Facts v. Facts

For 18 days the three men on the fact-finding board had listened as 60 stubborn steelmakers and six stubborn labor leaders made their largely contradictory points. The board wrote its report. Last week, in a body, it went to the White House.

Outside the President's office, Board Chairman Carroll Daugherty, New Dealing professor of business economics at Northwestern University, polished his rimless glasses. Judge Samuel Rosenman, onetime adviser to Franklin Roosevelt, removed his hat from his large, pompadoured head. David Cole, Paterson, N.J. lawyer and veteran mediator, dressed in a well-draped tan suit, paused to pass a word with reporters. Then the three of them went in to the President to discuss their findings and point out their salient conclusions.

Out of the Weeds. Their job had not been easy. In their report, they assailed both labor and management for playing fast & loose with statistics. In contrast to the uncritical respect which the Administration had shown in the past for labor's philosophy, Daugherty, Rosenman and Cole time & again chided labor economists for the lack of reliability in their "facts;" they also chided steelmakers for the unreliability of theirs. The truth, the board had decided unanimously in the end, lay somewhere in between.

The truth as far as they were able to weed it out:

P: Steelworkers were doing all right compared with other factory workers; since 1939 and 1941, their wage increases had been above the average.

P: As the productivity of the industry has increased, steelworkers have teen paid a fair share of increased profits.

P: Steel profits were large: $606 million after taxes, based on the first half of 1949 --an increase of 124% over 1940-41. But that was not as big as it seemed because of the drop in the value of the dollar. And the industry's recent modernization and rebuilding policy "has absorbed most of its recent substantial profit."

Over & beyond all that was the matter of the national welfare. "A wage increase in steel," the fact-finders reasoned, "would be urged as a pattern to be followed in other industries; this in turn might well cause price dislocations . . . interruptions to production might ensue." Steel workers themselves "would run the risk of losing more than they had gained." Said the board: "In general, it seems desirable at this time to stabilize the level of wage rates . . . the union [should] withdraw its request for a general increase in rates of pay."

But while turning down Murray's demands for a 12 1/2-c--an-hour wage hike, the board also took dead aim on the steelmakers. Their modernization program, when complete, should result in higher profits. If these profits were not passed along to the consumer "in the form of lower prices," said the board, then labor would be justified in trying again for higher wages.

The Human Machine. The union did win one great advance. Murray's demands for social welfare had been 11.23-c- for old-age pensions, 6.27-c- for death and sickness insurance. The industry had gagged. It was particularly set against the idea of paying for pensions to which the workers themselves did not contribute. But the board, arguing that "a part of normal business costs is to take care of temporary and permanent depreciation in the human 'machine,' " upheld Murray. Although it trimmed his demands, it allowed 6-c- for pensions (to go into effect next spring), 4-c- for insurance. Many companies already have insurance plans; they would be taken into consideration. The board figures were the maximum each company would have to pay.

The board estimated that these assessments would cost the steel industry an average of 2 1/2% of its total operating costs, and that the industry could afford that. For workers, the pension plan (supplemented by federal social security) would provide an income of around $100 a month after age 65.

Almost as an afterthought the board took one more sortie into steel's economics. For years, Phil Murray's contracts with the gigantic U.S. Steel Corp. have pretty much determined the contracts signed by the rest of the industry. In effect this has given him the weapon of industrywide bargaining and a tremendous power to will over the country's steel mills.

Because Murray has exercised his power with some wisdom and restraint, the big companies have not been unhappy. But the small companies were. Many complained that union negotiators never came near them, or when they did, carried on only token bargaining; they all had to do what Big Steel did. The union answered that it was a waste of time bargaining with anyone but the industry's handful of top firms, who set the pattern for all. Big & little firms, they were all in the same labor market.

Nevertheless, the board told steelmakers and the steel unions to get back to company-by-company bargaining. They would have to make a start in that direction, in fact, when they negotiated pension and insurance terms.

The board had one more piece of advice: it urged both labor and management to get out of the habit of "turning to government instead of arguing it out in collective bargaining."

Foot in the Door. The President, a little awed by the length (80 pages) and the complexity of the report, accepted it without comment, hurriedly wired the disputants a plea for an eleven-day postponement of the strike deadline (Sept. 14) until everyone could give the findings "the greatest weight and most earnest consideration." One by one steelmakers began agreeing to the truce. The auto workers' Walter Reuther flew to Pittsburgh to sit at the elbow of Phil Murray as the elderly labor chief sat down for a careful study of the report.

This week Murray and 170 of his lieutenants held a 3 1/2-hour session. They agreed to the truce, sadly regretting the board's rejection of their "completely justified" wage demands. But with considerable satisfaction they unanimously accepted the board's full recommendations and the principle of company-financed welfare plans which they had been long hoping for. Murray told his sub-chieftains: "We have one foot in the door." Did Murray think the steelmakers would fall into line? "I am forever the optimist," the labor boss said.

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