The CHAIRMAN. Have there been attempts in the Department of Labor to do some conciliatory work in connection with strikes and have they met with success?

Senator WAGNER. The difficulty is that no power exists.

The CHAIRMAN. Senator Thomas desires to ask you a question. Senator THOMAS. Senator Wagner, you have connected up and linked up this proposed legislation very well with your experience in the last few months; will you go a little further and link it up with the evolution of labor legislation in the past, so we can see if it is a permanent evolutionary development or whether it is rather sporadic, growing out of that which has happened lately?

Senator WAGNER. I think that for a great many years, Senator, those who have been interested in avoiding industrial strife and bringing about industrial peace and industrial democracy have advocated some board of mediation, conciliation, and arbitration when both parties submit. In addition, they have believed that there ought to be some powers existing for the prevention of certain practices which interfere with equality of bargaining power.

I think it has been recognized that, due to our industrial growth, it is simply absured to say that an individual, one of 10,000 workers, is on an equality with his employer in bargaining for his wages. The worker, if he does not submit to the employers terms, faces ruin for his family. The so-called freedom of contract does not exist under such circumstances.

The only way that the worker will be accorded the freedom of contract to which, under our theory of government, he is entitled, is by the intrusion of the Government to give him that right, by protecting collective bargaining. When 10,000 come together and collectively bargain with the employer, then there is equality of bargaining power. That is all this legislation attempts to preserve, and I think it is a matter of evolution.

The CHAIRMAN. It need not be unanimous; a majority have that right, that is your view?

Senator WAGNER. Yes; it must be that way or you will never get anywhere.

Senator LA FOLLETTE. This is an application, is it not, of the same general principle which was involved in the Railway Labor Act, to the entire industrial field?

Senator WAGNER. Exactly; it is a development of that legislation, of course.

Senator THOMAS. Do you assume this is broad enough and general enough to cover our complex conditions as they exist in the different parts of the country?

Senator WAGNER. I think so.

Senator THOMAS. There has been a review, or, rather, a survey, made of various parts of the country in various industries and various occupations attempting to bring this bill into effect, has there not? Senator WAGNER. Yes. Of course, this legislation, like all other legislation of its kind, is always for the recalcitrant minority. I will say that the majority of employers, by far, want to deal fairly with their employees, but the minority prevent them from doing so.

The CHAIRMAN. I am surprised to have you tell us, Senator, that your greatest difficulty has been with the group that employ the largest number of employees; that is, the bigger industries.

Senator WAGNER. Exactly. They have regarded

The CHAIRMAN. Is that true in the commercial field also? Do you think the bigger commercial dealers have exercised the same attitude toward their employees?

Senator WAGNER. Well, usually in commercial lines there is less difficulty. We have not had, as I recall it, any great difficulties. It has been primarily in the major industries, the large industries.

Of course, the N.R.A. and the fixation of hours has brought to the surface a great deal more exploitation of labor than I think any of us realized existed in this country. We have a tremendous problem ahead of us. Give the worker the right to organize and collectively bargain and he will eventually remedy that type of exploitation.

The CHAIRMAN. The committee will be pleased, Senator, to have you keep in touch with us during the course of these hearings and participate in the questioning.

Senator WAGNER. Thank you very much.

The CHAIRMAN. I observe the Secretary of Labor is in the room. Will you come forward, Miss Perkins?

STATEMENT OF HON. FRANCES PERKINS, SECRETARY OF LABOR

Secretary PERKINS. I am here this morning, sir, at your request, to express my very great interest in this measure, and to say that I think it is one of the most important which has been before the Senate in a long time.

The bill, as you know, has three titles, title 1, dealing with certain substantive provisions which are to establish clearly the practices; title 2, establishing a Labor Board to exercise judicial authority with regard to whether or not the fair labor practices described in title 1 have in effect been lived up to in any given case; and title 3, giving a clear statutory basis for the conciliation service in the Department of Labor.

I want to point out that, if I may, sir, discuss title 2 first, I should like to do so.

The CHAIRMAN. You may proceed as you choose.

