Memorandum, Meeting the Labor Situation

Please return MEETING THE LABOR SITUATION Cabinet meeting meeting Lata Cabinet Meeting - November 30, 1945 CR : AND At this juncture it is clear that the Labor Management Conference will fail to agree on mechanisms and procedures for preventing industrial strife and that responsibility for action will rest on the government. It is also clear that in its present frame of mind the Congress, if left to act on its own initiative, will probably enact legislation which may well be resented by both management and labor and, on balance, probably be adverse to the interest of labor. In this setting it is proposed that the Administration be prepared to adopt a labor policy, as necessary, in the following stages: 1. As a first step, the Administration should support the McMahon bill (S. 1419). This bill contains provisions for fact finding boards of inquiry, strengthened mediation and conciliation services, and a Federal board of arbitration for voluntary use. It in no way infringes the right of labor to strike or the right of management to shut down. 2. As a first step beyond the McMahon bill, it is proposed that the Administration support a measure requiring compulsory arbitration, in industries affecting public health or safety, including public utilities, if management and labor do not voluntarily agree upon arbitration procedures. These two steps would undoubtedly be fully condoned by public opinion and would on the whole probably not meet with too intense antagonism on the part of either management or labor. These steps, however, would still fall short of providing a solution to the strikes such as the General Motors strike or the imminent steel strike. To meet these types of situations the Administration should be prepared to support: 3. Legislation which would compel, under penalties, the use of arbitration procedure in industries in which S trikes or shut- downs would interfere with the free flow of interstate commerce if disputants have not voluntarily agreed to arbitration procedure, for avoiding the industrial strife based on dis- agreements under existing contracts. These steps, although they would limit labor's freedom to strike or management's freedom to shut down, would not completely abrogate these rights. Strikes and shutdowns would still be possible prior to the negotiation of a contract or subsequent to its termination. It is felt that the Administration should not contemplate compulsory arbitration in such situations at this time, although it should make every effort to assist labor and management to arrive at peaceful agreements through collective bargaining, fact finding, mediation, and conciliation.