the 1936 rate of production, the carriers would now need 600,000 more employees, but the increased rate of production per employee has made it possible to move materials and the traveling public without calling for the additional 600,000 employees. If the productivity of railroad employees had been the same in 1948 as it was in 1921, a million and three-quarters more employees would be required to do the work today. In other words, today 40 employees are doing the work which 100 employees performed in 1921. While technological changes, particularly Diesel-electric locomotives, have brought with them great gains in productivity, they have also brought to the human beings who comprise the labor force of the industry an accompanying loss of gainful employment. The financial structure of the railroads should and does permit the granting of reasonable wages, hours, and working conditions to railroad men. The inequities which the ORC-BRT have sought to correct in this present dispute merit this consideration. The Emergency Board in its report to the President failed to recognize this, and this failure was the cause of the organizations' rejection of the recommendations as a basis of settlement.

The National Mediation Board again proffered their services and this proffer was accepted by the organizations. Mediation started in Chicago, Ill., on June 27, and continued until July 8, at which time the meetings were recessed. Mediation proceedings were then transferred to Washington, D. C., where the organizations met with the Board from July 17 to August 3. The carriers were still adamant in their refusal to go beyond the confines of the report and recommendations of Emergency Board No. 81 for the purpose of arriving at a settlement that would be satisfactory to the two organizations. On August 3, the chief executives of the two organizations notified President Truman of the gravity of the situation and urged the Government to take over the railroads, because we felt it was the only action that would cause the carriers to proceed to mediate a settlement with us in good faith.

From the initial conference with the carriers from June 20, 1950, to and including all of the conferences held with Dr. Steelman, the organizations have contended that the Board's recommendations could not alone serve as a basis for an agreement, because:

(1) The Board in its report brushed aside the main issues, that is, "inequalities of increases in wages or treatment, the result of previous adjustments to wages and working conditions."

(2 Its report denied the employes we represent treatment equal to that given the employees with whom they work on the same trains and in the same tour of duty.

(3) The Board's report is not in itself adequate grounds for continuation of the inequities cited or for increasing disparity in wage rates as between train and engine service groups.

(4) Growing gross inequalities from which train service or other employees suffer cannot be justified merely because the Board failed to recommend measures to correct.

In presenting our case to the Emergency Board we were not asking that the employees we represented be given any advantage over any other group of employees. On the contrary we asked the same treatment already given to the employees with whom they work. Senator LEHMAN. May I ask a question?

Senator HILL. Certainly.

Senator LEHMAN. Mr. Hughes, you testified that because of the difference in the workday mileage between the engine crews and the trainmen, the increase in any wage allowed would be only 6623?

Mr. HUGHES. Every dollar the engine crew got in wage in

creases

Senator LEHMAN. Yes. In other words, if the engine crews got an increase of $3 the trainmen would only get an increase of $2. Mr. HUGHES. Right.

Senator LEHMAN. There have been many instances of increases, of course, since 1921?

Mr. HUGHES. There have been quite a few and in every instance the passenger men got 66% against the dollars secured by the others. Senator LEHMAN. I see. I wonder if you have any figures of the actual pay-wages paid-to the various classes of trainmen, of train operating crews, from 1921 to today? I do not know whether you have that or whether you intend to put it in the record.

Mr. HUGHES. I believe if you look in the record, at page 32, rendered by the Board, you will find the table there that does show earnings, but it does not include the earnings of engine crews-it is limited to conductors and trainmen-but it does give the weekly hours, weekly earnings, hourly earnings, and annual earnings from 1922 to and including 1949, a spot check.

Senator LEHMAN. Thank you very much.

Senator HUMPHREY. Mr. Chairman, may I ask a question?

Senator HILL. Certainly.

Senator HUMPHREY. Mr. Hughes, you pointed out this differential between the engine crew and the train crew which I think is quite clear. Is that differential aggravated by the introduction of heavier and more productive locomotives?

Mr. HUGHES. That is right; that is the reason for it.

Senator HUMPHREY. Let me ask you this: As I recall, in your earlier testimony, where you were quoting from an earlier Emergency Board report, that quotation was:

Train service employees function on the same trains as engine service employees, obviously assist in producing the same product in the same tour of duty as enginemen, and are identified with the same mechanical processes on each trip, namely, those that run trains over the road.

