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Full text of "Investigation of improper activities in the labor or management field. Hearings before the Select Committee on Improper Activities in the Labor or Management Field"

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INVESTIGATION OF IMPROPER ACTIVITIES IN THE 
LABOR OR MANAGEMENT FIELD 



HEARINGS 

BEFORE THE 

SELECT COMMITTEE 

ON IMPROPER ACTIVITIES IN THE 

LABOR OR MANAGEMENT EIELD 

EIGHTY-FIFTH CONGRESS 

SECOND SESSION 
I>URSUANT TO SENATE RESOLUTIONS 74 AND 221, 85TH CONGRESS 



APRIL 23, MAY 6, 7, 8, AND 9, 1958 



PART 28 



Printed for the use of the Select Committee on Improper Activities in the 
Labor or Management Field 




INVESTIGATION OF IMPROPER ACTIVITIES IN THE 
LABOR OR MANAGEMENT FIELD 



HEARINGS 

BEFORE THE 

SELECT COMMITTEE 
ON IMPROPER ACTIVITIES IN THE 

LABOR OR MANAGEMENT FIELD 

EIGHTY-FIFTH CONGRESS 

SECOND SESSION 
PURSUANT TO SENATE RESOLUTIONS 74 AND 221, 85TH CONGRESS 



APRIL 23, MAY 6, 7, 8, AND 9, 1958 



PART 28 



Printed for the use of the Select Committee on Improper Activities in the 
Labor or Management Field 




UNITED STATES 

GOVERNMENT PRINTING OFFICE 

WASHINGTON : 1958 



Boston Public Library 
Superintendent of Documents 

AUG 8 -1958 



SELECT COMMITTEE ON IMPROPER ACTIVITIES IN THE LABO.i O.l 
MANAGEMENT FIELD 

JOHN L. McCLELLAN, Arkansas, Chairman 
IRVING M. IVES, New York, Vice Chairman 
JOHN F. KENNEDY, Massachusetts KARL E. MUNDT, South Dakota 

SAM J. ERVIN, Jr., North Carolina BARRY GOLDWATER, Arizona 

FRANK CHURCH, Idaho CARL T. CURTIS, Nebraska 

Robert F. Kennedy, Chief Counsel 
Ruth Young Watt, Chief Cl.rk 



CONTENTS 



Philadelphia Teamsters; Food Fair Stores, Inc., and Rolee Publications, 

Inc. 

Page 

Appendix 11169 

Tt'Stimony of — 

Barton, Blayney 11018 

Bertucci, Louis 10997 

Blank, Samuel A 11074 

Carroll, John Rogers 10826 

Clark, James P 11059 

Cohen, Arnold D 11090 

Cupp, Paul 11018 

Dunne, Robert 10951, 10967, 10996 

DeCarlo, Ralph . 10892, 10919 

Farr, Asa H 10886 

Gallagher, Arthur A 10838 

Gannon, U. F., Sr 11059 

Hanover, Harold C 10979 

Jaslow, Henry A 10957 

Kopeckv, Gebrge 11098, 11126, 11148 

Kramer, J. Albert 11036 

Landreth, Burnet, III 10877 

Lee, Robert i 10840 

Lefkowitz, Eleanor 10944, 10953 

Machold, Earle J 11011 

Mandell, Samuel P 11122, 11127 

McDevitt, James L 10865 

Miller, Reuben H 10925 

Nash, George L___ 10851, 10852 

Nixon, Carl 10991 

Polen, Bernard 10834 

Saxonoff, Ralph 10842 

Schwartz, JuHus S 11039, 11160 

Segal, Bernard G 11055 

Shore, Jack 11117 

Slattery, Robert 10910 

Smith, Elmer W 10898 

Stein, Louis 11130, 11149 

Strauss, Leon 10997 

Thomas, Larry Anderson 10857 

Trimble, Henry W., Jr 10986 

Voitsberger, DeForest M 10881 

Wolfe, Charles E 10951, 10967 

Wolfson, Julius 10850, 10852, 10854 

III 



EXHIBITS 

Introduced Appears 
on page on page 
29. A group of photographs showing damage done to the 

showroom and automobiles of a Pontiac dealer 10838 (*) 

30A. Bill from Girard Wallpaper & Paint Co. to local 596 

dated November 7, 1956, in the amount of $3.04 10843 11169 

30B. Canceled bill from Girard WaUpaper & Paint Co. to 
local 596 dated November 8, 1956, in the amount of 

$9.12 10843 11170 

30C. Bill from Girard Wallpaper & Paint Co. to local 596 

dated November 8, 1956, in the amount of $9.12 10843 11171 

31. Yearbook Pennsylvania Federation of Labor, 1953 10867 (*) 

32. Letter dated January 12, 1948, addressed to Mr. C. A. 

Thomas, S. S. White Dental Manufacturing Co., and 
signed "Pennsylvania Federationist, James L. IVIc- 
Devitt, president" 10869 (*) 

33A. Letter dated March 18, 1952, addressed to Mr. D. M. 
Voitsberger, S. S. White Dental Manufacturing Co., 
and signed "James L. McDevitt, president, Pennsyl- 
vania Federationist". __ 10869 (*) 

33B. Letter dated March 20, 1952, addressed to Mr. D. M. 
Voitsberger, S. S. White Dental Manufacturing Co., 
and siajned "James L. McDevitt, president, Pennsyl- 
vania Federationist" 10869 (*) 

33C. Letter dated March 26, 1953, addressed to Mr. D. M. 
Voitsberger, S. S. W^hite Dental Manufacturing Co., 
and signed "James L. McDevitt, president, Pennsyl- 
vania Federationist" 10869 (*) 

34. Letter dated April 29, 1952, addressed to Mr. Charles 

H. Laudreth, president, Penn's Manor Canning Co., 
Inc. and signed "James L. McDevitt, president, 
Pennsylvania Federationist" 10878 T(*) 

35. Letter dated May 9, 1952, addressed to Mr. Fred 

Nuspickle, Better Business Bureau of Philadelphia 
and signed by Burnet Landreth, 3d, secretary- 
treasurer, Penn's Manor Canning Co 10878 (*) 

36. Letter dated April 15, 1952, to Mr. Huch Smith, Better 

Business Bureau of Philadelphia and signed by George 
Meanv, secretarv-treasuer, American Federation of 
Labor! ^ 10880 (*) 

37. Letter dated January 8, 1948, addressed to Mr. D. E. 

Duvall, S. S. White Dental Manufacturing Co., and 
si'med by James L McDevitt, president, Pennsylvania 
Federation of Labor 10882 (*) 

38. A card Pennsylvania Federation of Labor which was 

si<^ned for an ad in the Pennsvlvania Federationist.. _ 10885 11172 

39. Check No. 10912 dated December 31, 1952, payable to 

Pennsylvania Federation of Labor in the amount of 

$1,000, drawn by Kingston Trap Rock Co 10887 11173 

39A. Check No. 12244, dated May 4, 1953, payable to Sam 
Kirsch in the amount of $1,000 drawn by Kingston 
Trap Rock Co 10888 11174 

