Politico-economic
m
No. 453 S
BRITISH EMBASSY,
WASHINGTON, D. C. .
/^^I'^ril 20th, 1939
My Lord,
With reference to my despatch No* 393 E
of April 6th I have the honour to inform you that the
Senate on April 11th passed the new Emergency Relief
Bill in the form in which it had reached them from the
House*   Instead of providing $150 millions for the
Works Progress Administration which was the sum asked
for by the President, Congress has only voted a sum of
$100 millions* and attempts "by New Deal Senators to
obtain the larger sum were defeated by 49 votes to 28.
This vote shows how completely the President has lost
control of the Senate:   it means that at least half of
his Democratic followers cannot be relied upon to
support any progressive legislation*   The President
himself rather than accept a compromise went right ahead
with his proposals and courted the rebuff which he has
now received*   The so-called economy group in Congress
are reported to be aiming at curtailment of the Works
Progress Administration and a complete change in the
relief system whereby "social security", which really
means unemployment insurance, is to be put in the
forefront of the campaign against unemployment* The
whole subject is being considered in the appropriate
Senate Committee and Senator Byrnes is taking the lead
there/
The Right Honourable
The Viscount Halifax. K.G.,
etc.,       etc., etc. IK tf K/rT**'
RCL:H0C: PRHM: VALM: DH

there on b'ehal-f of those who advocate economy.
2. Another minor rebuff for the President has
been the withdrawal of Mr. Thomas 4*110*8 nomination
to the Interstate Commerce Commission.   The subject was
referred to in paragraph 2 of Mr. Mallet fs despatch
No. 214 of February 16th.   Mr. Amlie has been accused
of being a Communist, and It became quite clear that
the Senate Committee would not recommend the
confirmation of his appointment.   In these circumstances
he asked the President to withdraw his nomination and
Mr. Roosevelt did so, at the same time addressing a
letter to Mr. Amlie deeply regretting the circumstances
and complaining that those who had called Mr. Amlie a
Communist were ill serring the democratic form of
government.   "A quarter of a century ago", said Mr.
Roosevelt', "I too was called a Communist and a wild-
eyed radical because I fought for factory inspection,
for a 54—hour week bill for women and children In
industry and similar measures".
3# The Senate Committee on Education and Labour
is conducting public hearings on proposals to amend the
National Labor Relations Act, commonly known as the
V/agner Act.   The hearing is being used by the American
Federation of Labor to publicize its disagreement
with the JZongii&ss: of industrial Organisations and to
undermine the two strongest unions affiliated with the
latter, namely the United Mine Workers and the
Amalgamated Clothing Workers.   Senator Wagner himself
has defended his Act before the Senate Committee,
insisting that its basic principles were sound and that
it was promoting industrial peace.   While the Act was
not perfect, changes should be made only as the need
for/
for then was clearly evident.   In particular he
favoured grating the employer the right to petition
for an election in his works when rival unions were
competing among the employees, t The Senator promised
that if the need for changes were to he established
after a full enquiry he would himself he ready to
Introduce op support such amendments as seemed necessary*
Meanwhile there is no sign yet of the rival unions
coming to terms in spite of the President's efforts. In
some ways the split is "becoming more open than ever,
Mr. Homer Martin who broke away recently from the
Congrefese of Industrial Organisations United Automobile
Workers (see paragraph 3 of ray despatch No. 336 of
March 22nd) has now agreed to sponsor the return of
his followers to the American Federation of labor,
4, For nearly three weeks there has been a strike
of 320,000 bituminous coal miners in the Appalachian
fields in consequence of the failure of miners and mine-
owners to reach a new agreement after the expiry of the
former two-year agreement.   The Mayor of New York has
taken a hand in trying to settle the strike which
threatens to ereate a coal famine in New York and
seriously embarrass all public utilities in that and
other cities*   The dispute is really narrowed down to
the refusal of the owners to agree to the union's demand
for elimination of the penalty clause, under which the
union is fined from one to two dollars per day per man
for strikes called during the term of the agreement.
