatives whom they choose as their 
agents for collective bargaining. The employer may not restrict their 
right of free choice in any way. Since the word "representatives" in 
Section 7(a) is used in its generic sense, emxiloyees may select a union 
as their representative, 

" Seli'-Orgajni zgt ion " 

The Board has ruled that the tenn "self-organization", as used in 
Section 7(a), means organization wholly free from interference by the 
employer: organization and representation concern the employees exclusive- 
ly, aiid an employer may not, under normal circumstances, initiate a re- 
presentation plan in the absence of a request from the employees. 


Reinstatement and placing on a preferential list in order of senior- 
itj-, ai'ter a strike, has frequently been recommended for the purpose of 
avoiding all question of possible discrimination. 

Shut-do'.-n of Plant and Transfer of Work 

The Board has conderaneo. the moving or shut-down of a plant, the dis- 
solution of corporations, and the transfer of work to other factories when 
it found, thait an employer took such action in order to interfere with the 
self-organization of his employees. It has directed the reinstatement of 
eraijloyees of the old plant in the new one, i-,-hen it found tha.t there had 
been discrimination. 

Strikers as Employees 

Although the ITational Labor Board has made no explicit ruling stating 
that strikers are employees, a, number of decisions ordered their partici- 
pation in elections or their reinstatement, or both, and thus treating 
them as employees. 



Union kc ^--''^^-7 ^i^T-ing TJorkin^ Hours' 

fered vitia the employee's -'ork. 

Tlie Board hc^s ruled that strikin.^; employees who have been proven 
ine _)oaio, ucvb iux et-r-ikp nped not "be reinstated, 

guilty of violence in the course of a strike neea noL u 
Se Board has often recommended tnat special tribunals be established 
to determine the question of violence, in oraer to avoid the delays m 
volved in court proceedings, 
vnt.. Of v.vnlovee r. Regarding Acceptance _of_loMALs. RgcQinmendatlcns 

In the case of a precipitate strike, .here the ^^-f^^l^^^^^l'^ 
as to whether the union membership desires to continue the ^^J^e the 
Board has recommended that employees vote ^^^^^"^J^^^^^Jf,, :,^:^"""' 
whether they vrish to accept the Board's proposals for settlement. 

Written A^reem.ent 

The Board has often recommended that agreements -^ich are reached 
between employers and employees should be reduced to v^ritm, m 
to avoid later conflict and insure certainty. 





ITiiile the interpi'etation of section 7 (a) is not free from diffi- 
culty a.t so'ie points, we have scuf^ht to develop a. tody of decisions 
in harnony \dta the lajiguaBe of the statute and the intent of Congress 
as maiiifested in the hearings rnd debate's on the National Industrial 
Recov,ery Act. As the Board, stated in its decisions in the Houde 
£ngineerini3 Corporation Case: 

"Section 7 (.-i) must te construed in the lignt of the tra- 
ditional practices i7ith 'rhicn it deals, and the traditional 
Lieanings of the \~ords vrhich it uses. Tflien it spealcs of 'col- 
lective iDargaining' it caii only be taJ-ien to mean that long- 
ol}served process vrherelDy negotiations are conducted for the 
purpose of arriving at collective agreenents governing terms 
of employiaent for some specified, period.. And in prohibiting 
aai;r interference with this process, it must have intended 
tho.t the process shoulc' "o^ encouraged, and. that there was a 
d.efinite good^ to be obtained by promoting the stabilization 
of eraployrient relations through collective agreements." 

Ill this the 3oa,rd to section 7 (a) a, fuaidanental construction 
similr,r to that given the compr.rable provisions of the F.ailway Labor 
Act -^f 1925 by the Unitec States Supreme Court in Texas and New Orleans 
Railroad v. Brotherhood' of Railway and Steamship Clerks , where Chief 
Juctice Plughes wrote for a ijnaninous Court: 

"The leg,?2it;/ of collective action on the part of 
enplojrees in order to safeguard their proper interest is 
not to be disputed . It has long been recognized that 
enployees are entitled, to orgp^nize for the purpose of 
secvjring the red.ress of grievances pno. to promote agree- 
ments with employers relating to rates of pay ajid con- 
ditions of work. Americaji Ste e l Foundries v. Tri-City 
Central Trade Council , 257 U. S. 134,209. Congress i7as 
not required to ignore this ri ^ht of the employees but 
coulc". safeguard it and seek to mr^:e their appropriate 
collective action an instrument of peace rather than of 
strife. Such collective a.ction VTOuld be a mockery if 
representation were made futile by interferences with 
freedom of choice. Thus the prohibition by Congress of 
interference vdth the selection of representatives for 
the purpose of negotiation and conference between em- 
ployers pmC. enployees, instea,d nf being an invasion of 
the constitutional right of either, was based on the 
recognition of the rights of both." 