39B. Check No. 15335, dated January 26, 1954, payable to 
Pennsylvania Labor Journal in the amount of $1,000 

drawn by Kimjston Trap Rock Co 10889 1 1 175 

40. Worksheets, analysis of receipts, and application of 
funds derived from advertisements in the Federa- 
tionist, taken from the annual reports of the Pennsyl- 
vania Federation of Labor, 1946 through 1954 10896 (*) 

• May be found in the files of the select committee 



CONTENTS 



Introduced Appears 
on page on page 

41. Letter dated June 30, 1950, addressed to Lewis W. 

Heath, vice-president, Pennsylvania Power & Light 
Co., Allentown, Pa., from James L. McDevitt, 
president, Pennsylvania Federation of Labor 10899 (*) 

42. Memorandum dated May 10, 1955; Merger Objectives — • 

signed John Bokel 10904 11176 

43. Four page file memorandum, notes on interview with 

Mr. George Nash, signed E. W. Smith and Edw. J. 

Brill 10907 (*) 

44. Letter dated February 14, 1950, addressed to Malcolm 

Adams, president, Penn Mutual Life Insurance Co., 
from James L. McDevitt, president, Pennsylvania 
Federation of Labor 10911 (*) 

4oA. Memorandum dated July 31, 1950, to Malcolm Adams, 
president, Penn Mutual Life Insurance Co. from 
W. J. Probst, manager, Sales Promotion and Adver- 
tising. Subject: Pennsylvania Federationist 10918 (*) 

45B. Special report from Better Business Bureau of Philadel- 
phia, re Pennsylvania Federation of Labor 10918 (*) 

46. Publication Pennsylvania Trade Unionist, labor-manage- 
ment edition 10927 (*) 

47A. Letter dated February 15, 1954, addressed to John N. 
Huebner, vice president, Pennsylvania Power & Light 
Co., Allentown, Pa., and signed by Ralph L. Lyons, 
president, Pennsylvania Trade Unionist 1092Q (*) 

47B. Letter dated May 7, 1955, addressed to Mr. Elmer Smith, 
Pennsylvania Power & Light Co., and signed by 
Edward H. Miller, secretary-treasurer, Pennsylvania 
Trade Unionist 10929 (*) 

47C. Letter dated February 9, 1957, addressed to Mr. E. L. 
Palmer, Pennsylvania Power & Light Co. and signed 
by Edward H. Miller, secretary-treasurer, Pennsyl- 
vania Trade Unionist 10929 (*) 

48A. Publication, New York State Federation of Labor, 

labor-management edition, Federationist, 1949 10944 (*) 

48B. Publication, New York State Federation of Labor, labor- 
management edition, Federationist, 1950 10944 (*) 

48C. Publication, New York State Federation of Labor, labor- 
management edition, Federationist, 1951 10944 (*) 

48D. Publication, New York State Federation of Labor, 

labor-management edition, Federationist, 1952 10944 (*) 

48E. Publication, New York State Federation of Labor, 

labor-management edition, Federationist, 1953 10944 (*) 

48F. Publication, New York State Federation of Labor, labor- 
management edition, Federationist, 1954 10944 (*) 

48G. Publication New York State Federation of Labor, labor- 
management edition, Federationist, 1955 10944 (*) 

48H. Publication, New York State Federation of Labor, labor- 
management edition, Federationist, 1956 10944 (*) 

481. Publication, New York State Federation of Labor, labor- 
management edition, Federationist, 1957 10944 (*) 

49. Invoice from Trucraft Printing Co., dated March 3, 

1953, for rubber stamp 10949 11177 

49A. Imprints of 3 stamps made by Trucraft Printing Co 10950 11178 

50. Contract between the State federation and Rolee Pub- 

lishing Co 10985 (*) 

51. Letter dated September 17, 1954, addressed to Mr. F. 

W. Climer, Goodyear Tire & Rubber Co., Inc., from 
George Mason, New York State Federation of Labor, 
with resolution form of the New York State Federation 
of Labor; letter addressed to Mr. Thomas Murray, 
president, New York State Federation of Labor, from 
Arden E. Firestone, Goodyear Tire & Rubber Co., 
Inc., enclosing check in the amount of $500 for con- 
tribution to the "Good Roads" campaign; and letter 
addressed to Mr. Firestone from Thomas Murray.. 10997 (*) 



VI 



CONTENTS 



Introduced Appears 
on page on page 

52. Letter dated February 28, 1952, addressed to Earle J. 

Machold, president, Niagara-Mohawk Power Corp., 

signed by D. M. Lion, director of publicity 11015 11179 

52 A. Letter dated February 5, 1953, addressed to Earle J. 
Machold, president, Niagara-Mohawk Power Corp., 
signed by George Mason 11015 11180 

53. Memorandum of agreement drawn up between Motor 

Transport Labor Relations Association group and 

local 107----, 11025 (*) 

54A. Check No. F-1373 dated December 9, 1953, payable to 
Ben Lapensohn in the amount of $1,500, drawn by 
Blank & Rudenko, attorneys at law 11075 11181 

54B. Check No. F-2037 dated March 15, 1954, payable to 
Ben Lapensohn, in the amount of $3,000, drawn by 
Blank & Rudenko, attorneys at law 11075 11182 

55. Worksheet of operating figures as of December 1954, 

Food Fair, Stores, Inc. showing list of stores operated 

with drops 11095 (*) 

56. Memorandum concerning stocks and bonds of Food 

Fair Properties, Inc., issued in September and Oc- 
tober 1955 11099 11183 

57. Memorandum, summary of stocks and bonds purchased 

and sold by labor officials 11101 (*) 

58. List of suggested names of labor men for consideration 

in connection with Food Fair Properties, Inc., stock-- 11111 (*) 
59A. Check No. 2313, dated September 23, 1955, payable to 
Jack Shore in the amount of $2,000 and signed by 

Ben Lapensohn 11118 11184 

59B. Check No. 2334, dated October 3, 1955, payable to Jack 
Shore in the amount of $10,000 and signed bv Ben 

Lapensohn : 11118 11185 

60A-E. Five stock certificates in the amount of $100 each on the 

Dan River Mills in the name of Samuel P. MandelL. 11125 (*) 
GOF. Treasurer's check No. M-53982, dated June 27, 1955, 
payable to Samuel P. Mandell in the amount of 

$10,000, drawn on Broad Street Trust Co 11125 11186 

60G. Charge to bank account of Ben Lapensohn, dated June 
23, 1955, in the amount of $10,000. Order 21660 
pay to Sidney Mandell on delivery of 500 shares of 

Dan River Mills J 11127 (*) 

Proceedings of — 

April 23, 1958 10825 

May 6, 1958 10857 

May 7, 1958 10919 

May8, 1958 11011 

May 9, 1958 11097 

*May be found in the flies of the select committee. 



