MAKING UNLAWFUL THE EXACTION OF TRIBUTE OR ROYALTIES FROM THE PRODUCTION OF ARTICLES IN COMMERCE BY COERCION, INTIMIDATION, OR THREAT

MONDAY, MAY 6, 1946

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE OF COMMITTEE ON THE JUDICIARY,

Washington, D. C.

The committee met at 10:30 a. m., the Honorable Zebulon Weaver (chairman) presiding.

Mr. WEAVER. The committee will be in order.

Gentlemen of the committee, we have two bills before us today for consideration. One is H. R. 6259, introduced by Major Robertson to amend the Criminal Code so as to make unlawful certain harmful and disruptive practices in commerce.

Also another, which involves the same question, introduced by Representative Smith of Virginia, to amend the Criminal Code by making unlawful the exaction of tribute or royalties from the production of articles in commerce, and to prohibit coercive practices affecting such production, and for other purposes.

(The bills are as follows:)

[H. R. 6230, 79th Cong., 2d sess.]

A BILL To amend the Criminal Code by making unlawful the exaction of tribute or royalties from the production of articles in commerce, and to prohibit coercive practices affecting such production, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Criminal Code is amended by adding at the end thereof the following new section:

"It shall be unlawful by the use, or express, or implied threat of the use, of force, violence, intimidation, or duress, or by the use of implied threat of the use of other means, to coerce, compel, or constrain, or attempt to coerce, compel, or constrain any person, firm, or corporation to pay or agree to pay tribute or royalty for the privilege of or on account of producing, mining, repairing, manufacturing, or distributing any article: Provided, That nothing in this Act shall prohibit the owner of property or the holder of patents from receiving rents or royalties for the use thereof, or make unlawful enforcement or attempted enforcement by means lawfully employed of any contract right or legal obligation. "Whoever willfully violates or attempts to violate any provision of this Act shall, upon conviction thereof, be punished by imprisonment for not more than one year or by a fine of not more than $5,000, or both."

[H. R. 6259, 79th Cong., 2d sess.]

A BILL To amend the Criminal Code so as to make unlawful certain harmful and disruptive practices in commerce

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Act entitled "An Act to codify, revise, and amend the penal laws of the United States", approved March 4, 1909, as

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amended, is amended by adding after section 245 a new section to read as follows: "SEC. 245A. (a) It shall be unlawful for any employer to pay or deliver, or to agree to pay or deliver, any money or other thing of value to any representative of any of his employees who are engaged in commerce or in the production of goods for commerce.

"(b) It shall be unlawful for any representative or agent of any employees who are engaged in commerce or in the production of goods for commerce to demand, receive, or accept, or to agree to receive or accept, from the employer of such employees any money or other thing of value, for the use of such representative or in trust or otherwise.

"(c) The provisions of this section shall not be applicable with respect to any money or other thing of value payable by an employer to an employee or former employee as compensation for, or by reason of, his services as an employee of such employer, and shall not be applicable with respect to any amounts deducted from the compensation of any employee and paid to a labor organization by an employer in payment of dues or other similar fees payable by such employee to such labor organization.

"(d) Any person who willfully violates any of the provisions of this section shall upon conviction thereof be subject to a fine of not more than $10,000 or to imprisonment for not more than six months, or both.

"(e) The district courts of the United States and the United States courts of the Territories and possessions shall have jurisdiction, for cause shown, and subject to the provisions of section 17 (relating to notice to opposite party) of the Act entitled 'An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes', approved October 15, 1914, as amended (U. S. C., 1940 edition, title 28, sec. 381), to restrain violations of this section, notwithstanding the provisions of sections 6 and 20 of such Act of October 15, 1914, as amended, and the provisions of the Act entitled 'An Act to amend the Judicial Code and to define and limit the jurisdiction of courts sitting in equity, and for other purposes', approved March 23, 1932.

"(f) As used in this section

"(1) 'commerce' means trade, traffic, commerce, transportation, or communication among the several States, or between the District of Columbia or any Territory of the United States and any State or other Territory, or between any foreign country and any State, Territory, or the District of Columbia, or within the District of Columbia or any Territory, or between points in the same State but through any other State or any Territory or the District of Columbia or any foreign country.

"(2) 'goods' means goods, wares, products, commodities, merchandise, or articles or subjects of commerce of any character, or any part or ingredient thereof.