This was a feature of the former agreement which has now
expired.   The miners maintain that the penalty clause
has worked one-sidedly, since the owners have never
teen subjected to its provisions that they too should be
fined for lock-outs and violations of the agreement.
The owners insist upon retaining the Clause as essential
tor enforcing the agreement and keeping the industry
stable.   On all ether points such as wages, hours and
conditions of employment, there has been agreement
between owners and workers, and there are many complaints
in the press that Mr. John L. Lewis by insisting upon
the elimination of the penalty clause is victimizing
the consumer for no good reason.   The Secretary of Labor
has now intervened in the deadlock and the latest reports
are hopeful of a settlement.   One effect of the strike
has been that considerable orders have been given by
power plants in New York for Welsh coal, and the
"Journal of Commerce" is already speculating how far
His Majesty*s Government will permit a drain on supplies
in Wales at the present time in view of the threatening
situation in Europe.   The present orders are said to be
for between 25 and 45 thousand tons of Welsh coal.
5* The Supreme Court has given an important
decision which validates the provisions of the
Agricultural Adjustment Act of 1938 setting up a system
of rigid control over the marketing of cotton, maize,
wheat, tobacco and rice in an attempt to limit
production of these crops.    In a 6 to 2 decision the
Court ruled that the Act is net a statutory plan to
control agricultural products, that the system for
regulating farm quotas is not uncertain, vague or
indefinite, and that it did not constitute taking
property without due process of law as applied to crops
already in the ground at the time when control over
marketing was exercised.   In pronouncing this decision
the Court did not specifically overrule its previous
opinion/
-5-
opinion which invalidated the first Agricultural
Adjustment Act in January, 1936.   such a course was not
necessary because the present Aet rests on a
constitutional foundation quite different from that of
its predecessor,   She Court in 1936 would not permit the
regulation of agriculture under the taxing power of
Congress, hut it has now sanctioned a more drastic
type of regulations under the Interstate Commerce
clause.   The decision nevertheless signifies a great
change in the attitude of the Supreme Court and it is
noteworthy that both the decisions in 1936 and now were
written by justice Roberts* .What the Court has done is
to ignore the motives and purposes of the Act of Congress
and consider only the constitutional pegs on which such
legislation is hung*   This would seem to be the proper
function of a Supreme Court, hut some newspapers have
criticized this attitude as destroying the safeguards
under the Constitution.
6. Another decision of the Supreme Court on
April 17th gave a ruling in the case of a man named
Strecker who came to the United States in 1912, was a
member of the Communist Party for three months in
1932*1933 and was ordered to be deported in 1934. The
Court held that the Department of Labor had no right te
deport him in this case*   The Department had assumed
that a man who was deportable for being at present a
member of an organisation advocating the violent over-
throw of government was also deportable for past
membership in such an organisation.   The Strecker
decision of the Court holds that it is only present
membership of such subversive organisations as the
Communist Party which render an alien liable to
¦'kuj deportation/
52-
deportation, and that his past should not he held up
against him.
7* Another important case, hut this time not in
the Supreme Court of the United States, has been the
judgment given by the Federal District Court at
Philadelphia in favour of the Apex Hosiery Company
against the Congress of Industrial Organisations*
American Federation of Hosiery Workers.   The Company
operated a non-union hosiery mill "but owing to
numerous strikes in 1957 in other unionized mills it
became impossible to continue work and the Apex mill
had to be closed on account of rioting and
demonstrations by union men outside the factory. The
Company sued the union for loss of profits and damage
to the factory, and the Court has now declared that the
union is responsible for damages amounting to
$237,000, which the Judge promptly trebled under a
provision of the Sherman Act*   The defeated union has
decided to appeal to the higher courts.
8. I am sending copies of this despatch to the
High Commissioner for the United Kingdom in Canada,
the Prime Minister of Australia e/o the Dominions
Office, and the Department of Overseas Trade.
I have the honour to be,
with the highest respect,
My Lord,
Your Lordship's most obedient,
humble servant,
(3Gi>> R. C. LINDSAY