frank to say that in the tensity of the White House discussions I didn't keep any too much in the way of notes-possibly one of my colleagues may recall whether it was Sunday night or Monday nightbut on either night, sometime after midnight, Dr. Steelman brought Mr. Kennedy and Mr. Hughes into his office to talk with us, and he left us alone. We went through the so-called blue book rules-I say that because it had a blue cover on it-which had been prepared by Mr. Edwards. We read them in considerable detail and word for word. Generally speaking, as we finished each rule, Mr. Kennedy said, "What is the matter with that?" and we said, "Well, we don't see much wrong with it." Whereupon he would say, "Well, let's go on to the next one." Whereupon we went on to the next one.

After that discussion was completed, Dr. Steelman did come in and visit with us to see where we stood after the session had been completed. We told him that we appeared to be pretty well in agreement with respect to the rules. I believe this was Monday night, and I will explain why I think so in a moment. Then Mr. Shields and Mr. Robertson discussed the rules with us in much the same detail. They stated that the thing that caused them the greatest trouble or the greatest fear was the interdivisional-run proposition-that that was the serious thing.

I might illustrate what is meant by an interdivisional run to make sure you know. You have seniority districts set up on a railroad. It may be an operating division, it may be less than an operating division. For instance, between here and New York there are three seniority districts on the Pennsylvania Railroad. Although the Philadelphia Terminal Division is a small part of the run between New York and Washington, a part of it is actually a seniority district on that run. The Pennsylvania has interdivisional runs between New York and Washington, so that a crew runs through from New York to Washington. If they did not have the interdivisional-run set-up, they would have to use probably two crews here between Washington and New York. One might run as far as Philadelphia, and another crew from Philadelphia to New York. That is the sort of thing that is involved in interdivisional runs.

To get back to the White House discussions, as I said, both Mr. Shields and Mr. Robertson stated that it was the interdivisional run matter that seemed to be most serious to their committees, and that if we could find some way of putting that off for a while that would be of assistance to them. Dr. Steelman came in and took part in some of those discussions, particularly when that point was being discussed. Mr. Mackay, Mr. Horning, and I retired to an outer office, and discussed it ourselves. Dr. Steelman came out and talked to us about it. He said he thought there was something to the brotherhood's argument, that we might well consider putting it off for a while, trying a little more collective bargaining on it on the individual railroads and see how it worked. We told him that the question of putting off interdivisional runs was a matter that we had not discussed with our committees, that we would have to discuss it with them, but our own opinion was that we would be willing to enter into an arrangement to put off the adoption of a rule of procedure covering the interdivisionial runs provided there was a terminal point which ultimately could be used if the thing didn't work.

With that discussion on Monday night, when it got around 3: 30 the conference adjourned. The reason I am quite sure this took place Monday night is that when we broke up Dr. Steelman said, "I think we have talked rules enough for me to understand where the parties stand with respect to the rules. What you have verbally worked out between yourselves, I think I understand all of that and when we meet again tomorrow I am going to start talking the wage question. I am not going to talk any more about rules now because I think I understand what the parties will do and just where we stand."

Senator MORSE. Mr. Loomis, let us see if I understand this. When this dispute first developed, as far as the brotherhoods were concerned it was a dispute over wages.

Mr. LOOMIS. Wages and rules.

Senator MORSE. They made some brotherhood rule requests and some wage requests. The carriers then countered with some rule proposals of their own; is that correct?

Mr. LOOMIS. Well, the phrase "countered"

Senator MORSE. Strike it. Offered some rules changes of their own. Mr. LOOMIS. The brotherhoods like to call it "countered"; we don't. Senator MORSE. I am perfectly willing to say that you served a request that you would like to have some rules changes of your own. Mr. LOOMIS. Yes, sir.

Senator MORSE. I understand how those things go. As to the carriers' rules requests, the brotherhoods at least for months were pretty adamant in opposition; were they not?

Mr. LOOMIS. I think that is a fair summary.

Senator MORSE. When the case got to the White House in the early stages of the negotiations there, was it the position of the brotherhoods that they did not want any of the rules changed by the carriers?

Mr. LOOMIS. No, I don't think that is fully correct, Senator. There were discussions in which some of the organization representatives admitted that the more than one class of service rule, for example, had been misinterpreted and that we ought to do something to straighten it out, and that this question of extension of switching limits ought to have consideration.

