GOVERNMENT INVESTIGATION OF RAILWAY DISPUTES.

THURSDAY, JANUARY 4, 1917.

UNITED STATES SENATE,

COMMITTEE ON INTERSTATE COMMERCE,

Washington, D. C.

The committee met at 10 o'clock a. m. at room 326, Senate Office Building, Senator Francis G. Newlands (chairman) presiding. The CHAIRMAN. The committee will come to order. I will first inquire whether there is any representative of the brotherhoods or labor organizations who have not as yet announced their desire to be heard?

Mr. H. E. WILLS (assistant grand chief engineer, Brotherhood of Locomotive Engineers). Mr. Chairman, possibly to-morrow, if we can have a few minutes, we will be glad to utilize the time.

The CHAIRMAN. I wish to say that as yet they have not been heard, and we are ready to hear any one of them at any time. Mr. Furuseth, would you like to say anything?

Mr. FURUSETH. Later on, Mr. Chairman. I would like to hear what Mr. Emery has to say.

The CHAIRMAN. Very well, we will now hear Mr. Emery.

STATEMENT OF MR. JAMES A. EMERY, ATTORNEY AT LAW, WASHINGTON, D. C.

Mr. EMERY. Mr. Chairman and gentlemen of the committee, I appear on behalf of the National Association of Manufacturers, the National Founders' Association, the National Metal Trades' Association, and the National Erectors' Association. The first three associations are composed of about 5,500 manufacturing organizations, producing every variety of commodity in perhaps 25 States of the Union. The National Erectors' Association is composed of makers and erectors of structural steel. These associations give steady employment, in the aggregate, to approximately three to three and a quarter millions of men. Their interest in the proposal pending before the committee is primarily that of shippers and manufacturers who are utterly dependent for the continued operation of their plants upon an uninterrupted flow of the raw material of production and the movement of finished product from their plants to its market. Needless to say, their continued capacity to employ is equally dependent upon their ability to receive raw material and distribute the finished product.

Several years ago an inquiry made among the membership of the National Association of Manufacturers, and many nonmembers, disclosed that substantially 90 per cent of everything produced by the

manufacturer was consumed outside of the State of production. I can not say with equal certainty what percentage of "raw material” is produced outside of the State in which it is manufactured. "Raw material" is, of course, a term of varied meaning, for that which is the" raw material" for one plant is the finished product for another. Taking this fact into consideration, I believe it approximately correct to say that something like 90 per cent of "raw material" is cbtained through the channels of domestic or foreign commerce from outside the State in which it is transformed into a new commodity. I call attention to this condition, Mr. Chairman, to illustrate the utter dependence of continuous industrial production upon the maintenance of uninterrupted intercourse with every source of production and distribution.

I beg also to say, Mr. Chairman, that those whom I represent are organizations who realize to the utmost the value and importance of associated effort. That, indeed, the world in which we live maintains all its great powers of production, transformation, and distribution only through organized cooperation, supervision, and direction. No one is more interested than these organizations and their employees in protecting the right of association. within proper limitations, against undue interference by the State. They desire to its fullest limits the right of free association, subject only to the paramount right of the individual, and the public interest to be protected against the misuse of the power of organization.

I beg to suggest as a further preliminary that the proposal to regulate combinations in interstate commerce be considered from the standpoint of prospective as well as actual associations. The manifest tendency of combinations should be held in mind, and the possibility of new forms, as well as those of which we are presently familiar through history and judicial decisions. We must consider the capacity of combination for evil as well as good in the light of the life we now live, and I refer not less to combinations of employers than of employees.

In order that I may address myself with definiteness to the proposal pending before the committee, and particularly that I may make distinctions which in this discussion I regard as essential, I beg to insert in the record at this point the recommendations of the President, as stated to Congress in his message of August 28, 1916, and reiterated, emphasized, and amplified in his subsequent message of December 5, 1916.

In the first message the President suggested:

Fifth, an amendment of the existing Federal statute which provides for the mediation, conciliation, and arbitration of such controversies as the present by adding to it a provision that in case the methods of accommodation now provide for should fail, a full public investigation of the merits of every such dispute shall be instituted and completed before a strike or lockout may lawfully be attempted.

