type of craft unions which constitute the American Federation of Labor. That this aim is clearly not in accord with the best judgment of our working people is shown by data recently given out by the Labor Department of the present administration on reports from 3314 industrial companies. These reports show that industrial workers of America are divided as follows: 45 percent are employed under openshop conditions, 45 percent belong to company unions, and 10 percent belong to craft unions. Let us examine these different forms of employee-employer relationship. In the open shop without any form of organization and which is particularly applicable to the medium- and smaller-sized shops, all employees deal with the employer as individuals. In our own company under this plan we hold meetings with our employees by departmental groups at which the business situation, the company's position, and similar subjects are discussed. In addition employees are given full opportunity to bring up any subject they choose, or make any suggestion in connection with the operation of our business. The importance of these meetings and their effect in promoting good relations as shown by the last paragraph of our annual report to the stockholders for 1933, by Mr. J. C. Belden, our president, which reads as follows: The labor clause of the National Recovery Act has been the cause of much misunderstanding and many strikes costly to both labor and employer. Your management held many group meetings with employees, where discussions were .frank and open. A number of valuable suggestions of mutual benefit were received from employees and acted upon the company. Such harmonious relations are a great source of satisfaction to your management and of benefit to all concerned. We take this means of expressing our appreciation of the cooperation received from all our fellow workers. Under the plan of employee representation the employees of a company form an organization of their own and elect from among themselves a committee or council to act for them in dealing with the employer. The term "company union" has been widely, but in most cases improperly, applied to plans of this character. There is nothing new about employee representation except its greatly increased use in recent months. It has been in successful operation in some companies for years. The reason why so much has been heard about it lately is that the National Industrial Recovery Act grants to workers the right to bargain collectively with employers through representatives of their own choosing and, since employee representation is the leading form of collective bargaining, it has been widely discussed and has been adopted in many companies. The outstanding advantages of this plan are: 1. It makes it possible for both management and employees to learn the point of view and problems of the other and to discuss a question in a frank and friendly way. 2. Questions are confined to local conditions and needs. 3. As an organization of the employees of a company, it is the natural body to initiate and coordinate various activities of interest to employees. Plans of mutual aid, recreation and athletic programs, social gatherings, educational and cultural projects may well be undertaken and carried on by the representation committee or council. Under the labor-union plan when a worker joins a labor union he accepts the leadership of union officials. He turns over to these officials the right to represent him in dealings with the employer. In effect the union member makes regular payments to the union to have officials conduct his dealings with his employer. If he is ordered out on strike he is expected to strike. A strike may be ordered for a variety of reasons: It may be to try to force the employer to recognize the union. It may be to try to force the employer to agree to changes in wages and working conditions demanded by the union. It may have nothing to do with conditions in the particular plant, but union members in that plant may be ordered out to strengthen the union's position in its struggle with some other employer. It may have nothing to do with any employer's policy or action, but may be caused by the struggle of rival unions for supremacy, or for jurisdiction over a particular kind of work. A study of these three plans of industrial relations clearly indicates why only 10 percent of industrial workers of America belong to craft unions. Senator DAVIS. You have made that statement before, that 45 percent belongs to company unions-was that it? What were those figures you gave us? Mr. CRAIGMILE. Forty-five percent are in open shops; 45 percent are in so-called "company unions"; and 10 percent in craft unions. These are Department of Labor figures. Senator DAVIS. As I understand it, inasmuch as I was former Secretary of Labor, I read those reports, if I remember correctly, the Department of Labor just published those and stated when they published them that they were for the National Conference Board, they were figures of the National Conference Board, and they were not the figures of the Department of Labor, that it was done for the National Conference Board in New York City. Mr. CRAIGMILE. The most recent figures, at least, those most recently in the