(*) National La.bor Relations Boa.rd, Si?:th lionthly Report, 
February 12, 1936, pp. 3-5 



Actir.g en thin frjicTr,nent,^l polic'/ gjicT constriction, the Board hr.s 
in itt. iioi'ii- c.ecisions to oate aou^.-ht to give content to the legal i-iehts 
anc: c.uties" errpressed 13-- Congress in Section 7 (a), in their applica- 
tion to the man:'- factixal Eitiio.tions i::. \7hich the:-- arise. 

(1) C o 11 a c t i ve Bar f :ai r. in- . The ri'ht r ;:' enployees to "bargain col- 
lectivol-- carries '---ith it a correlative CcAj on the part of the employer 
to 'oarcair- vritii taeir representatives. '.Tithout this d\ity to bargain the 
ri :ht to ' ^70uld be sterile; and \je do not believe that Congress 
intencec. t \-"rif ht to be sterile. The employer is obligated by the 
statiite to negotiate in ro-^f faith -Itla his enployees' freely chosen re- 
presentatives, to rratch their proposals, if unacceptable, 'rith counter 
proposrls, a..d to na':e ever^" reasonable ef'/ort to reach pxi agreor.ent for 
a -o'esioC. of ti-i.e. Thus erepty decl.'^:ro.tionE by the enployer of villingnr-ss 
to comer ■■•ith union representatives, offers to adjust individual griev- 
pncec as the" prise, or nere asesnt to those tens or derrirxnds as' are 
fo-ojid saiisLactrry, -7itiiout an understanding as tr duration, do not con- 
stitute cr::pli.-ncc -rith tlip st-.tute. 

T-iile tlie failure tc r':^ducp jin. <",gree- lent to --ritin-'- is not neces- 
sarily a violation of thp la'% ' the 3oard has frequently urged thr-t this 
action be tcJien, as consistent vath business e:-pedienc^,^ coranon sense, 
and the :;eneral purpose of the statute to stabilize industrial relations 
upon a basis clearly ezrpressed aiid mutually ag-reed upon. And fne insis- 
tence 'cy ra enployer that ne "Till go no farther thra: tr enter into an r'-reernent na" be evid-v-.ce, in the liht of other fcircumstaaices in 
tne case, of a denial of tli- right of collective bargaining. Igain,^ 
vhile the breach of a collective .agreenent is not in itself a violation 
of tne statute, the joarc" :,rs held illegal tho •■Tholesale discharge of 
employer's in violation of nji ir.plied term of such agreement or "onder- 
staiiding vithout e:aiausting the processes of collective bargaining, since 
the enployer is obligated, to bargain c'^llectively before modifying or 
terminating pii agree-nent, arrangement, or -onderstauding. The Eoard has 
prescribed the activities of so-called "run-a,-:ay enrpl'oz'ers" rrho sought 
by t:!'^ transfer of their business to .other localities to avoid their 
prior agreements or understandings -jid to defeat the right of their en- 
pl03'-eps to collectivel'^ . 

(2) i:a,1ority R-gle . acting en the viei-j that ar.y interpretation ^f 
section 7 (a) miich in aractice -,'ould nanper self-organization and the 
mailing of collective agreements cannot be sounc" , the Board in the Iloud e 
Engineerin, : Corporation case eribra-ced the na.jorit^- rule. It is there 
stated ar follo-^s: TJhen a -lerson, con uttee or or.^anization has been 
desi-T-o.ted '^j the najorit- of enploye'-s in a plant or other appropriate 
unit for collective bargaining, it is th.e right of the representative so 
designated to be treated by tn.e erployer as the exclusive bargaining agenc;- 
ofaUthc ^.vsilo'jes in tne -unit, a:id the emplo3^er's dut^'- to nahe every rea- 
sonable effort, n'hen reouected, to arrivpTfitu this prepresentative at a 
collective a.greement covering terms of eraplo^Taent of all such employees, 
'.7itno-ut thereby denying to any ei.rployee or group of eiroloyeer the right 
to present griev^inces, tr .confer rdth their eriroloyer, or to associate 
themselves aid act for ini'cual air or protection. This construction 
accords 'vith ij-ifirican traditions of political denocracj'-, uith 
est-ablished custom in industrial relations, '-utli the decisions of 
the ITational Lafoor Board, aad rith those of the National 'Jar Labor Board 
a^-d the I.ailro,ad Labor Board iinder statutes or pronouncements similar in 



