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BLE EXHIBIT No. 3

CLEVELAND, OHIO, December 22, 1950. Mr. J. P. SHIELDS, GCE.,

1112 B. of L. E. Building, Cleveland, Ohio. DEAR SIR AND BROTHER: While in conference in the office of Assistant Vice President-Personnel B. B. Bryant, of the Chesapeake and Ohio, in Richmond yesterday, the following message was received and he gave me the attached copy, which I though perhaps you may be interested in, especially that part that I have underscored.

Conference was held together with General Chairman Richards in efforts to have Brother F. R. Piper's rights restored to road service and Brother Harry Bishop, who was dismissed from service September 4, 1947, returned to service. Mr. Bryant informed us that he would take both cases under advisement and notify us of his decision.

At the conclusion of conference I left for home in accordance with your letter concerning holidays. Fraternally yours,

J. W. TURNER, Assistant Grand Chief of Engineers.

Following taken on telephone from Mr. S. H. Pulliam, 1:30 p. m., December 21, 1950.

Yardmen: 23 cents October 1; 2 cents January 1; 4 cents when the 40-hour week becomes effective.

Roadmen : 5 cents October 1; 5 cents January 1.

Stewards: The present rate for the 206-hour month until February 1. straight time up to 240 hours. After February 1, time and one-half after 220

hours, and add to the rate $4.10 January 1 (2 cents for 205 hours). The cost-of-living index to be based on 176 instead of 174. The next adjustment to be April 1, 1951.

We will get rule changes will have to write after January 10. Steelman is in favor of our rules and he will write.

Moratorium clause will be taken from Glover's agreement and add this: Provided, however, That if as the result of Government wage stabilization policy workers generally have been permitted to receive so-called annual improvement increases the parties may meet with Dr. John R. Steelman on or after July 1, 1952, to discuss whether or not further wage adjustments for employees covered by this agreement are justified in addition to increases received under the cost-of-living formula. At the request of either party for such a meeting, Dr. Steelman shall fix the place and time of such meeting. Dr. Steelman and the parties may secure information from the wage-stabilization authorities or other Government agencies. If the parties are unable to agree at such conference whether or not further wage adjustments are justified, they shall ask the President of the United States to appoint a referee who shall sit with them and consider all pertinent information and decide promptly whether wage increases are justified and, if so, what such increases should be and the effective date thereof. The carrier representatives shall have one vote, the employees' representative shall have one vote, and the referee shall have one vote.

If the parties cannot agree on the details of the agreement or rules, they shall be submitted to Dr. John R. Steelman for final decision.

This last paragraph refers particularly to the rules. The rules will be Steelman's interpretation, which is pretty much the same as the railroads'.

Senator Morse. Mr. Chairman, could I look at the exhibit before it is introduced into the record ?

The CHAIRMAN. Certainly.
Senator Morse. Mr. Chairman, may I ask the witness a few identi-

a fying questions?

The CHAIRMAN. Yes.

Senator MORSE. This memorandum, which is headed "The Chesapeake & Ohio Railway Co., following taken on telephone from Mr. S. H. Pulliam, 1:30 p. m., December 21, 1950,” is not signed; is it?

Mr. SHIELDS. No, sir; it is not. Senator MORSE. It is your testimony that you came into possession of this memorandum as an inclosure to the letter that was sent to you under date of December 22, 1950, signed by J. W. Turner?

Mr. SHIELDS. Yes, sir.

Senator MORSE. Is it my understanding that you offer this memorandum in evidence in this hearing as a memorandum of note written by Mr. J. W. Turner following a telephone conversation that he had with Mr. S. H. Pulliam?

Mr. SHIELDS. Pardon me, Senator. This memorandum was not written by Mr. Turner, but was written by someone in Mr. Bryant's office and purports to represent the substance of a telephone conversation between Mr. S. H. Pulliam and Mr. Bryant. As I understand from Mr. Turner's letter, this was discussed because of the natural interest in whatever had come out of the White House conferences, and before Mr. Turner left the office he was given a copy. We had the photostat that you have there made from the original copy. Mr. Turner's only interest in the matter was to call my attention to the two paragraphs in the memorandum which have been underlined and will show were underscored by him on the original copy.

Senator MORSE. I will get that in a minute. First, I want to get the origin of this memorandum clearly in mind. I do not know what the foundation of this memorandum is and would like to know before it goes into the record if it goes in.

