tracted. When the railroad industry decreased the workday to 8 hours in 1916, pursuant to the Adamson Act, it was enjoined by section 3 of that act not to reduce "the present standard day's wage," at least for a period estimated to run from 8 to 11 months thereafter, and subsequently the carriers agreed to the continuation of this standard day's wage.

That is from the report to the President by the Emergency Board, December 17, 1948, pages 13 and 14.

The Leiserson Board recommended that a workweek of 40 hours. be established for nonoperating employees, and

(b) That in connection therewith all basic rates of pay now in effect, i. e., exclusive of the general increase recommended below, be increased by 20 percent to provide the same basic earnings in 40 hours of work as are now paid for 48 hours (Report to the President by the Emergency Board, December 17, 1948, p. 38).

This finding and recommendation by the Leiserson Board was not only in line with an earlier Emergency Board report, that of Board No. 7 in 1940 in the express industry, but it was reviewed and followed by emergency boards realing with railway express employees, and with the employees of short-line railroads in the United States. That is Board No. 92.

Subsequently, an arbitration board in Canada established the 40hour workweek for nonoperating railway employees in that country, with maintenance of take-home pay. The Leiserson report was, therefore, one of a series of reports dealing similarly with the same subject.

The second of the two Boards, Emergency Board No. 81, now called the McDonough Board, was set up to consider

Mr. MURDOCK. Before you go into that may I ask a question, Mr. Oliver?

Mr. OLIVER. Surely.

Mr. MURDOCK. Do I understand that the nonoperating employees on the Canadian railroads received the 40-hour week with 48 hours' pay?

Mr. OLIVER. They did, sir.

Mr. MURDOCK. Was that prior to the extension of the 40-hour week with 48 hours' pay to the nonops in the United States?

Mr. OLIVER. No, it followed.

The CHAIRMAN. You may proceed.

Mr. OLIVER. The second of the two boards, Board No. 81, now called the McDonough Board, was set up to consider the request of two groups of train service employees for changes in working rules, including the request for introduction of the 40-hour week for yard service employees, with maintenance of the previous 48-hour earnings.

I have prepared also an excerpt from the report of that Board which I believe will be in more convenient form for reference and that I should like to have accepted as exhibit No. 10 in this sequence.

The CHAIRMAN. It will be received in evidence and marked as requested.

Mr. MURDOCK. That will be B. L. F. & E. Exhibit No. 10.

(The document referred to was marked "B. L. F. & E. Exhibit No. 10" and is as follows:)

EXCERPTS FROM THE MCDONOUGH BOARD REPORT

(NMB Case No. A-3290-Report to the President by the Emergency Board, June 15, 1950, pp. 29-31, 41-42, 45-46)

Concerning the precedents set by other industries in the matter of maintenance of take-home pay when a shortened workweek is introduced, the parties before this Board found themselves in vigorous disagreement, each casting doubt on the accuracy and validity of the data employed by the other and on each other's interpretation of said data. According to the organizations (exhibit 76), their data show that weekly take-home pay has been maintained or increased in 75 to 80 percent of 207 cases cited where weekly hours were reduced. This Board's analysis of these data show that in 104 cases, or 69 percent of the 151 cases for which information was available on the number of hours by which the workweek was reduced, there was a reduction of 4 hours or less in the workweek. Considering the data further, it appears that the workweek has been reduced by 8 hours in only 20 cases, and by more than 8 in 6 additional cases. In the 17 cases where the reduction in weekly hours was from 48 to 40, full maintenance of take-home pay was indicated in but 7 instances; partial maintenance was apparently obtained in 9 cases, and in 1 case the adjustment in wages was unknown. In brief, this exhibit, while presenting an interesting array of individual wage-hour settlements, falls short of demonstrating in a convincing manner a widespread practice of full maintenance of take-home pay, particularly when the workweek is reduced by as much as 8 hours.

