Secretary PERKINS. The Department of Labor has a function of conciliation-it has three functions, arbitration, mediation, and conciliation, and they are rather distinct in the understanding of the Department.

Arbitration is a function which, as is well known, can be exercised only when both parties to a controversy agree to permit a third party to act as an arbitrator and agree to abide by the decision of that third party. The Department of Labor can exercise the function of arbitration when both sides agree to it.

The Department of Labor can also act as mediator, that is, it can of its own interposition and without invitation of either side, intervene in an industrial dispute with suggestions as to ways of bringing the conflicting parties into agreement, with suggestions perhaps as to the formula upon which they may agree.

It can also act in a third capacity of conciliation, by which is meant commonly a more or less negative activity in which the conciliator attempts to be the go-between between the parties who are in conflict until they, acting through him, come to some formula which it appears can be mutually agreed upon. Thereupon he retires from the scene leaving them to agree.

I am just defining this very roughly.

The CHAIRMAN. You have a bureau in your Department that handles those functions?

Secretary PERKINS. Yes.

The CHAIRMAN. What is the title of the officer of the bureau? Secretary PERKINS. He is known as the "Director of the Conciliation Service," and there is a title known as "Commissioner of Conciliation," who are individuals appointed for the purpose of conciliation. Nevertheless, within the bureau we can perform the other functions.

The CHAIRMAN. How many employees in the bureau?
Secretary PERKINS. Thirty.

The CHAIRMAN. Is it proposed that the functions of that bureau be transferred to this board?

Secretary PERKINS. I should be very loath so to recommend, sir. Senator WAGNER. No.

Secretary PERKINS. I think it is not proposed in this bill. Title III of the bill preserves the Conciliation Service of the Department of Labor. That function should go on and rather be strengthened by the existence of the Labor Board. That is my conception of it. Senator WAGNER. It is preserved by this bill.

Secretary PERKINS. Yes; it is my conception that that function in the Labor Department ought to be preserved and strengthened, sir, and that the cooperation between the Labor Board and the Department of Labor in the performance of the function of conciliation ought to be clearly defined so that the Labor Board may refer cases for conciliation to the Department of Labor rather than attempting to perform the compromise and conciliation service itself, and so, I think, impairing somewhat its prestige as a judicial body engaged in a more serious and more dignified work.

Senator WAGNER. They have been doing that now, Mr. Chairman. The CHAIRMAN. Care has been taken in drafting this bill to prevent any conflict between the powers of the board created here and the Department of Labor?

Senator WAGNER. Oh, yes; there is no conflict now, and, as a matter of fact, we utilize to a great extent through the genuine cooperation of the Secretary, the conciliation clause of the Department of Labor in our efforts to compose differences.

The CHAIRMAN. Proceed.

Secretary PERKINS. On the composition of the board I think that public and the Government members of the board are necessary.

The CHAIRMAN. You are referring to the board?

Secretary PERKINS. To the board as created by this bill. I think that permanent public and Government representatives to give the board continuity, to give it disinterestedness, and to give it the services of persons who gradually acquire from a long period of service a certain expertness in those particular problems.

Moreover, I think it is wise and necessary that there should be members from industry and from labor in order to keep the board in touch with current activities and current thought in the industrial field on both sides, and to keep it from being a purely remote judicial tribunal that has no real and vivid relationship to the industrial needs of the moment.

My own suggestion with regard to this would be that in view of the provision which is made in this bill for its composition, that there should be rather panels from which the employer and employee members can be drawn, and that these panels should be perhaps not less than six or seven on each side, and that employer and employee members should be drawn from those panels to sit for a longer or shorter period of time or to sit even on special cases or special classes of

cases.

I think this would be extremely important in bringing into the board those individuals on both the labor side and the employer side who have particular knowledge of the industry or of related industries in which the controversy is at that moment raging.

It is one of the most difficult things for a meat packer, for instance, to sit with any kind of intelligence upon a dispute in the cotton textile industry, and yet he may be an extraordinarily wise employer, but when it comes down to the particular questions, which, for instance, are involved in the stretch-out, he has relatively no knowledge which makes him a sound judge of what is just and fair.