In his message of December 5 he amplifies this recommendation, as follows:

I would hesitate to recommend, and I dare say the Congress would hesitate to act upon the suggestion should I make it, that any man in my occupation should be obliged by law to continue in an employment which he desired to leave. To pass a law which forbade or prevented the individual workman to leave his work before receiving the approval of society in doing so would be to adopt a new principle into our jurisprudence which, I take it for granted, we

are not prepared to introduce. But the proposal that the operation of the railways of the country shall not be stopped or interrupted by the concerted action of organized bodies of men until a public investigation shall have been instituted which shall make the whole question at issue plain for the judgment of the opinion of the Nation is not to propose any such principle. It is based upon the very different principle that the concerted action of powerful bodies of men shall not be permitted to stop the industrial processes of the Nation, at any rate before the Nation shall have had an opportunity to acquaint itself with the merits of the case as between employee and employer, time to form its opinion upon an impartial statement of the merits, and opportunity to consider all practicable means of conciliation or arbitration. I can see nothing in that proposition but the justifiable safeguarding by society of the necessary processes of its very life. There is nothing arbitrary or unjust in it unless it be arbitrarily and unjustly done. It can and should be done with a full and scrupulous regard for the interests and liberties of all concerned as well as for the permanent interests of society itself.

It is to the principles of this proposal alone that I desire to address my remarks. I understand this proposal to be pending before this committee in tentative form, together with a measure introduced by the distinguished Senator from Alabama (Mr. Underwood), which proposes to confer upon the Interstate Commerce Commission the power to fix the wages and hours of labor of employees engaged in the operation of interstate trains.

The President's recommendation, as we understand it, is that of an extraordinary remedy for an extraordinary situation. He proposes that in the event a labor dispute between the managers and operatives of an interstate carrier by rail threatens the interruption of the mails, or the performance of the military or civil functions of the Federal Government, or the free flow of commerce between the States, and mediation or conciliation shall have failed and arbitration shall have been rejected, Congress shall provide for the appointment of a commission, clothed with full investigative authority, to inquire into and report upon the merits of the dispute: and, pending the conclusion of that inquiry and the submission of the report thereon, it shall be unlawful for the managers of said carrier to lock out its employees or for said employees to combine to strike.

In part the proposal is not new. The first instance of an effort to focus an intelligently formed public opinion upon a controversy of this character was found in a proposal submitted by Mr. Charles Francis Adams to a meeting of the Civic Federation shortly after the submission of the final report of the Anthracite Coal Strike Commission of 1902. That proposal, however, did not contain the further suggestion embodied here that a strike or lockout should be penalized until the public investigation should have been completed.

Senator BRANDEGEE. Would it interrupt you if I should ask you a question right there?

Mr. EMERY. Not at all.

Senator BRANDEGEE. To your mind, does it make any difference whether the combination which you want to have conditioned is a combination for the purpose of interrupting the flow of commerce or for the purpose of improving their condition, the simple effect being to interrupt the flow of commerce?

Mr. EMERY. It makes all the difference in the world, and it is to that distinction I shall especially address myself in just a moment. Senator BRANDEGEE. Very well.

Mr. EMERY. As I understand the President's proposal, it is an attempt to focus upon a stubborn controversy, threatening a serious

interruption of intercourse, the full force of public opinion to be accurately formed through a public inquiry, under circumstances which fix public attention upon its investigations because of the character and eminent qualification of the commission of inquiry. That, substantially, was the purpose and effect of the appointment of the Anthracite Coal Strike Commission by Mr. Roosevelt, a voluntary body unauthorized by law, but appointed by the President of the United States, with the consent and approval of the parties to the coal strike.

If the appointment of such a commission as the President proposes be considered from the standpoint of the power of Congress to make inquiries preparatory to legislating upon any given subject, it requires no vindication here, for your power to investigate for the purpose of securing information upon which legislation is to be predicated is as broad as the legislation itself.

There seem to be involved in the President's recommendations two broad questions, one of power, the other of policy. Does Congress possess the authority to do that which he proposes, and is it expedient to do it?