Secretary PERKINS. Title 2, establishing the Labor Board, seems to me to be a very important step forward in our progress of management of our community life and a step forward in the practice of democracy, for we have undoubtedly recognized in the last 10 years a very great disparity between the opportunities of workers to determine the conditions of their work and the opportunities of their employers to determine those conditions, and yet, under our democratic form, we have held that all men should be equal in respect to the performance of all of the obligations.

We have found it necessary under the development of our common law and our statute law, to provide for judicial tribunals to determine certain items which men even in a Democracy were not able to adjudicate fairly for themselves, and, so, it seems to me, we have come to the time when the establishment of a judicial tribunal to determine certain things in the relationship between employers and employees is definitely indicated, and that we shall be making real progress in an orderly and democratic life if we establish on a permanent basis a national labor board which shall have certain very definite powers and duties which we all understand.

Of course, the right of workers to organize and the right of workers to deal collectively with their employers existed before section 7 (a) of the National Recovery Act. Nevertheless, section 7 (a) of the National Recovery Act, by a very definite and clear statement of the Congress, reestablished and reaffirmed those rights and obligations and, apparently, because of the fact that the Congress itself modified the terms of the bill when it was before the Congress, it seems quite clear that the Congress had a definite conception of the rights and duties and opportunities of wage earners to deal collectively with their employers.

The Congress having, therefore, within the past year taken affirmative action on this point, and having reaffirmed the rights of labor to organize and deal collectively with the employers, has, therefore, it seems to me, a further obligation to clarify it, if it needs clarification, that relationship, and to establish on a permanent basis a tribunal before which the facts with regard to whether or not employees have had that opportunity can be clearly established.

The Labor Board has been set up, as you know, by Executive action during the summer because of the necessity which developed, at once, of having some trustworthy authoritative tribunal before which these questions could be put and where decisions which would be recognized as valid and impartial decisions could be rendered.

So, we have had 7 months experience with this type of organization even though it did not have the powers that it might have had conferred upon it if it had been established by a duly considered act of the Congress.

It was an emergency creation and has served an extraordinarily useful purpose, and I say this as one who has not been a member of the Labor Board, but who has cooperated with the Labor Board, who has observed the activities of the Labor Board, observed the cases that have come before it, and who knows of the countless decisions that have been made which were complied with and about which there has been no question.

The public in general and perhaps you, sir, are, however, better acquainted with the few cases which have been outstanding and in which the Labor Board has not been able to bring about a complete compliance with its decision. Those, of course are the items which concern us, and which put before you the necessity of taking some affirmative action which will define more clearly in the interests of the practice of democracy just what these obligations are and just what the duties and limits of authority of the Labor Board are.

Now, this Labor Board, in the 7 months of existence on an experimental basis, not constituted by Congress, has, nevertheless, given an authoritative interpretation of section 7 (a) of the Recovery Act. It is highly essential that there should be a definite interpretation of it. As a tribunal composed of men experienced in industry and labor questions, and as a tribunal dealing with controversies that have arisen, it has been able to build up in these 7 months, I think, the beginnings of a common law of industrial relations. This method of building law by decisions in particular cases does not seem to me to avoid the faults inherent in general laws which might be passed, or general orders which might be issued by administrative officers. is, of course, a somewhat slower process, the process, the process of adjudication in particular cases and the evolution of principles out

It

of cases, but, I think, an infinitely safer process than orders in council or the administrative orders, or even acts of Congress defining such delicate and as yet undetermined things as the rights and duties of both parties in industrial relations where our thinking has not been clear and where the natural rights are not so obvious as they are in some of the other human relations with which we have dealt in the past by our statutes or by our Constitution.

The Labor Board has, moreover, by utilizing the principle so familiar to the American Commonwealth, of holding elections to determine what are the desires of individuals, has carried over into this field principles well established in American democracy, and a discipline well established in our lives, the discipline of elections and of the rule of the majority.

