121.5493/12–849: Telegram
The Second Secretary of Embassy in China (Bacon) to the Secretary of State
[Received December 8—5:30 a. m.]
2556. Re Embtel 2520, December 1. Aliens Affairs Office requested Soule December 5 by telephone to [go?] Labor Bureau December 6 a. m. Soule, Clough, and I appeared and found Employees’ Committee, Labor Union and AAO officials present, plus 9 stenographers and several photographers. Clough and I registered but Soule did not. Chang for Labor Bureau announced Bureau had been requested by Union to mediate and asked if we agreed. We raised question of necessity Soule’s presence and after great argument Chang declared Soule was responsible party. We requested written decision to that effect, which Chang promised to give at end of hearing.
Resuming after lunch, Chang immediately asked for employees to state case. Union officials read long statement including claims for 2 months’ separation pay, 1 month’s pay in lieu of New Year’s bonus, maintenance at full wages from October 1, leave pay at rate of 1 day per week, all payments to be recalculated according to rise in cost of living since September 30, standard being number of parity units purchasable that day by PBN18a equivalent of each employee’s US dollar salary. He also alleged long hours, hardships, et cetera. I requested copy of statement but none was given. I then introduced employees’ statement giving copies to Union and AAO officials. Principal point made was that extra demands not covered either by terms of employment or labor regulations. During afternoon session Bureau official, Chang, directed most of his questions at Soule, who referred them to me. At close of session Chang announced Bureau’s recommendations—namely, 1–½ months’ separation pay, 1 month’s pay in lieu of New Year’s bonus, full maintenance from October 1, all payments to be recalculated according to rise in cost of living. I requested recess to afternoon December 7 in order to determine whether club able to pay and renewed my objections to demands which appeared to be outside amounts covered by regulations.
Resuming hearing December 7, succeeded only in reducing mediator’s recommendation New Year’s bonus proportionately to number of months served. Draft agreement then prepared by mediator which mentioned only Soule as responsible board member and provided for signature by one representative each party. After extended argument clause referring to responsible board member was amended to read as [Page 854] follows: “Soule and Bacon, responsible members of the board of the former American Embassy Club”.
Terms stated were:
- (1)
- 1–½ months’ separation pay.
- (2)
- New Year’s bonus equal to 1–½ months’ pay for each month employed.
- (3)
- Full maintenance from October 1.
- (4)
- All payments to be recalculated according to rise in cost of living.
Mediator then asked whether we agreed. I replied that employer agreed. Employees Committee likewise assented. Mediator asked whether Soule had any statement to make. He then prepared to read text of letter which appears below. Mediator, however, called recess for preparing final copies agreement and meantime indirectly ascertained nature of Soule’s statement.
On resuming hearing, head of Labor Bureau for first time joined conference and new copies of final agreement were given to parties. Union official then announced that my name should not appear in text of agreement and that Soule must sign. Based statement on fact employees had alleged Soule was responsible person and in petition to Labor Bureau had referred to Soule only. Soule then read following statement:
“As I have previously stated, upon dissolution of former ‘American Embassy Club’ at end of September, I delegated all my responsibility as former member of board of governors to Mr. Bacon, Chairman. I have taken no part in ensuing labor dispute negotiations. I have attended mediation proceedings in Bureau of Labor at request of AAO, but I have no authority from former board to agree to any settlements. Such authority is vested solely in Mr. Bacon. If, in view of Bureau of Labor, my signature is necessary to confirm Bureau’s decision, I can affix my signature only under protest.”
Head of Bureau immediately declared that question Soule’s responsibility had already been determined by Bureau, that his protest was evidence bad faith, that mediation proceeding had ended; next step would be arbitration and that Soule was responsible for mediation failure. I inquired of Chang when arbitration would take place and he stated “very quickly”, and that Arbitration Committee would be composed of three persons selected by Labor Bureau.
Nanking Military Control Commission on October 21 promulgated pertinent Shanghai regulations for application in Nanking. Provisions for arbitration are as follows:
“If mediation proves to be of no avail, Labor Bureau shall then render an arbitration in accordance with law. Decision of Arbitration Board shall be signed by its chairman and after approval by Director of Labor Bureau it shall be notified to both labor and capitalist for execution. If either party of labor and capitalist offers objection to arbitration, he shall notify Labor Bureau within 5 days after receipt [Page 855] of arbitration decision and shall request court to deal with it; otherwise arbitration decision shall have legal binding force.”
Sent Department; repeated Peiping 424, Shanghai 1260; Department pass Army.
- People’s Bank Notes.↩