INVESTIGATION OF IMPROPER ACTIVITIES IN THE 
LABOR OR MANAGEMENT FIELD 



WEDNESDAY, APRIL 23, 1958 

United States Senate, 
Select Committee on Improper Activities, 

IN the Labor or Management Field, 

Washington, D. C. 

The select committee met at 10 : 30 a. m., pursuant to Senate Resolu- 
tion 221, agreed to January 29, 1958, in room 357, Senate Office Build- 
ing, Senator John L. McClellan (chairman of the select committee) 
presiding. 

Present : Senator John L. McClellan, Democrat, Arkansas ; Senator 
Sam J. Ervin, Jr., Democrat, North Carolina; Senator Barry Gold- 
water, Republican, Arizona ; Senator Frank Church, Democrat, Idaho. 

Also present : Robert F. Kennedy, chief counsel ; Jerome S. Adler- 
man, assistant chief counsel; John B. Flanagan, investigator; Leo C. 
Nulty, investigator; Herbert J. Rose, Jr., investigator; Ralph De- 
Carlo, investigator ; Ruth Young Watt, chief clerk. 

(Members of the committee present at the convening of the session 
were : Senriors McClellan, Church, and Goldwater.) 

The Chairman. The committee will be in order. 

We are very happy to welcome this morning a new member of the 
committee. Senator Church of Idaho, who has been appointed by the 
Vice President to succeed Senator McNamara who resigned recently. 

Senator McNamara was rather faithful in attending the meetings 
of the committee and it was a great pleasure to work with him. 

While he and the Chair did not always agree upon some matters, 
our relations were very pleasant and it was a genuine privilege to be 
associated with him in this very important work this committee is 
doing. 

Senator Church is one of the youngest members of the Senate, both 
in age and also in point of service. In the brief time he has been in 
the Senate, he has demonstrated a capacity for work and a capacity for 
understanding and helping to solve and resolve the great problems 
that confront us as a Government and as a free country today. 

Senator Church, on behalf of each member of the committee, and all 
members of the staff, we welcome you. You will soon find that there 
is plenty of work for all of us to do. I know you are going to be 
occupied. 

We are surely glad to have you. 

Senator Church. Thank you very much. 

The Chairman. All right, Mr. Kennedy, call the next witness. 

Mr. Kennedy. Mr. Carroll has requested permission to address the 
Chair. 

10S25 



10826 IMPROPER ACTIVITIES IN THE LABOR FIELD 

STATEMENT OF JOHN ROGERS CARROLL 

Mr. Carroll. With your permission, Mr. Chairman 

The Chairman. To keep the record straight, and I am not doing 
this to cast any reflection in any way, but Mr. Carroll has been sworn, 
and at times has testified and now what is your choice ? 

Mr. Carroll. I am not going to state any facts relating to this. 

The Chairman. This may be regarded in the record as a statement of 
counsel. 

Mr. Carroll. May I say first that having been here for nearly 
a week and a half, I feel like an old hand, and I join in the chair- 
man's welcome to Senator Church. 

I agree with the chairman entirely that this committee is doing 
very important work, and that Senator Church on this committee 
will have much important work to do. 

As the committee is no doubt aware from the press, considerable 
publicity has been given to the problem of my simultaneous repre- 
sentation of Local 107 of the Teamsters Union and some of its oflS.- 
cers, business agents, and members who have been subpenaed here as 
witnesses. 

Up until now I have acted in accordance with an opinion rendered 
by the professional guidance committee of the Philadelphia Bar As- 
sociation on the 17th of March which said that that simultaneous 
representation was proper. 

As the Chair is undoubtedly aware, the committee met again yes- 
terday afternoon and has issued another opinion. 

I have, and I would like with the Chair's permission, to read into 
the record the text of that opinion. 

The Chairman. Counsel has previously read into the record at 
the request of a member of the committee, I believe, the original ruling 
of the committee to which he refers, and which sustained his posi- 
tion that there was no impropriety in his character of representation 
and the clients he was representing here. 

Questions arose during the development of testimony, however, 
that possibly threw a different light on it to that which the com- 
mittee of the Bar Association of Philadelphia had understood the 
facts to be at the time they rendered the first decision. 

Afterward, is was quite proper, I think, for Mr. Carroll now to 
read into the record the opinion of this committee as of yesterday. 

Mr. Carroll. Thank you, sir. I might preface it with this brief 
statement, that I have been, from the time I was admitted to the bar, 
a member of the Philadelphia Bar Association, and I am very proud to 
be. 

We asked their guidance on this, and I agreed in advance to be 
bound by what they said. I intend to continue that because although 
we are not always in agreement, we believe in Philadelphia in reason- 
able disagreements of opinion. 

Therefore, now that the committee has, I may say, changed its 
mind, I have agreed to abide by it, and I intend to abide by what they 
have decided. Their opinion reads as follows : 

In our opinion to you of March 11, 1958, we stated in the concluding paragraph 
the following : 

"While the attorney at this stage of the proceedings is free to, and, indeed, 
must, presume his client innocent, recent experience indicates that evidence 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10827 

before the committee may show improper actions on the part of the officers of a 
union. Such evidence may give rise to an actual conflict of interest between the 
union and its officers." 

We have examined the notes of the sworn testimony before the United States 
Senate Select Committee on Improper Activities in the Labor or Management 
Field— 

I may say parenthetically that those notes I provided to the com- 
mittee myself 

which indicate that a conflict of interest may arise between the particular 
labor union under investigation and certain of its members, both of whom you 
represent. 

In the authoritative work on the ethics of the legal profession, Legal Ethics, 
by Henry S. Drinker, Esq., of the Philadelphia bar, the author, in discussing 
canon VI of the Canons of Professional Ethics of the American Bar Association, 
which is the canon under consideration, states : 

and the coimnittee quotes : 

"In observing the admonition of canon VI to avoid the representation of con- 
flicting interest, the lawyer must have in mind not only the avoidance of a 
relation which will obviously and presently involve the duty to contend for one 
client what his duty to the other presently requires him to oppose, but also the 
probability or possibility that such a conflict may arise. 

"In such cases, as will later be pointed out, even though the clients both con- 
sent to the assumption of the relation, the lawyer may eventually regret that 
he did not initially refuse to take the case. 

"The appearance of a lawyer on both sides of the same controversy, particu- 
larly in cases of some notoriety" — 

and I need not say that this is such a case — 

"will often give an impression to the public which is most unfortunate for the 
reputation of the bar, and which, of itself, should be decisive. 

"The temptation to get into an interesting, important, or profitable case is 
always alluring, and the lawyer is very prone to rationalize himself to the belief 
that he will be able to steer safely between Scylla and Charybdis, when sober 
reflection or discussion with his partners would bid him pause. 

