121.5493/12–1549: Telegram
The Second Secretary of Embassy in China (Bacon) to the Secretary of State
[Received December 15—1:41 p. m.]
2596. Embtel 2556, December 8. On telephonic notification to Soule from Aliens Affairs Office a. m. December 14, Soule, Clough and I appeared Labor Bureau 3 p. m. to attend arbitration. In anticipation of possibility receiving oral decision only, I had invited one representative from Canadian Embassy and two from Dutch who accompanied us as spectators. Although they declared their interest in proceedings as former club members, their admission refused after 20 minutes’ delay on ground no invitation given them by Labor Bureau.
Five-man arbitration committee composed of Labor Bureau Deputy Director Feng, two representatives AAO, one representative General Labor Union, and one other representative Labor Bureau. Each side given 10 minutes present arguments. Employees merely stated they wished eliminate from terms agreed on December 7 provision for recalculation wages according to cost of living because difficult explain substitution of parity unit to other employees. (During intervening 7 days parity unit had risen less than 8 percent while dollar exchange had risen 20 percent.) I then stated had always urged actual wage was proper basis for payment and employer agreed to modification terms as proposed by employees. (This change eliminates slight saving resulting from current rate fluctuations but also eliminates one speculative feature of agreement and avoids dangerous precedent.) I further stated that I understand both sides had agreed to terms of settlement and only question for arbitration was which individual required to execute agreement, and that on that point employer had already stated his full case.
After short recess Feng read preliminary statement summarized as follows: (1) Soule is wholly responsible for settlement dispute because (a) he was responsible member of board at time dispute arose, (b) his statements regarding resignation self-contradictory, (2) he refused negotiate and therefore responsible for delay in settlement, (3) Labor Bureau succeeded bringing both sides to agreement on terms, (4) at least moment Soule wrecked mediation proceedings by declaring he could sign agreement only under protest.
Feng then read Arbitration Committee’s decision which in general repeated foregoing and fixed terms of settlement as follows: (1) one and half months’ separation pay in view long hours and no vacations, (2) maintenance full wages from October 1 to December 14 and (3) New Year’s bonus one-twelfth month’s pay each month’s service; said written copies of decision would be delivered a. m. December 15, [Page 857] after which each party had 5 days either to report dissatisfaction to Labor [or] appeal to People’s Court.
Full text of decision will follow as soon as received and translated.
Sent Department 2596, repeated Shanghai 1271, Peiping 428.