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percent of the total cost of wages and of crews' subsistence on subsidized vessels. Sixty-four percent of every operating-differential subsidy dollar now being paid goes directly to the seamen in the form of wages and subsistence. The public, therefore, has a vital interest in labor disputes. Congress might well consider whether it proposes to spend large sums in promoting an American merchant marine and to countenance, meanwhile, the continued disruption of shipping services by disputes.

The Commission believes that some definite step should be taken to stabilize the situation. Various possible courses of action are, of course, open for consideration. For example, we could go along as we are now. However, the jurisdiction of the National Labor Relations Board is not believed to be sufficiently extensive to meet all of the problems which arise. That board is primarily concerned with safeguarding the right of employees to organize and select their own representatives for the purpose of collective bargaining. If no further provision is made for the handling of labor disputes in the shipping industry, conditions will probably remain as chaotic as they are at the present time.

Another possibility would be to give the Maritime Commission jurisdiction over such problems. However, there are obvious objections to that procedure. The Maritime Commission is the agency through which subsidies are granted both for the construction of vessels and for their operation. The Commission is also engaged in the shipping industry as an owner of vessels and, therefore, as an employer of labor.

Another possibility is the use of the conciliation services of the Department of Labor. However, that service can function only when invited to do so when its services are acceptable to both parties. It thus appears to have definite limitations as an agency for the stabilization of labor disputes in this field.

A further possibility would be the establishment of an agency similar to the National Mediation Board, which has operated so successfully in the field of railway labor relations, or the granting of authority to the National Mediation Board to handle labor disputes for the maritime industry.

After examining these various possibilities the Maritime Commission believes that the most practical method of attempting to alleviate the unrest in the maritime industry is to provide for the application of the mediation principles of the Railway Labor Act. We believe that such action is desirable at this time. I should like to add, however, that this suggestion is not offered as the only possible solution for the problem; if any other plan is suggested it should receive the most careful consideration.

Perhaps the most significant thing about the Railway Labor Act is the policy which it lays down for the guidance of the railway managements and their employees. This policy as set forth in the act, is simple and to the point:

It shall be the duty of all carriers, their officers, agents, and employees to exert every reasonable effort to make and maintain agreements concerning rates of pay, rules, and working conditions, and to settle all disputes, whether arising out of the application of such agreements or otherwise, in order to avoid any interruption to commerce or to the operation of any carrier growing out of any dispute between the carrier and the employees thereof.

This policy, it will be seen, emphasizes the making and maintaining of agreements between labor and management to govern their relationship. It safeguards the right of employees and managements respectively to associate themselves together as they see fitthat is, without influence, interference, or coercion on the part of one over the other.

Inasmuch as the National Labor Relations Board has already been granted jurisdiction over questions growing out of unfair labor practices, freedom of association and representation for purposes of collective bargaining in the maritime industry, and has already begun to issue certificates of labor representation, it is felt that it would be unnecessary to grant similar jurisdiction to the National Mediation Board. If a dispute arises among the employees of a water carrier as to representatives, the services of the National Labor Relations Board may be invoked for the purpose of investigating the dispute and determining who should represent the employees. From that point forward, the principles of the Railway Labor Act, as amended, would appear to be well adapted for application to the shipping industry.

One very important feature of the act, in keeping with its basic. purpose to further collective-bargaining agreements, calls for the serving of written notices, by one party on the other, of a desire to make a new agreement or to make changes in existing agreements. Such notices must be acknowledged within 10 days, and within 30 days conferences must begin for purposes of negotiating the new agreement or the proposed changes. This is an exceedingly important part of the procedure under the act, because it prevents the unreasonable delays about which the maritime unions are now complaining. The act lays down three major steps to be followed in the process of making and maintaining agreements. The first is direct negotiation between duly accredited or certified representatives of the railroads. The conferees, while in negotiation, are required to make a serious and determined effort to adjust their differences; that is, to bargain collectively within the accepted meaning of that term.

