Rowe, Jame H., 1938 - June 1941

PSF : James H. Rowe, Jr. 1938 - June 1941 PSF: Rowe Subject THE WHITE HOUSE WASHINGTON fill November 4, 1938 Memorandum For The President. I telephoned Ed Flynn your decision on the H.O.L.C. matter. He said it would not solve the difficulty, that the only solution was to fire Hunt, the Regional Manager and Nelson, the State Manager. I asked him at least to try the other method and he was first inclined to do so, but finally said he would not. Mr. Fahey will send Hunt to see Flynn anyway. Flynn said he has been very ill and is going away right after election for six months and could not really devote any time to the matter for that reason. JHR James Rowe, Jr. PSF: Rowe Subject THE WHITE HOUSE WASHINGTON December 19, 1938 Memorandum For The President. Clinton Hester, Administrator of the Civil Aeronautics Authority, told me that a few days ago Clarence Lea, Chairman of the House Interstate Commerce Committee approached him ostensibly about something else and in the course of the conversation asked if Hester, since he was on such good terms with James Roosevelt, could get word to you that he was interested in the judgeship in the Northern District of California which is now vacant. Lea told him he did not want to come down to see you about it. Hester pointed out he had no choice but to listen. Hester pointed out to me that the next ranking member of that committee is Crosser of Ohio who has not been too friendly to the Administration. James Rowe, Jr. PSF Rowe adm.assts adm. assts N.Y. Herald-Tribune, April 12, 1939 Speech by Wendell Willkie Occasion: Ohio Society of New York, Hotel Pennsylvania Guest of Honor: Tom Girdler Note: Willkie did not introduce Girdler - merely praised him thus: "These politicians didn't build America, and they won't rebuild it." He added that "the great industrialists of America, the Girdlers, the Irwins made the country" and that people thru- out the country with "returning sanity" were coming to realize it. "If we are patient we will see the time when men like Girdler are recognized as the true heroes of America." Memorandum For The President. Perhaps these two quotations will amuse you. They have been sent to interested persons. file J. H. R. Bruce Barton - Article in American Magazine, June 1930 "How can we develop the love of country, the respect for courts and the law, the sense of national obligation, that Mussolini has recreated in the soul of Italy? Must we abolish the Senate and have a dictator to do it? I some- times think it would be almost worth the cost." Barton is running for the Senate in New York State against Senator James Mead. PSF: Rowe THE WHITE HOUSE Subject WASHINGTON May 8, 1939. MEMORANDUM FOR JIM ROWE Will you talk with Wallace about this and try to get him busy on it and also talk with the R. F. C. people? F. D. R. 5/8 - I talled to Secretary Walloce and to cliff Drov, director of Complety Crist Corporation. I notified J Gillin the me were eventing on it. JHR. THE WHITE HOUSE WASHINGTON May 6 1939. MEMORANDUM FOR THE PRESIDENT: The attached memorandum from James Rowe has to do with the repeated repre- sentations of Gillis, from Georgia, re- garding the Georgia Commodity Credit Corporation situation. Gillis seemed to think that it is very urgent, as the Commission meets Monday. Emml- E.M.W. THE WHITE HOUSE WASHINGTON May 6, 1939 Memorandum For The President. Re: Georgia Turpentine Loan Jim Gillis of Georgia has been calling me about loans to be made by the Commodity Credit Corporation to turpentine producers in Georgia. Gillis is trying to remove a 22% "selling charge" which the factors, who distribute the loan, deduct from the money the Commodity Credit Corporation gives them. The attached is an explanatory memorandum which Gillis' lawyer gave me on the subject. I am told that Gillis discussed this turpentine loan with you in detail during your last trip to Georgia, and that you promised to get the commission deducted when the matter was brought to your attention. The Commodity Credit Corporation is holding a meeting Monday to decide. The factors' lobby which works through the Congressional delegation has been trying to persuade the members of the Board to retain the commission. Clifford Durr, Assistant General Counsel of R. F. C., tells me the problem is exceedingly complicated. The factors claim if the 22% commission 1s removed, they will refuse the loan. If they are not bluffing, this will ruin the producers whom Gillis represents. A majority of the producers support the factors "on the record". Gillis claims they are forced to because they owe the factors so much money. Durr says that might very well be so, but it would take the C. C. C. months of investigation to find out. Durr believes nothing can be done this year except to retain the commission but thinks they ought to start working to revise it next year. Gillis has been told by the producers that if he can do nothing for them, they will change their allegiance to the other faction in Georgia. He says it will cost him 50 counties and may lose him the delegation. IHR. James Rowe, Jr. The charge of 2-1/2 percent by the factors is unreasonable and unjust even when the producer is making a profit but the assessment of such a charge at a time when the Government is in effect purchasing the entire production is unthinkable. These commodity loans are made at or below the cost of production for the purpose of preventing the disruption of production and the destruction of the producer and no possible excuse exists for permitting the factors to receive such an undue profit as the 2-1/2 percent commission plus other charges