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Senator Hill. Well, now, I do not know.

Senator MORSE. Mr. Chairman, I assume that that is Mr. Hughes' statement and we would want to make it a part of the record. Maybe my objection is the reason now for withdrawing it. I want to read it now and I suggest that we take a minute and read it, and when we finish reading

it, he continue. Senator Hill. All right, Mr. Hughes. Suppose you just wait a moment until we have time to read this.

Without objection, then, the questions and answers will appear at this point in the record just as though you had read it. (The material referred to is as follows:)

By Mr. Suggs, general counsel, Texas & Pacific: Question. All right, sir. Mr. Loomis, the contention is made in this case that service of a notice under section 7,' of the act, by an employee's organization, in this instance two employees' organizations, acting jointly, is effective to cancel a rule in the schedule involved. From your familiarity with the Railway Labor Act, its history, and its interpretation, I will ask you to state, please, sir, whether in your opinion notice by the employee or his organization under section 6, can effectively cancel a rule in the schedule without an agreement of the carrier?

Answer. Well, the general understanding of the Railway Labor Act on my part and on the part of anyone with whom I have come in contact, including in my experience the National Mediation Board, is about as follows: If the employees desire to change an agreement, they serve the necessary notice provided for in the act and negotiations are conducted on the property. If the negotiations do not result in an agreement, mediation may be invoked and further proceedings are conducted in mediation. If no settlement is reached as a result of mediation, it would be open to the parties to agree to arbitrate. If an arbitration agreement was not reached, the matter would then either die because of lack of agreement, or if the organization threatened an interruption of commerce, an emergency board would be appointed to investigate the disputes. No change in an agreement can, however, be made without the consent or acquiescence of the carrier and unless and until the carrier agreed to any proposed change, the existing agreement would remain in effect. On the other hand, suppose the carrier served a notice provided for in the act, proposing a change in the agreement. If negotiations and mediation fail, the carrier could loftily put its proposed change into effect if the required time had elapsed following mediation. If the organization took a strike ballot to resist the change, and threatened an interruption of commerce, and arbitration was not agreed to, an emergency board would be appointed. Let us assume, however, that even after the emergency board report no agreement has been reached and the time prescribed by the statute has elapsed, the carrier would then be free to put into effect its proposed change and if the men continued to work, they would be working under the change put into effect by the carrier. The carrier's right to make unilateral changes in a schedule agreement is balanced by the employee's right to refuse to work under such a changed agreement. [Italics supplied. ]

Senator HILL. You may proceed, sir.
Mr. HUGHES. Thank you.

I would like to emphasize that portion of Mr. Loomis' testimony, reading as follows:

Let us assume, however, that even after the emergency board's report no agreement has been reached and the time prescribed by the statute has elapsed, the carrier would then be free to put into effect its proposed change and if the men continued to work, they would be working under the change put into effect by the carrier.

In giving consideration to this testimony of Mr. Loomis, the only protection the organizations had from the carriers' counterproposals in the instant dispute was to set a strike date for withdrawal of our

? It is assumed that Mr. Suggs referred to section 6 rather than section 7 of the Railway Labor Act.

men from service. Our organizations had no assurance whatever from the carriers that they would refrain from precisely that unilateral and high-handed scrapping of our rights established by scheduled agreements.

The organizations' instructions to the employees they represented to withdraw from service on August 28, 1950 at 6 a. m. resulted in the issuance of Executive Order No. 10155 under date of August 25, 1950, which authorized the Secretary of the Army to take and assume possession, control and operation of certain railroads operating within the continental United States, effective at 4 p. m., eastern standard time, August 27, 1950. The Government seizure of railroads in turn has prompted your committee to institute an investigation of this dispute which made necessary the seizure of certain railroads by the United States Government.

In my opinion, the failure to settle this dispute in direct negotiations, in mediation, and before an emergency board, was the failure of the carriers to recognize the controlling precedents for correcting inequities. The emergency board also failed to give proper recognition to these controlling precedents. There are of course other factors that enter into the failure of the parties to reach a satisfactory settlement.

One factor that I think should be emphasized is that the longer the carriers can delay settlement of these fair and equitable proposals of the organizations, the more they will have in profits. Without retroactive application, the cost of these proposals on the part of the organizations is avoided so long as conferences continue, so long as mediation is in progress, and so long as the parties do not enter into a formal agreement. Even now with Government control of the railroads the carriers are continuing to enjoy additional profits which would not have been available to them had they settled this dispute through honest collective bargaining.