It has acted, as you know, as a board of elections, and has conducted innumerable elections to determine what were the desires and what was the will of the wage earners in the community, in the industry, or in the plant with regard to their representation in dealing with their employers under the collective bargaining requirements of section 7 (a), and I think that that has been an extremely wise procedure, one which grew, as we may say, quite naturally and spontaneously out of the exigencies of the situation as they came this summer, and one which can safely be continued for a most conservative and yet democratic interpretation of the needs of the community in developing the human relations of employer and employee and the human relations between groups of employers and groups of employees on a sound and substantial and just

basis.

By using its national prestige as an industrial labor board to act as arbitrator in cases voluntarily submitted to it, in which the parties in advance agreed to accept the final decision of the Board, it has produced a fundamental body of rulings, all of which it appears to me have been in the interests of law and order in industry, and in the interests of the progressive utilization of the disciplines of democracy in settling these controversies, these complexities of needs, and of interests between the two great parties of our industrial life.

Moreover, this board by regulation and by experimentation is working out the board's relationships to other agencies for the settlement of industrial disputes. The Conciliation Service of the Department of Labor, and the industrial relations board, and the cotton textile code authority, and the coal code authority, has performed a very useful service in determining just what the relationships between this board and other instruments of conciliation and arbitration might be, and this process of experimentation should, it seems to me, be allowed to continue. We have not yet reached the limits of the possibilities of cooperation or the possibilities for a great variety of devices to bring about the right relationship between employer and employee interests in a great democracy which is, after all, devoted constructively to the interests of all the people, not only the two great parties to the industrial situation.

Where this board has been inadequate it has been, I think, largely due to the lack of definite outlines of its powers, of its duties, and of its responsibilities, and due to the fact that the public in general, not knowing those definite outlines and not having the habit of acceptance

of its authority, has been unwilling to participate voluntarily and to agree voluntarily to its decisions.

As, of course, you know, and as has been pointed out to you, because of the very Executive order under which it existed and because of the lack of congressional definition as to its authority, the board has lacked power to summon witnesses and to require elections to be held and to restore to their positions men who have been discharged for organizing, to stop discrimination, and so forth.

These powers, it seems to me, clearly can be conferred by Congress and ought to be conferred by Congress if the board is to fullfil all of its very great possibilities for usefulness in our community in this transition period.

I also think that the board has been obliged by the exigencies of the situation of the summer to mix its duties and by so doing has perhaps sometimes impaired its prestige. It has been obliged to mix its judicial duties with the technique of conciliation. I feel that it is desirable to separate the duty of conciliation from the duty of a judicial board. A judicial board ought, in my opinion-and this labor board, if it is created by Congress as anticipated in the draft before you, will be primarily a judicial board—a judicial board ought to confine its duties to really serious determinations of fact and the law, but ought not to attempt to make a conciliation in which the real desire is to reach a compromise.

A judicial board ought to be building up the body of our law and the body of our understanding, and our interpretation of law which we may come to count upon as a set of precedents.

A conciliator, however, on the contrary, goes into a particular situation and attempts to find a formula upon which both parties may agree at the moment, which may or may not be in the line of permanent justice.

This board, I think, should be confined to the practice of justice in in this very unusual field, whereas the function of conciliation and mediation is an important function, but I do not think it should be performed by the same board.

The continuation of the function of conciliation in the Department of Labor closely allied with the National Labor Board is, I think, highly desirable. Moreover, I think the National Labor Board, recognizing as it will in certain cases that come before it, that as a practical matter the proper technique in the particular case is not a judicial decision but conciliation-that is, many cases are brought, as you know, almost in the spirit of litigation and will be brought before any board which is a judicial board in the spirit of litigation, and the judge sitting upon that case sees at once that what is really needed is not a judicial decision but some negotiation, some method of bringing the parties together to agree upon a compromise which will meet the particular situation-the board should have the power to establish or to authorize the creation of boards of conciliation or boards of mediation or to refer the case for conciliation or for mediation to a properly constituted authority, but I feel that it should itself not engage and so impair its prestige in actual conciliation as it has been obliged to do.

The CHAIRMAN. What is the function of conciliation that your Department now possesses?