Senator MORSE. Was it the position of the brotherhoods, however, that the proposals for rules changes as presented by the carriers should be postponed at least for some time and that the wage issue should be settled first?

Mr. LOOMIS. The position of the brotherhoods-I am referring now to conductors and trainmen, although later I think it pretty much came to be the position of all four-was generally speaking to adopt some pious language that the individual carriers and the committees on each property should give consideration to these things and attempt to work them out and to leave it that way, which of course amounted to really nothing unless they were willing to agree to it. Senator MORSE. It amounted to trying to sidetrack the issue? Mr. LOOMIS. That is true.

Senator MORSE. The only purpose of this line of questioning, I assure you, is that I am trying to reconstruct the negotiation of this dispute so that I know what the conflict was when it got to the White House level with respect to the requests of each party. I have referred as I have heard this case developed thus far, that when it got to the

White House level the position of the brotherhoods was that they didn't want to have anything to do with the rules proposals of the carriers other than to have them postponed for the time being. They wanted to get the wage issue settled first, and then part of this strategy was that, after they got the wage issue settled, which they felt was the great demand of their men upon them as union leaders, they would then be in a position to consider the rules changes and I haven't any doubt in my mind that they thought that would take some considerable amount of time, but they would have the money in the meantime, which I think is understandable from the standpoint of the union representatives.

Was that pretty much the situation as it existed when the case got to the White House?

Mr. LOOMIS. I think that is a pretty fair summary, Senator.

Senator MORSE. So when we come to the memorandum of agreement of December 21, as far as section 11 is concerned, it changed the situation by agreement as far as the brotherhood representatives were concerned in that if the agreement was ratified then the issue of rules would ultimately be decided by Dr. Steelman if the parties couldn't reach agreement. Is that not true?

Mr. LOOMIS. That is correct.

Senator MORSE. So when they signed this agreement, if it were to be subsequently ratified, they had retreated from their position at the time the case came into the White House of not wanting to have much to do with the carriers' rules proposals but only wanting to do with the disposal of the question of wages first. They had changed their position from that in that this agreement would bind them to some changes in rules by arbitration, if necessary. Is that not true? Mr. LOOMIS. It is correct that that is what the agreement did and would do. May I qualify my answer, of course, to repeat my statement that the first we heard of ratification was some couple of hours after the agreement had been signed, except as to Mr. Robertson.

Senator MORSE. That is your understanding, and I have no doubt that it was your understanding, but it is also your testimony that you don't know what might have been said at the time the brotherhood representatives signed the agreement in the presence of Dr. Steelman. Mr. LOOMIS. That is correct.

Senator MORSE. I do not know, either.

Mr. LOOMIS. In fact, I think Mr. O'Neill testified he wasn't even sure whether Dr. Steelman was in the room when that statement was made. I have some reason to doubt whether he was, because after the press conference when we were leaving the White House Mr. Mackay and Mr. Horning and I returned to his office to get our coats and hats and Dr. Steelman said to us, "What about this question of ratification which came up at the press conference? Is that anything serious?"

We told him that we were not inclined to be too disturbed about it, that we had dealt with these organizations for years, and once we had signed an agreement with them that had been it, that we were inclined to view it more as a matter of form than as anything of a serious

nature.

Senator MORSE. I am going to take up this ratification in some detail later, but if you will, bear with me on section 11 for a moment.

Mr. Chairman, you feel free and the general counsel, too, to interrupt at any time.

Senator HUMPHREY. You are developing this subject, and I think you should continue it. Go right ahead.

Senator MORSE. I want to be clear in my understanding that in effect the brotherhoods were opposed to rules changes other than the ones they proposed themselves, but under this memorandum of agreement if it was subsequently ratified, or if they had made representations that no ratification was needed, or had led people to understand that no ratification was needed, they had bound themselves by this agreement to submit rules changes to arbitration.

Isn't that quite contrary to the up-until-now attitude of the brotherhoods in regard to arbitrating rules changes? Aren't rules changes one of the things that the brotherhoods generally have taken the position should not be subjected to arbitration?

