the Mediation Board and Dr. Steelman of the limitation upon their authority.

Mr. MURDOCK. What about Mr. Hughes, the chief executive of the conductors? Had you heard him inform the Mediation Board or Dr. Steelman that he didn't have authority to enter into a binding agreement?

Mr. SHIELDS. Yes; I did.

Mr. MURDOCK. And what about Mr. Robertson?

Mr. SHIELDS. I have heard both President Robertson, and President Kennedy also, indicate certain limitations placed upon their authority in the matter of finally signing a binding agreement. I cannot at this time relate just exactly what was said, but I do recall that that was mentioned on two or three occasions during our conferences.

Mr. MURDOCK. Well, now, is it a true statement that at all times the four brotherhoods who were before the Mediation Board and Dr. Steelman, all of the chief executives, made it clear that they didn't have authority to enter into a binding agreement?

Mr. SHIELDS. From my recollection of what had transpired, I would say that that was true of the other three chief executives. Speaking for myself, there is no question about it at all, because that limitation on my authority, as I have already stated, was so indelibly impressed upon me, and for the reasons already indicated in the record; which were in substance that because of the unusual aspects of this situation, where on the one hand we had requested what we thought were reasonable wage increases and a the same time had requested the adoption of the 5-day, 40-hour week, optional for acceptance or rejection, which, in my opinion, was more or less of an institution, not only in outside industry but also in the railroad industry-and then on the other hand, the carriers had declined so far in the negotiations to agree to an adjustment of the rates, and particularly those of the engineers, that would protect against any loss in take-home pay in the conversion to the 5-day, 40-hour week, and also had failed so far to offer more than 10 cents per hour increase for roadmen, while at the same time insisting upon literal compliance with the settlement provisions of the four rules which have been under discussion.

Mr. MURDOCK. You say Dr. Steelman expressed displeasure at your lack of authority. He likewise expressed displeasure at the lack of authority of the other chief executives?

Mr. SHIELDS. I don't recall that he went into any detail about that, although he may well have. But being interested at that point particularly in my own situation, I perhaps was not as attentive to the conversation that took place between him and the other chief executives as I might have been.

Mr. MURDOCK. Well, what was your understanding of the authority of the representatives of the carriers? Was it your understanding that they had authority to enter into a binding settlement?

Mr. SHIELDS. I have always understood, and this is entirely speculation, that after conferences and bargaining have taken place up to the point where what we might term "a package settlement" has been offered-now, I want you to understand this is purely my assumption at that point perhaps it was necessary for the carriers to get further authority. I am not sure about that. I didn't question the carriers' authority at all. And because of the fact that I did not

regard the memorandum of agreement which was submitted to us on December 21 as a final and binding agreement upon me, by the same token I was not interested at the moment whether or not the carriers had authority at that time to make a final and binding agreement. I was interested only in having a record of exactly what had been proposed as a basis of settlement up to that time.

Mr. MURDOCK. Now, did this pattern of authority to negotiate differ materially from other negotiations you had had with the help of the Mediation Board with respect to your authority and your understanding of the authority of the carriers?

Mr. SHIELDS. In some respects, yes.

Mr. MURDOCK. In what respects?

Mr. SHIELDS. As I have stated in the earlier part of my statement, I believe, the authority to pass finally upon these matters rests with the general chairmen as representatives of our general committees, and it is their authority at their option to say whether or not they wish to delegate authority to the chief executive of our organization and any wage group, or not, and they have the authority to delegate or to take from that committee this authority.

Mr. MURDOCK. Mr. Shields, the attention of the committee has just been called to an announcement from the White House this morning of a settlement of the wage dispute between the railroads and the nonoperating unions. According to an AP dispatch, the settlement calls for a 122-cent hourly pay increase for a million workers. The announcement also indicates that this settlement has come after a night-long session at the White House, climaxing negotiations which had begun last October 25.

I take it this announcement doesn't in any way apply to or refer to the four operating brotherhoods, does it?

Mr. SHIELDS. It does not.

Mr. MURDOCK. You have not participated in these negotiations?
Mr. SHIELDS. No, sir; we have not.

Mr. MURDOCK. There have been no sessions in which the "ops" and the nonoperating unions were involved?