What of the relevancy of the Emergency Board's recommendation of the 40-hour workweek with 48 hours of pay for nonoperating employees, effective September 1, 1949? The situation and the evidence in that case do not, we think, necessarily set a pattern for a recommendation in the instant case. There are fundamental differences between the group of occupations represented by the employees before the 1948 Emergency Board and the group of occupations represented by the organizations before the present Board. Viewed functionally, these two sets of occupations present marked differences in job content, the one being characterized as operating and the other as nonoperating. As a consequence of this, the problems involved and the principles determining the maintenance of full take-home pay-that is, the payment of 48 hours of pay for 40 hours of work-are different in the two cases. These differences deserve consideration. It must be remembered, first, that most nonoperating employees work in the noncontinuous phase of the railroad industry, so that 6 and 7 days of work are not imperative. There is nothing in the demands of the traveling and shipping public which normally will compel the railroads to employ these workers on a 6or 7-day basis. It is quite otherwise with the operating employees before this Board, whose functions must be performed on the sixth and seventh day, with relatively minor variations, in order to meet the demands of the traveling and shipping public. Passenger trains cannot arbitrarily be canceled nor freight movements suspended in order to escape completely or minimize significantly the financial impact of a 40 hour week, at 48 hours of pay for yard service employees. In other words, the carriers were able to make adjustments which help to cushion the shock of a 40-hour week at 48 hours of pay and time and onehalf for overtime in the case of nonoperating employees; they can do so to only a limited extent in case of such changes in hours and compensation for yard service employees. In the latter case it is not so possible to compress, defer, and postpone work as it is in the former instance; consequently the cost factor is vastly different. It is essential to remember in this connection that no matter how effectively it may be concealed, the demand for a 40-hour workweek with 48 hours of pay is a demand for a 20 percent increase in wage rates, and that the carriers indicate the additional cost of this proposal alone would be $63,400,000 (carriers' exhibit 31, p. 1).

General conclusions.-As was indicated at the outset of this analysis, the Board believes that the trend toward shorter weekly hours of work is clear and unmistakable. Most workers now enjoy a standard workweek of 5 days and 40 hours. Within the transportation industry itself, the airlines in 1946 and, more recently, many transit companies, have adjusted their operations to a basic 5-day 81733-51-39

workweek. The Board is of the opinion that the Nation's railroads should follow suit with the adoption of a 40-hour workweek for yard train service employees.

The more engaging question revolves about the extent to which, if any, the present pay of the employees should be adjusted concomitant with the reduction in hours of 16% percent. Historically, labor's slogan has been to "shorten the hours and increase the pay." This is understandable. In most instances the shorter hours have come gradually, or as the result of widespread unemployment. The latter was the case under the NRA. In 1932, for example, the number of idle workers exceeded 12,000,000 while in 1938, when the Fair Labor Standards Act was passed, over 10,000,000 American workers were unemployed. National policy dictated the necessity of reducing hours to spread gainful employment. The Board is not persuaded, however, by the evidence submitted to it in this case that these reductions in hours were generally accompanied by partial or full maintenance of the worker's previous take-home pay. It is true that the NRA had a significant and salutary effect in increasing the hourly earnings of low-paid workers. The record is not equally as clear, however, that higherpaid workers incurred no loss in achieving the 40-hour week. Even as recently as 1945, after the end of World War II it was acknowledged that the cut-back in overtime hours, from 48 to 40, could hardly be accomplished without some loss in weekly earnings. The first round of wage increases was, for nonrailroad workers, primarily one to cushion the shock of the return to the standard 40-hour week. Had the carriers and the organizations then faced and resolved their 40-hour week problem it is likely that their 18% cents an hour wage increase settlement obtained at that time would have been credited against the cost of the shorter workweek.

It was not resolved then. As a result this Board is confronted (as was Emergency Board 66 in the Railroad Nonoperating Employees Forty-Hour week case) with recommending an equitable adjustment. This Board has two choices: (1) To recommend, as did the earlier Board, full maintenance of take-home pay, or (2) to recommend another form of settlement which it believes to be equitable and fair, based upon the record spread before it.

