their action during the week preceding the strike was taken in reliance upon the company's statement on August 25 that it had subscribed to the fabricated metal industry code.

Early on the morning of the 31st, a strike of the employees on the morning shift occurred. Workers proceeded to a park where a meeting was held to discuss the grievances against the company. About 500 people attended this meeting. There were 1,235 employees on the pay roll on the day before the strike. It is uncertain, however, how many of the employees had joined the Federal Labor Union at this time. The representatives of the employees submitted membership cards totaling 854, but since these cards are undated, they cannot be exclusively relied upon in determining the strength of the union at the beginning of the strike.

Mr. Hogland, president of the company, was absent from Rockford, but returned immediately when notified of the strike. According to his statement, he requested his employees to meet with him at the factory on the afternoon of the 31st. The employees' grienvance committee which had been selected at the park meeting appeared, but objected to the persence of a large number of other employees, since the committee desired a conference with the officials alone. After the departure of the committee, Mr. Hogland addressed those remaining and suggested that the employees select a representative committee from the various departments of the plant.

The employees assert that the strikers' committee returned on the morning of September 1 to submit their demands to the company. They claim that the company officials then suggested that they reduce their demands to writing, which they did. They insist that they submitted a writing to Mr. Strenquist, a vice president of the company, requesting that the company recognize their rights under section 7 (a) of the National Industrial Recovery Act and offering to return to work if the company would agree not to discriminate against the participants in the strike. Mr. Hogland categorically denied that any responsible official received this document. The conflicting testimony on this matter presents an issue of fact which cannot be determined by this Board, since neither the members of the committee nor Mr. Stranquist appeared before it. If the document was received, the summary rejection by the employer could only be construed as a denial of the rights conferred upon the workers by the statute. Further investigation, including the taking of testimony under oath, will be required to determine the truth of this charge.

Late on the afternoon of September 1, the company mailed a statement to its employees, asserting that the company had been informed that a committee had been chosen to present grievances, but that the committee was "not representative of all employees, because four members thereof are employed on the sixth floor." The company went on to say "We suggest that a committee of 7 employees be selected, 1 from each of the following departments" and listed 7 departments which vary considerably in size. The statement suggested that the employees report to work on September 5, and that an election be held on that day. The statement also included the following:

"As we are operating under the N.R.A. code being affiliated with the Fabricated Metal Products Federation, which code has been tentatively approved, and because of this fact, we have been granted the Blue Eagle emblem, we are consequently subject to the following:

"SEC. 7. (1) That employees shall have the right to organize and bargain collectively through representatives of their own choosing.

"(2) That no employee and no one seeking employment shall be required as a condition of employment to join any organization or to refrain from joining a labor organization of his own choosing."

A serious omission occurs in this quotation of section 7 (a). The important provision precluding employers from interfering in the self-organization of employees was deleted. There is also a serious misquotation in clause (2) in that the word "organization" is substituted for the words "company union." The company denied that the misquotation was deliberate, and insisted that the provision had been copied from a draft of the proposed fabricated metal code which the company had received from its trade association. However, the original basic code for the industry as presented to the National Recovery Administration by the Fabricated Metal Products Federation included a correct quotation of section 7 (a).

The workers contend that the company's statement was in response to their written demands. If this be true, the company occupies the unenviable position of meeting a demand for the recognition of the rights conferred by section 7 (a),

with a counterproposal, garbling the statute and restricting the statutory rights of its employees.

The employees have alleged that on September 2 the company solicited the members of the strike committee to appear individually at its offices, and that at this time Mr. Stranquist, vice president of the company, stated when section 7 (a) was read to him, "We will never agree to that. We will never let any outsider tell us what do do." Again, a sharp issue of fact is raised by the company's denial.

On September 6, the National Lock Co. addressed a telegram to General Johnson, reading in part: "We are now and at all times have been willing to deal with our employees individually or collectively, but we resent and refuse to accept interference from outside labor forces, who are not in sympathy with our mode of operation, and whom we refuse to trust with our business secrets."

During the first week of the strike, the company obtained two extremely severe injunctions against the strikers.

On September 12 Conciliator Rodgers of the Department of Labor sought, at the request of the National Labor Board, to mediate the dispute. He proposed that the strike be terminated, that all the employees be reinstated without prejudice, and that upon their return representatives should be selected for the purposes of collective bargaining. The company countered with the following proposals. It offered to reinstate all those who had been on the pay roll prior to March 1, and to reemploy within its own discretion those who had entered its employ after that date. But it refused to take back March, Potter, or 12 other employees whose names were designated. It insisted that "the members of the committee * * * be selected from the employees of the company." company's proposals imposed restrictions upon the ordinary scope of collective bargaining and included a merit clause.