I now understand that the original of this photostatic memorandum was a copy of notes taken by a Mr. Bryant or by someone acting for him in his office of a telephone conversation which Mr. Bryant had with Mr. S. H. Pulliam. Again, who is Mr. Bryant?

Mr. Shields. He is vice president in charge of personnel of the Chesapeake & Ohio Railroad.

Senator MORSE. Who is Pulliam ? Mr. SHIELDS. I don't know what Mr. Pulliam's official capacity is. I have been told that he is a superintendent of the Huntington division of the Chesapeake & Ohio Railroad.

Senator MORSE. And it is your testimony that when Mr. Turner left Mr. Bryant's office Mr. Bryant gave Mr. Turner the original of this photostatic copy of notes, memorandum of notes, of the telephone conversation that Mr. Bryant had had with Mr. Pulliam? Mr. SHIELDS. That is my understanding; yes, sir.

Senator MORSE. Any information that you want to state in the testimony as to why he gave him a copy?

Mr. SHIELDS. No. Not except as I would understand it, and I don't presume to speak for Mr. Turner on that except that s would understand that, knowing Mr. Turner's interest in the final outcome of the Washington conferences, that was the basis of furnishing him with this copy of the memorandum.

Senator MORSE. You now ask to have this memorandum made a part of the record ?

Mr. SHIELDS. I would like to; yes, sir.

Senator MORSE. With that foundation, Mr. Chairman, for whatever the memorandum may be worth, I have no objection.

The CHAIRMAN. It may be received.

Senator MORSE. At the time you went into the White House conference, had you received from your organization any specific or implied authorization to make a binding agreement or an agreement that was not subject to ratification by the appropriate committee or board in your organization?

Mr. SHIELDS. No, sir; I did not have complete authority. My authority was limited to negotiation to the point where it seemed that nothing further could be accomplished, after which I was to refer the matter to the association of general chairmen of my organization.

Senator MORSE. Was your position made clear to the persons that participated in the conference?

Mr. SHIELDS. Yes, sir. As I have stated for the record, Senator, repeatedly.

Senator MORSE. Did you wish to discuss exhibit 3?

Mr. SHIELDS. I wanted to call the attention of the members of your committee to the two sentences which were underlined by Mr. Turner and which I think have a special significance. In calling these two sentences to your attention, I want you to understand that this is not an indictment of Dr. Steelman's motives but I merely want to convey to you my thought that if the carriers really felt this way about Dr. Steelman's attitude toward their rules then certainly there was more than the ordinary cause for apprehension, of the possibilities in signing an agreement providing for Dr. Steelman to be the sole arbiter of these rules, and I might say for the record that on the first meeting that we had with Dr. Steelman after we returned to Washington, and that meeting as I recall was on January 18, I showed Dr. Steelman a copy of this original letter and the memorandum which I have offered in evidence in this hearing.

The particular sentences which I wish to call particular attention to are as follows:

We will get rule changes will have to write after January 10, Steelman is in favor of our rules and he will write.

Then there follows comment upon certain portions of the contents of the December 21 memorandum, ending with the last paragraph which reads as follows:

This last paragraph refers particularly to the rules. The rules will be Steel. man's interpretations, which are pretty much the same as the railroads'.

I have stated in the record here that after receiving that I was more apprehensive of the possibilities of my group and the other group being damaged by the final interpretation that might be placed on these rules or the final consist of the rules than I had been heretofore or theretofore. I will say that this letter from Mr. Turner and this memorandum was not shown to our association of general chairmen. But, as I have already indicated, it was shown to Dr. Steelman at the first meeting after we returned to Washington.

Senator MORSE. Did you say, Mr. Shields, that Mr. Turner is in the room?

Mr. SHIELDS. Yes, sir; he is right here.

Senator MORSE. As far as your brotherhood is concerned, is he available as a witness?

Mr. SHIELDS. Certainly, yes, sir.

Senator MORSE. I may in time, Mr. Chairman, ask that he be called as a witness to elicit further testimony in the way of answering questions.

The CHAIRMAN. Very well.

Senator Morse. Mr. Shields, as president of your brotherhood, what explanation do you have as to why Mr. Bryant would turn over to Mr. Turner any such memorandum as this?

