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these things, unions have been of inestimable benefit to all the people. Through their efforts, and with their support, educational conditions have been improved, the level of the general health of all the people has been raised, and our national income greatly increased.

But human nature is the same, whether we look for it in the captains of industry or in great labor leaders. Excess of power makes men careless and contemptuous of the rights of others. We had a graphic example of the truth of this statement in the orgy of unrestrained capitalism in the period from 1880 to 1890. The situation got so bad that an aroused public opinion demanded that national legislation be enacted to preserve our competitive business system. In response, Congress gave us the Sherman antitrust law, and most of the States gave us constitutional and statutory provisions to protect the people against monopolies and restraints of trade in intrastate transactions. At the present time, organized labor, relying upon its substantially complete freedom from the existing Federal antitrust statutes resulting from the construction given those statutes by the Supreme Court, has become as great a threat to our competitive system and to the general welfare as was capitalism in the 1880's and 1890's. The informed citizen, who is not disturbed by the present situation, is either very callous and indifferent, or is an unreasoning partisan of unionism. The citizen who desires to rectify the evil by the destruction of unions is either extremely short-sighted or an unreasoning enemy of unions. If legislation is to be enacted which will rectify the evil, and at the same time preserve to the country the benefits of unionism, Congress must disregard the contentions and demands of each of those extreme schools of thought. I firmly believe that legislation can be enacted which will meet each of these much desired objectives.

It seems reasonable to me that the first step in correcting the situation is to carefully review the legislative and judicial steps which in large part have brought us to our present plight, and see if we cannot find in that review the key to the solution to our problem.

Prior to 1890, we had no Federal law interdicting combinations, agreements, and conspiracies in restraint of interstate trade or against monopolies. Prior to that time, such agreements and conspiracies were regarded as immoral and against public policy, and the courts would not enforce any such agreement, but the Sherman Act of July 2, 1890, for the first time, branded those agreements, combinations, and conspiracies as illegal, and prescribed penalties for those found guilty of its violation. It also provided that those injured by such illegal conduct could recover treble damages. As you all know, by its terms, the Sherman antitrust law was all-inclusive. It made no exception in favor of labor organizations or any other nonprofit organization organized and existing for the betterment of its members, and in 1908, in the celebrated Danbury Hatters case (208 U. S. 274), the Supreme Court held that it was applicable to labor unions the same as to capitalistic organizations; and in Gompers v. Bucks Stove and Range Co. (221 U. S. 418), decided in 1911, that court established the rule that boycotts by labor unions, whether primary or secondary, were violative of the antitrust laws if they resulted in unreasonable restraint of interstate or foreign trade or commerce. The construction given the act in the Danbury Hatters case and in the Gompers v. Bucks Stove and Range Co. case aroused bitter resentment on the part

Letters, statements, exhibits, charts, etc.-Continued

Van Horn, Ezra, operators' trustee, United Mine Workers of America welfare and retirement fund:

Page

Exhibits:

1. Labor's participating royalty.

918

2. Operators' negotiating committee rejection of labor's
participating royalty, etc..

918

3. Proposals.

919

4. Radio broadcast, the coal strike a public issue, etc...
5. Royalty tax on coal---

920

922

6. Health and welfare program.

923

7. United Mine Workers of America welfare and retirement
fund....

923

8. Proposal of John L. Lewis made to the trustees for estab-
lishing pensions__

926

9. Proposal of Thomas E. Murray made to the trustees for
establishing pensions..

926

10. Letter to John L. Lewis regarding activation of welfare
fund..

930

11. Letter to John L. Lewis, regarding request for infor-
mation concerning welfare fund..

931

12. Letter to John L. Lewis regarding appointment of
neutral trustee___.

931

Letter to signatories and beneficiaries of bituminous wage
agreement...

932

Press release regarding letter.