It has been my experience that men are at their best in a moral sense, that is, their moral aspects function more keenly, when they are in the field of the material that they know well, and that they are inclined to follow somebody else's leadership in the details of a field which they do not know well.

Their principles are all right, but the application of them is sounder when they come into a field which they know well. I should be very much in favor of a panel system.

I also think it is highly important, in drawing up this board, that the employer-employee members of it be so selected that we are certain to escape the inhibiting effects that have so often come about in boards composed of the three parties, by drawing on to the employer-employee membership only the retired people-that is, those who are already out of active relationship to industry. Only by making their period of service short can you be certain to secure for this constructive judicial activity those who are at present in active rela

tionship to both the labor movement and to the employer responsibility. Out of that you get a very much sounder permanent system, it seems to me, than if you rely upon those who have already given over active responsibilities for the conduct of industry and leadership of labor.

I think one of the most important things that will grow out of such a board as this is that the active participation of both employer and employee in the educative experience of finding a formula, will develop a technique which is for the welfare of the whole American people.

I also wish to recommend to you, sir, that this board should be located not as an independent office of the Government, but should be located in the Department of Labor. I could, with equal logic, recommend that it be located in the Department of Commerce, or located in the Department of Justice, if you like, but I think it should be located in a regular department of the Government, a permanent department of the Government, one which has an officer, who has a place in the Cabinet of the President. I think that only by such location will you get that attention, that prestige and that continual cultivation and fostering of this important new function in our life that it deserves and that it ought to have. I am very much afraid if we pass into a period of prosperity, when these problems become less acute, that there will be that neglect of such a board in the public mind and in the conceptions of Congress, and in the conceptions of any administration which happens to be in power that it may lose its prestige as a national body. I think that its purposes can best be served by being attached to a regular department of the Govern

ment.

You will forgive me for a certain jealousy when I say I think it should be attached to the Department of Labor, I really believe that that department will be the department in which it can be developed into its soundest activities and can be given the very fullest cooperation. Here it can find the greatest integration with the other activities of the Department of Labor.

The CHAIRMAN. And especially if you are going to maintain the functions which you now have in the Bureau of Conciliation?

Secretary PERKINS. Especially if you are going to maintain the functions which we now have in the Bureau of Conciliation.

The CHAIRMAN. Don't you think the membership of seven is a little large? This bill provides a membership of 2 representing the employers, 2 representing the employees, and 3 representing the general public. The three representing the general public are given a salary of $10,000. Don't you think it would be better to have just a board-I would like to have your views about thatthree members, those representing the employers and employees to be associate members?

Secretary PERKINS. That is a possible device. You mean by "associate members" members without a vote but in an advisory capacity?

The CHAIRMAN. In an advisory capacity. Let the responsibility rest upon the three representing the public interest.

Secretary PERKINS. That is a perfectly possible device and one that is not without sound and reasonable basis.

The CHAIRMAN. May I suggest that you and Senator Wagner give some consideration to that suggestion which has been made?

Secretary PERKINS. I shall be glad to, but I would like to say at this moment, that after having given that considerable thought, my conclusion although this is susceptible of correction, if the Senator wants to talk it over with me-my thought is that on the whole it would be wiser to maintain representation with vote by both employer members and labor members. That is for the present. It may be that we shall work out of that, but we are engaged at the present time in a mutual experience in this country, one in which the educative experience of responsibility in this field, is, I think, of extreme importance both to the employers' and employees' representations.

When an employer comes to take responsibility for a suggestion affecting the public interest, which he must take when he is sitting on one of these boards, he does begin to take a more impersonal and impartial view of the dispute than he does if he is only an adviser, and therefore in almost a special pleader's relationship. I think the same is undoubtedly true of the labor side.

The CHAIRMAN. My experience is that where you have a board composed of officials who are paid a full salary and other members of the board are paid a per diem, there is apt to be conflict in the feeling that the full-paid officials have superior rights, and are apt to assume them and proceed without consulting those who are on a per diem basis on the board.