puri^ose and fit3 quently strikliiv;ly simil-r in lanir^:ua,<';e to section 7 (a). 
It ;iaG been extiressly c -cii'ir.'ded no less t;ian f.ii'.ee times by the Presi- 
dent in his Ezecutiye Orders, those of '■"'eliraary 1, 1934, with refer- 
ence to the national Labor I- oard, and of Jurie 28 and September 26, 1934, 
establishin,^/ the Steel and Textile Labor relations Boards. The rule 
Tiras exoressly v/ritten into the HailV'^ay Lcbor Act by Congress in the 
araendvaents of June, 19o4-, '.'e believe it to be the .'-oystone of any 
sound, worl;able, system of industrial relationship by collective bar- 
t aining. 

Often the (lue;-tion ~f wiiat ind-jistrial unit shoulr' be reco£^,'nized as 
ar)"oroj:)riate presents diff icu].ties '"hicii reQiaire careful consideration. 
Plant represent;\tion may be the proper uait; ■jr ^n industrial, as a.ainst 
a craft, u:iion. The or£;anization of t";ie business, the comi.iunity of inter- 
ests, ; eorraphical convenience, lovior arf lainin; ■ relations, functional 
conerencc-- all these consider ..ti jns should be tahen int ^ a.ccount. This 
is "leculie.rly an administrative matter whic'n has been determined flex- 
ibly by the B-^ard, ha,ving in mind the ^-rcv/th and jiati^re of labor unions, 
without layin; d:vrn to? rigid gcner-'il -irinciples. The Board has s-^u^ht 
wherever "lossible to av^'id dicta,tinf: labor union policies or bein^; dravm 
into decidin^^ uiiion j"aris;-icti "nal ;'. is"putes, 

('')• Elections , The Board believes th^t the device of elections in 
a democrG.tic society has, amon^; other virtues, that of allaying strife, 
not pr:.vol':in it, ..n electi:;n is ; lerely a uevice for determining as a 
matter of loxt vdio t'.ie reT'resentatives of the majority of the em- 
ployees in t!ie rarticular ixiit. Therefore, where there are contending 
fa^ctions of crqioloyees, or a substantial nur.bcr of emploj-ees in any par- 
ticular unit c.T.11 for -n election, this sh-suld, in most cases, constitute 
.rounds fjr a:.ldini^: thr.t the r)\iblic interest requires it, 

(4). C onvoa-ny Uni c.n s , The stat..te does not render illejcal a "comiDany 
union", if by tliattcrm is siiiiiply :neant a self-organiza.tion if the employees 
in a, -particular plant into som.e form of association f:r collective bargain- 
ing or mutua.l aid or protection. 7.'iia.t the statute prohibits is the inter- 
ference, restraint or coercion of employers, or their a^:;ents, in connec- 
tion -f.'itn their eiiroloyees ' c'esignaoion of representatives ^f tneir own, 
choosing, self- organization, or ot.ier c.ncerted activities f:r the pur- 
pose of collective barga.inini, or other mutual aid or protection. Thus 
violations of laV/ mpiy arise in res'oect of tnc initia„tion, s'oonsorship, 
financial suojorrt, olections, by-laws ,r .ther .affairs of any labor 
organizatijn, including a plant or, '.ni station or company union, 

pa,rticipati u by employees in rn election under a cnopany uni'n 
lolan wnich ha.s not been submitted to them for a"o--.roval, lias been taken 
to indicate ±10 a,ff irmative acceiotance of that or^ aniza,tion as the ('e- 
sired means of clllective bargaining. In certain extreme cases of 
coercio;. 3.; c' interfere :ce or where the coTirpoony imion pl;an clearly could 
not opero.te •-£ a ioeans of collective bar, paining, the Soart .103. "is- 
q-oalified the company as a-i a;';:ency for that purpose. 

