CABINET MEETING, FRIDAY, SEPTEMBER 28, 1945
1. Strike situation
2. Unemployment compensation
Silver manufacturers are being put out of business by present silver policy and requested that the Secretary of the Treasury discuss the matter with Senator Green of Rhode Island. Senator Green and Senator McCarran head up the leadership of the eastern and western silver blocs.
Stated that the Government has been attempting to import additional Mexican silver. Promised he would give the President a report with respect to the Government's progress.
Requested Secretary of Labor to inform the Cabinet with respect to the labor situation.
Stated he has called a meeting of labor and management in connection with the oil strike situation. He believes that industry made a mistake in offering a wage increase of 15¢, saying that it was as high as industry would go. Secretary hoped that a formula could be worked out over the weekend, otherwise seizure of oil properties would become necessary.
Assured the Secretary of Labor that he would back him up in anything he deems necessary in connection with the oil strike situation.
Stated, however, that there was more talk about the Detroit situation than anything else. The strike at the Kelsey-Hayes plant should be disposed of as that would materially improve the situation. The west coast lumber situation is still serious. He believed that both sides desired a strike. Labor is anxious to receive additional wages and industry on the other hand, having plenty of money, has indicated that it would be to its own advantage to slow down and take advantage of present tax structure. He pointed out that collective bargaining in this industry had been set aside during the war.
He believed that there was a choice of either allowing labor and management to sweat it out until legislation is provided or there should be an immediate statement of policy by Presidential directive.
Was firmly convinced that compulsory arbitration would not be acceptable to Congress. Penal sanctions will not work. They are unsuccessful in England. He believes that the present picture is a determined effort by labor to obtain wage increases. During the war labor had a longer work week and had considerable overtime pay. He believed that we were facing the most serious labor situation in the history of the country. Recited that the Smith-Connally Bill passed in 1943, instead of improving the labor situation, made it worse. Any proposed policy at this time should reflect great study with respect to the entire program on wages and prices.
Was definitely against the President coming out for compulsory legislation at least until public opinion becomes crystallized. Believed that a lot of these present problems would take care of themselves by Jan. 1st.
Must be kept in mind that local and state governments are not doing their part. They have consistently shirked their responsibility and deferred their problems to the federal government.
Disagreed with Crowley that this is a temporary situation which will correct itself. Labor leaders are convinced that this is a time for labor to go to bat to get raise increases.
Had no opinion.
POSTMASTER GENERAL HANNEGAN
Price limitations fixed by government through the operation of the Office of Economic Stabilization and the OPA. Therefore, he believed it necessary that the government should have a wage policy now. He is convinced that some increases should be given to labor and there was no doubt that labor will demand such increases. Believed that the Administration should give some incentive to industry by tax revision in order that industry could go forward and production begin at the soonest possible time. Industry and labor are waiting for the government to move. This means that the President and Secretary of Labor are looked to to develop a wage price policy.
ATTORNEY GENERAL CLARK
Was convinced that a legislative policy was necessary if labor disputes are to be effectively dealt with.
Disagreed with Postmaster General Hannegan and said that the type of program advocated by the Postmaster General could be compared to the situation where one became just a little bit pregnant. A spiral of inflation would start and it would get completely out of control. Was firmly convinced that corporation taxes cannot be dropped. He recited the fact that the British negotiated by industries. He raised the question as to whether a similar method of negotiation would work in the United States. At any rate, he believed that the President should indicate that he is doing everything he can to bring about a solution to the labor problem.
Was of the firm opinion that the President should not wait until the Labor-Management Conference on November 5th before taking some positive action. He stated that a food subsidies policy should be determined. He believed that the President should call in industry groups to develop a wage policy. He thinks that this would aid in bringing about satisfactory legislation. He was not too worried about a slight degree of inflation. He believes that the national income will be endangered if strikes are allowed to persist. He believes there is a danger that any delay would give a forum to those who are desirous of repudiating our obligations.
POSTMASTER GENERAL HANNEGAN
Suggests the President set aside three or four days of appointments for business and labor leaders. By so doing the country would be apprised of the fact that the President is trying to arrive at a solution.
Expressed alarm at the talk of increased prices. He stated that if prices are allowed to go up it would create a dangerous situation as there is a limit to purchasing power. In order to attain full employment we must have mass production. In order to achieve mass production prices should be kept to a minimum.
If a flat price increase was granted labor would be dissatisfied.
Each industry should be treated separately. Each has its own percentage of labor cost.
(For Ickes) Agreed with Mr. Crowley.
(for Wallace) Approved Hannegan's idea of calling in the leaders of industry and labor in order to let the public know that positive steps were being taken to meet the situation.
Favors calling in leaders individually. Agreed with the President that state and local governments are passing the buck to national administration and fail to meet their own obligations. Believed that the long term policy to be adopted is collective bargaining.
Big steel is capable of absorbing some increases, however, the situation with respect to little steel is just the opposite. This segment of the industry is losing money at the present time. He believed that an interim wage price policy is necessary if reconversion is to succeed.
Expressed fear of price increases at this time. Labor leaders must convey to workers that higher prices would be ruinous and that production costs must be kept down. He believed that wage increases should be granted in such cases where prices increases were not necessary.
Thinks that the answer is the awareness of the public that rough water lies ahead. This should be dramatized.
Fears that a slump in the construction industry is inevitable if labor gets wage increases or if there are increases in material costs.
Is convinced that industry is standing by and is endeavoring to find out just what the President desires.
Raised the question as to whether the members wish to have the Cabinet meetings continued in the afternoon or whether morning meetings would be more satisfactory. A vote reflected that there was a general agreement that morning meetings would be of greater convenience to the members. It was so decided.