would result in. Factors are money lenders and nothing more or less. All of the charges they assess are simply increased interest charges be they called by what- ever name. Normally they collect inspection fees, insurance fees, storage and interest. The service they render is solely the advance of money for production purposes. Production credit associations make a profit at 5 percent per annum, factors charge 6 and 8, the majority of producers are charged 8 percent. If the 2-1/2 percent is waived the factors will receive the entire amount of the loan out will credit the producer's account with $1.00 per unit more than they would otherwise do. The producer would owe the factor $1.00 less for every unit he produced. The factor would also make a profit from storage, insurance, inspection and interest charges and the sale of supplies. The producer would certainly no more than break even as a profit cannot be made at $40.00 per unit. Surely the factors should be willing to forego this small part of their profit, not for the purpose of increasing the profit of the producer, but to make his loss less. The producer can obtain no relief except by action of C. C. C. Storage rates were reduced 50 percent last year - they are still ample. The charge of 1/2 percent insurance is absurd but 2-1/2 percent for selling is ridiculous as no sale is made nor have the factors ever sold, they have simply financed production, charged high interest rates and assessed such other charges as the producer would or could bear. They received his product and transferred it to some dealer who actually made the sale and made an additional charge. PSF: Rowe THE WHITE HOUSE subject WASHINGTON I June 20, 1939 MEMORANDUM FOR: The President. Department of Justice (Judge Townsend) tells me that a man may be nominated and confirmed as administrator of one of the three new agencies and can, on July first, take the oath of office wherever he happens to be. The commission can be signed by you in Washington. The administrator can then immediately appoint an assistant administrator, without Senate confirmation, who could act as acting administrator until the arrival of the administrator. (Sections 201-(c), 301-(c) and 402-(b) -- creating the new agencies-read in part: "The assistant administrator shall act as administrator during the ".) absence or disability of the administrator IHR James Rowe, Jr. THE WHITE HOUSE WASHINGTON June 20, 1939. MEMORANDUM FOR JIM ROWE Will you give me the answer to the following question: If one of these men is nominated who cannot take over the duties on the first of July, can he appoint immediately an Assistant, without Senate confirmation, who could be sworn in and act as Acting Administrator until the Administrator gets here? F. D. R. THE WHITE HOUSE WASHINGTON June 19, 1939 MEMORANDUM FOR: General Watson. The President may be interested in the following which Harold Smith, Director of the Budget, asked be brought to his attention: The positions of the administrators of the three new agencies created by Reorganization Plan #1 do not exist until July first. Smith was of the opinion that the President could not nominate these men until July first but I have checked this question with Department of Justice and Treasury lawyers. It is their informal opinion the President may send down the names at any time and that the Senate may confirm. The commissions, however, should properly not be issued until July first. Rudolph Forster is having them prepared to read "I nominate to be , effective July 1, 1939." I might emphasize that this is only an informal expression of opinion by the Department of Justice. In any event, the important thing from the Bureau of the Budget's point of view is that these nominations should be sent down as soon as possible so that on July first there will be administrators who can take over immediately. Other- wise, there will be a gap of several days before confirmation in which these agencies, composed of presently existing agencies, would have no one who could legally sign necessary papers and, therefore, a large segment of the Government would cease to function temporarily. Smith regards this problem as so serious from a managerial point of view that lie hopes the President can send down the names soon. JHR H. R. PSF Rowe June 22, 1939 Memos from Jim Rowe to Gen Watson subject in re-appt. for Congressmen Healey and Celler- Subject--The Hatch Bill--letter from Carl A. Hatch to Watson attached, also copy of Chas. Michelson's letter to Bankhead and and Rayburn in ref to Hatch Bill. See: Watson folder-Drawer 2-1939 Rome N. July 18, 1939 subject File Memo to Watson From James H. Rowe In re-Congr. Sabath and Tom O'Malley See Watson folder-Drawer 2-1939 fillsmal PSF Rome THE WHITE HOUSE WASHINGTON subject September 13, 1939 Memorandum For The President. Jerome Frank telephoned, saying there were Wall Street rumors that Paul Shields 18 to be put on the War Resources Board. He wanted to remind you that Shields has turned out to be one of the SEC's worst enemies, injuring it with his sub rosa activities whenever he can. As between Jim Forestal of Dillon, Reed and Shields, Forestal is far and away the better choice. IHR James Rowe, Jr. fite PSF THE white HOUSE WASHINGTON Rowe Subject September 25, 1939 Memorandum For The President. Check on Transatlantic Messages Larry Fly, Chairman of the Federal Communications Commission, asked that I give you the following report, since he does not wish to bother you personally at this time. This concerns the check on transatlantic messages which you discussed with him last week: His key staff men are devising a