Our records shov.- that in 30 percent of the 36 cases heard by the 
3 -ard, conr;a,ny imions vreve a primary or attendant cause of the dispute. 
All but tvr,; of these u:iions were f orm.ed or revived since the pa.ssa;';e of hational In'lustrial Recovery ;,ct; and a groat majority became active 


imraediately "oeforc or after a c 3ntgnTp:.l-arv la'b-^r -union ':Tr;ani7,ing inDve- 
ment, or in clj?e relation to a Gtril:e. 

(5) ation. Tliis ic oy far the m^cr frequent form of 
interference, ? :r C3crci:;n vitli c/ioice if representatives or 
self-org.niiz.ation, 'oeini'.; involved in a;:iTr ^xinately half of the cases 
heard "by the Board, It lias arisen in a v;',riety if situations, includ- 
ing disci"ia.ri:e , lay-off, demjtion ^r tra;isfer, forced resignation, or 
division -f '-ork, anci. in connecti n vdth reinstatement following a 
C-ianje in c^rp'r;=i.te structure, strike, terrporary lay-off or transfer 
of plan'i;. In nu.ierous cases :f this t_"oe the Board has ordered enroloy- 
ees reijistated to their former positions. 


Selected Lioli^ raphy 

G'vernmcnt LTcimient: 

Legislative I :c"ui"nentati "n of tiie ilatirvial Industrial Hecrvery .Act, 73rd 
Con{:;ress, 1st Sessirn, 1933 - Billc, "earin{js and Reports listed in 
Arppendix I~£ 

Coni:,rss signal Rec:rd, Vol-umc 77. 73rd C ujTess, 1st Session, 1933 

Decisions and Releases of tlie "^ati inal Lo,b:)r Board 

Decisions and Releases ::f the Fational Labor Relations Boards 

Jlinutes of the iTRA Industrial and Lal^or Advisory B)ards 

NRA Bulletins and Releases 

HEA division of Reviev' Lator Studies 

Executive Orc.ers 

Other j'aterial s 

Dearing, C'la-rles L. et al . "T he AFC of tiie ITRA" Brookings 
Instit^it icn, Washington, 1934 

Johnson, H"U£;h S. " The Blue Earde from rd':/; t: Earth" . 
Douhleday, d'ran and Conrpany, 1935 

Lorvrin, Lewis L, and Wuhnig, .-.rth-ujr "L3''oor R elations 3oa.rds "« 
Bro'hino^s Institution, Washin/;ton, 1935 

Lyon, Leverett ct al, " The national Recovery Administration ", 
Br Dkinf^s Ins ti tut i on , 7a,shin;_^t on , 1935 

Richher^-, 1-nald R. , " The Rainh )w " , Dou''ijlec''ay, r-:ran and 
Corapojiy, Inc., Fev; York, 1936 

S'oencer, '''illiar.: 3;. "Collect ive Bar; ainin^; Un der Section 7 (a) 

of the ilg-.ti nal Indus tripl Recovery Act ", nniversit-- of Chicago 
Press, Chicago, 1935 

Tv/entieth Century "u^ad. Inc., " Lai' or and tne G'^vernm ent" , 
NcC-rav'-Hill Book Company, ITew York, 1935 

Econ-:nic Essays in Hjn:r of W. ~. liitchell, C"lunhia University Press, 
New York, 1934, Ciiapter Toy P. P. Brissenden 

9860 =r 




Executive Order No. 7075, dated June 15, 1935, established the Division of Revie* oi" the 
National Recovery Administration. The pertinent part of the Executive Order reads thus: 

The Division of Review shall assemble, analyze, and report upon the statistical 
information and records of experience of the operations of the various trades and 
industries heretofore subject to codes of fair competition, shall study the ef- 
fects of such codes upon trade, industrial and labor conditions in general, and 
other related matters, shall make available for the protection and promotion of 
the public interest an adequate review of the effects of the Administration of 
Title I of the National Industrial Recovery Act, and the principles and policies 
put into effect thereunder, and shall otherwise aid the President in carrying out 
his functions under the said Title. I hereby appoint Leon C. Marshall, Director of 
the Division of Revie w. 

The study sections set up in t he Division of Review covered these areas: industry 
studies, foreign trade studies, labor studies, trade practice studies, statistical studies, 
legal studies, administration studies, miscellaneous studies, and the writing of code his- 
tories. The materials which were produced by these sections are indicated below. 

Except for the Code Histories, all items mentioned below are scheduled to be in mimeo- 
graphed form by April 1, 1936. 


