to insert in the record at the close of the hearings this morning a wire that I have received asking for time to file some additional statements. Senator YARBOROUGH. The wire and statements will be ordered printed in the record at the conclusion of the hearing, and we have other statements that we will put in the record before we close today. The next witness is Mr. William J. Knecht, vice president of C. H. Knecht & Sons of Camden, N.J., accompanied by Mr. Joseph D. Wilder, executive vice president of the Sheet Metal & Air Conditioning Contractors' National Association, Inc.

Gentlemen, we do not want to cut anybody off, but I think that you gentlemen probably know it is printed in the papers that the President of the United States is coming up here at noon and is going to have lunch with the Senate at 12:30.

Now, under protocol, we are supposed to be over there before 12:30 and before the President comes in so we will ask you gentlemen to expedite your statements as much as possible.

Senator MORSE. I will make this additional comment for the attention of Mr. Curtin. If we are not going to come back this afternoon, I want you to be sure that you get Mr. Taylor's statements into this record some time between today and tomorrow.

Mr. CURTIN. I just received a call 10 minutes ago that Mr. Taylor has landed at Dulles Airport, apparently the weather cleared in Philadelphia and he is now en route to the hearing.

Senator YARBOROUGH. It is unfortunate the fog fogged him in, but if we are not able to get the members back this afternoon due to the heavy burden of work in the Conference Committee meeting. We will not only consider his statement, but the fact that he was making this very diligent effort to get here.

You say he landed at Dulles?

Mr. CURTIN. Yes.

Senator YARBOROUGH. If it had been National, we might have expected him.

STATEMENT OF JOSEPH D. WILDER, EXECUTIVE VICE PRESIDENT, SHEET METAL & AIR CONDITIONING CONTRACTORS' NATIONAL ASSOCIATION, INC.; ACCOMPANIED BY JAMES H. FERGUSON, DIRECTOR OF INDUSTRY RELATIONS

Mr. WILDER. Mr. Chairman, we are also involved in transportation difficulties, so Mr. Knecht, who is scheduled, is either in Philadelphia or somewhere between.

I am Joseph D. Wilder, executive vice president, Sheet Metal & Air Conditioning Contractors' National Association, and I would submit the statement which Mr. Knecht would have presented. At my right is Mr. James H. Ferguson, director of industry relations for the Sheet Metal & Air Conditioning Contractors' Association. So with your permission I will present this report.

I am here in the capacity and on behalf of some 30,000 contractors in the United States who are involved in one way or another in the sheet metal and air conditioning business. This association has taken an official position opposing the enactment of H.R. 1153, which would amend section 302(c) of the Labor-Management Relations Act of

A former president of Sheet Metal & Air Conditioning Contractors' National Association, Marlow C. Hodge of Los Angeles, Calif., issued a statement to the House Education and Labor Committee when it was considering H.R. 1153 in the first session of this Congress. That testimony is available to the members of this subcommittee and I see no reason to repeat it.

Senator MORSE (presiding). The chairman rules that the statement of Mr. Hodge that he gave on the House side will be made a part of this record, may I say to counsel for the committee, and inserted in the record immediately following your testimony.

Mr. WILDER. I would, however, like to call attention to a few points to emphasize our opposition to H.R. 1153.

The bill in question would permit joint administration of industry promotion funds by unions and employers. Even more importantly, it would legalize the use of jointly administered, union-management funds to finance a joint board or committee to interpret and resolve provisions of a collective-bargaining agreement.

This bill is intended to involve the construction industry alone and as such would appear to be class legislation. We can not understand why Congress would consider giving additional power to labor unions who have in the past year particularly demonstrated that they have almost a total dictatorial power with respect to contract negotiations at the present time.

If H.R. 1153 is passed in its present form, we personally expect to see a reoccurrence of the history of abuses which led to the passage of the Taft-Hartley Act in 1947 and the Landrum-Griffin Act in 1959. First of all, the use to which the promotional funds are to be applied is not described with any certainty in the proposed legislation. And I think this is borne out by the conversation between the committee and the last man to testify.

The need for section 302(c) was clearly demonstrated in 1947 to the satisfaction of Congress and it would seem basic that if exception is to be permitted, the area of exception should be delineated with a great deal of certainty and caution.

With respect to the second purpose of the proposed legislation, it would appear that this would permit construction unions as such. Anyone knowledgeable in the field of labor management relations realizes that 90 percent of the unions' function is encompassed in the area of interpreting and administering their labor agreement.