"Where there is any serious doubt, it should be resolved by declining the 
second retainer. He should avoid not only situations where a conflict of interest 
is actually presented, but also those in which a conflict is likely to develop." 

It is our unanimous opinion that you are now in a situation where you cannot 
represent both the labor union and the members involved in the pending sena- 
torial proceeding. 

It is signed, J. Wesley Williams, chairman of the professional guidance com- 
mittee, and Walter E. Allessandroni, chancellor of the Philadelphia Bar Associa- 
tion. 

May I say that this was taken over the telephoiie in the early hours 
this morning, and my transcript of it may not be the exact words of 
the committee. 

I noticed as I was reading through it that there were a couple of 
grammatical errors, and please charge them to me and not to the bar 
association's committee. 

That is the gist of their opinion, sir, and now I should add the fol- 
lowing : In this morning's newspaper it was reported that my partners, 
one of whom you gentlemen have met, or at least you, Senator Mc- 
Clellan, advised me to believe they did — 

I would like to place in the record the telegram which they sant to me, 
with your permission, sir. 

The Chairman. Without objection, the telegram may be read into 
the record. 



10828 lAIPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. (\\RROLL. It is addressed to John Rojrers Carroll, Willard Hotel. 
"\Vashin<i;ton, D. C, and it reads as follows : 

Tlie suidanee committee just ruled we are now in a situation we c-anuot repre- 
sent botli local 107 and the members involved in the pending senatorial pro- 
ceeding. 

As a result of this change in the guidance we have requested, we direct you 
to appear before the Senate committee at the first opportunity and tell them of 
the ruling of the guidance committee and ask them to postpone the interrogation 
of all our clients for a reasonable period of time so that they may engage new 
counsel and so that new counsel may read the record, be brought up to date by 
you, and consult with the clients. 

If the postponements are granted, withdraw entirely from these proceedings 
at once on behalf of any interest whatever. If the ix)stponements are not 
granted, continue to represent our clients until new counsel has been engaged and 
ask them to engage new counsel at once. 

Michael Von Moschzisker and Raymond .7. Bradley. 

Subsequent to the receipt of that telegram. I held conferences with 
my clients, with my partners, and with other members of the bar whose 
advice I respect. The sum total of all of that advice is the following 
decision : That our tirm has, as of today, and in fact about an hour ago, 
perhaps a little less, decided and communicated to local 107 of the 
Teamsters Union that we will not represent them any further; that 
I have decided that I will continue to represent such of the witnesses 
before this committee who have asked me to represent them. 

They have retained me on a personal basis, and no union funds! 
will be received by me, and I will not in any respect represent local 
107 in any further matter before this committee. 

There are only three people who have, as of now, asked me to rep- 
resent them before this committee. They are Eaymond Cohen, Ed- 
ward Walker, and Arthur Brown. They are the only people I will 
now represent. 

They have asked me personally and on a personal basis to represent 
them, I will do so. 

I want the entire committee to understand that our tirm tliis morn- 
ing, not without serious consideration, has decided that we will not 
represent local 107 any further in anything. 

This morning Mr. Bradley, who has entered an appearance in the 
Court of Appeals for the Third Circuit on behalf of local 107 in 
the Xational Labor Relations Board matter, is withdrawing his 
appearance. 

I have entered an appearance for local 107 in the District Court of 
the District of Columbia in a suit against this committee to get back 
its books and records. I will, this afternoon or immediately when I 
am free, withdraw that appearance on behalf of local 107. 

We are not representing local 107 any more. Are there any 
questions ? 

The Chairmax, When you say local 107, do you mean to include 
its officers who are under investigation ? 

;Mr. Carroll. I think I have said, sir, that Mr. Cohen, ^Ir. Walker, 
and yiv. Brown 

The Chairmax. What position do they hold ? 

Mr, Carroll. Mr. Cohen, as you know, is secretary-treasurer. Mr. 
Walker is recording secretary. I am not certain of Mr. Brown's posi- 
tion. I think he is a member. I will be able to tell vou better 

The Chairmax. Mr, Cohen, Mr. Walker, and Mr. Brown ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10829 

Mr. Carroll. Yes, sir. They are the only three ])eople whom I 
previously represented, who remain under subpena. They hold posi- 
tions in the union, but I am not representing- them as union counsel. 
I no longer represent this union. 

The Chairman. Are there any observations by any member of the 
connnittee i 

Senator Goldwater. Mr. Chairman? 

The Chairman. Senator Goldwater. 

Senator Goldwater. In view of this development, where a ques- 
tion was raised as to the propriety of a lawyer being retained to de- 
fend the union with union dues, can we expect a similar ruling in the 
future when this conflict of interest occurs? It would be reasonable 
to expect that. 

The Chairman. You mean a ruling from whom, Senator? 

Senator Goldwater. I would ask the Chair's oi)inion as to the 
possibility of a ruling like that when we have conflict of interest in 
the future as we have had in the past. 

The Chairman. Each case, of course, would have to stand u]3on its 
own merits or lack of merits, as the facts are developed. It is cliificiilt 
for the Chair to make a ruling in advance. Primarily, the matter 
would address itself to the bar association. Some would charge it 
would be an arbitrary ruling for the Chair just to rule that a lawyer 
who has api^eared under the circumstances that Mr. Carroll has ap- 
peared was ineligible to represent his clients before this committee. 

The Chair has tried not to do that. It is something that should 
address itself first to the conscience of the attorney. He should know 
whether he is engaged in a conflict of interest. It would have to defer, 
to a very great extent, to the conviction, to the conscience, of the at- 
torney who appears. 

As this hearing progressed, it became evident to me, at least, that 
there was a conflict of interest or the strong probability of it. 

In fact, I thought it was inescapable that it did exist. You can 
appreciate, however, that to rule tliat way and simply to bar an at- 
torney meant delay. I explained once before that I was proceeding 
and letting the attorneys continue in order to try to expedite these 
hearings. Such a development as this will obviously make this hear- 
ing more expensive. With respect to some of our proceedings, at least, 
we will have to defer them. There is also a criminal case pending in 
New York that is involved in this deferment. 

That has been adjusted so that this committee might proceed. It 
might take a further readjustment in that or some other readjustment 
on the part of the committee. We have proceeded, and I don't think 
any serious harm has been done by our continuing to proceed. Again 
I say the burden of the propriety or impropriety of it rests primarily 
with counsel himself and, second, with the bar association when they 
have knoAvledge and information of it. I will say this about counsel 
in this instance, obviously he acted in good faith in the beginning when 
he requested his bar association committee having jurisdiction of this 
matter to pass judgment on it. 

