Julius Henry Cohen, of New York:

I do not intend to read the resolutions, all of which have been read by Mr. Davis.

In behalf of Mr. Butler, whose absence all the other members of the committee regret-because Mr. Butler has performed a very able and a 'very valuable service to this organization-I would say he would have been here to present the report of his committee, save for the illness of his wife.

The recommendation which calls for the approval of legislation at this time is the one that I have been called upon to present. In the light of the experience this morning with the Section on Mineral Law, I have brought with me the material which will enable me to answer, I hope, any questions that may be put.

I ought to say at the outset that this part of the work of the committee was inaugurated during President Long's administration, carried through Governor Whitman's administration and through Mr. Strawn's administration; and that without the cordial support of those three Presidents we should not have been able to accomplish the result we think we have accomplished.

It will be very difficult to summarize the results of the work of your committee in this field over the period of the last five years. I merely wish to indicate in a very simple exhibit to you how extensive that work was. This volume (indicating) contains the typewritten minutes of the public hearings that our committee held in New York City last February, on this subject alone, covering a period of over two and one-half days, at which 125 people were present and about 20 or 25 gave testimony. If I had brought with me the briefs and the exhibits that were received to aid us, in addition we would have another volume. The other volume that I hold in my hand is the newspaper and editorial comments, all of them commendatory of the American Bar Association for taking this step forward, with not a single editorial in criticism of the recommendations made in this report.

I shall be very glad to answer any questions that may be put from the floor concerning either the spirit or the letter of the proposed bill, and I should like to say that the committee will more than welcome the assistance of the members of the Associa

tion toward any improvement in the language of the bill or, indeed, any suggestion for improvement of any kind.

The American Bar Association, of course, can take neither the side of labor nor the side of capital in industrial disputes. We are essentially a body of lawyers and must be neutral and impartial in the treatment of all social groups. We are concerned, however, that the processes of social conflict shall, so far as practicable, be put upon the basis of law and order, and to the extent that there is interruption in commerce, our Commerce Committee feels that it is its duty to submit a constructive program. It now appears that the time is ripe for such a program.

Those of you who have taken pains to read the platforms of the two political parties dealing with this same subject will find a remarkable agreement in the policy of both parties with the report of our committee, and those of you who have followed what Sir Alfred Mond is doing in England will find English common sense traveling in the same direction.

For over seven or eight years—at least as long as I have been a member of the Committee on Commerce, we have had upon our annual agenda the subject of compulsory arbitration of industrial disputes.

Summarizing the testimony which is contained in this volume in a single sentence, the unanimous opinion of all our advisors is against compulsory arbitration of any kind. We turned our attention next to those voluntary efforts that might be made to avoid controversy in industry in the field of interstate commerce, and there we found a readiness to be constructive on the part of organized labor, organized employers and organized business generally. Out of the mass of conflicting opinions that we received during the last four or five years we have been able to draw certain lines upon which there is a concurrence of opinion. It is perfectly natural that lawyers should have found that concurrence of opinion.

The lines are very simple. The first is that there shall be created a Federal Industrial Council made up of official representatives appointed by the President from the American Bar Association, the American Federation of Labor, National Chamber of Commerce, National Association of Manufacturers, three of the agricultural organizations in the country, as well as the Secretary of Commerce and the Secretary of Labor ex officio.

This Federal Industrial Council is not to be a judicial tribunal nor an arbitration board. It is merely to create the opportunity for representatives of those various groups to sit continuously and study these problems with a view to recommending to Congress and the public generally from time to time an industrial policy for our country which will represent a meeting of minds of these various groups. That, put in a single sentence, is the first recommendation in this bill in the matter of the Federal Industrial Council.

I shall not go into the details of the machinery of the statute. I assume, it having been printed, that you have read it.

As to the second part, we found a very simple plank upon which everybody seemed to be willing to stand, and it is so simple that it is really remarkable that we have not found it before. You lawyers know to what extent English and American social conditions and government conditions have progressed under the application of what we call the "contract principle." That principle, simply stated, is that we may make agreements undertaking to do certain things, and that unless there is something against public policy operating against it, or unless there is some fraud or duress in the making of the contract, the contract is valid.