practical plan of operation for handling the problem. He has conferred with the Attorney General and a member of the FBI, who will cooperate. He has conferred with Vincent Astor, who has been extremely cooperative and has arranged a meeting with White, head of Western Union, in New York this Thursday. Astor indicates White will be cooperative. Fly raised two problems for your consideration: (1) He feels it would be extremely unwise to take an FBI man with him to the New York conference, since he is trying to avoid, above all, "scaring these men". This is Astor's advice also. If agreeable to you, he will go alone. The FBI will, of course, be kept informed. (2) He learned in confidence that the Communica- tions Division of the State Department is planning to call to Washington the same industrial leaders in the Communications field with whom you told him to confer in New York. This is a specific instance of a recent tendency for other government departments to cut across the Commission's field. He says he mentioned this general tendency to you at your conference. To avoid violating the confidence, but also to pre- vent action by the State Department, he suggests that if you tell the Secretary of State that you have directed Fly to take charge of this problem, that procedure will provide the solution. JHR James Rowe, Jr. THE WHITE HOUSE WASHINGTON October 4, 1939 Memorandum For The President. Larry Fly, who has gone up to New York on the matter on which he has been reporting to you, telephoned that he hopes that when you see Vincent Astor over the week-end, you can find time to get Astor's point of view on the subject. Fly says Astor has been invaluable to him and has thought the problem through better than anyone else. JKR James Rowe, Jr. PSF Rowe, THE WHITE HOUSE WASHINGTON November 21, 1939. memorandum FOR JIM ROWE: Will you ask Stewart McDonald to put James Townsend of Poughkeepsie, N.Y. back as field Executive Secretary of Federal Housing Administration for Hudson River Valley. He resigned a few months ago under the Hatch Act as he is Democratic County Chairman in Dutchess County. The campaign 1s over and he is voluntarily retiring from the chairmanship and asks to be put back on F.H.A. F.D.R. PSF THE WHITE HOUSE Subject OK. yes. Jun Rone WASHINGTON December 9, 1939 FDR Memorandum For The President. Congressman Sirovich (1) District Attorney Cahill says he will do his duty and give Sirovich an appointment from his district. He hopes that if Sirovich's candidate is obviously incompetent, you will allow Cahill to ask that Sirovich submit the name of a more competent man. (2) Sirovich also told me that he mentioned the name of Isadore Apfel to you and that you were annoyed because Justice had not put him on before. You had once told me that you wanted this done if he were any good. I have arranged that Justice will put him on Monday morning. lie has a good record. Governor Lehman plans to put him on the New York Supreme Court after this job. Do you want Sirovich to get both jobs? JHD James Rowe, Jr. 12/11- 2 tabl the to Littell PSF Pome Subject Memorandum for Jim Rowe from the President december 9, 1939, Re-Dave Sholtz Asks J. R. to talk with Senator Pepper about job which Dave Sholtz wants as Ambassador to Cuba. Attached is memo of Dec 13th from Rowe outlining Pepper's reply; also letters of Dec 7th and 13th from Sholtz to the President and one to Mr. McIntyre of Dec 14th. Attached also is Watson's reply to Sholtz of Dec 15, 1939. For memo from Towe to President-Feb 6, 1940-Re-conversation with Sholtz who says he can beat Andrews for the Senate if the Pres keeps WPA out of politics etc. See:Sholtz-Gen Corres-Drawer 2-1940 PSF Rowe THE WHITE HOUSE Subject WASHINGTON Confidential January 11, 1940 Memorandum For Mr. Forster. Labor Board Although I do not expect the question to arise, if the name of Professor McCoy of the University of Alabama appears as an appointment to the Labor Board, Senutor Lister Hill telephoned his opposition and asked that it be held up until he can talk to the President. I understand that the Secretary of Labor feels the same way, so this is merely an added precaution. JHR James Rowe, Jr. \ PSF Prive F - confidential (have. Subject THE WHITE HOUSE WASHINGTON January 13, 1940. JIM ROWE: To speak to me about. F.D.R. 1/22 - Talle to Lany Fly who will toy. JHR one Int Thail Bruwn out - keet Willis Bullinger In a Reduct Bill Dary eago Janush 1440 THE WHITE HOUSE PSF WASHINGTON Subject January 30, 1940 Memorandum For Paula Larrabee: I think this should be in the President's confidential files, don't you? James 2 Rowe, Romae Jr. Memorandum from the President to Jim Rowe--Dec 9, 1939. Re-Dave Sholtz Asks J..R. to talk with Senator Pepper about job which Dave Sholtz wants as Ambassador to Cuba. Attached is memo of Dec 13th from Rowe outlining Pepper's reply; also letters of Dec 7th and 13th from Sholtz to the President and one 60 Mr. McIntyre of Dec 14th. and Watson's reply to Shottz of Dec 15, 1939. For Memo from Rowe to President-Feb 6,1940 RE-conversation with Sholtz who says he can beat Andrews for the Senate if the Pres keeps WPA out of politics etc. See:Sholtz-Gen corres-Drawer 2-1940 PSF Review subject THE WHITE HOUSE WASHINGTON February 6, 1940 Memorandum For The President: Oregon Dick Neuberger, Portland newspaperman, who had an appointment with you last week but came down with the grippe, asked that you be given the following message: 1. He was sent as an emissary from the group in Oregon who have circulated petitions to put your name in the Primary. He wanted to know whether you wished to have your name withdrawn. Under the Oregon law, the petitions can be filed even against the consent of the person and once filed cannot be withdrawn. (In 1916 Hughes tried un- successfully by a mandamus suit to withdraw his name). I told Neuberger it was impossible for me or anyone else to get an answer on that question. Neuberger said Lowell Mellett had strongly hinted the petitions should not be filed. If so, the group will file the name of Wheeler to beat Garner. The delegates must vote for the candidate se- lected until released by him. Incidentally the Oregon Commonwealth Federation, which is the group circulating the petitions, is closely affiliated with the Labors Non-Partisan League of John Lewis; in fact they share the same office and have several of the same officers. 