Public Arguments Between Peers...what should I do?

I am curious how others would react in the following situation, and if they might have some advice as to 1) what the manager should have done and 2) what I should have done as a peer of two employees who were engaged in a verbal disagreement in front of customers.

I work in a service related industry where we have close contact with our customers.  Last week (Friday), two employees and I were in a common area where customers and employees interact.  Two co-workers of mine, I'll call them James and Tom, started having a disagreement regarding an internal policy that deals with customer accounts. 

Jim was "fed up" with the way he was being continually criticized by Tom and another employee for managing those customer accounts when she was given a directive by the manager to facilitate discrepencies with those accounts in a certain way. 

Their argument became so loud and unprofessional that I asked them to move to a private workroom behind the counter where they closed the door for about 45 minutes.  When they emerged, Tom took over the customer counter and acted like nothing had happened.  James was disheveled from the incident,  and I spent about an hour trying to console him.

While this was happening, the manager was in her office approximately 15 feet away from the spectacle.  She has a clear view of the customer counter and could tell there was an issue (as I found out later).  Any other time the door to our workroom is closed, the manager is quick to come out and find out why.  After I was done talking with James, I proceeded back to my office.  The manager came back to my office and asked me what had happened.  She had seen the door was closed, knew they were raising their voices (she could hear them), and understood there was some issue.  She had talked with them earlier in the day and the same issue came up, so she was aware that they had a disagreement about the current policy. 

I asked the manager if she planned to talk to them that afternoon, and she looked at my like I was crazy.  She said she was going to wait for them to talk to her about it, and that she might address it on Monday.

My question to you is, what would you do?...What is the right thing to do?

I'm at a loss because I feel this issue needs role power, of which I don't seem to have any being a peer of both of them. 

As always, your guidance and suggestions are greatly appreciated.