Section V. The company has attempted to meet this postwar squeeze in its cost-price relationships by increasing its operating efficiency. In the postwar period the management of the company has taken a series of important measures designed to improve operating efficiency. The company has expended substantial sums to attain more efficient operations by providing more satisfactory plant arrangements, eliminating duplication of effort, bringing equipment up to date, and installing new facilities to produce additional lines of products. Our technical and metallurgical facilities have been considerably improved and developed. Another major move has been the plant-consolidation program under which three plants in Syracuse have been combined into one plant, two plants in the New Jersey area have been combined into one, one plant in the Pittsburgh district has been discontinued and its agricultural operations moved into new quarters at the existing Midland Works. The principal melting facilities have been centralized at Midland Works. One hundred byproduct coke ovens have been rebuilt and 84 new ones installed, and the company has acquired facilities for entering the field of stainless tubular products. The seriousness of our position has led to energetic steps to reduce overhead. Executive responsibilities have been rearranged and concentrated, and selling expenses have been carefully controlled, and are low by comparison with others in our part of the industry. As an example of what has been done in overhead reduction, the management and executive pay roll of the company has been reduced between 1946 and 1949-this, during a period when the very substantial first, second, and third round postwar increases and large inequity adjustments were being incorporated in the wage and salary pay rolls. We are in a competitive position in respect to cost and efficiency in the specialty field and hope to be allowed to remain there. However, the steps we have been taking to improve operating efficiency have been far more than offset by the squeeze in the cost-price relationships already noted, as a result of union demands. Summary and conclusion: The tool and specialty steel producers thus find themselves in a serious situation, due not to obsolescence, or inefficiency, but to the failure of the union to recognize the nature of the business which must be carried on if the thousands of small buyers are to be served. But neither this nor any other business in such a field can indefinitely survive these uniform applications of economic demands, renewed year after year by the union and urged again this year on a scale which is not only alarming but catastrophic. If there were no manufacturers of tool and specialty steels equipped to serve this type of business, it would be necessary to create one to serve these small businesses and enable them to maintain their own productive enterprises. It is apparent in any event that the trends shown by this statement point toward diminishing competition in our segment of the industry and a probable concentration of production under semimonopolistic conditions. In other words, the power of a labor monopoly thus applied, may, in due course, result in a monopoly of productive facilities. The serious disadvantages of such a result need no emphasis and it may be they can be avoided only by recognizing and prohibiting monopolistic practices wherever they exist, on the part of labor as well as on the part of business. Senator ROBERTSON. Is it your opinion that the Steelworkers have a monopoly of the labor supply in the steel industry? Mr. COLVIN. That is not an opinion. In the case of our company it is a fact. Senator ROBERTSON. You heard the testimony of Admiral Moreell; did you not? Mr. COLVIN. Yes, sir. Senator ROBERTSON. Do you agree with him that this situation has gone beyond the power of even big business, to say nothing of little business, to control, and that legislation by the Congress is clearly indicated? Mr. COLVIN. In our judgment; yes. Our problem, however, is not whether big business can deal with the unions, but after they have dealt with them, the results of that deal are made applicable to us regardless of the consequences. Senator ROBERTSON. You are speaking primarily from the standpoint, as to some industries, of little business. Mr. COLVIN. We are the largest people in our field. We are approximately the same size in relation to the tool and specialty tool business as United States Steel is in relation to the whole business. Senator ROBERTSON. But still you cannot control this problem. Mr. COLVIN. Cannot do anything about it at all. Senator ROBERTSON. Do you recommend that the Congress try to do something to try and give you a better opportunity to survive? Mr. COLVIN. That is an appeal to the Government for help, and that we do not make, but we ask you to look into it and see if there is a need for action. We do not even know that there is a