2. Neuberger also wanted to warn you against the "Western Liberal Conference". He says that Costigan, the prime mover, is still following the so-called "Communist Party line" even after the Russian attack on Finland, and that the West Coast communists were active. He believes there is absolutely nothing to be gained by such a Con- ference and that if held the "left wing crowd" would seek to embarrass the Administration. I do not know how reliable this information $s. I do know that Neuberger on one side and Boettiger and Littell on the other dislike each other heartily. ,INR James Rowe, Jr. Grace: The President may wish to look at this tonight, or to take it on the trip and think about it. On the other hand, it could wait until his return. I promised Dr. Leiserson left. I would get it to him before he friend J.m. J.H.R. PSF Subject THE WHITE HOUSE February 13, 1940 WASHINGTON Memorandum For The President. National Labor Relations Board Rowe Dr. Leiserson asked me to give you this message before you left and wants to discuss it with you on your return. When you appointed him to the Labor Board he told you he did not believe he could successfully clean up the internal situation there unless he had a majority of the Board. He now says his judgment was correct. He can do no more alone. The Wagner Act itself is all right; it should not be amended. The Smith Com- mittee's forthcoming proposals will make matters worse, as will those of the National Association of Manufacturers, the A. F. of L. and the C. I. 0. He believes there must be an entirely new Board, and thinks the Administration should sponsor an amend- ment to the Act to provide for such a Board. I suggested it might be impossible to get able men to accept appointment at this stage. He admitted this is Secretary Perkins' point of view, but disagrees with her. New members can change the staff and then the administrative procedure which Leiserson indicates is the basic trouble. For example, four of the best regional directors proposed such changes, but Madden and Smith refused to put them into effect. Leiserson told me you have been quietly trying to get Edwin Smith to resign. The statute requires the President to show neglect of duty or malfeasance at a hearing before he can remove a member. This would be difficult if not impossible. Secretary Perkins thinks she can get him to resign. Leiserson disagrees. ,Inknow Smith fairly well and think Leiserson is correct. Smith has "all the makings of a martyr". But there is one chance. If you send word to Ed Smith that if he will not resign, you will sponsor an amendment to create a new five-man (or three-man) Board, thus throw- ing open the Act to damaging amendments, he might yield. Nothing would be lost by trying it. Leiserson, as you may know, has been severely criticized by friends of the Act for the way in which he has tried to reorganize the Board. General opinion is that he blundered badly in his attempt to remove Nat Witt, Secretary of the Board (I understand this was at your order). Madden in testimony before the Smith Committee showed that Leiserson accused Witt of certain things which were handled in other divisions and which were handled quite adequately. Leiserson told me he refused to tell the Committee the truth about Witt's actions only because he wanted to protect the Act. It is only fair to say that Madden has for years been the "tower of strength" of the Labor Board. He has been forced to handle the labor split and the enmity of industry without any help from his fellow Board members, who were at least incompetent and at most indiscreet. Friends of the Administration insist that Leiserson has peculiarities of temperament, approaching arrogance, which alienated Madden. For example, Madden was angered because Leiserson told too many people that the President had sent him into the Labor Board to clean it up and he would do it despite Madden. THE WHITE HOUSE WASHINGTON -2- Former employees of Leiserson who applauded his appointment to the Labor Board as the solution have been chagrinned at his tactics. He has, of course, been faced with an almost impossible problem, but some of the blame is his. I think Miss Perkins would agree with this analysis, although I am not sure. I know John Carmody, who was once a member of the Board, does agree, especially about the temperament of Leiserson. If Smith would resign and someone like Millis of the old Labor Board were appointed, I think Madden and Leiserson would work "in harness". The Smith Committee has done enough damage to make it a campaign issue. Because of the approaching campaign, if any change is to be made it should probably be soon, 80 the Board can get its house in order. JHR James Rowe, Jr. PSF gim Rome THE WHITE HOUSE WASHINGTON Subject March 11, 1940. MEMORANDUM FOR THE ATTORNEY GENERAL Will you speak to me about this at lunch today? F. D. R. Memorandum from