The Code Histories are documented accounts of the formation and administration of the 
codes. They contain the definition of the industry and the principal products thereof; the 
classes of members in the industry; the ^.istory of code formation including an account of the 
sponsoring organizations, the conferences, negotiations and hearings which were held, and 
the activities in connection with obtaining approval of the code; the history of the ad- 
ministration of the code, covering the organization and operation of the code authority, 
the difficulties encountered in administration, the extent of compliance or non-compliance, 
and the general success or lack of success of the code; and an analysis of the operation of 
code provisions dealing with wages, hours, trade practices, and other provisions. These 
and other matters are canvassed not only in terms of the materials to be found in the files, 
but also in terms of the experiences of the deputies and others concerned with code formation 
and administration. 

The Code Histories, (including histories of certain NRA units or agencies) are not 
mimeographed. They are to be turned over to the Department of Commerce in typewritten form. 
All told, approximately eight hundred and fifty (850) histories will be completed. This 
number includes all of the approved codes and some of the unapproved codes. (In Work M ate - 
rials No^ i§< Contents of Code His to ries . will be found the outline which governed the 
preparation of Code Histories.) 

(In the case of all approved codes and also in the case of some codes not carried to 
final approval, there are in NRA files further materials on industries. Particularly worthy 
of mention are the Volumes I, II and III which constitute the material officially submitted 
to the President in support of the recommendation for approval of each code. These volumes 
9768 — 1, 

-ii - 

set forth the origination of the codes, the sponsoring group, the evidence advanced to sup- 
port the proposal, the report of the Division of Research and Planning on the industry, the 
recommendations of the various Advisory Boards, certain types of official correspondfcnoe, 
the transcript of the formal hearing, and other pertinent matter. There is also much offi- 
cial information relating to amendments, interpretations, exemptions, and other rulings. The 
materials mentioned in this paragraph were of course not a part of the work of the Division 
of Review. ) 


In the work of the Division of Review a considerable number of studies and compilations 
of >.ata (other than those noted below in the Evidence Studies Series and the Statistical 
Material Series) have been made. These are listed below, grouped according to the char- 
acter of the material. (In Work Materials No. 17, Tentative O utlines and Sum Tiaries of 
Studies in Process , the materials are fully described) . 

I ndustry Studies 

Automobile Industry, An Economic Survey of 

Bituminous Coal Industry under Free Competition and Code Regulation, Ecnomic Survey o f 

Electrical Manufacturing Industry, The 

Fertilizer Industry, The 

Fishery Industry and the Fishery Codes 

Fishermen and Fishing Craft, Earnings of 

Foreign Trade under the National Industrial Recovery Act 

Part A - Competitive Position of the United States in International Trade 1927-29 through 

Part B - Section 3 (e) of NIRA and its administration. 
Part C - Imports and Importing under NRA Codes. 
Part D - Exports and Exporting under NRA Codes. 
Forest Products Industries, Foreign Trade Study of the 
Iron and Steel Industry, The 
Knitting Industries, The 
Leather and Shoe Industries, The 

Lumber and Timber Products Industry, Economic Problems of the 
Men's Clothing Industry, The 
Millinery Industry, The 
Motion Picture Industry, The 
Migration of Industry, The: The Shift of Twenty-Five Needle Trades From New York State, 

1926 to 1934 
National Labor Income by Months, 1929-35 
Paper Industry, The 

Production, Prices, Employment and Payrolls in Industry, Agriculture and Railway Trans- 
portation, January 1923, to date 
Retail Trades Study, The 
Rubber Industry Study, The 

Textile Industry in the United Kingdom, France, Germany, Italy, and Japan 
Textile Yarns and Fabrics 
Tobacco Industry, The 
Wholesale Trades Study, The 

Women's Neckwear and Scarf Industry, Financial and Labor Data on 

- iii - 

Women's Apparel Industry, Some Aspects of the 

T rade P ractic e S tudies 

Commodities, Information Concerning: A Study of NRA and Related Experiences in Control 

Distribution, Manufacturers' Control of: Trade Practice Provisions in Selected NRA Codes 

Distributive Relations in the Asbestos Industry 

Design Piracy: The Problem and Its Treatment Under NRA Codes 

Electrical Mfg. Industry: Price Filing Study 

Fertilizer Industry: Price Filing Study 

Geographical Price Relations Under Codes of Fair Competition, Control of 

Minimum Price Regulation Under Codes of Fair Competition 

Multiple Basing Point System in the Lice Industry: Operation of the 

Price Control in the Coffee Industry 

Price Filing Under NRA Codes 

Production Control in the Ice Industry 

Production Control, Case Studies in 

Resale Price Maintenance Legislation in the United States 

Retail Price Cutting, Restriction of, with special Emphasis on The Drug Industry. 