Is that the statement of the economic theories here or economic reality that you feel ought to be applied in adjusting these wage rates that this is an integrated unit?

Mr. HUGHES. That our relationship between the rates for the men should be constant and be a fair relationship.

Senator HUMPHREY. Yes.

Mr. HUGHES. You give credit to some previous Board for that quotation?

Senator HUMPHREY. That is correct.

Mr. HUGHES. That was the language; you can find it in the McDonough Board report.

Senator HUMPHREY. Oh, yes.

. Mr. HUGHES. They would say what they did and then turn around and recommend that it be withdrawn. That is on page 59 in their discussion.

Senator HUMPHREY. I see you have that cited.

Senator HILL. Page 59 referred to the report of the McDonough Board?

Mr. HUGHES. Yes.

Senator HUMPHREY. Let me ask you this: Was this historic differential also supplemented by the technological developments, such as the Diesel locomotive? Was this passed down to the train crews or did these increases to the engine crews merely aggravate the differential? Has the train crew been given these compensatory increases that came to the engine crew?

Mr. HUGHES. No. It was impossible for them to discuss any such increase because of being on a single pay basis or single rate basis. I might say that back through the years at one time the average engineer rate of pay was the rate applicable to the 250,000-pound engine. Latest information is that his average rate is that equivalent to the 400,000 or 450,000-pound engine in freight service. So that just means that he has traveled upward approximately three or four brackets on the wage ladder-that is, the average engineer has-and the conductor has stayed still; he is right where he was. There is no chance to give him any reward for his productivity so long as he stays on the kind of pay basis that he finds himself on now. But the engineer and the firemen do receive a reward for their productivity because of the multiple Diesel units that the Diesel serves-larger locomotives being in use.

Senator HUMPHREY. Thank you, Mr. Hughes.

Mr. HUGHES. The chief executives of the organizations had 14 conferences in the White House with Dr. Steelman from August 4 to 29, 1950, during which time Dr. Steelman prepared a settlement formula which we could not accept because it gave us absolutely no protection against carriers' attachment A. Nor did this settlement formula correct the basic inequities which have so adversely affected the men we represent.

During the course of our series of conferences with Mr. Steelman at the White House he indicated to us more than once that the administration was concerned and desired to establish a long-term period of stability of labor relations on the railroads of the United States through the medium of a long-term agreement. A period of 3 years of assured "peace on the rails" was suggested as most desirable in view of the current defense emergency.

Our response to this indication of desired long-term stability of labor relations was one of quite reasonable concurrence, provided the terms of the settlement would give fair recognition to the necessity for correcting the inequitable conditions under which our members are now working. We assured Dr. Steelman that we had no basic objection to a long-term agreement provided our current program be first satisfactorily concluded.

Later in the conference he stated to us, in substance, that the carriers had indicated they saw the need for an assured period of peace and that they were willing to pay something for it. We specifically called to Dr. Steelman's attention then, as at all times, that first things must come first, and that the valleys in our wage rates must first be brought up to prevailing levels by correction of the major inequities mentioned in this statement. I was under the distinct impression at that time that Dr. Steelman agreed with us that bringing up those valleys to

reasonable levels was a first necessity, preliminary to agreement upon any long-term period of stability.

Still later, however, Dr. Steelman indicated that the carriers were willing to pay very little indeed for a 3-year moratorium on changes in wages and rules.

Here is what he reported to us that the carriers were willing to give for assurance of 3 years of freedom from any demands by our organizations: They would follow specifically all the recommendations of the Emergency Board, including those in favor of six of their own counterproposals; they would add 5 cents per hour for yardmen, and grant 5 cents per hour to roadmen; but they would do nothing further for roadmen whatever, and all the grievous inequities which brought forth our program on behalf of roadmen would remain uncorrected; and in return we would be required to grant them a 3-year moratorium on both wage and rules changes, modified only by quarterly adjustments of wage rates, in proportion with changes in the Consumers' Price Index.

Senator HILL. You did not leave out those words, did you, "supposedly, though not really"?

Mr. HUGHES. I want it out, sir.

Senator HILL. "Supposedly, though not really"?

Mr. HUGHES. Yes.