The

These proposals were rejected by the representatives of the strikers on the ground that they were inconsistent with the law. In a second letter to Mr. Rodgers, which was substantially reproduced in the Rockford newspapers, the company reiterated its position and included in its proposals the plan for employee representation presented to the workers on September 1. At the hearing before the National Labor Board, the company's reasons for refusing to consider the reinstatement of the aforementioned 12 men were not brought out clearly, but it was indicated that their participation in the strike, and particularly in the carrying of certain placards in a parade, had given offense to the company.

The formation of the employees' representation plan was described in considerable detail by the witnesses for the company at the hearing before this board. An election was held within the plant for the choice of employee representatives on October 3. This plan was promulgated by the company and was explained to the employees less than an hour before the election. A meeting of the employees in each department was called by the management. The works manager admitted that he had not only selected those who were to explain the plan to the employees but that he had also explained it himself in several of the departments of the plant. All of the employees were instructed to vote. Section 7 (a) was not read to them, and they were not afforded an opportunity to pass upon any other form of organization or representation. Nominations were oral. judges of the election were selected by the employees.

The

Various officials of the company called off the names of the employees as they proceeded to the ballot box. The ballot itself was secret, but the company officials were in a position to know whether or not an employee participated in the election. Immediately after the election, the length of the terms of the individual representatives was fixed by pulling numbers out of a hat. The company not only proposed that the terms should vary from 1 to 3 years but suggested and supervised the device which was employed to determine the length of each representative term. No constitution or bylaws were prepared for the plant either before the election or since, and no collective agreement with the management has ever been reached by the elected representatives. At least two of the elected representatives are assistant foremen.

The National Labor Board sought to bring the parties to an agreement in order to terminate an industrial dispute of long standing. Proposals and counterproposals were offered by the parties, and the board suggested various modes of settlement, but the company's unyielding position on several of the controversial issues made a mutually satisfactory agreement impossible. The employees' representatives proposed, as a means of settling the strike, that the company acknowledge its obligations under section 7 (a), that it permit an election of representatives by those on the pay roll on August 31, that it place all the strikers

upon a preferential list for reinstatement, and refer the question of the reinstatement of the aforementioned 12 men to the National Labor Board for decision. They also requested that the company seek the dismissal of the injunctions against the strikers and the Chicago Regional Labor Board. As soon as these proposals were heard by the company's representatives, they withdrew their own previous offer to place the strikers, exclusive of the 12 men, upon a preferential list and maintained an uncomprising position thereafter. At no time did the company indicate any willingness to reinstate the 12 blacklisted men or to submit the question of their right to reinstatement to an impartial tribunal. The collective bargaining envisaged by the statute involves a duality of obligation, an obligation on the part of employees to present grievances and demands to the employer before striking and an obligation on the part of the employer to discuss differences with the representatives of the employees and to exert every reasonable effort to reach an agreement on all matters in dispute. Negotiations should precede rather than follow the calling of a strike. But no matter how grievous the fault of the employees may have been in striking before exhausting every possible means of reaching an amicable adjustment of differences, there was and can be no justification for the infringement by the employer of the statutory rights of his employees.

Section 7 (a) cannot be altered by omission or qualification by those unsympathetic with its major objectives. The statute was enacted by the Congress after full deliberation and debate. Its mandates are unequivocal. Representation is not restricted under the statute to follow employees. There is no limitation on the form of organization which may be established by the workers.

There is no limitation on the form of organization which may be established by the workers. There is no requirement that the organization which is set up shall follow the departmental lines of any plant. Organization and representation are matters which concern the employees exclusively. The employer has no right to initiate a plan of organization or to participate in any way in the absence of any request from the employees, in their designation of representatives and their self-organization. In fact, such actions are expressly forbidden by the statute. The record reveals a studied hostility to the purposes of section 7 (a) and a disinclination to observe its requirements.

The National Labor Board and its regional boards were established by the President of the United States for the purpose of maintaining industrial peace. To restrain a disinterested agency of the Government from investigating the causes of an industrial dispute and seeking to compose the differences between the parties to the dispute manifests a lack of cooperation in the recovery program. This Board finds as a fact that the National Lock Co. interfered with the right of its employees to organize and bargain collectively through representatives of their own choosing.

The National Labor Board, in order to bring about a condition in harmony with the law, rules:

(1) The strike shall be called off at once.

(2) All the employees on the pay roll on August 31, who are now without permanent employment and who manifest a desire to be reinstated, shall be placed by the company on a preferential list and shall be reinstated in order of seniority without discrimination before any new employees are engaged. This ruling shall not apply to any employee who was guilty of violence or other improper action during the strike, as determined by this board upon the submission of specific complaints by the company.

(3) An election shall be held under the supervision of the National Labor Board for the selection of representatives for the purposes of collective bargaining. All employees on the pay roll of August 31 who are now in the company's employ or who manifest a desire to be reinstated shall be eligible to vote, as well as all employees who have been on the company's pay roll for 90 days prior to the holding of the election.