If the issues in question cannot be adjusted by direct negotiation, either or both parties may invoke the services of the National Mediation Board. If necessary, the Board, of its own accord, may proffer its services. In any case, it is important to note that both sides are still bound to keep the peace.

The third important step in the making and maintenance of labor agreements involves arbitration. If direct negotiations do not result in an agreement, and mediation proves unsuccessful in whole or in part, both parties may agree to arbitrate their differences. Arbitration is not compulsory, but in the event the parties to the dispute do sign a voluntary contract to arbitrate the remaining issues, the resulting award is final and binding upon both for 1 year. All proceedings before an arbitration board are formal. Testimony is taken under oath, and the resulting awards are filed with the district court.

In the experience gained in administration of the Railway Labor Act, it has been discovered that the three steps outlined above result in a gradual narrowing down of the issues in dispute. Direct negotiations, if not entirely successful, tend to bring about agreement on at least some of the questions involved. When direct negotiations are

followed up by mediation, additional matters are disposed of. The result is that if arbitration is eventually resorted to after mediation, the issues usually become limited to the most highly controversial questions involved in the dispute. Thus, in a way, the procedure as outlined becomes in essence a process of elimination.

If it should happen that the National Mediation Board is unsuccessful in adjusting the matter at issue through mediation, or in bringing about arbitration, then both parties to the dispute are relieved of any obligations under the law.

However, if the action of either party threatens to deprive the country of an essential transportation service, a special fact-finding emergency board of impartial persons may be appointed. This board is required to investigate the dispute promptly and to report within 30 days. During such period, and for 30 days thereafter, the parties are forbidden to alter the status quo except by mutual agreement. The experience of the railroad industry reveals that the technique so employed-conferences, mediation, arbitration, and fact finding-is effective not only in eliminating the hasty action which begets strikes and unrest in an industry but also in bringing about mutually satisfactory agreements. Under the Railway Labor Act provision is made for the appointment of this fact-finding board by the President. A serious question arises, however, as to whether the President should be forced to assume the added responsibility of passing upon such questions in every case of labor trouble in the maritime industry. The principal reason for placing this responsibility on the President. is that a board appointed by him carries with it, in the public mind, the influence of the Presidential office. If it is decided that the advantages to be derived from Presidential appointment of such a board are not sufficiently important to justify placing this additional burden upon the President, Congress could select some other governmental body to make the appointment.

The Maritime Commission might be selected to fulfill that duty, in view of the fact that it is conversant with conditions in the industry. It is desirable that the selection of the emergency boards be made in such a manner that their recommendations will be given the highest value in public opinion.

Another important feature of the Railway Labor Act is its provision for the National Railroad Adjustment Board, which was created by the 1934 amendments to the act.

This Board handles all disputes that grow out of individual grievances or out of the need for interpreting existing rules and labor agreements. If a man has a wage claim, or if he considers that he has been denied his rights under a given rule, or if he feels he has been improperly discharged, and the matter cannot be adjusted on his own railroad through his chosen representative, he may refer the matter to the National Railroad Adjustment Board for final determination. The Adjustment Board consists of an equal number of labor and railroad representatives. In the event these representatives deadlock, a neutral may be called in, or appointed by the National Mediation Board, to make a decision. All decisions of the National Railroad Adjustment Board are final and binding.

It is suggested that it may not be necessary at this time to establish a national adjustment board for the maritime industry. The same re:sult could be reached by requiring that every maritime employer and

his employees, acting through their accredited representatives, establish a board of adjusting with jurisdiction similar to that exercised by the system of group boards under the Railway Labor Act. At the same time it is believed that it would be desirable to give authority to the National Mediation Board to establish a national maritime adjustment board when, in its judgment, it would be necessary to have such a permanent national board to provide for the prompt and orderly settlement of disputes between maritime employers and their

employees.

It should be emphasized that this act does not prohibit the use of labor's most important weapon-the strike. It merely provides in the public interest that such weapon shall not be employed until reasonable efforts have been made by both parties to settle the dispute, with the assistance, if need be, of the Federal Government. Although complaint is made by some against possible delay, it is the opinion of the Commission that in water transportation, as well as in rail and air transportation, the interests of the public are paramount; both operators and employees must relinquish some of the privileges of those who are not engaged in businesses so directly connected with the public welfare. In the maritime field, additional important considerations prevail-those relating to safety at sea and to national defense.