Jim Rowe to the President in re Congressman Thomas D'Alesendro and his desire for certain jobs in the District Attorney's Office and the Marshal's office in Maryland. March 18, 1940. MEMORANDUM FOR MRS. BONSTEEL: Did the memo from Jim Rowe get to your files? If so, this memo belongs with it. no it did not PTL (Parrabee) Savey. S.B. Shin Larraber - Wish l could pull this out of the hat for you, but The bay looked it up this a m & report "no".IB March 28, 1940. Mrs. Bonsteel: Will you please check again to see if you have the memo before I file this. Thank you. PTL PSF Rome subject Re:Memo from Jim Rowe of March 13, 1940 about Senator Murray having to support Senator Wheeler etc. See: Senate folder-Drawer 2-1940 PSF Rowe Subject April 11, 1940 Memo to General Watson from the President: Re: appt to see Joe Guffey about sending Woodward's name up for appt to Maritime Commission and to tell Guffey that poor Woodward is being sued for his back salary etc. Attached to the above memo are the following memos re Woodward: Memo of April 9-1940 to the President from Steve Early re conversation he had with Mr. Frederic Delano etc. Memo to Steve Early from Jim Rowe-April 9, 1940 re Jerry Land and his talk with the President about Woodward and Guffey etc. Memo to the President from Jim Rowe--April 8, 1940 re inquiry of Admiral Land's who is interested to know whether President has seen Guffey. For the above memos See:Maritime Commission folder-Drawer 2-1940(4pril 11, 1940) Grace: file Will you show this to the President? J. h. R. PSF THE WHITE HOUSE Subject WASHINGTON April 23, 1940 Dear Grace: Jim Gillis telephoned to say he is calling the State Committee together this week to select a delegation which will be for the President -- and will insist the President must be drafted. He feels strongly that no one in Warm Springs should have communication with the Georgia leaders before this is done (probably Thursday). He asked if this would be agreeable to the President; I said I had no idea and could not get an answer. He asked if I could give him a "green light"; I said I could not. He will, therefore, go ahead on his own. Gillis and Governor Rivers are not getting along. Gillis says he must go along with Rivers ( which means he must support Rivers for reelection as National Committeeman) so he can get the delegation without a fuss. The President's popularity in Georgia is about 20 to 1; Rivers' popularity is 1 to 20. Gillis expects a scandal very soon which will be as bad as the recent Louisiana scandal. He did not indi- cate whether it was corruption in the road program or the S. E. C. utility investigation, but it is probably the former because that is Gillis' background. Rivers is deeply involved. There is talk that the President will stop the Federal investigations now going on and Gillis suspects Rivers is circulating it. Gillis hopes the President will have no conversations with Rivers and, what is more important, will not give Rivers an opportunity to appear with him in public, since Rivers' only chance is to hide behind the President. You will note that Gillis is much more outspoken against the Governor than ever before. James J Rowe, Jr. PSF gim Rowe subject / Memo to FDR from Jim Rowe dated June 4, 1940 with attached memo from Harold Smith of same date re recommendations for Comptroller Generalship. Rowe also suggests that the President replace Stanley with Brown or give Brown position which R. Walton Moore has, also memo to J.Rowe from FDR for him to note enclosed memo of June 21st from Stevens opposing suggested appointment of J.L. Sullivan as Comptroller General. See:Fred Brown-Gen corres-Drawer 2-1940 PSF Rowe subject Memo for Grace G. Tully--June 12, 1940 From Jim Rowe Re:Ray Stevens calling Mrs. Fred Brown about the Comptroller Generalship. See:Fred Brown-Gen corres-Drawer 2-1940 file PSF Rowe Subject THE WHITE HOUSE WASHINGTON August 22, 1940 Memorandum For The President. Chairman Madden Warren Madden, Chairman of the Labor Board, asked that I transmit this four-page letter (with appendix) to you, with the distinct understanding he is not pressing his candidacy for reappointment through this document. It is Madden's accounting to you of the past five years' operation of the Labor Relations Act. Although I recognize it is not my function to make recommendations, I have been disturbed by the fact that those men who should recommend the re- appointment of Madden have not done SO. So far as I can discover, every person informed about the Labor Board believes that Madden has contributed the best single outstanding performance in this Administration. That includes Francis Biddle and Lloyd Garrison, former Chairmen, Senator Thomas, Senator Wagner and with one or two exceptions the entire staff of the Board. Every New Deal lawyer without exception is an admirer of Madden. I believe the Secretary of Labor thinks he should be reappointed. Yet none of them seem to be willing to speak for Madden. There are, of course, difficulties in the way of his reappointment: (1) A. F. of L. It is difficult to follow Mr. Green's shifting point of view toward the Board and the Act. As you know, he changes frequently. I believe that today Green is against Madden. Strangely enough, on a statis- tical basis only, Madden personally has been more favorable toward the A. F. of L. than the C. I. O. Green's real enmity is against Ed Smith who is always C. I. 0. Some months ago I suggested to you that Smith be asked to resign, but I understand Murdock and Healey (who are in favor of Madden's reappointment) vetoed that idea. If Smith would resign, Green might go along with