PERCENTAGE CHANGE IN EARNINGS
IN MANUFACTURING INDUSTRIES
BEFORE AND AFTER WAGE STABILIZATION
TWO EQUAL 15 MONTH PERIODS

PERCENT

PERCENT

24

22

Mr. DAVIS. It has another significance, too, and that is, it does happen as a broad generalization that the white-collared workers tend to concentrate in the unorganized groups. We have statistics in here which I wish you would look at, which deal with the statistics for retail trade and the wholesale trade, and banking and so forth, where there is a concentration of white-collared workers, and they tend to show the same thing. This thing shows that the white-collared workers have had a higher cents-per-hour increase, but then again the same question arises where did they start from?

Senator DANAHER. The percentage increase may have been minimal. Mr. DAVIS. Of course the percentage increase of 7.5 cents you will find will be a higher percentage increase than the 5.6, a good deal higher, because the white-collared workers tend to be lower-based. Senator DANAHER. I expected as much.

Mr. DAVIS. Yes.

Senator DANAHER. Mr. Davis, is it not your policy to adhere to the Little Steel formula in the adjudication of future disputes?

Mr. DAVIS. Will you excuse me, Senator? I was interrupted. I did not hear the first part of your question.

Senator DANAHER. I say, is it your purpose to adhere to the Little Steel formula in the adjudication of future disputes?

Mr. DAVIS. Oh, yes, sir; we are bound to do that. It is imposed upon us by Executive Order 9328.

Senator DANAHER. The reason I asked is that the Executive order to which you refer clearly antedated the act of Congress which became law June 25 last.

Mr. DAVIS. The War Labor Disputes Act.

Senator DANAHER. In it Congress expressly gave to you the power not only to decide the dispute but to provide by order the wages and hours and all other terms and conditions which might be pertinent, having in mind the statutes which are enumerated and all other applicable statutes.

Mr. DAVIS. That is right; but that power to decide disputes was made subject by Congress to the act of Congress of October 2, 1942, as amended, and all other applicable provisions of law; which included, of course, the Executive orders that had been issued under the Emergency Price Control Act.

Senator DANAHER. Beginning now in section 7 (a), subparagraph 2, we further read that it was the intention of Congress that

Where no other law is applicable, the order of the Board shall provide for terms and conditions to govern relations between the parties, which shall be fair and equitable to the employer and to the employee alike under all the circumstances of the case.

Would you not feel that under such language you have adequate authority in a proper case to take account of inequities?

Mr. DAVIS. Oh, I think if you will let me go back to that, Senator, our power here to make orders that are fair and equitable embraces not only wages but also other matters in dispute.

Senator DANAHER. I see.

Mr. DAVIS. As to wages, the power to make a fair and equitable award is limited by the Little Steel formula and by the bracket system which I described, and by all of the provisions of the Executive orders. We cannot say for instance, we think it would be fair and equitable to give one group of workers a certain wage increase and give it to them, except this as I explained before you came in. Senator DANAHER. I have been here a long time.

Mr. Davis. Have you? Excuse me. That we have under this May 12 directive the proviso that in a rare and unusual case vitally affecting the war effort we may depart from the bracket system.

I can put it this way, Senator. What happens is this that we started off with the act of Congress which said, "You must stabilize wages as of September 15, 1942, as far as practicable." That meant something. Then it said, "You must do it if you can so as not to adversely affect the war effort and so as not to do gross inequity." Now, we take great areas as the Little Steel formula took the whole area of people who had lagged behind in the race since January 1, 1941, and said, "To avoid gross inequities, you can bring those people up to 15 percent before you freeze them." So that was a limit tied upon that exception to the rule.

Senator DANAHER. But that was a limit which the Board itself fixed, was it not?

Mr. DAVIS. That is right. Then we had this kind of inequity, that did not grow out of increases in the cost of living but grew out of the relative position of workers in one plant compared to workers in another-that type of inequity. Then we said, in November of 1942, "There are a great many historical differentials in American wages. As I say, they are about as level as the Himalaya Mountains. We are not going to disturb those. We are not going to try to level the Himalaya Mountains and slide across the plain. We are going to try to work our way through." But there were cases in which the discrepancy was so great that there was not only the gross inequity involved for the workers but it was grossly inequitable to the employer because he could not get workers at those wage rates. He would have to go out of business, and in that way it interfered with the war effort.

Senator DANAHER. Now, let me interrupt you to point out that when we wrote section 7 (a) of the War Disputes Act we provided that

The National War Labor Board, established by Executive Order No. 9017, in addition to all powers conferred on it, shall have the following powerswhich include the power to handle these wage disputes in terms of orders affecting the wages and hours and all other terms and conditions.

In other words, this was in addition to all existing law.

Mr. DAVIS. Well, I do not know, Senator; but it surely isn't your thought that the June act said to the War Labor Board, "You can now proceed to approve wage increases without regard to the act of October 2, 1942, and the Executive orders thereunder, if you think it fair and equitable to do so." We have not so interpreted it, of course. Senator DANAHER. Let me ask you if it is your purpose to ask the

Congress to "up" the Little Steel formula?

Mr. DAVIS. We have no such purpose.

Senator DANAHER. And of course, the Board's rules, whatever they are, or their orders, whatever they are, in a given case are final?