Therefore, it would appear by the device of a labor-managemen industry fund of this type, a union could replace its need for dues. If a union is permitted under law to accomplish this, there is little necessity for responsibility or responsiveness to the individual union. member. Certainly this would encourage the return to union dictatorship which Congress has for many years attempted to avoid and restrain.

As we visualize the operation of this second portion of the bill, a union could pay 90 percent of the business agents' salary as well as its office staff and 90 percent of everything else that a union might properly spend to accomplish its goal. All of this by exacting a payment from employers under the guise of free collective bargaining. As a matter of fact, nothing in the bill would indicate that the union members need even have a report as to the expenditure of these funds.

Obviously, truly responsible labor officials in the United States are not looking for the type of power that is visualized in this statement. No doubt there are well-meaning persons who believe truly legitimate and useful objectives can be accomplished by the device proposed. It is clear, however, that the concern as raised is real and that the development of the type of situations explained is probable. The history of abuses in the labor-management field is too well known to the Congress to need specific repetition at this time.

We would like to point out that industry funds as they are now constituted are for the advancement of the industry and those are not for the advancement of either labor or management. Management

is in a much better position to decide the advantageous functions of an industry fund and those things that are good for the industry than the union members.

Since the money that is contributed is money from management, we believe that management should have the final say as to how it is spent.

In addition, we are unaware of any activity financed by an industry fund that in any way is detrimental to the best interests of the industry as a whole. In our own industry, every industry fund trust agreement that we have reviewed has a provision in it that the funds shall not be used for antiunion activities.

These agreements say that the employer will use this money to promote programs of industry education, training, research and promotion that will expand the market for the services of the sheet metal industry, both management and labor.

For these reasons, we strongly urge that this subcommittee not give a favorable report on H.R. 1153.

That is our statement.

(The prepared statement of Mr. Hodge follows:)

PREPARED STatement of MARLOWE C. HODGE, PRESIDENT, SHEET Metal and AIR CONDITIONING CONTRACTORS' NATIONAL ASSOCIATION, INC. Pursuant to the invitation of presiding Chairman Dent of the General Subcommittee on Labor of the House of Representatives, the Sheet Metal and Air Conditioning Contractors' National Association, Inc., wishes to file a brief statement outlining our opposition to H.R. 1153. This association represents approximately 1,300 members who are engaged in the sheet metal and air conditioning business throughout the United States. Almost all of them have contractual relations with the Sheet Metal Workers' International Association, one of the principal unions in the construction industry of this country.

We do not wish to duplicate arguments advanced by other groups and therefore limit these expressed opinions to a few thoughts which we consider worthy of your attention.

It is recognized that industry promotion funds are not new in this country in the construction industry. Most of the principal construction areas in the sheet metal field have established industry promotion funds, operating within the laws defined by the Federal courts. This means they are not subject to collective bargaining, except by the consent of the employers, and, even then, only under rules laid down by the National Labor Relations Board. However, their status has been generally recognized in collective bargaining agreements within the limits of these rules. We believe that industry promotion funds, solely administered by employers, should be a compulsory part of the collective bargaining process, and we would like to see Federal labor laws amended accordingly. Although we do not believe it feasible at this time, we do think it should take precedent over the different collective bargaining principles advanced in H.R. 1153.

70-202-66- -5

Stripping the issues in this type of legislation to the basic principles involved, we believe the following to be true:

Labor unions have fought for the recognition of the union shop for many years. Except for certain States in the nonindustrial South and West, this has been unquestioned for some time. Collective bargaining itself has strengthened the legal basis of the unions in this and many other phases principally through the Wagner, Taft-Hartley and Landrum-Griffin Acts. We do not believe a reappraisal of substantial parts of these acts is needed at this time.

Collective bargaining is a part of the labor relations of most industries in this country, including the individual manufacturer such as General Motors, United States Steel, and the like. Not too much attention has been paid to the part played by smaller employers who must approach the collective bargaining table after first banding together in order to have equality in collective bargaining strength. There is a minimum of specific legislation for their protection. This is particularly true in the construction industry where management functions are handled by a large number of comparatively small employers who must approach collective bargaining, the consumers, and governmental agencies on the basis of an association of like employers. Absent this association, these employers cannot be heard because their economic voice and their numbers are too small.

This is quite similar to the arguments advanced in the 1930's by labor unions on behalf of the Wagner Act. The comparison is relevant and substantial.