Madden. (2) Political. Undoubtedly the Republicans would make Madden's con- firmation a campaign issue. But to replace Madden at this time is to admit something has been wrong with the Labor Board and the Republicans would make that too a political issue. I think the appointment of Madden to the Court of Claims vacancy would also be regarded as an admission something is wrong with the Board. (3) Leiserson. In a purely personal conversation months ago I urged Miss Perkins to ask you to appoint Leiserson to the Board as the only possible solution. At that time I was an ardent admirer of Leiserson, but his behavior during the past year has been inexcusable. He played hand in glove with the Smith Committee in its attempt to discredit not only the Board but the Administration. He has not been able to put through what he regarded as necessary reforms only because he deliberately antagonized his natural ally Madden and made charges against members of the staff which were easily proven incorrect, instead of making obvious charges in forcing out the personnel - 2 - which has caused most of the trouble in the Board. Leiserson has also preached a gospel that Madden, Charles Fahy and the rest of the lawyers are "doctrinaire". The easy answer is that the Labor Relations problem was in the first few years a Supreme Court problem. (4) Nat Witt. I understand Witt will resign if Madden is reappointed (it should not take long to clean out his cohorts). Madden can be justly criticized for being stiff-necked about this problem; but it can be justly explained by Madden's feeling the last few years that his back has been against the wall, that no one, including the unions, was helping him except his staff, and that, therefore it was up to him to protect them. If Madden is not reappointed, the Board will become fair prey for pressure groups; the fight over the appointment of the new man will accentuate the labor split. Under the terms of the statute Madden cannot hold over after next Monday. That will leave Smith and Leiserson directly opposed to each other and will mean public turmoil, since neither of them have a sense of restraint. A sound solution would be to reappoint Madden, Ed Smith to resign and make an appointment satisfactory to Leiserson, thus satisfying all sides. IHIP James Rowe, Jr. STARD NATIONAL LARDY STATE SEAL NATIONAL LABOR RELATIONS BOARD WASHINGTON, D. c. J. WARREN MADDEN August 21, 1940 Chairman EDWIN S. SMITH WILLIAM M. LEISERSON Honorable Franklin D. Roosevelt The White House Washington, D. C. My dear Mr. President: The conclusion of five fiscal years' of operation of the National Labor Relations Act suggests an accounting to you of the present status of the objectives of that legislation. Present Status of Collective Bargaining Nine million American employees today have chosen trade union representatives to negotiate working agreements with their employees. This is three times the number of employees who in 1933 enjoyed trade union recognition and the consequent opportunity to submit their in- terests to the conference table instead of resorting to strikes. Increased trade union' membership is directly reflected in an increase in written working agreements, annually renewed, under which wage-earners and those who hire know exactly where they stand for definite periods ahead. Indicative of the new relationship are these contracts in fields where five years ago few if any existed: Iron and steel, 550,000 workers, 654 agreements Automobiles, 400,000 workers, 600 agreements Rubber, 45,000 workers, 70 agreements Electrical Manufacturing, 150,000 workers, 630 agreements Aluminum, 25,000 workers, (not available) Marine transport* 150 agreements Petroleum, 75,000 workers, (not available) *More than 60 percent of all employees in salt water merchant marine vessels of 1,000 tons or more. - 2 - It so happens that this new growth trade unionism has taken place in industries basic to national defense. The practice of living under stable, renewable contracts has been extended almost as spectacularly in older trade union fields such as the clothing, coal mining, machinery and rail and truck transportation. Relation to Defense Preparations The written contract is in itself evidence that most of the causes which mar the industrial relationship have been removed. Where these contracts exist, fights for union recognition have ended. The bargaining units are set. Negotiations have advanced from hostility to the plane of solving mutual problems. This is demonstrable by strike data before and after 1937, the bench-mark year in which the National Labor Relations Act was held valid and its protection of the rights to organize and bargain became effective. In 1937 a five-year rising trend of strike activity reached a peak, halted and began to decline, falling off 42 percent in 1938, the first full year of the Act's operation, and continued to decline in 1939. Preliminary data for the first six months of 1940 show that time lost through strikes was lower than any comparable period since 1930. Further, during the past fiscal year there was 66 percent less time lost through strikes than in the fiscal year 1936-37, although the level of industrial activity was equally high and strikes traditionally increase during rising production. Since 1937, then, increased union membership has gone hand in hand with more numerous working agreements and decreased industrial strife. These related phenomena give reason to expect that responsible representa- tives of labor and industry will turn naturally to collective bargaining for the peaceful adjustment of disputes which may arise in defense industries. This expectation is buttressed by experience early in the first World War when workers were not schooled in collective bargaining procedures and went on strike as the only method of protest open to them. To meet this crisis, government in 1917 had to proclaim collective bargaining as national policy. Today collective bargaining has struck deep roots in industrial practice. - 3 - Operation of NLRB Since 1935 the Act has been invoked in 19,124 cases of alleged unfair labor practice. 