Whether they fully understood and appreciated then what has de- 
veloped since, I do not know. Very likely they did not. But as the 
revelations were made by this committee, and facts were developed, 
it became pretty obvious to the chairman that there was definitely a 



10830 IMPROPER ACTIVITIES IN THE LABOR FIELD 

conflict of interest, or such a strong probability of one that any attorney 
who continued to rex:)resent the two interests, as I see them, was cer- 
tainly in a precarious position. 

I think you acted wisely, Mr. Counsel, and your firm has acted wisely, 
by withdrawing from some of these clients, particularly the union. 
You can make your choice to represent the union and not represent 
these other individuals who are members of the union, and whose in- 
terests definitely are involved if the facts that have been developed 
before this committee are correct, that these funds have been misused. 

Certainly, their interests are not the same as the interests of the 
union officials who possibly have misused the funds. 

There obviously is a conflict. I can't pass on hypothetical cases. 
We will have to wait until they arrive. Even if the Chair made a 
decision, the committee could overrule him if they thought him 
wrong. Of course, any member of the committee can raise a ques- 
tion at any time when any facts or anything transpires which give 
the appearance of a conflict of interest of attorneys appearing before 
the committee. 

(At this point Senator Church withdrew from the hearing room.) 

The Chairmax. Senator Goldwater ? 

Senator Goldwater. Mr. Chairman, I am not concerned particu- 
larly with this instance, but in the past, and I suppose in the future, 
we will find lawyers who are defending either the union or members 
of the union, of these misdeeds, who are being paid out of union funds. 
That is my interest in the case. Not being a lawyer, a conflict of 
interest is a rather difficult thing for a layman to define. I do definitely 
feel that no union has the right to spend dues money to defend its mem- 
bers of the charges that are being made here. I did want to coimnent, 
though, if the Chair will indulge me just a moment or two. 

I sat yesterday afternoon, very interested in the colloquy between 
Senator Curtis and Senator Kennedy and Mr. Carroll. 

I felt that there was some question of ethics in approaching a pros- 
pective client in the halls of Congress. I had thought, along with 
the chairman and Senator Kennedy, that there vras a conflict of 
interest in this case. But in listening to both Senator Curtis and 
Senator Kennedy yesterday afternoon, and in reading the transcript 
this morning — and I don't say this to discredit or disparage either 
one — it sounded to me like a lawyer was being given a little bit of a 
chastisement for defendant for defending his client. It has always 
been my conception of American law that someone has to defend. 
Again 1 say I am sure that was not the intent of either of the Sen- 
ators, but it is the language of the record, and it was carried in some 
of the press in that way. 

If we are to question the lawyer's motives in defending a client or 
taking a case, then I think we do harm to the lawyer. 

I hope I never get in the position of having to not plead guilty 
when I am guilty, but if that ever comes, I want a good lawyer 
around, and 1 expect to find one. I just wanted to bring that up 
because I couldn't quite agree with the language that was used yes- 
terday. 

I think Mr. Carroll, again from the layman's standpoint, has done 
a good job in representing these people whom I, along with the com- 
mittee, feel to be guilty of the worst kind of crimes against the union 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10831 

movement. But, again, guilty or not guilty, I think Americans are 
entitled to a fair trial, if this be a trial. 

The Chairman. Are there any other comments ? 

Mr. Carroll. May I say just one or two things, sir ? 

First of all, thank you. Senator Goldwater. I appreciate your 
comments. As you know from yesterday's testimony, I was not 
present at that supposed incident between Mr. Markowitz and Mr. 
Keenan. 

However, as between the two versions of it, if there is any substan- 
tial difference, I have no doubt that I believe Mr. Markowitz, and I 
believe he acted entirely properly. I appreciate, too, your suggestion 
tliat it might harm the lawyers to have this sort of apparent public 
chastisement. I am more concerned, sir, that it does harm to the prin- 
ciple of the sixth amendment, which guarantees the right to counsel. 

I think that on that account, what you have said is important. 

I would say just one or two other things. Mr. Chairman, you and I 
have had our differences of opinion this week, both as to what the 
evidence has shown and as to what we have been doing. I have no 
doubt that we may continue to have such differences. As I pre- 
viously said, I come from a city where reasonable men can always 
disagree, and I think that democracy thrives on it. I think you 
would probably get pretty bored with these hearings if there weren't 
some disagreements. I think I would, too. 

Secondly, you did, in your last statement, raise some question, or 
at least it seemed so to me, as to whether the bar association committee 
was fully apprised at the time we asked for their guidance, of what 
was likely to be proved. 

(At this point. Senator Ervin entered the hearing room.) 

Mr. Carroll. I don't want to be repetitious about this thing, but I 
did read into the record the other day the opinion of that committee, 
which shows, and I will just read these 3 or 4 words from it 

The Chairman. I think I can save the counsel on that. 

I made no charge of the counsel. As I said, I think you acted in 
good faith in presenting it. But I think it would be even difficult for 
me in the beginning of a hearing of this nature, to be able to lay all of 
the facts before a committee like that, as the facts might later develop. 

Mr. Carroll. Yes, sir, but I want this one fact to be clear, that the 
committee's opinion recites that I told them that — 

Counsel has been advised by counsel for said committee that the committee pro- 
poses to prove in such hearings that all officers and business agents of the union 
have been guilty of defalcations regarding the union's funds. 

That is what your counsel or assistant counsel advised me and I 
told the committee in advance everything that I then knew from you. 

The Chairman. I thought I said a moment ago I thought you acted 
in good faith. I thought I said that. 

Mr. Carroll. You did, sir, but you also put a little aside in there 
w^hich seemed to say that maybe I hadn't told them everything. 

The Chairman. I don't know how the record reads, and I will 
change it if this will clarify it, but I don't see how a committee, before 
the hearings actually begin, can know what may develop. 

I am not chastising tlie committee. But based on the developments 
now, I think the committee has acted properly. That is my view. As 



10832 IMPROPER ACTIVITIES IN THE LABOR FIELD 

I said a moment ago, these things first address themselves to the 
conscience and judgment of the attorney himself . 

j\Ir. Carroll. Yes, sir. I would like to say just one thing about 
that, that my conscience is entirely clear and has been throughout. I 
trust it will continue to be. I would like to say that the connnittee has 
found not an actual conflict, but as their opinion states, as I read it to 
you a few minutes ago, this is a situation in which a conflict may 
iirise — a potential, not an actual conflict of interest. I do not say, 
sir, that I agree with the opinion of the Philadelphia Bar Association 
committee. I do say, however, that as a member of that bar associa- 
tion, and having great respect for the judgments of the association 
and this particular committee, I have agreed to abide by the decision. 

I have made the decision on that basis. I thank you for hearing 
me. 

Mr. Kennedy, Could I make a statement ? 

Mr. Markowitz, Mr. Chairman ? 