"(3) 'produced' means produced, manufactured, mined, handled, or in any other manner worked on in any State, Territory, or the District of Columbia; and for the purposes of this section an employee shall be deemed to have been engaged in the production of goods if such employee was employed in producing, manufacturing, mining, handling, transporting, or in any other manner working on such goods, or in any process or occupation necessary to the production thereof, in any State, Territory, or the District of Columbia. "(4) 'representative' means any individual who or organization which is authorized or purports to be authorized to deal with an employer, on behalf of two or more of his employees, concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work." Mr. WEAVER. Now, I have before me a list of witnesses that I take it wish to be heard this morning.

Of course, we wish first that Major Robertson may present his bill, and explain its purpose to the committee.

STATEMENT OF HON. A. WILLIS ROBERTSON, A REPRESENTATIVE IN CONGRESS FHOM THE STATE OF VIRGINIA

Mr. ROBERTSON. Mr. Chairman, it is a great pleasure to me to be able to appear today before one of the truly great committees of the Congress, which under the able and distinguished leadership of that great constitutional lawyer, J. Hatton Sumners, has been dedicated to the preservation of American constitutional liberty.

It is a source of pride to me that a former Member of Congress from my home town of Lexington, Va., Hon. John Randolph Tucker, whose picture appears on your wall to the left, was a chairman of this committee in 1887, the year that I was born. In 1888 he was succeeded on this committee by his son, Harry Tucker, who served until 1896, and then he was reelected to succeed Hal Flood in 1922, and served until 1932, when I succeeded him from our congressional district.

I may say that when I came to Congress in the spring of 1933, if I had had my choice I would have chosen service on this committee, but unfortunately I did not at that time have the choice of the committees, and I had to take what the then members of the Ways and Means Committee gave me.

Mr. WEAVER. May I say, I served with Mr. Tucker for a while. I want to mention another great Virginian, Governor Montague, who served on this committee.

Mr. ROBERTSON. Governor Montague taught in my grandfather's family after getting his B. A. degree and before he took his law degree, and he was my law professor at the University of Richmond before he came to Congress after being Governor.

Mr. Chairman, the bill I have introduced aims to remove the chief stumbling block of the coal strike, characterized last week by the President of the United States as a national disaster.

In fact, if that strike continues for two or three more weeks, it will be, in my opinion, a disaster second only to a major war, because it will paralyze our industry; it will throw millions out of work; it will stop all transportation; it will stop the production of power and it will deny to 140,000,000 American people the necessaries of life.

And in its essence, therefore, this coal strike is not a strike against the coal operators; it is not primarily a defiance of the administration and of the Congress; it is a strike against the American people, and the issue before us today, sir, is whether or not any individual or any group of individuals is more powerful than their Government, and have the right to impose any hardships they may see fit upon the American people in order to reach their objectives. I challenge the right of any individual or group of individuals to deny to the American people the necessities of life.

There was no real necessity for this strike. Aside from the fact that we had promised 12,000,000 men who had fought and sacrificed for the preservation of our freedom suitable employment when they returned from the war, and aside from the inherent desirability of speeding a reconversion program that the wounds and the scars of the greatest conflict in our history might rapidly be healed, this strike could easily have been prevented if those representing the miners had been willing to confine their demands to just, reasonable, and legal requests.

It was the demand which in its essence is the right to tax the product that is produced that caused this strike. It is that demand that continues the strike now for more than a 1 month.

I am reliably informed that the last message sent by the head of the United Mine Workers to the conference at 6 o'clock Saturday afternoon, when the conference adjourned without making any headway, was: "We will insist upon the so-called health and welfare fund and will not discuss wages or working hours, or working conditions until the operators first agree to that demand."

And so, Mr. Chairman, there is a part that this committee and that Congress can play in facilitating a settlement of this disastrous strike by making illegal the stumbling block to an agreement, and that, in a word, Mr. Chairman, is what H. R. 6259 does. It outlaws all payments of every kind to any labor union except wages and the checkoff that is now enforced upon employers where there is a closed shop, and it prohibits any labor union from receiving or attempting to get any such payments.

In that respect, H. R. 6259 is considerably broader than the bill by my distinguished Virginia colleague, Judge Smith, H. R. 6230. H. R. 6230 is an extension of the Petrillo bill to all products, but it hinges on the receiving or attempting to receive a royalty or other similar demand from the producer by force, or intimidation or the threat of force or intimidation.

