Veto of the Case Bill.

To the House of Representatives:

I am returning herewith, without my approval, HR 4908, entitled "An Act To Provide Additional Facilities For the Mediation of Labor Disputes, And For Other Purposes."

The outstanding domestic problem confronting this country today is the maintenance and increase of production. We must have production, or the effects or ruinous inflation will be felt by every one of our citizens. Strikes and lockouts are the greatest handicaps to attaining vital production.

Inasmuch as the solution of our present-day labor problems constitutes the key to production, this present bill must be judged in the light of whether it will assist in reducing labor strife in the nation.

I have given careful study to the bill. I have not considered it from the standpoint of whether it favors or harms labor, or whether it favors or harms management. I have considered it from the standpoint of whether or not it benefits the public, which includes both management and labor.

In the determination of the question of whether or not the great majority of our citizens will be benefited by this bill, the question presented is whether it will help to stop strikes and work stoppages and prevent other practices which adversely affect our economy.

I have reached the conclusion that it will not.

I have tried, as the representative of all the people of our nation, to approach this problem objectively, free from the emotional strains of the times, and free from every consideration except the welfare of our nation and of the world which is so dependent upon our recovery to a full peacetime economy.

This bill was undoubtedly passed by the members of the Congress in the sincere belief that it would remedy certain existing conditions which cause labor strife and produce domestic turmoil. I cannot agree with the Congress with reference to the results that would be achieved by it.

I trust that there will be no confusion in the minds of the members of the Congress or in the minds of the public between this bill and my request on May twenty-fifth for emergency legislation.

At that time I requested temporary legislation to be effective only for a period of six months after the termination of hostilities, and applicable only to those few industries which had been taken over by the Government and which the President by proclamation declared that an emergency had arisen which affected the entire economy of the country.

It was limited to strikes against the Government. It did not apply to strikes against private employers.

Such emergency legislation is now before the Congress, and I again make the request that it be passed.

H.R. 4908 is utterly different from my proposal of May 25, in kind and in degree. Its range is broad, dealing with a wide variety of subjects some of which are wholly unrelated to the subject of settling or preventing strikes. It covers strikes against private employers. It is permanent legislation, operative even after the reconversion period is entirely over. And it applies not to a few selected and vital industries, but to every dispute, no matter how insignificant, if the dispute affects interstate commerce.

At the same time, May 25, I also requested permanent legislation leading to the formulation of a long-range labor policy designed to prevent the recurrence of such crises, and generally to reduce work stoppages in all industries. I further recommended the immediate creation by the Congress of a joint committee to study the entire question and, within six months, to bring in its recommendations for appropriate legislation. I again renew the recommendation that a joint committee be appointed to make a study of the whole subject of labor relations, and to suggest permanent long-range legislation.

The fact that we are faced with an emergency which does justify the passage of temporary emergency legislation does not, in my opinion, justify us in the adoption of permanent legislation without the study that such permanent legislation needs. The bill is actually a collection of separate unrelated measures and is not an over-all solution of this most important problem. We must not make a false start. We must not approach the problem on a piecemeal basis as this bill does.

It is suggested that the bill merely constitutes a beginning, that it should be placed upon our statute books, and that we can then proceed with the study of additional legislation. I cannot agree with this thesis. This bill is not a permanent solution of our difficulties; and if it should become law, I fear that it may possibly result in being the only permanent legislation we would obtain.

We are not faced with a decision of choosing between this legislation and no legislation at all. It is more properly a choice between this particular bill and a more adequate and more inclusive solution of the problem.

The proposed measure, although described as a mediation law, is divided into two unrelated parts. The first six sections contain provisions relative to the mediation of labor disputes, postponement of strikes, and fact-finding. The remaining sections consist of provisions relative to robbery, extortion, unauthorized welfare funds, prohibitions against the organization of supervisory employees, union liability in the courts, and provisions establishing criminal sanctions, injunctive remedies and suits for treble damages against unions engaging in secondary boycotts, jurisdictional disputes and certain other activities. These are a few of the many complex problems which must be studied with infinite care before the proper solutions are found and incorporated into permanent legislation.