Trade Practice Rules of The Federal Trade Commission (1914-1936): A classification for 

comparision with Trade Practice Provisions of NRA Codes. 

Labo r Studies 

Cap and Cloth Hat Industry, Commission Report on Wage Differentials in 

Earnings in Selected Manufacturing Industries, by States, 1933-35 

Employment, Payrolls, Hours, and Wages in 115 Selected Code Industries 1933-35 

Fur Manufacturing, Commission Report on Wages and Hours in 

Hours a nd Wages in American Industry 

Labor Program Under the National Industrial Recovery Act, The 

Part A. Introduction 

Part B. Control of Hours and Reemployment 

Part C . Control of Wages 

Part D. Control of Other Conditions of Employment 

Part E. Section 7(a) of the Recovery Act 
Materials in the Field of Industrial Relations 
PRA Census of Employment, June, October, 1933 
Puerto Rico Needlework, Homeworkers Survey 

Administrativ e Studie s 

Administrative and Legal Aspects of Stays, Exemptions and Exceptions, Code Amendments, Con- 
ditional Orders of Approval 

Administrative Interpretations of NRA Codes 

Administrative Law and Procedure under the NIRA 

Agreements Under Sections 4(a) and 7(b) of the NIRA 

Approved Codes in Industry Groups, Classification of 

Basic Code, the — (Administrative Order X-61) 

Code Authorities and Their part in the Administration of the NIRA 
Part A. Introduction 
Part B. Nature, Composition and Organization of Code Authorities 


- iv - 

Part C. Activities of the Code Authorities 

Part D. Code Authority Finances 

Part E. Summary and Evaluation 
Code Compliance Activities of the NRA 
Code Making Program of the NRA in the Territories, The 
Code Provisions and Related Subjects, Policy Statements Concerning 
Content of NIRA Administrative Legislation 

Part A. Executive and Administrative Orders 

Part B. Labor Provisions in the Codes 

Part C. Trade Practice Provisions in the Codes 

Part D. Administrative Provisions in the Codes 

Part E. Agreements under Sections 4(a) and 7(b) 

Part F. A Type Case: The Cotton Textile Code 
Labels Under NRA, A Study of 

Model Code and Model Provisions for Codes, Development of 

National Recovery Administration, The: A Review of its Organization and Activities 
NRA Insignia 

President's Reemployment Agreement, The 

President's Roemployment Agreement, Substitutions in Connection with the 
Prison Labor Problem under NRA and the Prison Compact, The 
Problems of Administration in the Overlapping of Code Definitions of Industries and Trades. 

Multiple Code Coverage, Classifying Individual Members of Industries and Trades 
Relationship of NRA to Government Contracts and Contracts Involving the Use of Government 

Relationship of NRA with States and Municipalities 
Sheltered Workshops Under NRA 
Uncodified Industries: A Study of Factors Limiting the Code Making Program 

Legal Studies 

Anti-Trust Laws and Unfair Competition 

Collective Bargaining Agreements, the Right of Individual Employees to Enforce 

Commerce Clause, Federal Regulation of the Employer-Employee Relationship Under the 

Delegation of Power, Certain Phases of the Principle of, with Reference to Federal Industrial 
Regulatory Legislation 

Enforcement, Extra-Judicial Methods of 

Federal Regulation through the Joint Employment of the Power of Taxation and the Spending 

Government Contract Provisions as a Means of Establishing Proper Economic Standards, Legal 
Memorandum on Possibility of 

Industrial Relations in Australia, Regulation of 

Intrastate Activities Which so Affect Interstate Commerce as to Bring them Under the Com- 
merce Clause, Cases on 

Legislative Possibilities of the State Constitutions 

Post Office and Post Road Power — Can it be Used as a Means of Federal Industrial Regula- 

State Recovery Legislation in Aid of Federal Recovery Legislation History and Analysis 

Tariff Rates to Secure Proper Standards of Wages and Hours, the Possibility of Variation in 

Trade Practices and the Anti-Trust Laws 

Treaty Making Power of the United States 

War Power, Can it be Used as a Means of Federal Regulation of Child Labor? 