Addressing myself to the first consideration, I believe it will clarify the discussion if we consider, not merely the power of Congress to deal with the particular combinations to which the proposed legislation would be addressed-the strike or lockout-but the general rule as to the nature and control of combination itself, since the strike is merely one kind of a combination. While it has been intimated in this discussion, I can not believe that the members of the committee will conclude that the strike stands in the category of combination by itself with special rights and privileges differing from any other form of combination, for I shall submit that the legality or illegality, criminality or innocence of the combination to strike is to be determined by a standard of principles which is equally applicable to all forms of combination.

It should furthermore be emphasized, Mr. Chairman, that there is nothing in the President's proposal that interferes in the slightest with the right of any individual to quit whenever that individual desires to sever his relation with the employing carrier. This proposal involves only the power to control, regulate, or condition the right to combine to quit, a matter essentially different from the right of the individual to quit. This fundamental distinction has been observed throughout the entire course of common and statutory law since the beginning of English institutions. In our own country the distinction between the acts of individuals and that of combinations and conspiracies has been recognized from our earliest cases, and, in its application to the employment relation and the disputes which grow out of it, has been constantly considered, distinguished, and interpreted, as, for instance, the case of the Commonwealth v. Hunt, Fourth Metcalf, 75 years ago, even to the last adjudication of the circuit court of appeals in the eighth circuit in the very recent case of Dowd e. The United Brotherhood of Mine Workers, a most important decision under the Sherman Act.

A combination, Mr. Chairman, is any cooperative effort between two or more persons for the accomplishment of a given object. Combination is the generic term of which conspiracy is the illegal species. A combination is good or bad, lawful or unlawful, innocent or crimi

nal, not because of its magnitude or the personnel of those who compose it but but because of the motive or object which the combination undertakes to accomplish or the methods which it employs. This standard is, I think, of universal acceptance. I submit it is, furthermore, equally true that the right to act in combination is subordinate to individual rights of action, and that in any collision between the right of the individual and the right of a combination, other things equal, it is the duty and has been the general policy of the law and of government to protect the individual against the superior power which combination gives.

In the case of Gompers v. Buck Stove & Range Co., in Two hundred and twenty-first United States, Mr. Justice Lamar pointed out, with singular force and clarity, that as the result of the growth of combination in a society like ours that one man, acting within his right, might be opposed by many in combination undertaking to compel him to do something which he did not desire, and had a lawful right, not to do. In such an event he must do one of two things surrender to the will of the combination or appeal to authority to protect him against the exactions of the combination, and the court remarked that it was as much the public duty to protect the one against the many as it was to protect the many against the one. Needless to say, what is said of the duty of the court applies equally to that of the legislature, not only in the protection of the individual but the paramount public interest in any collision between it and the operation of the combination. And is this not especially true of the National Legislature, to which has been committed the exclusive and plenary national power to protect the most essential avenue of intercoursethe flow of commerce between the States?

For 26 years Congress has enacted and amended, and our highest courts have been engaged in interpreting, the regulation and prohibition of different kinds of combinations in interstate commerce. Thousands of pages of argument and decision have vindicated the right and duty of congressional authority to distinguish the operations of combinations from those of individuals, and to condition or exclude many forms of combination from interstate commerce.

I could read to the committee at length many examples, certainly over a period of three centuries, between the acts of individuals and those of combinations, and the early recognition, far back in the common law and proceeding to this hour, that many things are unlawful, or may be made unlawful and criminal, when done by a combination, which are not unlawful when done by an individual. The most common illustration is that a threat made by an individual is not, generally speaking, an unlawful act. Some overt step is usually required before the threat assumes a shape which the law will notice. On the other hand, a threat made by a combination is illegal without any step being taken to execute it. For the law considers that the very making of a threat by a combination carries with it, from the very nature of the confederacy, a menace not found in the weaker utterance of the individual. These distinctions, founded in common law and common sense, rest upon very clear fundamental differences between the combination and the individual. Combination is not a mere aggregate of individuals but, practically speaking, is a new personality. For the subordination of individual judgment and action to the purpose of the combination not only