One of the factors to be considered in judging this bill is whether or not it would have prevented, or shortened, the strikes which have so seriously damaged our economy these last few months. Judged solely from this standpoint, I am sure a fair-minded man would have to admit that it would have failed completely.

In 1943, in the heat of a controversy over a stoppage of war production in the coal mines, the Congress passed the War Labor Disputes Act, more commonly known as the Smith-Connally Act. In his veto message of June 25, 1943, President Roosevelt warned the Congress that the strike-vote provisions of Section 8 of the Smith-Connally Act would not lessen but would promote industrial strife. That prediction was fully borne out by subsequent events. It is my belief that a similar result would follow the approval of this bill.

If a joint committee to investigate this entire subject were appointed immediately and if the subject were given the priority to which it is entitled, a report covering the entire field could be submitted to the Congress within this calendar year.

I have analyzed the bill carefully and herewith submit my comments on the various sections:

Section 1. Declares that the objectives of the act are to encourage settlement of disputes between labor and management by collective bargaining and by conciliation, mediation, and voluntary arbitration, thereby minimizing industrial strife, strikes, and lockouts.

Upon careful consideration, I have come to the conclusion that the bill will not achieve this high and unquestionably desirable objective. On the contrary, much of the bill is not only wholly foreign to the achievement of that objective, but, in my judgment, would actually defeat it.

Section 2. Defines certain key terms used in the bill.

Section 3. Provides that employers and employees in industries affecting commerce shall: exert reasonable efforts to make and maintain collective bargaining agreements; give adequate notice of proposed changes; provide for the final adjustment of grievances or questions regarding the interpretation of agreements; arrange promptly for conferences with respect to labor disputes and cooperate with the new Federal Mediation Board in attempting to settle disputes amicably. The Mediation Board may proffer its services for the purpose of aiding in the settlement of a labor dispute affecting commerce.

If federal mediation is proffered, lockouts and strikes affecting commerce are unlawful until mediation is concluded or until 60 days after a written request has been made by one of the parties for a conference, whichever is earlier. An employer who changes the status quo by lock-out or other action is deemed to have engaged in an unfair labor practice within the meaning of the National Labor Relations Act. An employee who disturbs the status quo during this period, by striking or by engaging in a concerted slow-down of production, loses his status as an employee for the purposes of the National Labor Relations Act, unless he is re-employed.

Although Section 3 is ostensibly designed to insure that the parties will attempt to reach a peaceful settlement, making a strike unnecessary, I feel that it would, in practice, tend to increase the number of strikes. I think it would lead to the development of methods to avoid the operation of this section. The bill provides that the right to strike is postponed only if the Federal Mediation Board proffers its mediation services before the strike starts. I foresee that some unions might choose to strike before the Mediation Board had had an opportunity to determine whether it should enter into a certain case--an action not prohibited in the proposed statute. Although the purpose of the provision is to eliminate the so-called "quickie" strike, its effect might be to encourage unions to resort to such strikes.

If an employer violates the prohibitions of this section, he is merely guilty of an unfair labor practice. He may only be ordered by the National Labor Relations Board to cease and desist and to pay any back pay due. An employee, on the other hand, may suffer a far greater penalty. By Section 3(d), he loses his very status as an employee. That means that the employer, without offering any further reason, may refuse to reinstate him. The penalties are inequitable. An employer guilty of a violation can only be ordered (long after the event) to stop his violation and to restore the status quo. The employee, however, loses his basic industrial rights and perhaps even his means of livelihood. I fear that the provisions of Section 3(d) might well result in some employers provoking strikes in order to give them the opportunity to discharge the employee leaders.

To avoid the consequences of Section 3, and to legalize a strike under the bill, a union need only give early notice of a request for a conference to start the running of the 60-day period during which strikes are forbidden. The result probably would be a great rush of premature notices for conferences. Sixty days thereafter, employees would feel free to strike--with the sanction of the Congress. So, too, there would be premature demands for mediation, long before the possibilities of direct negotiations between the parties had been exhausted.