6,850 of these charges lacked merit and were dismissed or withdrawn. .1,714 were set for hearing, and during the five years 804 employers have been ordered to cease and desist from practices destructive of labor rights. This is one employer out of every 23 against whom charges were filed. On the estimate that 320,000 employers are subject to the Act, one twentieth of one percent of them have annually been held in violation of it. The Supreme Court and the Circuit Courts of Appeals have upheld Board cease and desist rulings in 120 cases, and 342 consent decrees have been entered in Circuit Courts of Appeals. In 25 cases Board orders were set aside. The five years have served to define the principal areas of jurisdiction of the Act and to establish precedents by which employers may guide their labor relationships. It has been judicially determined that the procedure of the Act does not deny due process of law; that reinstate- ment with back pay during unfair discharge periods is properly remedial; that strikers retain the status of employees when unfair labor practice caused the strike; that strikers who sit-down or commit serious violence lose their rights under the Act. These cases formally adjudicated by the Board and the Courts represent a small fraction of all Board cases. The great bulk of compliance occurs in the informal stage where employer, employee and Board representa- tives agree upon settlements. 8,200 such settlements have been concluded in unfair labor practice cases in five years. Board intervention in strikes only happens when unfair labor practice charges have been filed. 2,100 such strikes have been settled, 849 averted, and 275,510 workers reinstated after strikes and lock-outs. The election machinery of the Act has been used to a degree calling for deep satisfaction with the practical application of industrial democracy. During the last fiscal year 91 percent of eligible voters cast valid ballots in Board elections to determine bargaining representa- tives. In all 1,194,781 valid votes have been cast in 3,257 elections, with no serious challenges from any parties and without loss of production on balloting days. During the past fiscal year 69.3 percent of the 526,208 valid votes were cast for affiliated trade unions, 12.5 percent for unaffiliated trade unions, 9.8 percent against unions and 8.5 percent for neither of two competing unions. - 4 - Present Problems The A F of L-CIO split continues to add heavily to the burdens of the Board. Public acceptance of the Act is much better underneath than on the surface. Present general support of the principles of collective bargaining represents a reversal of opinion by very many who fought it even in theory five years ago. The true test of public acceptance lies in the increase in practical written working agreements between employers and trade unions. This has come about despite waves of attack on the Act and the Board, each one of which has encouraged intransigeant employers to refuse compliance. Present problems are no different than those already faced. During the past three years more progress toward acceptance of the Act has been made than was ever to my knowledge made within a similar period with any importent piece of controversial legislation. The underlying requirement is that the Act continue to have diligent and technically competent enforcement in order that indus- trial relations shall not drop back into the chaos of uncertainty and strife existing before the Act became effective. Civil Liberties Civil liberties are freely enjoyed today in many industrial communities where four years 820 they were denied. Most denials of freedom of speech, assembly, and publication related to attempts to organize labor unions. Since that right has been legally declared, and the law enforced, the economic motive for the denial of civil liberties has largely disappeared. I consider this result, though it is in a sense a by-product rather than the main purpose of the Act, as of importance comparable to the industrial peace and sta- bility which the Act has brought. Sincerely yours, J Warren Madden JUNE 30, 1940. RECORD OF NLRB FOR FIVE FISCAL YEARS TO I CHART G. TREND IN UNION MEMBERSHIP 1912-1938 MILLIONS OF MEMBERS MILLIONS OF MEMBERS 10 10 1939 estimate 8 8 6 6 4 4 2 2 0 1912 1915 1920 0 1925 1930 1935 1938 NATIONAL LABOR RELATIONS BOARD, DIVISION OF ECONOMIC RESEARCH APRIL 18, 1939 SOURCES - LEO WOLMAN, EBB AND FLOW OF TRADE UNIONISM S.L. CARROLL DAUGHERTY, LABOR PROBLEMS IN AMERICAN INDUSTRY* REPORTS OF A.F. OF L. AND C.I.O. NATIONAL BUREAU OF ECONOMIC RESEARCH SEE TABLE XXIII CHART E TREND OF MAN-DAYS OF IDLENESS DUE TO STRIKES COMPARED WITH TREND OF BUSINESS ACTIVITY 1940 JANUARY 1935 - JUNE 1959 MILLIONS OF MAN-DAYS OF IDLENESS INDEX OF INDUSTRIAL PRODUCTION 6 130 5 NATIONAL LABOR RELATIONS BOARD DIVISION OF ECONOMIC RESEARCH WASHINGTON D.C. 120 SR INTUMINOUS COAL STOPPADE 4 110 INDUSTRIAL PRODUCTION 3 100 2 90 I 80 MAN-DAYS OF IDLENESS 0 70 1935 1936 1937 1938 1939 1940 102197-40 (Face p. 197) ANALYSIS OF CHART The sharp increase in strike activity between 1932 and 1937 is attributable to two main factors, the