Mr. Kennedy. I think that, as w\as stated yesterday, the key part 
of this question was not these attorneys defending Mr. Cohen or any 
of these other individuals who were accused of taking money, or 
where there was evidence of forgery or any of these other matters. 
This was a question of these attorneys being paid out of union funds, 
and, at the same time, appearing with these witnesses who invoke the 
fifth amendment where there was evidence and where there was tes- 
timony before the committee show^ing alterations in the records of the 
union, where tliere was evidence and information showing forgeries, 
where there was evidence and information concerning wholesale mis- 
use of union funds. 

This was the key point. I think that Senator Kennedy and Sena- 
tor Curtis yesterday raised those questions. 

Nevertheless, in spite of that evidence for a week, where these facts 
were developed, these two attorneys attended a meeting on Sunday of 
the union, on behalf of Mr. Cohen, made a speech to the membership, 
and did not disclose any of tliis information or any of this evidence 
that was presented before the committee. 

We are not critical of Mr. Cohen or au}^ of the other officials who 
attended the meeting at all. But the attorneys then received a $1,000 
increase in salary. There was a question of the i^ropriety of that. I 
think Senator Curtis, Senator Kennedy, and some of the other mem- 
bers of the committee support the position that has been taken by 
the Philadelphia bar. 

Senator Goldwater. I agree with you, Mr. Kennedy, completely, 
in everything that you said. I pointed out that the transcript reads, 
and that sounded to me as a layman yesterday, in spite of all of those 
accusations — and I agi-ee w^ith them — that we were criticizing the 
right of a man to have counsel. Whether the counsel is right or wrong 
or acts with propriety in or out of here didn't enter into that part of 
my discussion. I wanted the record to show that if that was the at- 
tempt, and I don't think it was, it is not the duty nor the prerogative 
of tlie committee to criticize anybody for having legal advice. ' 

Mr. Kennedy. I would like to point out, for instance, that even 
Dave Beck, and certainly we had a great deal of information regard- 
ing him, even Dave Beck had the propriety and judgment to go 
out and get an outside attorney when he^ appeared before the 
committee. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10833 

Senator Goldwater. I remember his name. 

Mr. Carroll. JSIay I say one thing in response to Mr. Kennedy ? 

Senator Er\tn. Mr. Chairman, I want to say something. I have 
always hesitated 

]\Ir. Carroll. I haven't noticed that. 

Senator Ervin. I have always hesitated to judge my fellow travelers 
to the tomb. I have had very little to say. 

But one thing is so obvious in this pattern that it can't be erased. 
Here the connnittee has been trying to investigate whether or not those 
Avho have been controlling this union, this particular local, have been 
raiding the union treasury, and we see here in the glare of the noonday 
sun in this hearing, before this committee, that those who control this 
union are using the union funds to prevent it being determined 
whether or not they have raided the union treasury and to what extent. 
To my mind, no amount of argument or anything else can erase the 
plain fact tliat that is a gross misuse of union funds, and that persons 
who would countenance it are not fit to occupy positions of authority 
over other human beings. 

The Chairman. Are there any other questions? 

Mr. Carroll. Senator Ervin, I think you were not here when I 
announced that, in accordance with the opinion of yesterda}'- afternoon 
of the bar association, our firm has withdrawn as counsel for the 
union. I no longer represent this union. I am not being paid by 
union funds. 

1 would say one thing in response to you, ]\f r. Kennedy. 

I think Senator Goldwater has already saitl it. It will be a sad day 
for the right to counsel when tlie union's lawyers can't attend a regular 
union meeting and speak freely. So far as the mention of the $1,000 
raise is concerned, it is now and forever gone. 

Mr. Kenxedy. I am glad to hear that. 

Senator Er\^n. There is nobody that would defend the right of 
counsel to appear more than I. My father was a lawyer for 65 years. 
I spent most of my life in the law rather than in politics. My only 
son is a lawyer. I respect the right of everybody to have counsel. I 
think it is essential to the ascertainment of truth. But, frankly, I 
cannot understand how it can conform to ethical principles for lawyers 
to occupy inconsistent positions. 

I can't reconcile it with ethics for a lawyer to appear for a union 
or for union officers at union compensation, to prevent the disclosure 
of Avhat the officers of the union have been doing to the detriment of 
the dues-paying members. 

I just can't reconcile that. No man can serve two masters. Life 
shows that, and the law shows it. 

I just can't reconcile using union funds to prevent the disclosure 
of truth as to whether or not union officers liave been raiding the 
union treasury. 

Mr. Carroll. Senator, on tlie principle, you and I liave no disagree- 
ment. As I stated yesterday, we probably liave ditl'erent ophiions 
upon the facts that have been i)roduced here. However, so far as that 
is concerned as of now, the question is moot with respect to me. I 
liave taken up entirely too much time of this committee on this ques- 
tioiL I thank you for your indulgence, and now I would like to let 
tlie connnittee get back to its serious business. 



10834 IMPROPER ACTIVITIES IN THE LABOR FIELD 

The Chairman. Mr. Markowitz, did you wish to say something? 

You indicated you \yanted to say something. The Chair doesn't 
want to deny you the right to make a brief statement, if you desire. 

Mr. JNIarkowitz. I think there is nothing I can add, sir. I merely 
want the record to show tliat I am withdrawing my appearance on 
behalf of Mr. Cohen, Mr. Walker, and Mr. Brown, or any other officer 
or delegate of local 107 who may appear before this committee. 

The CiiAiRMAx. Do I understand you are not even representing Mr. 
Cohen, Mr. Walker, or Mr. Brown ? 

Mr. Markowitz. That is correct, sir. 

The Chairman. You are withdrawing from all of them ? 

Mr. Markowitz. That is correct, sir. 

The Chairman. I understand Mr. Carroll still represents those 
three. 

Mr. Markowitz, I heard that statement, sir. 

The Chairman. But you are withdrawing ? 

Mr. Markowitz. Yes, sir. 

The Chairman. All right. 

Call the next witness, please. 

First, I don't know who represents the union now, or I don't know 
whether any lawyer does or not. 

Mr. Carroll. The union has not been subpenaed before tliis com- 
mittee, sir. I understand they are not here. 

Senator Ervin. That was what puzzled me all the time, that they 
were not here, and yet they had attorneys to represent the people from 
wdiom the committee was seeking the truth with respect to whether the 
union officers were raiding the union treasury. 

Mr. Carroll. That is exactly what it is, sir, that the union agreed 
to provide counsel for those of its members and officers who were 
subpenaed here. 

The union's books and records are in the possession of this commit- 
tee. That is the only connection in which the union, as such, has been 
or is before the committee. So far as I know, there is no question 
about that at present. I don't represent them any more, so I can't 
speak about that. 

The Chairman. All right. The Chair understands there is no one 
here representing the union. There is no request pending before the 
committee for any continuance on account of the union not having 
counsel. Therefore, we will proceed. 

Call the next witness. 

Mr. Kennedy. Mr. Bernard Polen. 