No standard whatever--except only that the dispute should affect commerce--is provided for determining whether the Federal Mediation Board should proffer its services, although a strike can become illegal only if it occurs after such offer. It is apparently left to the Board's discretion. This places a heavy burden and extraordinary responsibility upon Federal mediation. Because of the serious consequences arising from the proffering of mediation services--namely the outlawing of a strike--mediation is likely to be discouraged and withheld in many cases where it might prove most useful. It is highly undesirable for the mere fact of mediation to operate so repressively upon one of the parties. Mediation should be welcomed by both parties to be effective. This provision would have just the contrary effect.

And, under Section 3, even if mediation is proffered, and the 60-day period expires without results, nothing happens. No facts are publicly found; no recommendations are made; no report is issued. No matter how important the dispute--whether in the steel, the automotive, or the shipping industry, so long as it is not a public utility--at the end of the 60 days, there is the anti-climax of nothing.

Not one of the major disputes which have caused such great public concern during the past months would have been affected in any way by this bill had it been law at the time.

The railroad strike would not have been covered by the bill at all. And the coal, steel and automotive strikes were certainly not caused by an insufficient lapse of time between the union's request for conferences and the calling of a strike. Each of these strikes would have had the full sanction of the bill.

Thus the very difficulties which this bill was presumably drafted to meet have been left untouched by it. These sections fail to provide a satisfactory method of coping with the labor-management disputes which confront the nation.

Section 4. This creates a new five-man Federal Mediation Board. All mediation and conciliation functions of the Secretary of Labor and the United States Conciliation Service are transferred to the Board. The Board, although technically within the Department of Labor, would not be under the control of the Secretary of Labor.

I consider the establishment of this new agency to be inconsistent with the principles of good administration..As I have previously stated, it is my opinion that government today demands reorganization along the lines which the Congress has set forth in the Reorganization Act of 1945, i.e., the organization of government activity into the fewest number of government agencies consistent with efficiency. Control of purely administrative matters should be grouped as much as possible under members of the Cabinet, who are in turn responsible to the president.

The proposed Federal Mediation Board would have no quasi-judicial or quash legislative functions. It would be purely an administrative agency. Surely, functions of this kind should be concentrated in the Department of Labor.

Since 1913 there has been within the Department of Labor and responsible to the Secretary of Labor a United States Conciliation Service formed with the very purpose of encouraging the settlement of labor disputes through mediation, conciliation, and other good offices. The record of that service has been outstanding. During the period of one year from May, 1945, through April, 1946, it settled under existing law 19,930 labor disputes. Included in this total were 3,152 strikes, almost ten each day. The Conciliation Service has formed one of the principal divisions of the Department of Labor.

The bill proposes to transfer that Service and its functions to the newly-formed Federal Mediation Board. To me this is the equivalent of creating a separate and duplicate Department of Labor, depriving the Secretary of Labor of many of his principal responsibilities and placing the conciliation and mediation functions in an independent body.

In the eyes of Congress and of the public the President and the Secretary of Labor would remain responsible for the exercise of mediation and conciliation functions in labor disputes, while, in fact, those functions would be conducted by another body not fully responsible to either.

As far back as September 6, 1945, I said in a message to Congress: "Meanwhile, plans for strengthening the Department of Labor, and bringing under it functions belonging to it, are going forward." The establishment of the proposed Federal Mediation Board is a backward step.

Section 5. Provides that it is the duty of the Mediation Board to prevent or minimize interruption of commerce growing out of labor disputes. The Board may proffer its services upon its own motion or upon the request of one or more of the parties to the dispute. Where mediation does not succeed, the Board is required to recommend voluntary arbitration.

Section 6. Provides that where a labor dispute threatens a substantial interruption of an essential public utility service, the Board, in the public interest, may request the President to create an Emergency Commission, and the President is authorized to appoint such Commission. The Commission investigates and reports within 30 days, after which the President must make the report public. The cooling-off period is extended for a maximum period of 95 days, with an additional 30 days upon the approval of the parties.

Much of the discussion with reference to Section 3 is applicable here. It is difficult to understand why the Congress has applied the fact-finding principle to public utilities but has omitted it entirely in other industries of equal importance.

The remaining sections of the bill have nothing whatever to do with the expressed objectives of the bill.