The Commission wishes it to be clearly understood that the proposed measure would not interfere in any way with the orderly processes of collective bargaining, or with the development of stable unionism in the industry. On the contrary, the application of the principles of the Railway Labor Act to the maritime industry will foster collective bargaining on a permanent basis and thereby serve the interests of employee, employer, and the general public, just as it has done in railway transportation.

It has been stated that the maritime unions are not yet sufficiently well organized to insure the successful operation of this statute. Assuming for the sake of argument that the unions are not well entrenched, the act, as applied to the maritime industry, should actually hasten the organization of labor. It should also foster increased responsibility on the part of the duly selected representatives of organized labor.

Because of the importance of untinterrupted service to waterborne commerce, and because of the intimate relationship of stevedores, wharfingers, and towboat, barge, and lighterage services to merchant shipping, it is recommended that whatever provision is made for the settlement of disputes in the maritime industry should extend not only to disputes between operators and vessel personnel but also to longshoremen and to towboat, barge, lighterage, and dock employees.

The Commission believes that it would be desirable to have the maritime industry included with the railroads under the National Mediation Board. The impressive record of that Board indicates that it will have the confidence of all concerned. This is necessary for effective service. The jurisdiction of this Board has been recently extended, with good results, to employees engaged in air commerce. Nor is this Board inexperienced in maritime matters. It already exercises jurisdiction over the employees of steamship lines and harbor craft controlled by railroads. The proposed amendments will

not, therefore, thrust this Board into a new field, but will merely extend the scope of its activities therein.

An additional reason for utilizing the service of the National Mediation Board is the saving in expense necessary for the establishment of a new board. Additional responsibilities for the National Mediation Board will doubtless require additional staff and expenses for that body, but such additional expenses will be small compared with those that would be required for the establishment of an entirely new agency for the maritime industry.

The National Labor Relations Act already guarantees seamen the right to organize for collective bargaining. Application of the Railway Labor Act to the maritime industry will go one step further. It will force operators to meet with the representatives of their men, not only to settle questions of future wages, rules, and working conditions but also to settle, through joint boards, all grievances and questions of interpretation of agreements already in effect.

Seamen and operators alike must not lose sight of the fact that shipping is primarily an international business. While losses incurred by domestic enterprises as a result of labor difficulties may be recouped later, the situation with respect to shipping is vastly different. The business which American lines are unable to handle because of labor difficulties goes to our foreign competitors. Some of it may be recovered, but much of it will never come back. If the American merchant marine is to continue, and the American people are to continue to support it, tie-ups must cease and regularity of service must prevail.

Training: In connection with its study of the labor problem, the Commission has gone carefully into the question of sea training. While four States maintain schools for the training of officers, the United States is the only maritime power which does not have extensive facilities for training young men for the licensed and unlicensed personnel of its merchant marine. The declaration of policy in the Merchant Marine Act, 1936, states that the United States should "have a merchant marine manned with a trained and efficient citizen personnel.”

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While the Commissions' general counsel advises that Congress has already granted the necessary power to enter into an adequate training program, the Commission is of the opinion that direct congressional approval should be had before undertaking substantial expenditures in connection with training.

It is suggested that the training program be worked out according to the needs therefor as envisioned by the Maritime Commission. The proposed amendment specifically authorizes the Commission to establish such a program. A further provision authorizes the Commission to establish a "maritime service." This service would be composed of merchant seamen who are willing to devote a part of their time to additional training. In this way it is contemplated that a force of competent merchant seamen will be built up for service on American-flag vessels. Such seamen in the maritime service will have a relationship to the merchant marine comparable to that of the Naval Reserve to the Navy. It is believed that with such a program, and with an improvement in working conditions, there is every reason to expect that a high type of personnel drawn from all

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