The Evidence Studies were originally undertaken to gather material for pending court 
cases. After the Schechter decision the project was continued in order to assemble data for 
use in connection with the studies of the Division of Review. The data are particularly 
concerned with the nature, size and operations of the industry; and with the relation of the 
industry to interstate commerce. The industries covered by the Evidence Studies account for 
more than one-half of the total number of workers under codes. The list of those studies 

Automobile Manufacturing Industry 
Automotive Parts and Equipment Industry 
Baking Industry 

Boot and Shoe Manufacturing Industry 
Bottled Soft Drink Industry 
Builders' Supplies Industry 
Canning Industry 
Chemical Manufacturing Industry 
Cigar Manufacturing Industry 
Coat and Suit Industry 
Construction Industry 
Cotton Garment Industry 
Dress Manufacturing Industry 
Electrical Contracting Industry 
Electrical Manufacturing Industry 
Fabricated Metal Products Mfg. and Metal Fin- 
ishing and Metal Coating Industry 
Fishery Industry 
Furniture Manufacturing Industry 
General Contractors Industry 
Graphic Arts Industry 
Gray Iron Foundry Industry 
Hosiery Industry 

Infant's and Children's Wear Industry 
Iron and Steel Industry 

Leather Industry 

Lumber and Timber Products Industry 
Mason Contractors Industry 
Men's Clothing Industry 
Motion Picture Industry 
Motor Vehicle Retailing Trade 
Needlework Industry of Puerto Rico 
Painting and Paperhanging Industry 
Photo Engraving Industry 
Plumbing Contracting Industry 
Retail Lumber Industry 
Retail Trade Industry 
Retail Tire and Battery Trade Industry 
Rubber Manufacturing Industry 
Rubber Tire Manufacturing Industry 
Shipbuilding Industry 
Silk Textile Industry 
Structural Clay Products Industry 
Throwing Industry 
Trucking Industry 
Waste Materials Industry 
Wholesale and Retail Food Industry 
Wholesale Fresh Fruit and Vegetable Indus- 
Wool Textile Industry 


This series is supplementary to the Evidence Studies Series. The reports include data 
on establishments, firms, employment, payrolls, wages, hours, production capacities, ship- 
ments, sales, consumption, stocks, prices, material costs, failures, exports and imports. 
They also include notes on the principal qualifications that should be observed in using the 
data, the technical methods employed, and the applicability of the material to the study of 
the industries concerned. The following numbers appear in the series: 

Asphalt Shingle and Roofing Industry Fertilizer Industry 

Business Furniture Funeral Supply Industry 

Candy Manufacturing Industry Glass Container Industry 

Carpet and Rug Industry Ice Manufacturing Industry 

Cement Industry Knitted Outerwear Industry 

Cleaning and Dyeing Trade Paint. Varnish, ana Lacqaer. Mfg. Industry 

Coffee Industry Plumbing Fixtures Industry 

Copper and Brass Mill Products Industry Rayon and Synthetic Yarn Producing Industry 

Cotton Textile Industry Salt Producing Industry 

Electrical Manufacturing Industry 


The original, and approved, plan of the Division of Review couLemplated rasuurcas suf- 
ficient (a) to prepare some 1200 histories of codes and NRA units or agencies, (b) to con- 
solidate and index the NRA files containing some 40,000,000 pieces, (c) to engage in ex- 
tensive field work, (d) to secure much aid from established statistical agencies of govcir.- 
ment, (e) to assemble a considerable number of experts in various fields, (f) to conduct 
approximately 25% more studies than are listed above, and (g) to prepare a comprehensive 
summary report. 

Because of reductions made in personnel and in use of outside experts, limitation of 
access to field work and research agencies, and lack of jurisdiction over files, the pro- 
jected plan was necessarily curtailed. The most serious curtailments were the omission of 
the comprehensive summary report; the dropping of certain studies and the reduction in the 
coverage of other studies; and the abandonment of the consolidation and indexing of the 
files. Fortunately, there is reason to hope that the files may yet be carec for under other 

Notwithstanding these limitations, if the files are ultimately consolidated and in- 
dexed the exploration of the NRA materials will have been sufficient to make them accessible 
and highly useful. They constitute the lar-est and richest single body of informatior. 
concerning the problems and operations of industry ever assembled in any nation. 

L. C. Marshall, 
Director, Division of Review. 

9768—6 .