Section 7. Re-enacts in amended form the so-called Anti-Racketeering Act. On its face, this section does no more than prohibit all persons, whether union representatives or employees or others, from interfering with interstate commerce by robbery and extortion.

I am in full accord with the objectives which the Congress here had in mind.

However, it has already been suggested that some question may arise from the fact that Section 7 omits from the original act the provision that it was not to be construed so as to "impair, diminish or in any manner affect the rights of bona fide labor organizations in lawfully carrying out the legitimate objects thereof."

It should be made clear in express terms that Section 7 does not make it a felony to strike and picket peacefully, and to take other legitimate and peaceful concerted action.

Section 8. Provides that it is a crime for an employer to contribute to a welfare fund to be administered solely by an employee representative. It is also a crime for the employee representative to receive the contribution. Welfare funds established by employee representatives are to be restricted to certain specific uses. The prohibitions of the section are made enforceable by injunction. Certain routine exemptions to the operation of the section are made.

Welfare funds supported by employers and administered by unions are no novelty. I believe it is inadvisable to remove such a question as this from the scope of collective bargaining between employer and employee. This section does more than require that there be joint control of such funds. It specifically limits the uses to which the monies deposited in such funds may be put.

This whole subject needs long and careful study. To write into the permanent law the program for worker's welfare funds without a study by any committee of the Congress is, in my opinion, at least improvident. This particular provision was prepared and presented because of one of the items of controversy in the recent coal strike. I feel that this is altogether too important and too complicated a question to be disposed of hastily.

Section 9. This provision deprives supervisory employees of their status as employees for the purposes of the National Labor Relations Act.

This section would strip from supervisory employees the rights of self-organization and collective bargaining now guaranteed them under the National Labor Relations Act. I fear that this section would increase labor strife, since I have no doubt that supervisory employees would resort to self-help to gain the rights now given to them by law.

This complex question has long been under consideration by the National Labor Relations Board. The Board and the courts have pointed out that supervisory employees have a dual capacity. In dealing with the employees under them, they act for management. However, with respect to their own wages, hours of work, and other terms and conditions of employment, they act for themselves. The full right of supervisory employees to the benefits of collective bargaining is one that cannot be lightly thrown aside.

On the other hand, management is entitled to proper protection. Somewhere in the area of disagreement between the parties the line can be drawn with reasonable accuracy. There has been no attempt to draw that line in this section.

Section 10. Provides that suits for violation of collective bargaining contracts affecting commerce may be brought in the Federal Courts; labor organizations are deemed to be bound by the acts of duly authorized agents acting within the scope of their authority and may sue or be sued as a separate entity; money judgments against a labor organization are made enforceable but only against assets of the Union; any employee who strikes or otherwise interferes with the performance of a collective bargaining contract in violation of the contract without approval of the labor organization party to the contract loses his status as an employee for the purposes of the National Labor Relations Act unless he is reemployed.

I am in accord with the principle that it is fair and right to hold a labor union responsible for a violation of its contract. However, this legislation goes much farther than that. This section, taken in conjunction with the next section, largely repeals the Norris-LaGuardia Act and changes a long-established Congressional policy.

I am sure that, without repealing the Norris-LaGuardia Act, changing this long established Congressional policy, or imperiling the principles of the National Labor Relations Act, a sound and effective means of enforcing labor's responsibility can be found.

Section 11. This provision subjects various union activities to the anti-trust laws with all their criminal sanctions, injunctive remedies, and provisions for treble damages. Although the section is entitled "Secondary Boycotts," the scope of the section in fact extends far beyond such matters. While its enactment would provide remedies that might result in the elimination of certain evils, such as improper applications of the secondary boycott, it would also make those remedies available against recognized legitimate activities of organized labor.

That there are some abuses in this field, no one can gainsay. I deplore the strike or boycott arising out of a jurisdictional dispute as one of the most serious of such abuses. A way must be found to prevent the jurisdictional strike. It cannot be justified under any circumstances. I am convinced, however, that the antitrust laws, the objectives of which are the elimination of unfair business practices and the protection of free competition, are not designed to solve the abuses pointed out in this section.

In this regard, however, I do not need to emphasize the necessity of applying the antitrust laws to combinations between employers and labor designed to restrain competition.

