Statement by the President Urging Railroad Management and Union Leaders To Arbitrate Their Dispute.

I HAVE been advised by the Secretary of Labor and the parties to the current railroad controversy that this dispute remains unresolved; that the carriers have served notice that they will put certain rules changes into operation, effective as of midnight tomorrow night; and that the unions have served notice that they will strike if this is done. In short, this Nation faces widespread economic disruption, dislocation, and distress unless this dispute is settled by other means.

I continue to believe that this controversy can and should be settled by voluntary and peaceful processes.

It is essential that the particular issues in dispute be resolved. It is equally important that the freedom of collective bargaining be preserved.

It is obvious that the parties cannot reach agreement on the specific terms of settlement before the deadline, which has now been set for midnight tomorrow. They can, however, agree voluntarily on a 'procedure for reconciling these differences.

Yesterday the Brotherhood of Railway Clerks, largest of the unions representing rail and airline employees, entered into a voluntary agreement with Pan American World Airways to submit to binding arbitration all disputes which cannot be settled by the full processes of negotiation, convinced that they can resort to "voluntary referral to a system of impartial adjudication rather than economic warfare without weakening collective bargaining."

The operating brotherhoods and the railroad carriers are equally free to avail themselves of similar voluntary .settlement procedures. Such procedures are not substitutes for collective bargaining; they are part of such bargaining, to be used when the possibilities of negotiation have been exhausted.

It must be made clear, in this connection, that there has been no proposal for arbitration at any point in this case by any Government representative or board except after every effort has been made to get the parties to agree on specific settlement terms. These arbitration proposals have not reflected Government's desire or design; they have resulted solely from private failure or refusal or inability to agree.

I consider negotiated agreement infinitely superior to arbitration. But where private parties can not negotiate successfully, arbitration is infinitely superior to a shutdown over a period of a vital segment of the Nation's economy.

I am convinced that an agreement now, in this case, to follow this course will be in the interest of the parties. I urge strongly that it be followed in the public interest--not only in maintaining continued rail transport but in preserving the freedom of private decision-making.

It is of vital importance that this most critical of all labor controversies end with the parties' agreement upon the procedure to be followed in resolving this dispute. The future of collective bargaining may well pend upon this being achieved.

I accordingly propose to the parties that they agree to submit all issues in dispute between them for final settlement to Associate Justice of the Supreme Court Arthur J. Goldberg, with the understanding that this matter will be completed before the convening of the next term of the Court. Mr. Justice Goldberg has previously made clear his intention to disqualify himself from any decisions coming before the Court which may arise out of this dispute. Although the use of a member of the High Court for additional duties has been and should be reserved for extraordinary situations--such as the Nuremberg trials and the Pearl Harbor inquiry--I believe this situation is extraordinary, in terms of its impact on collective bargaining, its relationship to the whole problem of technological unemployment and the potential effects of a nationwide rail strike on our economy, our defense effort, and our citizenry.

I urge the adoption of this proposal by both parties, with the understanding that the rules change and strike notices be immediately withdrawn.

I request the parties to advise me by a.m., tomorrow, July 10, of their response to this proposal.