Secretary PERKINS. In this proposed board you have self-interest motivating both sides.

The CHAIRMAN. I think if you have one commissioner, one representative of the employers and one representative of the employees, that my objection would not be so sound, but I think with 3 fullpaid public officials serving on the commission and the other 4 being called in on a per-diem basis, there is apt to be a feeling that the other 4 are inconsequential in their rights and powers. At another stage we can discuss this section of the bill.

Secretary PERKINS. I think Senator Wagner can tell you more clearly than I can, out of his very large experience this summer, that the problems before the labor board have been so great as to make it physically difficult to handle the number of cases coming before it, and it is highly desirable it should be able to reconstitute within itself a group to hear a special case, and in that group there should be representation of all three parties.

Senator WAGNER. I will discuss that with the committee later on. Secretary PERKINS. I also wanted to point out, sir, another reason for placing it in the Department of Labor is that the Department of Labor already has a large personnel which could be called into the service of this labor board appropriately, because they are already specialized on certain fields with which this labor board would have to come in contact. They could be called to do this service appropriately, if it were in the Department of Labor, and so save such expenditures that might otherwise be necessary by a growing staff for such a bureau or board.

The CHAIRMAN. I think Senator Wagner would probably agree if this board should be under the direction of any department it should be the Department of Labor.

Senator WAGNER. Yes.

The CHAIRMAN. It isn't necessary, but it could go there.

Senator WAGNER. I am agreeing with Madam Secretary on that particular phase of it. We rarely differ on anything.

Secretary PERKINS. I want to point out one more thing on this. I do not think the board, if it should be placed in the Department of Labor, should be under the authority of the Secretary of Labor. I want to make that quite clear. I think the board should be appointed by the President and should have the distinction and prestige that comes from such appointment, and the independence from any rule or any imposition of a point of view by the Secretary of Labor. It should be an independent board. The fact it is attached to the Department of Labor would not in any way bring it under the control of the Secretary of Labor, and I do not think it should be.

I think, looking forward into the future, we recognize that this board will be judicial in its nature, and should, therefore, not be dominated by any Secretary or any Secretary's point of view, but that the attachment to the Department of Labor, as a purely administrative function, would be relatively simple.

Senator Wagner will recall in the Department of Labor in the State of New York there exists a judicial board appointed by the Governor, not responsible to the Commissioner of Labor in any way, and yet able to call on the Commissioner of Labor for such services and personnel as it needs, and the Commissioner of Labor is obliged to give them such services. It has worked out in a very satisfactory way for the particular judicial function which has to be performed there, and has made a minimum of cost and of conflict.

The CHAIRMAN. We have such a board in Massachusetts, in the department of industry and labor.

Secretary PERKINS. Yes. That is similar and is appointed also by the Governor and is separate from the Commissioner's authority and has a very definite usefulness.

With regard to the substantive provisions of title I, I think the time has come to review very seriously the responsibility of the Government to various individuals who have taken literally, in the course of the past 9 months, the meaning of section 7 (a) of the Recovery Act. The Department of Labor has investigated over 3,200 complaints against 264 employers where it was charged that there had been discharge and discrimination against individuals because they had attempted to organize a union or an organization of employees independent of the employer. There are other cases I know in the hands of the Labor Board and in the hands of other departments of the Government. These individuals undoubtedly acted, it seems to be clear on investigation, within what they believed to be their rights and their opportunities under section 7 (a) of the National Industrial Recovery Act.

The Government and Congress certainly has an obligation to people who find themselves in that position, who are discriminated against, and there should, therefore, I think, be some clear definition of just what the responsibility and responsibilities, opportunities, and obligations of both parties to this contract are. Workers should be reassured and reconfirmed in the rights of free speech, free assembly, free association in any organization of their choice, and the right to elect representatives to represent them in the details of their collective bargaining, and there should be some clear definition by Congress that the management itself cannot interfere or intervene in the free choice of the workers of their representatives.