Mr. DAVIS. Yes.

Senator DANAHER. Is that so?

Mr. DAVIS. That is right. We are bound by our orders, and the people we issue orders to under the act of Congress of June 1943 are bound by our orders.

Senator DANAHER. That is the way you wanted it to be, too; is it not?

Mr. DAVIS. That is right. Now, you perhaps saw in the paper this morning, we did yesterday initiate a sort of prima facie look at the question whether the Little Steel formula was creating gross inequities or not. We agreed with the A. F. L. and the C. I. O. that we would go so far now as to look at it, to inform ourselves. My feeling about that is-I am speaking for myself alone, again-the War Labor Board ought to inform itself whether what it is doing results in gross inequities or not. There was a suggestion made that that was the business of Congress, and I think it is, but I do not want to be uninformed if Congress comes to me and asks about it. I was called up heresuppose that we had not looked into any of these things covered by this report until we got notice that we were coming up here. We would have been out of luck.

I like to keep informed. And besides that, speaking for myself alone, if the present wage stabilization policy is doing gross injustice, I want to know it. And if I find it out, I am going to say so.

The CHAIRMAN. That would mean a modification, would it not? Mr. DAVIS. Yes; but I think the President is entitled to know from me. I say "me," because I am not speaking for all my associates. The CHAIRMAN. Yes.

Mr. DAVIS. But I am just telling the way I feel about it. We created the Little Steel formula because we thought it was a fair and equitable way to handle it, that would avoid gross inequities, and we thought it would stabilize. Now, if I am ever convinced that it is unstabilizing, on the one hand, or that it is grossly inequitable on the other hand, I am going to say so; and I will say so to whomever it may concern. If Congress is interested at that time, I would say so to Congress.

The CHAIRMAN. The question is right before you now, is it not? Mr. DAVIS. Yes, sir.

Senator DANAHER. Mr. Davis, we have as you know under consideration the Emergency Price Control Act, one of the objectives of which is to assist in the achievement of stabilization.

Mr. DAVIS. Yes.

Senator DANAHER. Are there in your mind any suggestions for amendments which you think will further implement you in the performance of your duties? When I say "you" I mean the Board.

Mr. DAVIS. Not in the Emergency Price Control Act. I think it is very satisfactory. I think it has worked very well, Senator; and my own opinion, now-you know, in my tripartite board I do not always get agreement from my associates and my own opinion is that if Congress sees fit to reenact it as it is, we can hold the control of wages, if Mr. Bowles can hold prices.

Senator DANAHER. Do you feel that there is need for further implementation of the War Disputes Act or any other authority under which you operate, in order further to implement you and assist you?

Mr. DAVIS. Well, I think about the War Disputes Act that the provision for taking votes about a strike has done more harm than good. I wish it could be removed.

Senator DANAHER. I argued to that effect when the matter was before the Senate; but that is beside the point.

Mr. DAVIS. I think, too, it was based on a very honorable idea, but it has not worked.

Senator DANAHER. Well, let me come back. Do you think of any provisions of any other law under which you operate which should be expanded or ameliorated in order to assist you?

Mr. DAVIS. I do not, Senator; no. I will tell you, I am pretty busy administering the laws that you gentlemen have passed, and I do not devote an awful lot of time to thinking about changing them.

Senator DANAHER. And, of course, you are also administering some that we did not pass.

Mr. DAVIS. That is right.

Senator DANAHER. Such as the Little Steel formula?

Mr. DAVIS. That is right.

Senator DANAHER. And that is one in which you did have the unanimous action of the Board, did you not?

Mr. DAVIS. Labor dissented; that is right.

Senator DANAHER. But in any case you did have the unanimous action of the Board in demanding that there be finality to whatever decision the War Labor Board enters?

Mr. DAVIS. You bet. That is one thing we have never divided on yet. We have divided in all directions on every other conceivable subject.

Senator DANAHER. So that whatever decision or whatever order ultimately there be in a given case, in any event, the Board wants that order final?

Mr. DAVIS. You bet.

Senator DANAHER. Thank you.

Senator MALONEY. Have you finished, Senator?

Senator DANAHER. Yes; I have.

Senator MALONEY. Mr. Chairman, I would like to ask a question. The CHAIRMAN. Yes.

Senator MALONEY. Senator Danaher has asked, Mr. Chairman, if you had in mind any amendments which might be helpful to you, and you have indicated that you have none in mind now. On the other side of the fence, there is at present, as I understand it, a plan to offer an amendment which would abolish food subsidies. Will you tell us, if that should happen, what effect it would have, in your judgment on your existing labor-price policy?

Mr. DAVIS. Senator, my views about that are very definite.
Senator MALONEY. I would like them on the record.

Mr. DAVIS. Yes, sir. If you had sat with me the last 15 months, you would know that the job we have had is no cinch. I think the same can be said of Mr. Bowles' job.

Senator MALONEY. I know that, without sitting with you.

Mr. DAVIS. We have been able to do it. I think we can both of us hold on to it. I do not mean there is nothing to fight. We are not through that war, either, but I think we can win through on our present system. Now, I am told-of course, I do not know technically the effect of subsidies, but assuming that Mr. Bowles does and that what he says about the effect of doing away with the subsidies is anywhere near correct, then I say to you that in my opinion we could not hold the wage law.