I presume you have had some opportunity to study S. 3974, the Iso-called Kennedy-Ives bill, which has not been referred to this subcommittee. The bill is still on the Speaker's desk. But would you give us your thoughts about the Kennedy-Ives bill, whether or not it is the type of legislation you have in mind?

Mr. HIESTAND. Mr. Chairman, I have only the newspaper reports of the testimony on that bill, and the hearings in a very sketchy way. I am probably not qualified to comment in general, except that the inpression that I get is that it does not go anywhere near far enough in giving the worker his rights. It is just a start. The evidence submitted to the McClellan committee revealed many, many more things which that bill does not include, if my reports of it are accurate.

I am sorry I am not better qualified. I have not studied the bill as it

Mr. HOLLAND. Mr. Hiestand, I am pleased to have you before the committee. I sort of recognize that second paragraph you have. That is taken right out of the book by Donald Richberg.

Mr. HIESTAND. You are correct, Mr. Holland.

Mr. HOLLAND. I think Mr. Richberg is doing a great job right now of trying to destroy the labor movement in America, after being on the outside of the fence. He went to the other side of the fence this time because he found there was more money to be had.

You state here:

Instead of being a movement of workers banded together for the protection and advancement of their legitimate interests in a free economy, the labor movement has become, to a large extent, a political movement with the objective of establishing a Socialist labor government in control of the social and economie life of the Nation.

How would you explain that statement?

Mr. HIESTAND. The policies of the controlling factors of the national labor monopoly have indicated it be their advocacy of all of the measures that we have right straight through. There is a long list of them, I do not have it here, and of their opposition to a number of the measures that have been introduced to protect freedom and the free enterprise system.

Mr. HOLLAND. I take issue with you here, because I happen to be a member of the United Steel workers of America, was one of its original organizers. I do not think there was ever any thought in the United Steelworkers or in the steel industry to have a Socialist form of gov ernment. They have been very much opposed to it. They fought them in the union halls when they came in with Socialist ideas in the beginning. You have made a general statement, and say

a political movement with the objective of establishing a Socialist labor government in control of the social and economic life of the Nation.

Do you oppose social security?

Mr. HIESTAND. NO.

Mr. HOLLAND. Do you oppose welfare funds?

Mr. HIESTAND. Not at all. I am very emphatically in favor of

them.

Mr. HOLLAND. That is about the only part you might mean. The health and insurance fund, that is in all the anion contracts, which is a godsend.

Mr. HIESTAND. Those are wonderful movements; they are fine; they are in behalf of the member. They do need, as has been testified, supervision and control, but I did not go into that before this committee, because I understand that that is not within your purview. Mr. HOLLAND. You said:

When power is unlimited and union leaders are, in effect, above the law, abuses creep in, and we have seen many examples of cruel and unfair practices, denying the worker-member, for whom the union is organized, his rights.

Have you ever attended a union meeting?

Mr. HIESTAND. Oh, yes.

Mr. HOLLAND. Have you ever heard the argument on the floor?
Mr. HIESTAND. Yes, I have.

Mr. HOLLAND. Did you ever hear fellows that did not stand up for their rights?

Mr. HIESTAND. I have.

Mr. HOLLAND. I have been in the labor movement as long a time as anyone in this room, and I have yet to see a labor meeting that was just a peaceful meeting. I have been a union officer.

When you talk about union leaders, you always try to give the impression these men are not elected. If you had been in Pittsburgh in the last 2 years you would have seen a greater election and more democracy around the union hall than is seen at any political poll in the United States.

Mr. HIESTAND. Mr. Holland, I issued a statement for the Congressional Record emphasizing my very first sentence of this statement, that there are many, many well-managed, excellent labor unions, and they are operated by honest, conscientious leaders. I exemplified one of them, local 11 in Los Angeles, the Electrical Workers Union. They do have published, audited statements mailed to their entire membership, they do have secret ballots, they do hold periodic elections, all of those things. The worker has his rights there. And those are the things that we all advocate. But we do resent the black eye that has been given the whole labor union movement by those who do abuse it. And that is the need for legislation.

