(3) In this section

(a) The expression "established civil servant" means a person serving in an established capacity in the permanent service of the Crown, and includes any person who, having been granted a certificate by the civil service commissioners, in serving a probationary period preliminary to establishment; and

(b) the expression "conditions of employment" means in relation to persons other than persons employed by or under the Crown the conditions of employment of persons employed under a contract of service.

PROVISIONS AS TO PERSONS EMPLOYED BY LOCAL AND OTHER PUBLIC AUTHORITIES

6. (1) It shall not be lawful for any local or other public authority to make it a condition of the employment or continuance in employment of any person that he shall or shall not be a member of a trade-union, or to impose any conditions upon persons employed by the authority whereby employees who are or who are not members of a trade-union are liable to be placed in any respect either directly or indirectly under any disability or disadvantage as compared with other employees.

or

(2) It shall not be lawful for any local or other public authority to make it a condition of any contract made or proposed to be made with the authrity, of the consideration of acceptance of any tender in connection with such a contract, that any person to be employed by any party to the contract shall or shall not be a member of a trade-union.

(3) Any condition imposed in contravention of this section shall be void. (4) There shall be added to section five of the conspiracy and protection of property act, 1875, the following provision, that is to say:

"If any person employed by a local or other public authority wilfully breaks a contract of service with that authority, knowing or having reasonable cause to believe that the probable consequence of his so doing, either alone or in combination with others, will be to cause injury or danger or grave inconvenience to the community, he shall be liable, on summary conviction, to a fine not exceeding 10 pounds or to imprisonment for a term not exceeding three months."

RESTRAINT OF APPLICATION OF FUNDS OF TRADE-UNIONS, E1C., IN CONTRAVENTION OF ACT

7. Without prejudice to the right of any person having a sufficient interest in the relief sought to sue or apply for an injunction to restrain any application of the funds of a trade-union in contravention of the provisions of this act, an injunction restraining any application of the funds, of a trade-union in contravention of the provisions of section 1 of this act may be granted at the suit or upon the application of the attorney general.

In the application of this section to Scotland there shall be substituted therein for references to an injunction references to an interdict, and for the reference to the attorney general a reference to the Lord Advocate:

SHORT TITLE, CONSTRUCTION, ETC.

8. (1) This act may be cited as the trade disputes and trade unions act, 1927, and shall be construed as one with the trade unions acts, 1871 to 1917, and this act and the trade union acts, 1871 to 1917, may be cited together as the trade union acts, 1871 to 1927.

(2) For the purposes of this act

(a) the expression "strike" means the cessation of work by a body of persons employed in any trade or industry acting in combination, or a concerted refusal, or a refusal under a common understanding of any number of persons who are, or have been so employed, to continue to work or to accept employment;

(b) the expression "lockout" means the closing of a place of employment or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him in consequence of a dispute done with a view to compelling those persons, or to aid another employer in compelling persons employed by him, to accept terms or conditions of or affecting employment; and (c) a strike or lockout shall not be deemed to be calculated to coerce the Government unless such coercion ought reasonably to be expected as a consequence thereof.

(3) This act shall not extend to Northern Ireland, except that the provisions of this act relating to civil servants shall apply to civil servants employed in

Northern Ireland in the administration of services with respect to which the Parliament of Northern Ireland has not power to make laws.

(4) The enactments mentioned in the second schedule to this act are hereby repealed to the extent specified in the third column of this schedule.

[Extract from report of Sixty-second Congress, second session, Report 612, part 2, by Mr. Moon, of Pennsylvania]

The practice was first recognized four years before in the case of Schermerhorn v. L'Espenasse (2 Dall. 360). In this case the defendants, merchants of Amsterdam, had executed to the complainant power of attorney to receive for his own use the interest due on $180,000 of certificates of the United States, bearing interest at 6 per cent from the 1st of January, 1788, to the 31st of December, 1790, amounting to $32,400. Notwithstanding this assignment, the defendants, on the 16th of June, 1792, received certificates for the interest and funded the amount at 3 per cent in their own names. The bill prayed relief according to the equity of the case and a restraining order to prevent the defendants from transferring the stock or receiving the principal or interest. On the bill exhibited of the power of attorney and affidavits to the effect that the stock was registered in the name of the defendants on the books of the Treasurer the restraining order was granted. No subpoena was served until Mr. Lewis, on behalf of the defendants, moved for a rule to show cause why the injunction should not be dissolved. The motion was refused. An examination of the record discloses that Mr. Lewis, counsel for the defendants, supported his motion for dissolution on two grounds:

"That the injunction was issued irregularly, as there was no affidavit made of the truth of the allegations contained in the bill."