As the preceding analysis of the evidence indicates, substantial differences exist between the work and wages of yard-service employees in the instant case and the larger group of nonoperating-railroad employees. Yard-service employees are engaged in the continuous phase of railroad operations. Trains must move day and night, 7 days a week. While some slackening of yard work occurs on Saturday and Sunday, particularly as regards the spotting and pick-up of cars for local industries, through freight and passenger service continues irrespective of the day of the week.

With regard to the 5-day workweek. (a) That effective October 1, 1950, the Carriers shall establish for all yard-service employees represented in this matter, a workweek of 40 hours, consisting of five calendar days of 8 hours each, with two consecutive days off in each seven; that carriers shall have the right to stagger workweeks in accordance with their operational needs and requirements; and that employees shall have the right to expect that whenever practicable, from the standpoint of the carriers' operating necessities, the two consecutive days off occasionally shall be on Saturdays and Sundays.

(b) That the yard-service employees represented in this matter shall receive a basic wage-rate increase of 18 cents per hour, or $1.44 per basic day, beginning October 1, 1950.

Mr. OLIVER. From this exhibit I have repeated one or two quotations to indicate what seemed to be the outstanding points of difference between the McDonough and the Leiserson Boards. The McDonough Board found:

GENERAL CONCLUSIONS

As was indicated at the outset of this analysis, the Board believes that the trend toward shorter weekly hours of work is clear and unmistakable. Most workers now enjoy a standard workweek of 5 days and 40 hours. Within the transportation industry itself, the airlines in 1946 and, more recently, many transit companies, have adjusted their operations to a basic 5-day workweek. The Board is of the opinion that the Nation's railroads should follow suit with the adoption of a 40-hour workweek for yard train service employees.

The more engaging question revolves about the extent to which, if any, the present pay of the employees should be adjusted concomitant with the reduction in hours of 16% percent. Historically, labor's slogan has been to "shorten the hours and increase the pay." This is understandable. In most instances the shorter hours have come gradually, or as the result of widespread unemployment. The latter was the case under the NRA # The Board is not persuaded, however, by the evidence submitted to it in this case that these reductions in hours were generally accompanied by partial or full maintenance of the workers' precious take-home pay. It is true that the NRA had a significant and salutary effect in increasing the hourly earnings of low-paid workers. The record is not equally as clear, however, that higher-paid workers incurred no loss in achieving the 40-hour week. Even as recently as 1945, after the end of World War II, it was acknowledged that the cut-back in overtime hours, from 48 to 40, could hardly be accomplished without some loss in weekly earnings. The first round of wage increases was, for nonrailroad workers, primarily one to cushion the shock of the return to the standard 40-hour week.

As the preceding analysis of the evidence indicates, substantial differences exist between the work and wages of yard-service employees in the instant case and the larger group of nonoperating railroad employees. Yard-service employees are engaged in the continuous phase of railroad operations. Trains must move day and night, 7 days a week. While some slackening of yard work occurs on Saturday and Sunday, particularly as regards the spotting and pick-up of cars for local industries, through freight and passenger service continues irrespective of the day of the week.

With regard to the 5-day workweek: (a) That effective October 1, 1950, the carriers shall establish for all yard-service employees represented in this matter, a workweek of 40 hours, consisting of five calendar days of 8 hours each, with two consecutive days off in each 7; that carriers shall have the right to stagger workweeks in accordance with their operational needs and requirements; and that employees shall have the right to expect that whenever practicable, from the standpoint of the carriers' operating necessities, the two consecutive days off occasionally shall be on Saturdays and Sundays.

(b) That yard-service employees represented in this matter shall receive a basic wage rate increase of 18 cents per hour, or $1.44 per basic day, beginning October 1, 1950.

The disagreement between the two boards is thus fundamental and sharp. The conclusions of the two boards are diametrically opposed upon the same question of fact. That question is whether the practice and policy of American industry in reducing the workweek from 48 to 40 hours was to maintain weekly earnings. That question was and should have been a controlling factor in the recommendation of both boards. Since the actual facts were the same, the difference in the results reached by the two boards was a difference as to the interpretation and understanding of the situation. The difference in the conclusions of the two boards was primarily as to the policy and practice followed during the period of the National Industrial Recovery Act, when the actual change to the 40-hour workweek was in large measure accomplished. The conflict between the reports of the two boards is a summary of the problem in the current yard-service dispute. I should like to present what seem to be the relevant facts in this disagreement on past practice in the reduction of the workweek.