Mr. HOLLAND. You are taking the exceptions. You are taking the very small minority, which the AFL-CIO ethical committee is trying

to correct.

In western Pennsylvania, in the last 3 years, we had 11 bank officials, vice presidents and presidents, steal a lot of money. You would not jump into the State of Pennsylvania to pass laws to control all these other banks to put these fellows in jail, would you?

Mr. HIESTAND. No, because Mr. Holland, there are laws effective for that. Presently, we are lacking in laws for labor unions.

I take the position that every man deserves a check on himself. He should have an audit to prove that he is right.

Mr. HOLLAND. The United Steelworkers in the last issue of their paper, of which I think you get a copy, because every Member does, they have a detailed account of their finances, and it is also made open to the public. I think you know the M. Conik Co.

Mr. HIESTAND. I am not as familiar with that particular group as I

am with others.

Mr. HOLLAND. It is one of the finest firms of certified public accountants in the United States.

Mr. HIESTAND. It should be.

Mr. HOLLAND. They also give their report, and I know they are tough in auditing books.

I think that all the unions or the big majority of them, give these accountings. The Steelworkers do, the IUE does. So does General Motors, and all of them give a very good accounting.

Mr. HIESTAND. I agree, most emphatically, but the fact that we do not have a law means a few can abuse this thing, and there is no way that the worker can be protected.

Mr. HOLLAND. Don't you think there are a lot of corporations that abuse the law today?

Mr. HIESTAND. I do not doubt it.

Mr. HOLLAND. There is one other thing you state here:

Proper registration and auditing of welfare funds, for the prevention of resultant abuses. * *

You know that 92 percent of the welfare funds, pension funds, are administered by management alone, do you not? And the only letters I receive have indicated that industry is my district is against disclosure and every union wants to pass it. I don't think any of us have any doubt about the honesty or ability to handle these things of United States Steel. I had a meeting with the heads of the company, and they pointed out something to me: That a disclosure of funds would affect considerably the investment phase. Because if they bought common stock of one of their subsidiaries and then sold it and the news got out that they were selling the common stock of one of their subsidiaries, there would be a run on their company.

Mr. HIESTAND. I see no reason for witholding information about a welfare fund because the subscribers to that fund are shareholders. They should know what is done.

Mr. HOLLAND. They do get a report. General Motors gives a report, General Electric, Westinghouse Electric, Jones & Laughlin, all the steel companies do give a report. But what they have objected to is the disclosure of their investments. There are only 2 percent of the funds that are administered by union management.

Mr. HEISTAND. Certainly, any shareholder in a fund is entitled to the facts of how the funds are invested, because that is a protection, and publicity is the soundest kind of protection in that case.

The control of investing, naturally, should be in a committee, because you cannot have the whole membership veto any one investment, and the shifting, because the market shifts fast, and it should be in a committee delegated to do that.

But there is no reason for hiding any information of that kind, in my judgment.

Mr. HOLLAND. The plants that have the largest amount of funds are objecting to it strenuously.

Mr. HIESTAND. I would not defend that position, Mr. Holland.

Mr. HOLLAND. I am not defending it, but I say it is quite a problem. Mr. HIESTAND. Yes.

Mr. HOLLAND. Especially when you have such a large industrial district as I have and try to listen to both sides of the question. Of course, the labor movement has all gone along with the disclosure of funds, and the men who are responsible for keeping the funds strongly object to it, saying that it is going to hurt them considerably and also add millions of dollars to the cost of managing the funds.

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But I have yet to get the answer from anybody on it, in my estimation, because we are going to have to make all these reports in to the Federal Government. So it is going to cost more to administer, in percentages, and eventually it will even get higher and higher as we go along, because the funds get larger. I think it is going to be one of the largest funds administered in the United States, eventually.

Mr. HIESTAND. Mr. Chairman, in those States where there is proper legislation for the protection of welfare funds, there is quite a case for having the supervision of welfare funds in those States under the supervision of the State bureau that has that in charge, and a great many States I believe do.

The problem is, of course, that there are national funds in many of these national and international unions, and that is the reason for the part in my bill of recommending that that be registered.

Mr. HOLLAND. You also suggested that in those companies who have national organizations, the United States requires a report from them. There is going to be an awful lot of paperwork, is there not?