I do not propose to argue here in detail the merits or demerits of this freeze proposal, but pause to point out that such a proposal takes no account whatever of annual improvement factors such as characterize and highlight the General Motors agreement and other agreements in major industry modelled thereon.

I do emphasize strongly the vital point that the carriers' final stand prior to seizure did nothing whatever to correct the problems which caused the initiation of our rules change movement in the first place the inequities now applied against our roadmen. All the valleys we discussed with Dr. Steelman would remain; indeed, they would be frozen into our agreements to plague us until at least October 1953.

It must also be apparent that to extend a wage increase of 20 percent to yardmen (or any substantial variant of that percentage change down to the Board's recommendation of 18 cents per hour) while failing to correct the inequitable conditions of roadmen, and granting them a mere token adjustment of 5 cents per hour, would create a wholly new and most gross wage rate inequity within the railroad industry.

Not only would this new and flagrant inequity be thus created, but by freezing the situation for a period of 3 years, the proposal of the carriers would insure that the roadmen would rankle thereunder for the entire period of so-called stability. I can suggest no more certain method of guaranteeing a period of dissatisfaction and unrest in lieu of a period of peaceful operations.

May I repeat, however, that there is no fundamental bar to a proper long-term agreement at this time if such an agreement also eliminates the worst of the unequal treatment given to our members.

On August 23, at 3 p. m., Dr. Steelman advised us that he had reached the conclusion that we were hopelessly deadlocked and he felt that he could be of no further assistance at that time in breaking the deadlock. Representatives of the carriers' conference committee were called in and they had nothing to offer that could bring about a satis

factory settlement. Dr. Steelman then advised all concerned that we were hopelessly deadlocked and he had reluctantly arrived at the conclusion that he could do nothing further at that time.

With the breaking off of negotiations on August 23, 1950, it became necessary for the organizations to issue official notices to our general chairmen on all of the properties involved to withdraw the men from service in legal strike at 6 a. m., standard time, Monday, August 28, 1950.

Prior to August 23, 1950, our two organizations had resorted to strikes of limited duration on a very few small railroads throughout the country, as token demonstrations of the willingness of the employees in train service to withdraw from service rather than to continue to work under intolerable inequities. These token strikes served also to emphasize to the carriers and to the public the truth of our statements that the employees fully supported our proposals advanced on their behalf, and to controvert public assertions by the railroads to the contrary.

On the day of final deadlock we did indicate to the carriers and to Dr. Steelman that our token strike program was at an end. This indication by us was in some manner distorted so that, when our Nationwide strike call was made public, the President of the United States was under the misapprehension that we had in some manner broken a pledge. We took steps to correct this misapprehension early on August 25 by telegraphing the President as follows:

We wish to personally advise you that at the concluding conference presided over by Dr. Steelman, in the East Wing of the White House from 3 to 4 p. m., Wednesday, August 23, 1950, no mention whatsoever was made regarding the calling of any Nation-wide strike, and therefore any statement to the effect that we had broken our pledge is 100 percent false. Respectfully.

I would like to make it clear to the committee that this action on the part of the organizations to withdraw the men from service was not only a means to obtain justice in our request for the correction of inequities in the industry, but was also necessary to prevent the carriers of the United States from wantonly putting into effect their counterproposals which would adversely affect most of the schedule rules in the agreements between the organizations and the railroads of the United States.

To emphasize the need for this defensive action on the part of the organizations, I refer to the testimony of Mr. Daniel P. Loomis, chairman, Association of Western Railways, when he appeared as a witness on February 28, 1950, for the Texas & Pacific Railway in a hearing before Emergency Board No. 80, composed of Chief Justice Paul G. Jasper, Indiana Supreme Court, Thomas F. Gallagher, associate justice, Minnesota Supreme Court, and Attorney Frank M. Swacker, of New York City, in investigating a dispute between the BLE, BLF & E. ORC and BRT, and the Texas Pacific Railway and its subsidiaries. This testimony can be found on pages 862, 863, and 864 of the transcript of these proceedings.

I am willing to withdraw the questions and answers, it is quite lengthy, and I really duplicate it on the next page.

Senator HILL. In other words, you don't care to make this a part of your statement at this time?

Mr. HUGHES. No. I would like to start at the middle of the next page.