In supporting this he said:

"He did not object because the injunction was issued before a subpoena was served, as there were various cases in which justice could not otherwise be obtained."

This proceeding was had two years after the passage of the statute of 1793 before a justice of the Supreme Court who had been a member of the Congress which had enacted the statute; the hearing was held in a building adjoining that in which the act was passed and in the same district where the Congress was sitting. It demonstrates as no other case can the well-recognized equity practice in relation to temporary restraining orders, and shows the construction placed upon the statute by the profession and the court.

(Thereupon, at 11.55 o'clock a. m., the committee recessed until 1.30 o'clock p. m.)

AFTER RECESS

(The committee reconvened, pursuant to recess, at 1.45 o'clock p. m.)

STATEMENT OF WALTER GORDON MERRITT, GENERAL COUNSEL LEAGUE FOR INDUSTRIAL RIGHTS

The CHAIRMAN. The committee will be in order. We always refer to persons who appear here as witnesses.

Mr. MERRITT. Lawyers are poor witnesses.

The CHAIRMAN. Proceed.

Mr. MERRITT. My name is Walter Gordon Merritt. I am a practicing attorney in New York City, 165 Broadway. I am counsel for the League for Industrial Rights. I appear for that league and I appear as a member of the Federal bar, who has had considerable active experience in connection with the type of litigation which would be deeply affected by this legislation. In view of the very limited time, I think it will not be possible for me to do more than catalogue our major criticisms of this bill.

Point 1. In the first place, I call your attention to section 2 and the statement of public policy. It purports to state the purpose to protect liberty of contract and freedom of labor, and then adds in line 16, page 2, of the bill, that the worker "shall be free from the interference, restraint, or coercion of employers of labor or their agents."

It seems to me that that statement is improper because of its partisan nature; that the phrase "of employers of labor or their agents" should be eliminated. The worker and the freedom of contract and freedom of labor should be referred to in the earlier part of this paragraph to include freedom of coercion from all sources.

This bill, after announcing a policy in favor of freedom of labor and of freedom from coercion by employers, proceeds to impair the protective power, which labor now has by virtue of injunction, to secure an injunction against strikes which may be for the sole purpose of forcing a nonunion worker off a building or into the union, and for the purpose of calling a strike against contracts made by a worker because they are being used in a particular building or because made by a nonunion worker. In other words, this bill in this declaration of policy refers to freedom of contract and freedom of labor and then proceeds to give greater power of coercion to deprive him of the very freedom that he wants to exercise for the purpose of not being a member of a labor union. There is no such thing, as I understand it, as freedom of association. If a man against his choice is forced to associate, there can be no such thing as voluntary association in the real sense of the word that those associations are going to be built up by coercion. They then become voluntary associations. So I say coercion which interferes with a man's right to belong to a union or coercion which interferes with his right not to belong to a union, are essentially part of his liberty, and that this declaration of policy which refers only to coercion of employers should be so broadened that it protects him from all kinds of coercion which is objectionable in all matters.

Point 2. I will call attention to section 3 which appears on pages 2 and 3 of the bill. That is aimed at so-called anti union contracts and declares that they are against public policy and that the courts shall not be invoked to enforce them. My criticism of that is that the still recognized decisions of the Supreme Court of the United States and the numerous State courts place that matter beyond the power of Congress to legislate. It is recognized by those decisions that you can not make such agreements illegal because it is part of a man's constitutional right to make such an agreement. If you can not make that illegal because they are constitutional rights and rights of property, then certainly you can not accomplish the same end by declaring it against public policy and forbidding the courts to do anything to enforce it.

Point 3. With respect to section 4, which to my mind is one of the most serious provisions in the bill, subdivision (a) of section 4 forbids the issuance of injunction against men ceasing or refusing to perform work, and other provisions in that same section as well as section 5 provide that you may do those things in combination and may induce others to do so, and may aid, instruct, or induce them to do so, so you have there, as conceded by Mr. LaGuardia, that provision legalizing organized strikes as against the injunctive power, no matter for what purpose they may be carried on.