Mr. SHIELDS. No. There have been no joint conferences with that group.

Mr. MURDOCK. As this time, Mr. Chairman, I would like to offer for the record as committee exhibit 5, a copy of the AP dispatch announcing this settlement of the nonoperating dispute.

The CHAIRMAN. It will be received, and the exhibit will be marked for identification as requested and copied into the record.

(The dispatch was identified as "Committee Exhibit No. 5," and follows in the record at this point.)

COMMITTEE EXHIBIT No. 5

BULLETIN-RAILS

WASHINGTON, March 1 (AP).-Presidential Assistant John R. Steelman today announced a settlement of the wage dispute between the railroads and 15 nonoperating unions. It calls for a 12-cent hourly pay increase for 1,000,000 workers.

Steelman's announcement came after a night-long session at the White House climaxing negotiations which had begun last October 25.

The 15 unions originally had asked for a 25-cent hourly wage increase for their members, including shop employees, machinists, clerks, and others who do not actually run the trains.

The carriers estimated that the 12-cent increase will cost them $280,000,000 annually.

Another increase, estimated at 4 to 5 cents an hour, will be added to the 122 cents around April 1, based on the Government's cost-of-living index of February 15.

A still further boost in the hourly wage rate will be permitted in the summer of 1952 if the Government's stabilization program allows the kind of productivity allowance called for by the CIO auto workers' contract in the automobile industry.

That is supposed to allow another 4 cents an hour to compensate for improved productivity over the past year, effective May 29.

The union chiefs, speaking through George E. Leighty, chairman of the Railway Labor Executives Association, said no further ratification by the unions is necessary.

He told a news conference the agreement was signed, sealed, and delivered on the spot after the all-night session.

This explanation was significant because a similar agreement was announced under parallel circumstances at the White House last December 21 for the four operating rail unions. That settlement was later rejected by local chairmen of the operating unions.

The new agreement specifies that no further wage increase will be sought until October 1, 1953.

Mr. SHIELDS. Early in the morning of December 21, Dr. Steelman presented to the four chief executives a proposition in writing outlining a means of disposing of the disputes. He stated to us that this proposition represented the final and best proposition which could be obtained from the carriers.

As the hours passed it became understood that this proposition would be identified by our signatures. At no time did I undertake to do more than submit this proposition. Specifically, I never undertook to recommend its acceptance. Indeed, I never undertook more than to present it for action, though I of course intended to and did make a full explanation of the proposition in all its ramifications to our general chairmen.

Mr. MURDOCK. Mr. Shields, at that time, did you indicate to Dr. Steelman whether or not the proposal was satisfactory to you?

Mr. SHIELDS. All the way through I had indicated to Dr. Steelman, all the way through the negotiations and all through the nightlong negotiations in the east wing of the White House, December 20 and 21—I had indicated to him that certain of the carrier propositions were not satisfactory to me and I was sure would not be satisfactory to the people that I represented.

Mr. MURDOCK. Now, that apparently refers to individual items in the proposal. What about the package itself?

Mr. SHIELDS. The package itself was nonacceptable.

Mr. MURDOCK. And did you so indicate to Dr. Steelman?
Mr. SHIELDS. Yes, sir.

Mr. MURDOCK. What about the other three chief executives? Did they indicate whether or not the package was acceptable to them? Mr. SHIELDS. I can't recall clearly just exactly what they may have said about that, but it is my recollection that as a package settlement they so indicated.

Mr. MURDOCK. That it was unacceptable?

Mr. SHIELDS. That is right.

Mr. MURDOCK. You say, Mr. Shields, that you signed it, and you implied that you signed it purely for identification.

Mr. SHIELDS. That is right.

Mr. MURDOCK. Wouldn't that be a rather unusual procedure? To identify a proposal of that sort by your signature?

Mr. SHIELDS. I have a further statement, Mr. Murdock, which I think will explain that. I think your question is very pertinent, and I will attempt to explain that, if you please.

I have not presumed to shape the course of this investigation or to influence this honorable committee in the accomplishment of the purpose of this investigation, except to the extent which may result from presenting a factual statement concerning the conference experiences of one of the participating labor organizations. It does seem to me, however, that you will be particularly interested in a statement of facts concerning the reasons for signing the December 21 memorandum, and the reasons why I did not at that time and do not now regard it as a final and binding agreement.