The Chairman, You do solemnly swear the evidence you shall give 
before this Senate select committee' shall be the truth, the whole truth, 
and nothing but the truth, so help you God ? 

Mr. Polen. I do. 

TESTIMONY OF BERNAED POLEN 

The Chairman. Please state your name, your place of residence, 
and your business or occupation, Mr. Polen. 

Mr. Polen. My name is Bernard Polen. My business is at 4201 
North Broad Street, Shore Brothers Pontiac, in Philadelphia. 

The Chairman. Do you waive counsel ? 

Mr. Polen. Yes, I do. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10835 

The Chairmax. All right, INIr. Kenned}' . 

Mr. Kennedy. You spell your name P-o-l-e-n, is that correct? 

Mr. PoLEN. That is correct, sir. 

Mr. Kennedy. And the first name is Bernard. 

You sell Pontiacs, do you ? 

Mr. Polen. Yes, we are Pontine dealers. 

Mr. Kennedy. Retail dealers? 

Mr. PoLEN. Retail dealers. 

Mr. Kennedy. In November of 1956, was there a picket line placed 
out in front of your place of business ? 

Mr. Polen. Yes, sir, there was. 

Mr. Kennedy. And that picket line came from what union ? 

Mr. PoLEN. 596 and 724 were the numbers on the signs. 

Mr. Kennedy. 724 of what international ? 

Mr. PoLEN. Machinists, I believe it was. 

Mr. Kennedy. International Brotherhood of Machinists ? 

Mr. PoLEN. I suppose that is the technical name. 

Mr. Kennedy. And the other was teamsters ? 

Mr. PoLEN. Yes. 

Mr. Kennedy. 596 of the teamsters ? 

Mr. PoLEN. Yes, sir. 

Mr. Kennedy. Had you heard from the representatives of those 
unions prior to that time that they were interested in organizing your 
employees ? 

Mr. PoLEN. I had not heard prior or subsequent to the time. 

Mr. Kennedy. Did any of your employees indicate that they wished 
to join the union? 

Mr. Polen. Xone of them indicated to me that they wished to join 
the union. 

Mr. Kennedy. Had any election been held prior to the time the 
picket lines appeared? 

Mr. PoLEN. No, sir. 

Mr. Kennedy. And no representative of either one of these unions 
came to you and said they had a majority of the employees and wanted 
to organize? 

Mr. PoLEN. That is correct. 

Mr. Kennedy. Do you know who they were trying to organize ? 

Mr. Polen. I really do not. 

Mr. Kennedy. What did the signs that they carried say 

Mr. Polen. The signs si " ^ " ~ ' 

cars are not union drivers." 

They varied some. The signs varied at various times. I don't 
recall the exact wording. But the gist of the thing was that they were 
not union drivers. 

Mr. Kennedy. Did you have drivers working for you ? 

Mr. Polen. We have no drivers as such. Our emj)loyees drive cars, 
of course. 

Mr. Kennedy. And those were the ones evidently, the employees 
that drove the cars and did other work were the ones that the two locals 
were interested in ; is that right ? 

Mr. Polen. I don't know. I suspect they were perhaps interested 
in the mechanics also but I wouldn't know. 

Mr. Kennedy. You do not know ? 

21243— 58— pt. 28 2 



10836 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. PoLEN. No. 

Mr. Kknxedy. Now, that occurred in early November of 1956? 

Mr. PoLKN. I think the day the pickets ai)peared was (3ctober 30, 
11)50. 

Mr. Kexxedy. Now, did you have any damage doue to your auto- 
mobiles!? 

Mr. PoLEN. Sometime during the night of November 8 or the early 
morning hours of November 9, our place was broken into and acid or 
l)aint remover, and I don't know which it was, ponied on 8 new auto- 
mobiles, and 4 windshields on other cars were broken. 

This was the day of announcement of the new car for us. 

Mr. Kennedy. It was the day of the announcement { 

i\Ir. PoLEN. Yes, sir. 

Mr. Kennedy. That, Mr. Chairman, will be an important date as 
Ave go along, the night of November 8 or the early morning hours of 
November 9 ; is that right ? 

Mr. PoLEN. That is right. 

Mr. Kennedy. Some 12 cars were damaged? 

Mr. PoLEN. That is right. 

Mr. Kennedy. Acid was thrown on 8 new Pontiacs, and on 4 others 
the windshields were busted ; is that right ? 

Mr. Polen. That is right. 

Mr. Kennedy. Nobody was apprehended in connection with that? 

Mr. PoLEN. No, sir. 

Mr. Kennedy. Now subsequently, did you have any conversations 
with any of the pickets or were any threats made to you about what 
you should do ? 

Mr. Polen. No, sir. 

]\Ir. Kennedy. Did you have any conversations at all ? 

INIr. PoLEN. I never had any conversations with any one. 

Mr. Kennedy. Now, did you take any steps to try to get protection 
for your automobiles that were being brought in ? 

Mr. Polen. Yes. We called the Philadelphia police. Of course 
they knew about it, but I couldn't get very much assistance from them. 
So we tried to get guards from private detective agencies to protect 
our place during the hours we were closed. I had great difficulty in 
obtaining guards. Most of the detective agencies the minute they 
heard there was picketing shied clear of furnishing guards. 

AVe finally did obtain a guard for our service station, and a guard 
for our showroom, and they were with us until the picketing stopped. 
It was somewhere around the middle of December. 

As a matter of fact there were some weeks after that. 

Mr. Kennedy. Did you have any difficulty obtaining new cars? 

Mr. PoLEN. Yes, we had great difficulty. The Anchor Motor 
Freight who are the trailer people who deliver these new cars to us 
from the assembly plants refused to deliver cars to us and we had 
to have these cars sent to various groups, and sometimes as far as 
60 or 70 or 80 miles away, and had to drive them in ourselves. 

INIr. Kennedy. When you were driving them in, and driving through 
the picket line, were you subjected to any threats at that time? 

Mr. Polen. No,sir^ 

Mr. Kennedy. Nobody had any conversations with you ? 

Mr. Polen. No, sir. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10837 

Mr. Kennedy. None of the pickets did ? 

Mr. PoLEN. No, sir, 

]Mr. Kennedy. You say the picket line left at the end of December ? 

JNIr. PoLEN. May I amend that, there was one instance when I picked 
up two cars at Gallag-her's warehouse, which is not too far away from 
our showroom, and this was I think on the 9th of November, on a 
Saturday mornino;, and tliei-e were a group of men. 

Mr. Kennedy. Was that the day you found out about the damage? 

Mr. Polen. Yes, sir. This was announcement time for us and we 
were without cars to show, and we were in a rather difficult position 
at that time and I got the factory to agree to let me have two cars out 
of the warehouse and I went down there with our sales manager and 
there were a group of men outside of the warehouse w'ho made all 
sorts of threats. 

However, we drove past them, and brought the cars in. 