We urge upon you that industry promotion funds, formed by a combination of management in employers' associations, are a proper and necessary counterpart to what legislation has given, through government, to the labor unions in this country. We believe we must have industry promotion funds as a necessary management tool, comparable to the unquestioned tool labor unions have in the union shop. The proposed legislation in H.R. 1153 will take away two important functions from the present industry promotion funds and create two new trust instruments under joint control between management and unions. It is our belief that the absence of clear language in H.R. 1153 will cast a doubt of illegality on all industry promotion fund functions and uses. In the sheet metal industry, current industry promotion funds actually have 20 or more different functions all of which are essentially management functions.

In the sheet metal industry there are many activities in which the employer and the union have a common goal. These functions vary from time to time in the amount of time and money they require. This cooperative effort has been successful. We believe it characterizes the customary American approach toward resolving mutual problems.

H.R. 1153 proposes that a trust fund should be created for the single purpose of interpreting a current labor contract. The interpreting is now being done by the process of compulsory arbitration of differences through local and national joint adjustment boards. Each side pays its expenses. We believe this to be the only proper approach. This is not joint trusteeship and does not need a new hierarchy for this process. We believe joint trusteeship in this area will create additional and unwarranted expense. In the construction industry, this must ultimately be borne by the public.

Lest there be any misunderstanding, we wish to state that the Sheet Metal Workers' International Association has performed an outstanding service by advocating the need for industry promotion funds and agreeing that they should be equitably determined on the basis of man-hours worked. It should also be borne in mind that these funds are a cost of construction and under past principles, they have been treated as part of this cost, just as well as wages, fringe benefits, payment of union dues and initiation fees and payment of association dues.

We respectfully wish to disagree with the answer of Mr. C. J. Haggerty, president of the Building and Construction Trades department, to a question of the chairman at the hearing on March 9, in which Mr. Haggerty stated: "The money used for industry fund purposes is put up by management." The real source of these funds is the owner of the properties being built. Whether the owner is Government or private, this is the obvious source that pays for all materials, labor, and services rendered by the construction worker or the contractor. Payment of fair wages and a fair amount for services rendered and materials furnished is implicit in our system. Any unnecessary charges or committees or trusts which add to costs, without a resultant saving or additional quality of performance is to be avoided.

Therefore we request that you evaluate the collective bargaining processes within the construction industry and recognize that employers should have comparable bargaining tools and techniques with labor unions.

We urge the committee to recognize that labor unions, by law and principle, have been severed from employer control and participation, and that the same principle should apply to contractors operating within their own association or industry to promote that industry.

Because of a breakdown in past liaison, we also respectfully ask that a staff member of your committee place our association office on their mailing list tó receive all mailings, notices of further hearings, and any other information that will enable us to represent properly our membership.

We respectfully ask that this statement be made a part of the record of the hearing of March 9, 1965.

Senator MORSE. That is a very helpful statement. I think although it is clear in the record, I would like to give you an opportunity to pinpoint it, because it is set forth as your testimony.

You point out that all the funds that will be in this so-called joint fund comes from the employer?

Mr. WILDER. Yes, sir.

Senator MORSE. And none of the money in this joint fund is contributed by the unions?

Mr. WILDER. This is correct, in our industry.

Senator MORSE. It is your contention that the purpose of the fund is to promote the economic interests of the industry and one of the objectives will be to thereby promote the employment availability for the workers?

Mr. WILDER. This is correct.

Senator MORSE. But you do not feel that the employer money set aside by the employers by whatever assessment procedure is followed should be administered in part by the representatives of the workers? Mr. WILDER. Yes, sir.

Senator MORSE. What do you say to the argument of the workers that they, too, have a joint interest in the promotion of the industry and that they have a contribution to make to the promotion of the industry and that in a sense the funds that are assessed and charged to the employers are funds to which indirectly the workers make a contribution by the degree of efficiency of their labor, and make it possible for the employers to develop the industry?

Mr. WILDER. Senator Morse, all I can say is that within the experience of our industry where we have some 60 of these industry funds now in operation, it has always been the policy of the trustees representing management to keep labor currently advised as to how these funds are being used. This is conducted under the device of having regular meetings at which labor is in attendance to hear the report of the trustees on the administration of the money.

Where the labor has decided they do not approve or like some of the programs developed by the employers, labor in our industry has insisted that these programs be dropped and that other programs which are labor approved shall be added.

And in our experience most of these labor suggested programs are outside of the scope of the basic purpose of an industry promotion program.

Senator MORSE. That is all, Mr. Chairman.

Senator YARBOROUGH (presiding). Thank you for your testimony here. We regret, Mr. Wilder, that Mr. Knecht couldn't make it, but we invite him to file his statement.

I file here the statement of Mr. Stanley M. Rosenblum, attorneyat-law, representing the International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers of America; and Robert H.