press and made public as far as I know by the Federation of Labor checks about that percentage. It is to be assumed, as I understand it, from the figures, that there are somewhere between 40,000,000 and 50,000,000 employed people in the United States. Senator DAVIS. I think, if I remember correctly, it was 48,000,000 gainfully employed while I was Secretary of Labor, and now they say it is 50,000,000 gainfully employed. Mr. CRAIGMILE. The Federation of Labor, as far as I have seen their latest report on membership, is approximately 4,000,000, so that really tends to check approximately with the 10 percent. Senator DAVIS. When Mr. Green was here making his statement, I asked him how many members had joined the Federation of Labor since the passage of the National Industrial Recovery Act, and I think he said around 2,000,000. I asked him if he had any figures on the number who had joined so-called "company unions", and he said, I think it was, 2,000,000 had joined up in the so-called "company unions." Mr. CRAIGMILE. Of course, that does not check at all with the figures of the conference board, and their figures are generally accepted as being pretty reliable. Senator DAVIS. In reading the report of the Secretary of Labor, I know those particular figures were quoted from the National Industrial Conference Board, but they were not the Department of Labor figures. Mr. CRAIGMILE. I see. Well, I simply point out that according to all the information that has been made public, if, as Mr. Green says, approximately 2,000,000 men have joined the Federation of Labor, then it makes the total somewhere in the neighborhood of 4,000,000, which, roughly, would be something about 10 percent of the total employed people. Senator DAVIS. I have forgotten the number of members that there are in the brotherhoods, that is, the railway labor group, but I believe it brings it up to around 5,000,000 or 6,000,000 for those who belong to organized labor, and that with 50,000,000 gainfully employed, is somewhere about 10 percent. Mr. CRAIGMILE. I will put it this way: A study of the three plans of industrial relations clearly indicates why only approximately 10 percent of industrial workers of America belong to craft unions. Senator DAVIS. May I just say this? I noticed in reading the annual report of one of the constituent unions of the Federation of Labor, that they are more or less an industrial union because they' take everybody in from the common laborer to the highest-paid mechanic. Mr. CRAIGMILE. Yes. The principal objection to the Wagner bill is that it attempts to do by compulsion what can only successfully be done by evolution and education. Neither the cause of economic justice nor the cause of economic recovery is promoted by the employment of force to compel men to do these things which they should do of their free choice. This bill, if passed, would create a labor monopoly which would deprive the individual of his freedom in the selection of a job. If for any reason he got into difficulty with the union he might easily find it difficult or impossible to get a job in his line of work. Under the open shop if for any reason a man leaves one company, he is at perfect liberty to work for any other company, where he can find employment. If that liberty is taken away, as it will be under this bill, the opposition of open-shop employees now inarticulate will be terriffic. In regard to the extraordinary nature of the powers which this bill seeks to convey to the National Labor Board, it is perfectly evident that to convey them to a board constituted as provided in the bill means inevitable political domination of the employer-employee relation and the ultimate destruction of both. In conclusion our opinion Senator DAVIS. Before you conclude, I note your statement here related to the make-up of the board. Are you of the opinion that if we are to have a board at all, it ought to be nonpartisan? Mr. CRAIGMILE. It should be, if such a board is possible Senator DAVIS. The railroads have been more or less guided in their work by the Interstate Commerce Commission. What would you think of having a commission similar to the Interstate Commerce Commission that now regulates the railroads, to sort of guide industry? Mr. CRAIGMILE. I should say that if the regulation which now exists has anything to do with the financial condition of the railroads, it would be tremendously unfortunate for industry to have such regulation. I can say no more because I am not familiar with the railroad situation except from the standpoint of their financial condition. Senator DAVIS. Are you familiar with the set-up of the Railway Labor Board? Mr. CRAIGMILE. Only as any citizen might be from reading in the papers; I am not thoroughly familiar with the set-up. Senator DAVIS. All right, proceed. Mr. CRAIGMILE. In conclusion, our opinion has been so well expressed in an article which came to my desk recently that I would like to read one paragraph of that article [reads]: The Wagner bill is instinct with the spirit of war. It deals with employer and employee definitely as opposing forces. Even the prospect of its passage in its present form has filled the air with rumors of impending clashes and predictions of widespread strikes. The people of