increasing volume of employment which increased the bargaining power of labor from the levels reached in the Great Depression and the refusal of employers to bargain collectively in violation of statutory requirements embodied in the NIRA and later the Wagner Act. Since 1937, the increasing willingness of employers to bargain collectively has been manifested in a sharp decline in industrial strife. It is significant too that the maintenance of wage rates and a stable cost of living rendered unnecessary strikes to regain recession wage cuts, such as took place in the early '20's. Preliminary data for the first six months of 1940 indicate that man-days of idleness due to strikes were lower than for any comparable period since 1927 except for one year, 1930. National Labor Relations Board Technical Service Division Washington, D. C. August 12, 1940 sl STRIKE STATISTICS AND INDUSTRIAL PRODUCTION DATA BY FISCAL YEARS NUMBER OF INDEX OF WORKERS MAN-DAYS INDUSTRIAL FISCAL YEARS STRIKES INVOLVED IDLE PRODUCTION 1935 - 36 2,084 1,071,712 14,507,000 96 1936 - 37 3,840 1,743,192 26,998,000 114 1937 - 38 3,435 893,551 14,204,000 90 1938 - 39 2,733* 1,045,304* 15,602,000* 95 1939 - 40 2,147 641,933 9,077,000 111 *These figures include the bituminous coal stoppage of 1939. To exclude this stoppage the figures should be reduced by one strike, 343,500 workers and 6,920,000 man-days of idleness. Source: U. S. Bureau of Labor Statistics Board of Governors - Federal Reserve DECISIONS OF THE SUPREME COURT 1. Decisions granting enforcement of Board orders. . 18 (a) Orders enforced without modification. . 14 (b) Orders enforced with modification. : . 4 2. Decisions denying enforcement of Board orders : . 2 3. Decisions favorable to the Board relating to other questions 6 DECISIONS OF CIRCUIT COURTS OF APPEALS l. Decisions granting enforcement of Board orders. . 98 (a) Orders enforced without modification. 59 (b) Orders enforced with modification ... 39 2. Decisions denying enforcement of Board orders # 23 3. Consent decrees entered enforcing Board orders. 342 (As of August 20, 1940) RECORD OF NLRB FOR FIVE FISCAL YEARS TO JUNE 30, 1940 A total of 28,661 cases has been handled by the Board in the five fiscal years to June 30, 1940. 19,148 cases involved charges of unfair labor practice. 9,513 petitions were filed requesting determination of representation. The total cases involved 6,233,319 workers. Of the 25,608 cases handled, or about 89 per cent, have been closed, leaving 3,053 cases pending on July 1. Of these 25,608 cases, 12,309, or 48 per cent, were closed by agreement of both parties, 48 percent involving 2,006,495 workers. settled 4,331, or 17 per cent, involving 1,145,159 17 percent workers, were dismissed by the Board and dismissed regional directors. 6,970 cases, or 27 per cent, involving 27 percent 1,301,268 workers, were withdrawn. withdrawn 1,998 cases, or 8 per cent, involving 684,966 8 percent workers, were closed in some other way, by formal including compliance with the Board's decisions procedure and Trial Examiners' Intermediate Reports, certification after elections, refusal by Board to certify, Intermediate Report finding no violations, transfer to other agencies, such as the Conciliation Service of the Department of Labor and State Labor Relations Boards, and by the issuance of cease and desist orders. Of a total of 2,806 strike cases handled, involving 445, 518 workers, 2,100, or 75 per cent, were settled and 275,510 workers were reinstated after strikes and lock-outs. An additional 20,556 workers were reinstated after discriminatory discharges. 849 threatened strikes, involving 195,565 workers, were averted through the Board's action. There were 3,257 elections held in which 1,194,781 valid votes were cast. VOTES CAST IN ELECTIONS CONDUCTED BY THE NATIONAL LABOR RELATIONS BOARD, FISCAL YEARS ENDING JUNE 30, 1938-1940 Elections Eligible Votes Valid Votes Cast Votes Cast Votes Votes Cast Conducted Voters Cast Votes for Affil. for Unaff. Cast "for Cast Trade Unions Trade Unions Against Neither" Unions 1938 1,152 394,558 350,960 343,587 232,989 49,481 55,758 5,359 1939 746 207,597 181,090 177,215 121,643 16,389 34,085 5,098 1940 1,189 585,068 534,470 526,208 364,595 65,689 51,363 44,561 PER CENT OF VOTES CAST FOR MAJOR CLASSES OF PARTICIPANTS Per Cent of Valid Per Cent of Valid Per Cent of Valid Per Cent of Valid Votes Cast for Votes Cast for Votes Cast Against Votes Cast "for Affiliated Trade Unaffiliated Trade Unions Neither" Unions Unions 1938 67.8 14.4 16.2 1.6 1939 68.6 9.3 19.2 2.9 1940 69.3 12.5 9.8 8.5 ANALYSIS The Board conducted a greater number of elections during the fiscal year 1939-1940, with more workers participating, than in any preceding year. Eligible voters who cast ballots increased from 88 per cent in 1939 to 91 per cent in 1940. Unions affiliated with AFL and CIO received a higher percentage of valid votes, 69.3 per cent, than in any preceding year. Unaffiliated unions (which in 1940 included National Organi- zations such as the International Ladies Garment Workers Union, the standard Railroad Brotherhoods, the Mechanics Educational Society of America, the independent shoe and textile unions of New England and unions restricted to one plant or all the plants of one employer) cast 12.5 per cent of valid votes, a higher percentage than 1939 but lower than 1938. The percentage of votes cast against unions declined sharply from 19.2 per cent in 1939 to 9.8 per cent in 1940. Votes cast "for neither" occur in elections in which more than one union appeared on the ballot. Such votes increased from 2.9 per cent in 1939 to 8.5 per cent in 1940.