Section 11 (c) rescinds the Norris-LaGuardia Act with respect to antitrust actions against labor organizations. The labor injunction is a weapon to which no private employer should be entitled except within the careful restrictions laid down by that Act. We should not invite the return to the practice of issuing injunctions without notice or hearing and a revival of the other abuses that tended to discredit our Courts and give rise to the widespread popular denunciation of "government by injunction."

Injunctions requested by the Government itself, and designed to restrain strikes against the Government in cases where refusal to work for the Government has produced a condition of national emergency, are, to my mind, an essential element of Government authority. This authority, however, should not be available to private employers under the vast variety of conditions contemplated by Section 11 of this present Bill.

Sections 12-14. These sections include provisions with respect to making copies of collective bargaining agreements available to the public and with respect to furnishing available data which may aid in the settlement of labor disputes. They are unobjectionable.

The passage of H.R. 4908 confirms the need for a careful study of labor-management problems with a view toward long-range remedies. It demonstrates the dangers of attempting to draft permanent labor legislation without painstaking and exhaustive consideration.

H.R. 4908 strikes at symptoms and ignores underlying causes. As I have noted, not a single one of the recent major strikes would have been affected by this bill had it been law.

As I said to the Congress on May 25, we should immediately have temporary legislation, dealing with the urgencies of the present, so that strikes against the Government which vitally affect the public welfare can be halted. This is necessary in the midst of the extraordinary pressures of reconversion and inflation. I have asked the Congress for such legislation. The precise form which such emergency legislation is to take is, of course, for the Congress to decide. But if the form adopted is inadequate, the responsibility must also rest with the Congress.

It must be remembered that industrial strife is a symptom of basic economic maladjustments. We cannot attribute work stoppages to any one factor. As we move from war to peace, severe strains are placed upon our economic system. Labor and management alike are seeking security. The combination of rising prices, scarcity of commodities, lowered standards of living, and altered tax programs today creates fears which are present at the conference table to disturb the orderly process of collective bargaining.

A solution of labor-management difficulties therefore is to be found not alone in well considered legislation dealing directly with industrial relations, but also in a comprehensive legislative program designed to remove some of the causes of the insecurity felt by many workers and employers.

During the past ten months I have urged the Congress to enact such a program. Among the proposals which I have recommended are adequate insurance against unemployment, health and medical services for families of low and moderate income at costs they can afford, a fair minimum wage, and the continuance of the price control and stabilization laws in effective form. These measures would remove some of the major causes of insecurity and would greatly aid in achieving industrial peace.

Our problem in shaping permanent legislation in this field is to probe for the causes of lockouts, strikes and industrial disturbances. Then, to the extent possible, we must eliminate these causes. Strikes against private employers cannot be ended by legislative decree. Men cannot be forced in a peace-time democracy to work for a private employer under compulsion. Therefore, strikes must be considered in the whole context of our modern industrial society. They must be considered in the light of inflationary pressures, of problems of full employment, of economic security.

Legislation governing industrial relations is workable only when carefully considered against this broad background. I am confident that with painstaking and dispassionate study which will probe fairly and deeply, Congress can evolve equitable legislation which promises an era of peaceful industrial relations.

We accomplish nothing by striking at labor here and at management there. Affirmative policy is called for, and a Congressional Committee such as I have suggested is the best means of formulating it.

There should be no emphasis placed upon considerations of whether a bill is "antilabor" or "pro-labor." Where excesses have developed on the part of labor leaders or management, such excesses should be corrected--not in order to injure either party-but to bring about as great an equality as possible between the bargaining positions of labor and management. Neither should be permitted to become too powerful as against the public interest as a whole.

Equality for both and vigilance for the public welfare--these should be the watchwords of future legislation.

The bill which I am returning to you does not meet these standards.

Many procedures have been suggested from time to time by students of the problem. They should all be considered. A comprehensive study of this problem should be based on a realization that labor is now rapidly "coming of age" and that it should take its place before the bar of public opinion on an equality with management.

It is always with reluctance that I return a bill to the Congress without my approval. I feel, however, that I would not be properly discharging the duties of my office if I were to approve H.R. 4908.

HARRY S. TRUMAN