The only advantage that has come to the organizations through Government control of the railroads is the prevention of the application of the carriers' counterproposals, and the possibility that Govern. ment seizure might ultimately bring about a settlement of this dispute on a fair and equitable basis. The men we represent do not in any way receive additional benefits, as do the carriers, while the railroads are under the direct supervision of the United States Government. Their wages and working conditions remain the same and the inequities which have created the situation are still in existence and still continue to grow. The organizations urged the Government to take control of the railroads only as a last expedient to defend the employees against the unilateral application of the carriers' counterproposals (attachment A) and to induce the carriers to enter into constructive collective bargaining with the organizations on the issues that are still in dispute.

The Order of Railway Conductors has always advocated and supported the American system of free enterprise. We have not advocated Government ownership of railroads as we have felt that the best interests of the men represented by us would be served more effectively through collective bargaining with the railroads as privately owned companies.

Collective bargaining has not produced the desired result in the industry. The failure of collective bargaining in the present dispute

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and the ever-increasing reluctance of the railroads to deal with their employees through previously accepted channels has now undermined our faith. If the carriers continue to reject collective bargaining as a means to settle disputes or correct inequities and through their refusal force Government control of the industry, it can only follow that a more aggressive policy must be adopted. The token seizure of the raliroads by the Government has not had any influence on the American railroads to encourage settlement of disputes. Under this practice the carriers cannot possibly lose financially, but rather they gain additional profits so long as they can deprive their employees of just changes in wages, rules, and working conditions.

The Order of Railway Conductors therefore now supports the theory that the Government should impound profits during Government seizure and control brought about by unsettled labor conditions within the industry. It is our opinion that such a policy will be a step to encouraging cooperative collective bargaining.

Another theory has been expounded that may have adverse influence on honest collective bargaining within the industry. This theory is that if voluntary increases in wages or changes in working conditions favorable to the employees are agreed to in direct negotiations and thereby automatically increase the operating expenses of the railroads, that the Interstate Commerce Commission would not react favorably to the request of the railroads for higher rates. They feel that if the Government finally forces a settlement in disputes, and through this force raises the operating costs of the carriers, the Government through the Interstate Commerce Commission is obligated to increase freight and passenger rates to pay for increased wages and improved working conditions. The impounding of profits would destroy this fallacious theory.

Throughout this entire dispute the Order of Railway Conductors and the Brotherhood of Railroad Trainmen have made every effort to bring about a fair settlement which would correct the inequities now imposed upon our men. I am glad to have had this opportunity to present my views to you, and I will cooperate with you in any way possible. I sincerely hope that my statement will be useful to the committee in conducting the investigation.

Senator Hill. Any questions, Senator IIumphrey ?

Senator HUMPHREY. I would like to ask this one question so that we may have it clarified for the record, Mr. Hughes. I believe you have mentioned your representation of the passenger conductors, passenger crewmen. You also represent freight, is that not correct?

Mr. Hughes. That is right, and road service.

Senator HIUMPHREY. And road service. I just wanted that to be perfectly clear because most of your reference was to the passenger service.

Mr. HUGHES. I think that is right. I might say that the condition that the conductors complain about in passenger service applies to the brakemen with equal force; they are a team and work together, and they are subject to the same conditions and suffer from the same inequity.

Senator HUMPHREY. Mr. Chairman, one point that disturbed me in the tesetimony was the reference to the Railway Labor Act and as to whether or not it was adequate to meet the needs of collective bargaining in good faith and peace in the railroad industry. I would

like to ask Mr. Hughes whether he feels that the Railway Labor Act as now constituted with good faith on the part of both parties, both carriers and brotherhoods, would be adequate to meet the problems of labor-management relationships in the railroad industry?

Mr. HUGHES. I believe it would.
Senator HUMPHREY. You feel that the existing act —

Mr. Hughes. If both parties enter into this thing in the proper faith, it is adequate, in my opinion.

Senator HILL. You are, therefore, asking for no changes in the act at this time?

Mr. HUGHES. No.
Senator HILL. Senator Morse?

Senator Morse. Mr. Chairman, I wanted to raise the question of a few procedural matters. The hour is late, and I know we will have to recess for lunch shortly.