ROBERT F. WAGNER, Chairman.

Senator DAVIS. James L. Donnelly, executive vice president of the Illinois Manufacturers' Association, Chicago. Will you give your name to the record?

Mr. DONNELLY. James L. Donnelly, executive vice president Illinois Manufacturers' Association, 120 South La Salle Street, Chicago.

I have here approximately 15 industrial executives, representing various major industries in Illinois. These representatives are prepared to indicate how this bill, if enacted into law, would affect their particular industry.

I would like to have the privilege of having them make their statements, and at the end of that time I would like to make a summary, if I may.

I would like to have you call on Mr. Craigmile, Mr. Chairman. Senator DAVIS. Mr. Craigmile. Will you give your name, Mr. Craigmile, and your business connection?

STATEMENT OF CHARLES S. CRAIGMILE, GENERAL SUPERINTENDENT OF THE BELDEN MANUFACTURING CO., CHICAGO

Senator DAVIS. That is a part of the electrical industry, is it not? Mr. CRAIGMILE. Yes, sir.

Senator DAVIS. What do you manufacture?

Mr. CRAIGMILE. We manufacture insulated wire.

I appear before this committee as a member of the Illinois Manufacturers' Association and as a representative of the electrical industry in our State. I will present the viewpoint and opinion of our particular company, with the belief that we are fairly representative of the well-run companies in our industry.

The Belden Manufacturing Co. manufactures bare wire, magnet wire, enamel wire, rubber-covered wire, cordage, and cords. Our office and magnet wire plant are located in Chicago. Rubber-covered wire and cords are manufactured in our plant at Richmond, Ind. Our company was established in 1902. Its paid-in capital is $1,868,000. It has a bonded obligation amounting to $350,000, which must be retired by 1937. We employ, at the present time, a total of 916 people, about equally divided between our two plant locations. Our operations for the last 13 years, from 1921 through 1933, are shown best by the following figures, which, incidentally have been shown to and discussed with all of our employees. In 8 of these 13 years we operated at a profit and in 5 years showed a loss.

You will note from these figures that during the last have paid out a total of almost $17,000,000 in pay roll.

13 years we During the

same period our profit was $135,547, and our stockholders received a

total of $280,161, or a return of only 1.15 percent per year on their investment. Our earned surplus at the end of 1933 was $24,973.

I have shown you the detail of our company's operations and position up to date as a background for the opinions I will express on Senate bill 2926, which is before this committee for consideration. It is my opinion that these figures not only reflect the experience of the Belden Manufacturing Co., but are a fair sample of at least the recent experience of the average well-run small industrial enterprise. It is of particular importance to note that after this period of the last 13 years, during which approximately $17,000,000 was paid out in pay roll, that we had a very small surplus of approximately $25,000. Our profit for the period was less than one quarter of 1 percent on our sales, and our stockholders had received much less than an ordinary savings bank return on their investment. In other words, for 13 years our business was run for almost the exclusive benefit of our employees.

If industry is to absorb the unemployed and is to continue to pay in taxes the large part which it is now paying of the Federal Government expense, it is essential that industrial concerns which are well run shall make a profit. There is nothing more necessary to profit than good sound relations between employer and employee. Such relations are best cultivated by close cooperation.

This bill now being considered means turning over the management of industrial relations to union-labor representatives, without any responsibility on them to provide the money to meet pay rolls. Disguised under the title to equalize the bargaining power of employees and employer; to encourage the amicable settlement of disputes between employees and employer; to create a National Labor Board; and for other purposes the text of the bill nevertheless reverts back to the old and thoroughly disproved philosophy that the interests of employees and employers are more antagonistic than mutual. Robert Lund has expressed the danger of such philosophy as follows:

Management and labor work together to produce their product for a market. If their work is well done, both prosper; if not, both suffer. Any influence which divides the employer and his employees destroys the capacity of industry to do its job well and the dividing wall which organized labor attempts to erect between management and labor is dangerously destructive to the public welfare.

The question is: How can sound industrial relations be best maintained? The Congress of the United States has attempted to answer this question in section 7 A of the National Industrial Recovery Act. The principle of this answer is that the employer must deal with his employees by whatever method they choose and in deciding upon this method they shall be free from any interference or coercion by the employer or his agents. This means that if employees wish to conduct their dealings with the employer through organized labor union representatives, they are free to do so. If, on the other hand, they wish to organize their own plan of employee representation within the company for this purpose, they are equally free to do so. And, if they do not favor collective bargaining in any form, but prefer to deal with the employer as individuals, they have a perfect right to do that, also.

The Wagner bill is frankly a bill aimed at so-ca led "company unions," at the open shop in industry under which individual employees deal directly with their employer, and in favor of the standard