935

13. Resolution No. 8.

936

14. Press release of trustee H. Styles Bridges regarding
resolution__--

937

15. Resolution proposed by Mr. Van Horn.

939

Van Sickle, John V., professor of economics, Wabash College, Craw-
fordsville, Ind.: Industry-wide collective bargaining, article...
Victory, Lawrence H., former president, New York Typographical
Union, No. 6: affidavit..

Wisconsin Electric Power Co., Milwaukee, Wis., C. F. John, vice
president in charge of power: Letter to Senator Maybank....
Wisconsin Public Service Corp., C. E. Kohlepp, president, Mil-
waukee, Wis.: Letter to Senator Maybank...

883

946

981

982

ECONOMIC POWER OF LABOR ORGANIZATIONS

TUESDAY, AUGUST 9, 1949

UNITED STATES SENATE,

COMMITTEE ON BANKING AND CURRENCY,

Washington, D. C.

The committee met, pursuant to adjournment, at 10:10 a. m., in room 301, Senate Office Building, Senator A. Willis Robertson presiding.

Present: Senators Robertson and Cain.

Also present: Mr. Robert D. L'Heureux, counsel for the committee. Senator ROBERTSON. The committee will please come to order. Our first witness this morning is Judge Charles I. Dawson, of Louisville, Ky.

Good morning, Judge Dawson. We are glad to have you with us today. Will you please be sworn?

Do you solemnly swear that the testimony you give to this committee will be the truth, the whole truth, and nothing but the truth, so help you God?

Judge DAWSON. I do.

Senator ROBERTSON. Will you please identify yourself for the record? TESTIMONY OF CHARLES I. DAWSON, ATTORNEY, LOUISVILLE, KY.

Mr. DAWSON. I am an attorney practicing law in Louisville, Ky., interested, incidentally, in some other businesses, including stockownership in some bituminous-coal mines in eastern Kentucky. I am now, and since I resigned from the Federal bench in 1935 continuously have been, general counsel for the Harlan County Coal Operators' Association, which is an organization made up of operators of coal mines in Harlan, Bell, and Knox Counties in Kentucky, and Claibourne County in Tennessee. That association has a membership of 41 operators, and the total tonnage produced by the membership last year was 7,190,591 tons.

The invitation extended to me by your chairman to appear before your committee and testify, advised me that it was desired that my testimony should be directed to the extent and effect upon consumers, upon prices, and upon economic stabilization and small business enterprises of the economic power of labor organizations in industry. I have followed closely and with a great deal of interest the testimony heretofore adduced before your committee on those subjects, and it seems to me that if any proof were needed on the matters in respect of which I was invited to testify, the proof you have already heard has conclusively established that the industry-wide, and in most cases Nation-wide, organization of unions, and their ability-actually or

in effect-to make substantially uniform industry-wide and Nationwide contracts, unquestionably tend to, and in many cases have actually resulted in the elimination of competition, with resulting higher prices; interruption and uncertainty in the supply of essential products and services; the elimination of small businesses, due to their inability to meet the pattern set in contracts between the larger units in their particular industry and the contracting union; the restriction of output; inefficiency; and, in the coal industry particularly, in driving it into such an unfavorable position, in competition with other fuels, as to seriously threaten its future consumer market.

The testimony you have heard on those subjects has come from witnesses far more directly and intimately associated than I with the problems presented by the present labor monopoly possessed by the great labor unions of the country. What I could say on those subjects would add nothing to the information already in the possession of the committee. What I would say would be but a generalization on subjects about which previous witnesses have been able to be rather specific. So, with the committee's permission, I would like to explore with you the possibility of correcting the situation, and the means by which it may be done.

