Washington, March 9, 1934.

BUSINESS men who came to Washington expecting that the Government of the United States in the person of General Hugh Johnson would hold the scales even in interpreting the law were shocked at the outspoken championship of organized labor and the denunciation of the so-called company union.

Recent surveys show that 45 per cent of the employees are members of unions of their own choosing which are not affiliated with national unions and that about 10 per cent are members of what is known as organized labor, while the balance of the employees deal individually with their employers.

Under the circumstances, the open espousal of the cause of organized labor will mean a possible total of $300,000,000 in dues for organized labor, the largest fund of this kind ever amassed in America. There is no requirement of law and no regulation of the National Industrial Recovery Act as yet--though the power to call for it exists--whereby labor unions are to make financial reports either to the Government or to their members.

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Many business men, disappointed at General Johnson's reversal of all his previous utterances and statements, which endeavored to present the NRA as impartial as between the types of labor organization or collective bargaining, were saying today that if they must submit to the organized labor domination they believed the public interest required financial statements of all salaries and expenses incurred by labor officials, walking delegates, and legislative representatives, together with all sums spent annually in connection with lobbying at the federal and state governments.

For several months, the leaders of industry have been trying to keep peace in their own ranks by insisting that all official statements should point out clearly that the law meant the employees were free to speak through unions of their own choosing. After considerable controversy, such statements have been carefully phrased and finally approved by the President of the United States and the lead of the NRA.

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It may be that General Johnson thought his speech could be considered as a sort of unofficial utterance, as a bit of intimate advice given American industry over a national network of broadcasting stations, but the language of his address goes into the records and business men today were re-reading it to see that the General really went as far as he did. Here is the excerpt which will be used from coast to coast by labor organizers in what may precipitate all sorts of strikes and controversies:

"There is no law prohibiting a company union as such if there is no interposition whatever by employers, and if the men freely choose it. But 99 out of 100 times, you and I know that this is not the case. Let's not kid ourselves, let us act before Congress acts, call in Senator Wagner's board. Let your men express their choice under those public auspices from which no question can arise. Let's get this troublesome question settled and for all time."

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The charge that the only alternative to organized labor under the A. F. of L. is a company union influenced by employers is deeply resented by the business men who came here. The figures gathered by the National Industrial Conference Board in a survey of plants covering more than 2,585,000 workers showed that employee representation was more popular among manufacturing and mining industries especially than outside unions. The tabulation showed 45 per cent for employee representation or company unions as against 10 per cent for organized labor of the A. F. of L. type. The balance favored individual negotiation.