In other words, if a strike is carried on against an employer for the purpose of causing the employer to commit a crime, it can not be enjoined. Thus, in New York City, I have had instances where strikes were called on the piers to prevent the steamship companies from hauling so-called nonunion merchandise and the steamship company had to choose between incurring the strike, which meant great injury to them, or committing the crime of refusing merchandise which it was under affirmative obligation to carry by virtue of the terms of the shipping act. In that same connection Mr. Emery has referred to the so-called collusive agreement, and in order that the full force of this may be understood I will call attention to a case where there was an invention called the Geco trap, to be used in connection with plumbing. That trap meant it was not necessary to have the same number of vents in the building. It meant a reduction in the pipe. It meant a reduction in the other contractor's bills, which made a reduction in the amount of labor to be performed by the plumber. In order to prevent that reduction of labor and material and to deprive the public of the right to have those traps used in their buildings, there was a combination between the manufacturers of the pipe who wanted more pipe used and the plumbers who wanted larger contracts and the workers who wanted more work to do, and that combination was that no plumbers would put those Geco traps on and no worker would work on any building where those traps were used, and from that situation there were strikes on buildings to prevent the use of the Geco trap, which under the terms of this bill would be called industrial disputes. That was a sort of combination which was clearly a violation of the public interest and in violation of the Sherman antitrust law.

This bill, by forbidding the issuance of injunctions to restrain organized strikes and prevent the public from buying what they should have, would in effect make those combinations more possible.

I have had situations in connection with the wood-trim business where one set of union workers would split upon the use of trim and another set of employees who may be running an open shop, where they have struck against the nonunion competitors for the sole purpose of putting their nonunion competitors out of business. That is what is meant by the collusive agreement. Take a well-known case, which is the case of the Decorative Stone Co. (18 Fed. (2d), 333), and in that case the plaintiff was producing artificial stone in New Haven, Conn. It was a union concern employing union men in their recognized union in New Haven, and they were paid the factory wage of $9 a day, and the union decided that their material must not go into New York City for use there, because the men employed there were paid wages which the producers of the stone who employed union men there could not endure the competition from those products outside the State of New York, and they said that none of that stone should go into the so-called metropolitan area. They forced them to have a strike against the producers in New Haven and forbade their union employees to handle any stone destined to New York City. In New York City the union workers were forbidden to handle any stone on any building where that stone was to be used and of course they threatened strikes upon all union stone yards which were producing any job of stone that would be supplied there, for any 105105-32-SER 3- -3

building where the stone of the Decorative Stone Co. would be used. The result was to absolutely clear the market of the metropolitan area of everything which came from any point in Newark or New York. In the case of the Roosevelt High School at Yonkers, N. Y., the bid of one union contractor was something like $52,000 and the bid of the Decorative Stone Co. was less than a third of that amount. That was followed by the case of the New Rochelle Junior High School, where the people of New Rochelle had accepted the bid of the Decorative Stone Co. of $33,000 less than any other bid. If a strike were to prevent the use of that stone, which it did, it tied up the building for 20 months notwithstanding that the people, that the children of New Rochelle needed a junior high school very badly, and the strike prevented the progress of the work in any form whatsoever until finally that operation was released by a Federal injunction.

If I interpret correctly the purposes of this provision of this bill as interpreted by its advocates and proponents, such a measure would make those operations permissible so far as the equity power of courts is concerned. There are many other illustrations that amplify that. They are contained in the pages of my brief. But they go to the very root of the matter that the public is being injured by being deprived of the use of products not simply of nonunion labor but the products of union labor in other States, solely for the purpose of making it possible for union manufacturers in a particular locality to use the union through a strike as an instrument to suppress or destroy any competition in other lines of products.

I would say in that connection that the words of Mr. Justice Brandeis, in the case of Dorchy v. Kansas (272 U. S. 306), should not be forgotten:

The right to carry on business—be it called liberty or property has value. To inferfere with this right without just cause is unlawful. The fact that the injury was inflicted by a strike is sometimes a justification. But a strike may be illegal because of its purpose, however orderly the manner in which it is conducted.

Then he went on to state one or two forms of unlawful strikes. I think the law should be left in the form that strikes with their great powers for coercion are sometimes legal, legal when exercised in favor of industrial justice and to protect the rights of workers, but illegal when they are exercised in the furtherance of criminal purposes or purposes which are unlawful. If they are so unlawful, the appropriate means to reach them is through the injunction as has been demonstrated by many decisions in the Federal courts.

My next point deals also with section 4. If you will turn to subdivision (e) of section 4 on page 4, it gives the right to give "publicity to the existence of, or the facts involved in, any labor dispute, whether by advertising, speaking, patroling, or by any other method not involving fraud or violence."

In other words, any means are lawful for a purpose which does not involve fraud or violence. And then in subdivision (i) of the same section, you can not enjoin "advising, urging, or otherwise causing or inducing without fraud or violence," any of the acts specified in this section 4.

I will repeat what I have already said, that that means that fraud or violence are the only limitations placed upon the defense so far as an injunction is concerned in connection with acts of this character.