Mr. HIESTAND. I do not think so. One large fund, let us say, if it is the General Electric, registering it requires a very nominal amount of paperwork, negligible, really.

Mr. HOLLAND. Thank you.

Mr. PERKINS. Mr. Rhodes?

Mr. RHODES. I want to thank my good colleague from California for being before the committee. I might say that the gentleman from California has been interested in this field for many, many years, and in my opinion is one of the Members of the House who thinks deeply on this as well as all other subjects and has come here to give us the benefit of his thoughts.

As far as the general tone of the statement is concerned, I am sure that the gentlemen agrees with me that great power must breed great responsibility and, if the power is to be exercised properly, the responsibility must also be uppermost in the minds of those who are wielding that power.

I am sure that there is no thought in his mind, as there certainly is not in mine, of painting everybody with the same brush. Merely because some people are black is no reason to call everybody else black.

However, there is, as I am sure the gentleman from California will agree with me, a field here which I think has been blocked out fairly well by other hearings, over whether or not the average workingman who belongs to a union really is the master of not only his own destiny but the destiny of the union.

I am not afraid of what any group of Americans will do if they have freedom of action and all the facts at their disposal. I certainly feel very strongly that in this great labor movement, which does have great power and should have great power, it is the legislative responsi bility of Congress to make sure that that power is exercised respon sibly. And I think the best way to do that is to make sure that the will of the individual workingman is unhampered by any outside

forces.

I have made a long statement and the gentleman may care to

comment.

Mr. HIESTAND. I appreciate it very much, because it is in line with sound thinking as I see it.

Mr. HOLLAND. That is all.

Mr. PERKINS. Mr. Griffin?

Mr. GRIFFIN. I want particularly to note the inclusion in your so-called Bill of Rights of the procedure for recall of union officers, and focus attention upon the fact that the Kennedy-Ives bill does not include any provision whatsoever for recalling. I believe it provides for a secret ballot election at least every 4 years.

But it seems to me that any law which would try to provide even minimum of guaranty of democracy would have some provision for the recall of officers of the union. I feel very strongly about this. I think that is a serious defect in the Kennedy-Ives bill, and I assume that we agree on that, from your statement.

Mr. HIESTAND. I most certainly do.

Mr. GRIFFN. I have no other questions, Mr. Chairman.

Mr. PERKINS. Thank you very much.

Off the record.

(Discussion off the record.)

Mr. PERKINS. We are certainly glad to have you with us this morning, Mr. Porter. Coming from the Far Northwest, we are certainly interested in receiving your views on this bill.

You may proceed.

STATEMENT OF HON. CHARLES O. PORTER, A REPRESENTATIVE IN THE CONGRESS OF THE UNITED STATES FROM THE STATE OF OREGON

Mr. PORTER. Thank you, Mr. Chairman. I have a short and simple statement which, with the committee's consent, I will read.

I appear before your distinguished subcommittee to urge your favorable consideration of H. R. 5606. Briefly, stripped of its technical language, this amendment legalizes union-shop agreements in industries affecting commerce regardless of the so-called right-to-work laws enacted in 18 States.

There is obviously nothing radical about this proposal. The language of the United States Constitution is clear. It provides that Federal law "shall be the supreme law of the land."

However, in the case of union security, Congress has provided that State law would supersede the Federal law. Among the many fold objectionable provisions of Taft-Hartley is the special gimmick provided in 14 (b) which allows States to outlaw union-shop agreements even though the Labor Management Relations Act itself allows union security provisions. The State law prevails over Federal law only where it is more restrictive in its union security provisions.

Many employees and their spokesmen have used this provision to further the law of the jungle in labor relations as it existed prior to the passage of the Wagner Act in 1935. They are using section 14 (b) to establish open shops and to fight unions and the advantages that they bring to workers.

Experience has shown that workers favor union shops. Originally the Taft-Hartley required that union shops could be approved only by a majority of the workers involved in a bargaining unit. This provision remained in effect for 4 years. During this period, the NLRB conducted more than 46,000 elections with the unions winning 97 percent of these. It became evident that this section served to