In view of the testimony you have already heard, and in view of what is well known to every reasonably well-informed man, I think I may safely start with five fundamental premises:

(1) That labor unions do at this time possess a monopoly of the labor of this country;

(2) That monopoly has been so used in the last 10 or 12 years as to seriously threaten not only the American competitive system in business, but the general welfare of all the people, and, ultimately, of the individual members of those unions themselves;

(3) That this condition has been brought about in part by congressional legislation, but in the main by extreme and strained interpretation given to that legislation by the Supreme Court in a series of decisions during the last 6 or 8 years, and by the constant support of, and pandering to labor leaders by the executive department of the National Government in even their most intemperate demands;

(4) That it is not only desirable, but necessary in the general public interest that the situation be corrected; and

(5) That the only means by which it can be corrected is through legislation.

On these five premises, I would like to discuss with the committee what legislation can be enacted to accomplish the desired result, without restricting or destroying the legitimate objects and activities of labor unions.

At the outset, I wish to state that I agree with Judge Arnold's statement before this committee that it is neither feasible nor desirable to destroy unions' labor monopoly in this country, if, by that, he meant that it is neither feasible nor desirable to enact any legislation restricting the size or the territorial jurisdiction of unions or curtailing their lawful and legitimate objects and activities. No impartial man will deny that unions have been of untold benefit to the laboringman in this country. It took unions, and strong unions, with the sympathetic backing of the Government to better working conditions, and to secure for labor its just part of the earnings of industry. In accomplishing

these things, unions have been of inestimable benefit to all the people. Through their efforts, and with their support, educational conditions have been improved, the level of the general health of all the people has been raised, and our national income greatly increased.

But human nature is the same, whether we look for it in the captains of industry or in great labor leaders. Excess of power makes men careless and contemptuous of the rights of others. We had a graphic example of the truth of this statement in the orgy of unrestrained capitalism in the period from 1880 to 1890. The situation got so bad that an aroused public opinion demanded that national legislation be enacted to preserve our competitive business system. In response, Congress gave us the Sherman antitrust law, and most of the States gave us constitutional and statutory provisions to protect the people against monopolies and restraints of trade in intrastate transactions.

At the present time, organized labor, relying upon its substantially complete freedom from the existing Federal antitrust statutes resulting from the construction given those statutes by the Supreme Court, has become as great a threat to our competitive system and to the general welfare as was capitalism in the 1880's and 1890's. The informed citizen, who is not disturbed by the present situation, is either very callous and indifferent, or is an unreasoning partisan of unionism. The citizen who desires to rectify the evil by the destruction of unions is either extremely short-sighted or an unreasoning enemy of unions. If legislation is to be enacted which will rectify the evil, and at the same time preserve to the country the benefits of unionism, Congress must disregard the contentions and demands of each of those extreme schools of thought. I firmly believe that legislation can be enacted which will meet each of these much desired objectives.

It seems reasonable to me that the first step in correcting the situation is to carefully review the legislative and judicial steps which in large part have brought us to our present plight, and see if we cannot find in that review the key to the solution to our problem.

Prior to 1890, we had no Federal law interdicting combinations, agreements, and conspiracies in restraint of interstate trade or against monopolies. Prior to that time, such agreements and conspiracies were regarded as immoral and against public policy, and the courts would not enforce any such agreement, but the Sherman Act of July 2, 1890, for the first time, branded those agreements, combinations, and conspiracies as illegal, and prescribed penalties for those found guilty of its violation. It also provided that those injured by such illegal conduct could recover treble damages. As you all know, by its terms, the Sherman antitrust law was all-inclusive. It made no exception in favor of labor organizations or any other nonprofit organization organized and existing for the betterment of its members, and in 1908, in the celebrated Danbury Hatters case (208 U. S. 274), the Supreme Court held that it was applicable to labor unions the same as to capitalistic organizations; and in Gompers v. Bucks Stove and Range Co. (221 U. S. 418), decided in 1911, that court established the rule that boycotts by labor unions, whether primary or secondary, were violative of the antitrust laws if they resulted in unreasonable restraint of interstate or foreign trade or commerce. The construction given the act in the Danbury Hatters case and in the Gompers v. Bucks Stove and Range Co. case aroused bitter resentment on the part

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