Mr. MURDOCK. Mr. Oliver, at that point may we just for the record identify the McDonough report? That is Emergency Board No. 83, is it not?

Mr. OLIVER. No. 81.

Mr. MURDOCK. That is ORC exhibit

Mr. OLIVER. No, B. L. F. & E. exhibit 10.

Mr. MURDOCK. The Leiserson report is emergency board report number?

Mr. OLIVER. No. 66.

Mr. MURDOCK. And that is in evidence as committee exhibit No. 7. Mr. OLIVER. I offered excerpts from it as No. 9, with reference to the specific points of disagreement between these two boards.

I have also prepared a summary of the major factors and points involved in the evidence before the Leiserson Board, which if I may, I will submit as exhibit No. 11 and it will be available for reference to the particular statistics later on in my statement.

The CHAIRMAN. It will be so marked as an exhibit and received in evidence.

Mr. MURDOCK. That will be B. L. F. & E. exhibit No. 11.

(The document referred to was marked "B. L. F. & E. Exhibit No. 11" and is as follows:)

B. L. F. & E. EXHIBIT No. 11

ACHIEVEMENT OF THE FORTY-HOUR WEEK IN AMERICAN INDUSTRY EXCERPTS FROM NATIONAL INDUSTRIAL RECOVERY ACT

TITLE I-INDUSTRIAL RECOVERY

SECTION 1. DECLARATION OF POLICY.-A national emergency productive of widespread unemployment and disorganization of industry, which burdens interstate and foreign commerce, affects the public welfare, and undermines the standards of living of the American people, is hereby declared to exist. It is hereby declared to be the policy of Congress to remove obstruction to the free flow of interstate and foreign commerce which tend to diminish the amount thereof; and to provide for the general welfare by promoting the organization of industry for the purpose of cooperative action among trade groups, to induce and maintain united action of labor and management under adequate governmental sanctions and supervision, to eliminate unfair competitive practices, to promote the fullest possible utilization of the present productive capacity of industries, to avoid undue restriction of production (except as may be temporarily required) to increase the consumption of industrial and agricultural products by increasing purchasing power, to reduce and relieve unemployment, to improve standards of labor, and otherwise rehabilitate industry and to conserve natural resources.

SEC. 3. CODES OF FAIR COMPETITION.-(a) Upon the application to the President by one or more trade or industrial associations or groups, the President may approve a code or codes of fair competition for the trade or industry or subdivision thereof, represented by the applicant or applicants, if the President finds (1) that such associations or groups impose no inequitable restrictions on admission to membership therein and are truly representative of such trades or industries or subdivisions thereof, and (2) that such code or codes are not designed to promote monopolies or to eliminate or oppress small enterprises and will not operate to discriminate against them, and will tend to effectuate the policy of this title: Provided, That such code or codes shall not permit monopolies or monopolistic practices: Provided further, That where such code or codes affect the services and welfare of persons engaged in other steps of the economic process, nothing in this section shall deprive such persons of the right to be heard prior to approval by the President of such code or codes. The President may, as a condition of his approval of any such code, impose such conditions (including requirements for the making of reports and the keeping of accounts) for the protection of consumers, competitors, employees, and others, and in furtherance of the public interest, and may provide such exceptions to and exemptions from the provisions of such code, as the President in his discretion deems necessary to effectuate the policy herein declared.

SEC. 7. CONDITIONS, ETC.; LIMITED CODE PRESCRIBED. (a) Every code of fair competition, agreement, and license approved, prescribed, or issued under this title shall contain the following conditions: (1) That employees shall have the right to organize and bargain collectively through representatives of their own choosing, and shall be free from the interference, restraint, or coercion of