It is a remarkable thing that our federal constitution contains a provision that no state may impair the obligation of a contract. Such a provision I do not know to exist in any other federal constitution, but it exemplifies the point of view of American lawyers that contracts shall be valid and binding.

Now that principle in the field of arbitration has not always been followed. As you know, prior to the enactment of the arbitration statutes, arbitration agreements were revocable at the pleasure of either party. When our Committee on Commerce drew the United States Arbitration Act some years ago, it was applicable not only to business contracts but also to those agreements that were made in an industry between groups of employers and groups of employes. We found that particular phase of our statute was opposed by organized labor and we were obliged, with your approval, to delete that part of the act that made it applicable to industrial disputes.

The change which has occurred in the last five years is that organized labor, through the committee appointed on the suggestion of Governor Whitman by President Green of the American Federation of Labor, has accepted whole-heartedly the principle that when an agreement is freely and voluntarily entered into for the arbitration of industrial disputes it shall be valid and enforcible in law, and the parties who make it shall be held accountable for their promise. That is the principle upon which we gained the concurrence even of men who differ so widely as Mr. William Green and Mr. James A. Emery, counsel for the Manufacturers' Association. Business men, lawyers, all came before the committee and laid before us what seemed a perfectly natural, normal and simple solution of the problem, namely, that in the field of interstate commerce we should permit those in industry to make any kind of agreement they choose by which they set up machinery for the adjustment of their controversies without resort to the strike or the lockout, that those agreements when recorded with this Federal Industrial Council shall be valid and that the rulings made by such arbitration tribunal shall be effective and valid in law. When you have gone through the language contained in our bill you will find that that is the policy and that is the purpose, and we feel personally very grateful that we have been able to come to that advanced step because, as the press has said, it puts the American Bar in a position of being constructive in the solution of a great national problem.

We are not attempting, as I said at the outset, to solve all the social and economic problems of the country. Under our American principle of self-government, we allow the people themselves to do it, but we say when they do agree upon a method of doing something, that agreement shall have the sanction of law. We find that it is hailed with approval by business men throughout the country as well as by organized labor.

I move the adoption of that recommendation contained in our report, as well as the other recommendations.

The motion was seconded and carried by a two-thirds vote of the members present.

(See report, infra, p. 337.)

Chairman Whitman:

Next is the report of the Standing Committee on Commercial Law and Bankruptcy, Mr. Jacob M. Lashly, of St. Louis, Mo., Chairman.

Mr. Lashly:

I don't know just how reliable is the assumption that every one has read the printed report that appears in the Advance Program, but others seem to be relying comfortably upon that assumption and perhaps in an economy of time I ought to do it, too. The Committee on Commercial Law and Bankruptcy, as its name implies, has a two-fold subject for consideration. We held a meeting in New York, as has been customary for some years, and there we took testimony or heard speeches from representatives of the bench, referees and Bar, and Credit Men's Associations and others having special or peculiar interests in the commercial law and bankruptcy subject. From a mass of testimony and expressions of opinion and recitals of fact received at that time and from other sources, we learned some facts which we have endeavored to express in the report of our activities in this printed program.

Now, generally speaking, it is doubtful whether it is ever economy for a lawyer to try to state in substance what he has already written, but, on the subject of Commercial Law this committee has felt that the most acute subject for consideration just now is that of the ethics of commercial law practice. There is a good deal of uncertainty among members of the Bar of the country and of the commercial agencies as to just what applications the Canons of Ethics may have to commercial law practice. Commercial lawyers are in many instances associated more or less intimately with lay members in partnerships or associate relations, and it is obvious that the Canons of Professional Ethics cannot be enforced upon laymen and it is equally obvious that the laymen are not bound by the rules applicable to professional

men.

That subject is one which has been committed to the Committee on Supplements to the Canons, and while we kept in touch. with the committee's work and on its invitation attended its last meeting we have felt that we could perform a better service by