The carriers' position in this respect which they elected to advertise to the world through the medium of newspaper advertisementsand this prior to any across-the-table discussion of the matter with us-has operated to delay the reaching of a final settlement of the original questions at issue.

I have related the limitations upon the authority of the wage-rules committee and myself to sign a final agreement, and you will recall, as already stated, that Dr. Steelman, the members of the National Mediation Board and the carriers had been repeatedly advised of this lack of authority.

The several components of the December 21 memorandum had been discussed in piecemeal fashion during White House conferences, and not with the understanding of commitment that any or all of them were wholly acceptable, but with the statement from Dr. Steelman that this or that suggested disposition of a particular issue was the best he could do. At no time prior to the time the memorandum as a whole was submitted to us in its present form was it ever assembled for review or consideration.

When the assembled memorandum was submitted as a whole, and upon being advised by Dr. Steelman that it was the very best he could do, we had no other record of what had finally been proposed as a basis for settlement. I therefore thought it proper to sign the agreement in order that there would be a definite and agreed-upon record of what was then offered as the basis for final settlement, subject as all concerned had been informed, to the approval of the B. of L. E. General Chairmen's Association.

Mr. MURDOCK. Mr. Shields, you say you thought it proper to sign for that purpose. Did you make it clear at that time that that was your purpose in signing, and your only purpose?

Mr. SHIELDS. I think in connection with the repeated statements of my lack of authority to sign a firm agreement, Dr. Steelman fully understood my position at that time.

Mr. MURDOCK. What about the carriers' representatives? Did they so understand, do you think?

Mr. SHIELDS. They had been previously informed of the limitations upon my authority to sign an agreement, both at the outset of the conferences in the Statler Hotel beginning on October 5, and subsequently.

Mr. MURDOCK. Were there any members of the Mediation Board present at this meeting on December 21?

Mr. SHIELDS. There were two members of the Mediation Board present at that time.

Mr. MURDOCK. Which were they?

Mr. SHIELDS. As I recall it, they were Mr. O'Neill and Mr. Leverett Edwards.

Mr. MURDOCK. Do you think it was clear in their minds that there was a limitation on your authority?

Mr. SHIELDS. There couldn't have been any doubt in their minds, because that particular subject had been discussed so frequently, and, as I stated just a short time ago, to the point of being highly repetitious.

The CHAIRMAN. After the proposed agreement was signed for identification, as you say, did the press come into the room, and were there some statements made in the presence of the press and the photographers with reference to the limitation of authority?

Mr. SHIELDS. There were, Mr. Chairman, and I will treat of that a little bit later on in the statement.

I might add that we had previously discussed a rather lengthy and detailed proposition, which had been reduced to writing, covering possible disposition of one of the most controversial issues, the complex and distasteful carrier-proposed rule on interdivisional runs. This written proposal was not copied into or referred to in any manner in the memorandum. The memorandum merely lists "interdivisional runs" as one of the rules to be settled. Presumably, if we could not settle the language of this rule in conference with the carriers, it would "be submitted to John R. Steelman for final decision"that is, he would write the language which would be obligatory on us. Before I left Washington on December 22, I finally managed to obtain an incomplete copy of the written proposition for settling the interdivisional-run controversy. Language which we had discussed in the White House conference and which we regarded as essential protection, should there be any settlement of that issue at all, was omitted from the copy which I finally obtained.

In any event, it is certain that we had no assurance in the December 21 memorandum, if accepted by our chairmen, that even the meager concessions from the carriers' original position on interdivisional runs which had been discussed in the White House conferences and reduced to written language would still be available to us when we sat down to settle the rule or when we called upon Dr. Steelman to write the rule for us.

At this time I would like to offer as B. of L. E. Exhibit No. 1 a copy of that particular memorandum. And you will note on the second page of that memorandum an explanatory note just ahead of the particular paragraph which was not included in the copy of the memorandum which was furnished us by the White House.

The CHAIRMAN. You offer this as an exhibit?

Mr. SHIELDS. Yes, sir.

The CHAIRMAN. It will be marked for identification and received in evidence and printed in the record.