the United States as a whole are sick of war. They want peace and a chance to work and support themselves and their families. Any special class which seeks to precipitate and prolong class warfare will earn the hostility and condemnation of the public. The sound, sane, and wholesome conception of an overwhelming majority of the people is that employer and employee constitute a team who must pull together if the wagon of common welfare is to be pulled out of the mire of depression up to the heights of a restored prosperity. Thank you very much, sir. Senator DAVIS. Do you care to give the name of the author of that particular article? Mr. CRAIGMILE. I think I can; yes, sir. Senator DAVIS. I would like to have you put it in the record. If you could get the rest of that article, I would like to read it myself. Mr. CRAIGMILE. I think I am quite sure in stating that the article is the reported statement of Col. Frank Knox, over the National Broadcasting System on the 16th of March. Senator DAVIS. That is the Knox of the Chicago Daily News? Senator DAVIS. Thank you. Mr. CRAIGMILE. Thank you very much for your attention. STATEMENT OF PRESTON B. HELLER Senator DAVIS. Mr. Heller, just give your name for the record. Mr. HELLER. Preston B. Heller. Senator DAVIS. And your business and your general connection. Mr. HELLER. I am secretary of B. Heller & Co., manufacturing chemists, Chicago. Senator Davis, it is my desire to tell you briefly how the passage of the Wagner bill would affect my particular business, a small concern manufacturing chemicals and food products, and employing about 200 persons. This business was started 40 years ago. Many of our employees have been with us over 20 years. In all the 40 years of our existence we never had a labor dispute either with our own people or with outside organizers. That is, until a few months ago, an organizer for the engineers' union attempted to foment trouble, and justifying his intrusion with paragraph 7 (a) of the N.R.A. not by a desire of any of our employees to be organized. Because of the secretive nature of our formulae and processes, we have adopted a rigid rule excluding everyone even our own salesmen and customers-from our plant. Notwithstanding that, one Evans, representative of the engineers' union, was discovered in our engine room talking to our engineer. He had sneaked in, and had never tried to gain entrance through our front door, giving as the reason that he would not have been admitted. Senator DAVIS. If he had, and made application to come into the plant, would you have admitted him? Mr. HELLER. No, sir, we would not; but we would have given him permission to meet the men and talk to them, just as he could have gone to their homes. When discovered by two of our officers he stated he was a city inspector checking up to see if employment had been increased by the N.R.A. When asked for his credentials he became abusive and threatening, using language that could not be included in the record here. This was our one experience with a representative of the American Federation of Labor. Shortly after this, our employees, unsolicited, signed a petition requesting the management to protect them from attempts of professional organizers to stampede them unwillingly into trade unions. They gave as their reasons that they preferred to bargain as individuals with the management. And the reason for their decision, gentlemen, was because every man and woman in our employ knew he or she had always received a square deal, and could talk to us about wages or any other problem at any time. They had no desire to be dominated by a union which would cost them heavily for dues, and possibly call them out on strike because some other institution might be having a dispute. They knew they had always been treated with consideration, and could expect a continuation of this treatment in the future. The proof of the foregoing statement lies in the fact that although the volume of our business fell about one half from the peak, we have today, and have had all through the depression, the exact number of employees that we had in 1929. Not only that, but when we signed the President's agreement, under the N.R.A., immediately on its appearance, we were obliged to make practically no wage readjustments. In short, the policy we deliberately followed was to retain our personnel intact, and pay them good living wages, rather than create profits for a few. The result of this is an appreciative loyalty, which legislation like the Wagner bill would tend to destroy or at least impair. Our concern functions like a team. We pull together, not in two diverging, selfish directions. And when I say "our concern" I also include many small businesses in a like or other industry with which I am familiar. In our particular case we feel that the drastic arbitrary action contemplated by the bill would have the effect of driving a wedge between us and our employees, create strife, and finally destroy our business altogether. This last contingency can easily occur because the margin of profit is almost nonexistent because of our policy of keeping our organization intact and paying liberal wages. We feel, and our employees feel, that we have earned the right to control our own business with |