need for it. Perhaps the answer is for people who do our kind of work to get out of it. Perhaps the Government will have to have its own plant to take care of the people we now serve. I do not know what that answer is, but we certainly do not ask for Government help. Senator ROBERTSON. You certainly do not ask for nationalization of industry? Mr. ČOLVIN. No, sir. Senator ROBERTSON. You would deplore that? Mr. COLVIN. As a citizen, I would deplore that without any reservation whatsoever. Senator ROBERTSON. If the only remedy for this situation is legislation, then you would like to see legislation enacted? Mr. COLVIN. Yes, sir. Senator ROBERTSON. We thank you very much. That concludes the testimony for today. Tomorrow we will hear Mr. Edward H. Miller, a former employee of the Justice Department, in its Antitrust Division, now practicing attorney in Washington, who will discuss the antitrust laws; Mr. Weaver Miles, a former employee of the staff of the Joint Committee on Internal Revenue Taxation, now a tax lawyer in Washington, who will discuss pension and welfare funds; and Mr. Randolph Crossley, who is flying in today from Honolulu to discuss the longshoreman's strike, or whatever strike it is out there that has tied up industry in the Hawaiian Islands since last May. On Friday the only witness will be Mr. Ezra Van Horn, and his testimony will end the immediate plans of the committee; but on Wednesday of next week the committee will decide whether or not to continue these hearings to look into some of the problems mentioned, for instance, by Admiral Moreell this morning, and by other witnesses who have appeared before us, that these hearings should not be confined primarily to coal, or even to coal and steel, which are closely related, but should go into the full subject of whether or not we need legislation on antitrust laws or any laws to meet the problems that are confronting us. The committee will stand in recess until 10 o'clock tomorrow morning. (Thereupon, at 12: 35 p. m., an adjournment was taken until Thursday, August 25, 1949, at 10 a. m.) ECONOMIC POWER OF LABOR ORGANIZATIONS THURSDAY, AUGUST 25, 1949 UNITED STATES SENATE, COMMITTEE ON BANKING AND CURRENCY, Washington, D. C. The committee met, pursuant to notice, at 10 a. m., in room 301, Senate Office Building, Senator A. Willis Robertson presiding. Present: Senators Robertson Frear, and Tobey. Also present: Mr. L'Heureux, counsel for the committee. Senator ROBERTSON. The committee will please come to order. A few days ago there was brought to my attention a newspaper article in which the distinguished Senator from New Hampshire, Mr. Tobey, is represented as having referred to members of this committee as damn crooks. I know, of course, that the distinguished Senator in question has never on any occasion referred to any colleague in the Senate as a damn crook, and since he is present this morning and can explain this statement, I am going to ask at this time the counsel of the committee to read the newspaper article to which I have just referred. Mr. L'HEUREUX. The article is carried in the Trade Union Courier dated August 15, 1949, and is entitled "AFL Blasts Monopoly Quiz." [Washington Bureau, Trade Union Courier] GREEN LASHES ANITIUNION INQUISITION IN SENATE AS TOOL OF BYRD MACHINE WASHINGTON.-AFL President William Green last week ripped the fake veil of objective congressional interest from the Senate Banking and Currency subcommittee that is allegedly investigating "monopolistic practices" by labor unions. Commenting on that clique of witch hunters, hand-picked by Senator A. Willis Robertson, of Virginia, notorious stooge of the Virginia Byrd machine, the AFL president made clear to the American public that labor knew very well that it was being used once again as the scapegoat by a political machine trying to stage a comeback on the bent back of the wage earner. "The real purpose of this investigation," President Green revealed, "is to prop up the tottering Byrd political machine in Virginia and to bolster its antiunion gubernatorial campaign * * *. Senator Robertson, a subservient tool of this machine, has created this investigation to provide him with propaganda in the Virginia primary elections * * *"" President Green pointed out that if this were in any sense an aboveboard probe it would be conducted by either the Senate Labor and Public Welfare Committee or the Senate Judiciary Committee. "The fact that Senator Robertson has seen fit to bypass the two properly qualified Senate committees in order to keep personal control of the investigation is conclusive evidence of its hypocritical motivation," Green said. President Green, John L. Lewis, of the UMW, Philip Murray, and Walter Reuther of the CIO have been asked to appear before the committee and will probably do so this month. In the meantime a succession of big industry spokesmen has provided Senator Robertson with all the antilabor quotes he needs |