Mr. LOOMIS. In recent years that is so. On the other hand, in the earlier days several of their rules came out of arbitration. I want to say this about this question of attitude, that is, as I have previously testified, we had discussed rules on Sunday and Monday nights that as far as we were concerned and I would be quite certain as far as Dr. Steelman was concerned, from his participation in the discussions-we thought we had verbally reached a pretty definite understanding with respect to these rules, that all we were doing in the memorandum of December 21 was carrying out the discussions that we had had earlier in the week, that Dr. Steelman was familiar with those discussions, and that if we later had trouble in writing the rules into the agreement, he had heard so much of our discussion he would be able to put in the position of the parties.

Senator MORSE. I think that is rather a vital point.

Mr. LOOMIS. It is my purpose to offer in evidence-you asked Mr. Shields for it, but since we prepared it and have it stenciled-the proposals of the complete contracts which we later made to the organizations, and to go into considerable detail with respect to the rules.

Senator MORSE. It is your belief that prior to the signing of carriers' exhibit 8, based upon the joint conferences that you had with at least some of the presidents of the brotherhoods on Sunday and Monday evening, there had come to be a mutual understanding among you that at least some rules changes were going to have to be incorporated into the agreement.

Mr. LOOMIS. And as to what they would be.

Senator MORSE. And a broad outline of what those rules changes would be.

Mr. LOOMIS. In certain cases even the actual language.

Senator MORSE. From the so-called blue book of rules which had been prepared by Mr. O'Neill.

Mr. LOOMIS. That is correct. They gave us Sunday and Monday night, each side, copies of these rules that they had prepared in a so-called blue book. I believe the next day they furnished additional copies. They had them stenciled. Originally there had been only a very few copies of the blue book and neither side had had copies of it. Senator MORSE. Looking at the language of section 11, it is pretty broad language. It says:

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

Let us suppose that either party subsequent to the agreement of December 21 proposed rule X, suppose rule X was never noted in the blue book prepared by Mr. O'Neill, would there be anything under section 11 that would prevent the proposing party having arbitration on whether or not rule X should or should not be included in the final agreement?

Mr. LOOMIS. As a matter of strict language-even then I would think section 11 would be taken to relate back to sections 3, 4, and 5, certainly so far as the carriers were concerned and without hesitation, it was our understanding that that is confined exactly as I stated.

Senator MORSE. Under sections 3, 4, and 5 some very interesting rules are proposed and they might not even be mentioned in the blue book. Even under sections 3, 4, and 5, when read in the light of section 11, aren't you bound to have to believe that whatever dispute over whatever rules might be proposed by one of the parties to this agreement would, in the case of failure to negotiate a settlement, be subject to arbitration?

Mr. LOOMIS. Yes. Let me take that up separately. Insofar as section 3 is concerned, the parties had already done considerable work on the 40-hour week rule. There was comparatively little difference left between us. As to section 4

Senator MORSE. Let me interrupt long enough to say, and I am not facetious when I say you may think there was no difference, but isn't it true in these labor matters that even when you think you are talking about the same thing, sometimes you are not talking about the same thing, you discover, when a dispute arises. We are dealing here with a broad grant of power. I want to state now what bothers me about rule 11. I think there is a possibility that the broad language of section 11 of the agreement, ignoring now the question of ratification or any commitments made by these officers, is one of the things that threw fear in the joint chairmen when they came to study this agreement. I do not know whether they said this or not, but I suspect this is what happened: They said "What do you mean by tying us down to arbitration with as broad a grant of power as paragraph 11 gives? These carriers may come in and they may offer something that we have fought against for years in relation to paragraphs 3, 4, and 5, and Steelman may give it to them. You have sold us out, in effect, with that kind of broad power."

I just have the feeling that that is what is in the back of their minds of some of these people that caused this unanimous vote of rejection.

Mr. LOOMIS. Senator, of course that is a matter of opinion.

Senator MORSE. I know.

Mr. LOOMIS. My own opinion is that all of the propaganda with respect to section 11 is make-weight propaganda and an excuse rather than a genuine reason, except undoubtedly the general objection to granting the carriers any rules modifications, which you always run into.

Senator HUMPHREY. May I ask you a question here, Mr. Loomis? With all the background that we have had from your discussion with Senator Morse and answering his questions, did any of the agreements that you submitted for evidence yesterday, that authorized the intrusion or inclusion of a third person for certain specific purposes,