Mr. SHIELDS. The only reason that I can advance, Senator, is one that I have already briefly stated; that knowing Mr. Turner's interest in the outcome of the White House conferences and that he would be interested to know what the consist of the proposed settlement was, whether or not the individual that was responsible for furnishing Mr. Turner this memorandum realized what would happen when the majority of our groups, if and when they did, saw these two sentences that I have just read I can't say. But I would also understand, and this is pure assumption, that the representative of the carrier undoubtedly had the opinion that this was a firm agreement and there was nothing that could be done about it anyway. That is pure assumption on my part. I am merely trying, in response to your question, to give you my reasons why this particular memorandum might have been furnished our representative.

Senator Morse. Is it your interpretation of this memorandum that the carriers were under the impression that although the rules issue had been postponed for future determination under the Steelman agreement itself that they were satisfied that Dr. Steelman shared their position on the rules issue and that in due course of time a decision favorable to their position would be handed down by Dr. Steelman?

Mr. SHIELDS. Well, I don't know to what extent the carriers group shared the impression which undoubtedly the writer of this memorandum did, but it seems quite obvious to me that the writer of this memorandum and his informant from Washington undoubtedly thought that Dr. Steelman was quite favorable to their version of the rules.

Senator MORSE. And when you say that on December 28 you had received information of a rather specific nature which caused you to fear the consequences, “should our chairmen be inclined to accept the memorandum as a basis for settlement,” you are referring by implication to this memorandum which has become union exhibit 3?

Mr. SHIELDS. That is right.

Senator MORSE. Was it your personal opinion on the basis of this memorandum if you approved the Steelman agreement of December 21 that you would lose the rules issue in a future determination by Dr. Steelman?

Mr. SHIELDS. Frankly, I was then and am now of the opinion that Dr. Steelman could be and might eventually be persuaded to go

further in the direction of meeting the carriers' demands with respect to these rules than I believe he should.

Senator MORSE. What reason have you to believe that, assuming for the moment that Mr. Bryant was of the opinion as indicated in this memorandum as to Dr. Steelman's position on the rules issue, that Bryant's opinion was held by anyone other than himself and Mr. Pulliam, with whom he had the telephone conversation?

Mr. SHIELDS. I couldn't actually say that it was, that his opinion was shared in by any other member of the conference committee or by any of the other carriers.

Senator MORSE. You say that on January 18 you submitted the Turner letter of December 22 and the so-called Pulliam memorandum te Dr. Steelman; what did he say?

Mr. SHIELDS.' As I recall it, Dr. Steelman's only remark after reading about Mr. Bryant's letter and the memorandum was something like this:“Well, there is always someone trying to criticize you."

That is as nearly as I can recall Dr. Steelman's comment on the matter at that time.

Senator MORSE. No statement denying any basis whatsoever for such an interpretation that crept into this memorandum as to this issue

Mr. SHIELDS. No, sir; no flat denial of any justification for that assumption.

Senator MORSE. Did he or did he not indicate to you an attitude of resentment, possible anger, over the fact that any such memorandum would have been written by anyone which would be subject to the interpretation of casting reflection upon his impartiality?

Mr. SHIELDS. No; only to the extent that that might be implied in what I recall his statement to me was: “Well, there are always people ready to criticize.” He didn't go into any explanation beyond that simple statement or one of practically that substance.

Senator MORSE. I am to understand, and you would have the committee to understand, that it was union exhibit 3 that caused you to have some fear as to the advisability of accepting the Steelman agreement of December 21 because you were fearful that if you did you would lose the rules?

Mr. SHIELDS. That is one thing, Senator. If I might be permitted to go back a little further, let me say this: In 1948 the Brotherhood of Locomotive Engineers, the Brotherhood of Locomotive Firemen and Enginemen, and the Switchmen's Union of North America, after a series of conferences in Chicago, after hearings before the President's Emergency Board on a combined wage and rules request, submitted by those organizations, finally found themselves before Dr. Steelman in Washington. At that time and in the conferences presided over by Dr. Steelman, and I can't say whether or not members of the Mediation Board were present there or not because I was never present in any of the conferences, but in any event, out of those conferences emerged certain rules and with respect to 90 percent of those rules we are still in controversy. Each of the participating organizations, save, perhaps the switchmen, who do not have the complicated rules that the enginemen have, are now, and have been since those rules became operative, in conflict, sharp conflict with the carriers respecting what the original intention of the rule was and what interpretation should be applied. Both of the engine service organizations have stacks and stacks of time claims and at least one or two conferences have been held between representatives of the carriers and representatives of these two organizations in an effort to work out a workable understanding as to just what these rules meant. So far we have been unsuccessful.

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