In the first place, the general policy would be to listen to these witnesses and then ask for the privilege of calling them back for cross-examination at a later hour. I would like that opportunity at a later hour because I want first of all an over-all picture of this dispute. I wish we had a procedure, which does not prevail on the Hill, where a witness such as this witness would now be taken over by counsel for the carriers and cross-examined so that we on the committee would not have to do the job; people ought to sit at counsel table. I think that is the way to get the facts in the dispute, and we sit in judgment here. That does not happen to be the procedure, so I am going to try to do the best I can under the procedure we follow. Although I am going to ask some witnesses questions as we go along, I would rather wait until I hear their case in chief on their side of this issue and then I will call them back for the questions I want to ask.

Now, Mr. Chairman, I respectfully suggest that it be understood among us that the only statements from this witness that will go into the official record will be the statements that he has spoken plus the exhibits which we have admitted. I say that because I do not know where this hearing may lead to. These witnesses are under oath and as far as the junior Senator from Oregon is concerned he wants to keep this record in a position so that all the law applicable to testimony given under oath may be applied if it becomes necessary to apply it. I think earlier in the hearing this morning the chairman said the written statement would be included in the record. He is not here so he does not hear me raise this procedural point. But I want to raise an objection to the insertion in the record of any written statement of any witness not orally given before the committee. I would be very glad to discuss that further in executive session, but I raise it here in the public meeting. I shall object to any statement being included in this record that is not spoken by the witnesses save and except such exhibits as we pass upon at the time they are offered.

I respectfully suggest also as a matter of procedure that we not move too hastily in our acceptance of the exhibits until we are fully aware of their contents.

Then, Mr. Chairman, I want to raise a question as to procedure in respect to other witnesses. I want to respectfully suggest that we

I hear the presidents of the railroads involved as well as the carriers negotiating committee members; that we also hear the head men in

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charge of the Government seizure of the operation of these railways; that we hear the members of the Mediation Board; that we hear Dr. Steelman; that we hear any and all people who have been parties in any way to this dispute from the time of the Emergency Board report. I can imagine at once that there will be some suggestions as to the time element. It happens to be the view of the junior Senator from Oregon that this committee has an opportunity here to be of some service in laying down some policies which I hope will be helpful in this emergency period with respect to labor disputes generally, because I think today we are confronted with the whole employer-labor-management situation in a complete state of confusion, if not almost collapse, in this country. It is a very serious thing from the standpoint of the defense program and I do not think this committee can ignore its responsibility to do what it can to try to bring order out of what I think has almost reached chaos.

Therefore, I intend to be exceedingly particular in regard to the procedure that is followed by this committee. I shall, unless outvoted, insist upon getting all the parties involved in this dispute before this committee before we get through.

Senator Hill. In the absence of the chairman of the committee, as the acting chairman I might state that I think it might be well for the committee to say that the chairman has scheduled, in addition to Mr. Hughes to be heard today, as I understand it, Mr. William E. B. Chase, vice president of the Brotherhood of Railroad Trainmen, and Mr. W. P. Kennedy, president of the Brotherhood of Railroad Trainmen. It might be well at the conclusion of the testimony of these witnesses, either immediately following or before other witnesses are heard, for the committee to have an executive session at which time the committee can consider the different questions raised by the junior Senator from Oregon. Senator MORSE. I think it would be wise. Senator LEHMAN. Mr. Chairman? Senator Hill, Senator Lehman.

Senator LEHMAN. It seems to me that the greatest service this committee can render is to consider possible changes in the existing statutes which would strengthen the possibility and possibly give assurance of honest collective bargaining between the workers and the railroads. It seems to me that we ought to ask every witness, as we have Mr. Hughes, whether he has any suggestions to make with regard to strengthening, or revising for the purpose of strengthening, the existing statute.

Do I understand, Mr. Hughes, that in reply to the question put to you by the chairman, your answer was that you had no suggestion to make with regard to the revision or with regard to steps that might be taken by this committee to recommend changes to strengthen the existing act ?

Mr. Hugues. I have none.
Senator HILL. Any further questions?
Senator LEHMAN. No.

Senator Hill. Is it agreeable to the committee that we stand in recess until 2 o'clock this afternoon? The committee will stand in recess until 2 o'clock this afternoon.

(Whereupon, at 12 o'clock noon the committee recessed to reconvene at 2 p. m. of the same day.)

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