I just read in the paper that Mr. Petrillo intends to take that bill into court, not only to test the constitutionality of it, but possibly also to deny that he got his royalty on phonograph records by force or intimidation.

H. R. 6259 just covers the simple fact of the payment. It covers the employer, and it covers the employee, while the Smith bill covers only the employee.

I might also call your attention to the fact that the Smith bill provides in its title that it is to prevent unlawful exaction of tributes or royalties of articles in commerce.

But there is no reference in the body of the bill to commerce, and if the courts should hold, as I believe they would, that you cannot cover in a bill any more than is covered by its title, an issue would arise as to what was covered and what was not covered under the Smith bill.

Taking up very briefly, and I want to be brief, because there are five other witnesses, as I understand, and I feel it is more important to this committee for them to be heard, because they are under the guns, so to speak, and they can tell you better than I how this strike is affecting them, and how the application of the taxing power of a union to all other productions would affect them and the economy of the Nation.

I will comment on the essential provisions of the bill in question, H. R. 6259.

It amends the Criminal Code, and it provides in subsection (a) that it shall be unlawful for any employer to pay or deliver, and so forth. Subsection (b) provides: "It shall be unlawful for any representative or agent of employee to demand, receive, or accept," and so forth. Subsection (c) provides that "It shall not apply to the check-off.” Subsection (d) fixes the penalty.

Subsection (e) gives jurisdiction to the district courts of the United States and its Territories, and provides that should it be necessary to get an injunction, as an auxiliary means of enforcing this act, the provisions of the Sherman antitrust law, the Clayton antitrust law, and the Norris-LaGuardia amendments of the antitrust law, shall not be construed so ast to prevent the courts from enforcing the provisions of this act.

The principle involved in this proposal is not a new one. When labor was seeking what it has since termed its Magna Carta, known

as the Wagner Labor Relations Act, it was very fearful of the influence that employers might exert upon employees to keep them from joining one of the major national unions of the country, and so they caused to be written into the Wagner Labor Relations Act that it should be unlawful for any company to make any compensation of any kind, or character to its employees other than wages and enforcement of that was placed under the National Labor Relations Board. That act has been enforced in some instances with respect to company unions, but with respect to them only.

There are two instances that I could mention in which it has not been enforced, and there has been no intimidation whatever in this most flagrant demand of a royalty that on normal production would amount to about $60,000,000 per year, and a tax to that amount upon the consumers of coal, that the National Labor Relations Board would inform the United Mine Workers that was a violation of the Wagner Labor Relations Act and would not be permitted.

The Congress, on numerous occasions, has considered what is involved here. This committee in 1942 held voluminous hearings of approximately 500 pages on four related bills dealing with burdens. upon commerce, restrictions upon commerce, through force, intimidations and actions of that kind, and then, of course, the most recent action was the Petrillo bill, which sought to specifically outlaw the royalty demand of his union upon the phonograph records that they produced, and by an overwhelming vote in both the House and the Senate, the Congress passed that bill and the President signed it, and it is now a law.

The issue was deemed to be so simple and yet so vital and fundamental that the Interstate and Foreign Commerce Committee did not conduct hearings when the bill was before it, but merely acted on the hearings that had been conducted on the Senate side.

I am sorry I cannot get for you at this time a copy of those hearings, but the supply was exhausted and a resolution is pending to print some more of them, which has not yet been approved.

Therefore, in asking you to consider this legislation, I requested only five witnesses to appear before you because I did not believe that you would want to go into exhaustive hearings over the question of whether or not a union should have the privilege of denying a necessity of life to all the people of the Nation, or whether or not we should reverse the fundamental issue for which our ancestors fought in the Revolutionary War, that there would be no taxation without representation.

We won the Revolutionary War, and having done so, we established a Republic, and the most fudamental principle of that Republic was that there should be no taxes levied upon the people except by their duly elected representatives acting in a governmental capacity.

And now a union is asking the right to usurp that function of the Congress and levy a 10-cent-per-ton excise tax on coal which, at some later date, of course, might be fixed at any figure it saw fit.

I say to you that such a proposal is so diametrically opposed to our fundamental institutions and is so intolerable from every standpoint that no lengthy hearings are necessary for this subcommittee, or for your full committee, or for the House, to act on what is involved.

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