Mr. Kennedy. That was from the pickets outside the place ? 

Mr. Polen. Yes, sir. 

Mr. Kennedy. xVnd then they left ? 

Mr. Polen. Outside of Gallagher's and not outside of our place. 

Mr. Kennedy. That was another place where they were picketing 
cars ? 

Mr. Polen. Yes, sir. 

]\Ir. Kennedy. And the pickets left from your place of business at 
the end of December '? 

Mr. Polen. Just before Christmas, I think. 

Mr. Kennedy. Other Pontiac companies in Philadelphia were also 
being picketed at the same time ? 

Mr. Polen. Yes, sir. 

INIr. Kennedy. Did you have any other damage other than this one 
incident you told us about i 

Mr. Polen. No, sir. 

INIr. Kennedy. What was the total loss of business and the total cost 
to you of this picket line that was placed outside of your business? 

Mr. Polen. Well, it is very difficult to state it in dollars. Certainly 
it cost us a great deal of business and it was very inconvenient, and 
the guards that we had to furnish were expensive. It cost us thou- 
sands of dollars ; I would hesitate to say. 

Mr. Kennedy. How much was tlie damage itself, the acid and 

Mr. Polen. $1,200 or $1,300, as I recall. 

Mr. Kennedy. Then you had to pay for the new guards? 

Mr. Polen. We had to pay the guards. 

Mr. Kennedy. And then you had the loss of business ? 

Mr. Polen. I think we had tremendous loss of business, because 
the public seldom is aware of the difterence between a strike and an 
organizational picket line. They see pickets outside of your place 
and they assume that there is a strike going on. Many of them will 
not enter the place. 

Mr. Kennedy. Once again this was a situation where no repre- 
sentative of the union had approached either your employees or your- 
self and no one asked you ? 

Mr. Polen. I certainly never had any contact with any of them, 
and from what my employees tell me, they haven't. 

Mr. Kennedy. There was no election held indicating the employees 
wanted a union? 



10838 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. PoLEN. Xot asked for or held. 

INIr. Kenxedy. No cards were signed by your employees ? 

Mr. PoLEX. None that I know of. 

Mr. Kennedy. You are not aAvare of any ? 

Mr. PoLEN. No. 

Mr. Kennedy. And you never signed up with the union? 

Mr. PoLEN. No, sir. 

The CiiAiRMAx. Did any of your employees approach you, a com- 
mittee of them, or any one representing them, expressing an interest 
in joining the union or having a union shop ? 

Mr. PoLEN. Never at any time, before or since. 

The Chairman. So all of this just occurred without any warning, 
without any reason to anticipate it ? 

Mr. PoLEN. Absolutely no reason for it that I know of, and there 
was no warning of it, and there was no explanation of it. 

The Chairman. I hand you a series of nine pictures, I believe, 
showing automobiles and the damage to them. Will you identify 
those pictures if you can. 

( Documents were handed to the witness. ) 

Mr. PoLEN. Yes, sir; it is our showroom, and our cars, and the 
pictures are correct, sir. 

The Chairmax^. That group of pictures may be made exhibit No. 29. 

(Documents referred to were marked "Exhibit No. 29'' for refer- 
ence and may be found in the files of the select committee.) 

The Chairman. How did they enter your place of business, and 
how did they gain entrance to get access to the cars ? 

Mr. PoLEN. We have a door in the garage part of our building, and 
the lock on that door was broken, and the door itself was splintered, 
and that is the way they evidently got in. 

The Chairmax. Actually, it was a forcible entrance? 

Mr. PoLEx. Yes, sir. 

The Chairmax. All right, are there any questions ? 

Thank you vei*y much, Mr. Polen. 

Mr. IvENNEDY. Mr. Gallagher, please. 

The Chairman. Do you solemnly swear that the evidence, given be- 

►re this Senate select committee shall be t' 
and nothing but the truth, so help you God ? 

Mr. Gallagher. I do. 

TESTIMONY OF ARTHUR A. GALLAGHER 

The Chairman. State your name, and your place of residence, and 
your business or occupation. 

Mr. Gallagher. Arthur A. Gallagher, 516 Fisher's Eoad, Bryn 
Mawr, Pa., operating our business at several locations in Philadelphia, 
with our main office at pier 3, North Delaware Avenue. 

The Chairmax^. Do you waive counsel ? 

Mr, Gallagher. Yes. 

The Chairmax^. Well, proceed. 

Mr. Kennedy. Mr. Gallagher, what is your business? 

Mr. Gallagher. Trucking and warehousing. 

Mr. Kennedy. And one of the things you warehouse is the Pontiac 
cars, Pontiac automobiles? 

Mr. Gallagher. Cars for General Motors. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10839 

Mr. Kennedy. And prior to the delivery to the retail stores ; is that 
right ? 

Mr. Gallagher. Yes. We receive, store, and deliver to the dealers. 

Mr. Kennedy. Was a picket line placed out in front of your place 
of business in early November of 1956 by the teamsters ? 

Mr. Gallagher. I wouldn't call it a picket line. I would call it 
just a group of men in cars walking in front of our place, and we 
oj^erated through the line. 

Mr. Kennedy. Did any representative of the Teamsters Union 
approach you in November, or early November, prior to that time? 

Mr. Gallagher. Yes. The teamsters asked that we not deliver cars 
to the Pontiac dealers. 

Mr. Kennedy. Wliat did you say to them ? 

Mr. Gallagher. We took the position that the cars were owned by 
General Motors, and we would deliver them to the dealers. 

Mr. Kennedy. Who had approached you from the teamsters and 
had this conversation with you ? 

Mr, Gallagher. I wasn't apj)roached directly, but my brother John 
told me that Eddy Walker of 107 asked him not to make the deliveries, 
since Anchor Motor Freight were members of 107, and it would be 
embarrassing not to recognize the picket line. 

Mr. Kennedy. Anchor Motor Freight, are they the company that 
brought the General Motors cars to you ? 

Mr. Gallagher. Yes, sir. 

Mr. Kennedy. As I understand the situation, the}^ wanted you to 
cease to make deliveries to the retail stores, to the retail shops in Phila- 
delphia selling the automobiles, while they were striking these retail 
places ; is that right ? 

Mr. Gallagher. Yes. 

Mr. Kennedy. And you said that because of the fact that these 
Pontiac automobiles and these other automobiles belonged to these 
individuals, you were going to continue to make the deliveries ? 

Mr. Gallagher. Yes, sir. 

Mr. Kennedy. And they then put a picket line out in front of your 
place, or a group of men walked up and down ? 

Mr. Gallagher. I wouldn't call it a picket line. It was a group of 
men. 

Mr. Kennedy. But you yourself or you and your drivers were not 
on strike, or your employees were not on strike ? 

Mr. Gallagher. My men were 107, delivering the cars, and they 
were not on strike. 

Mr. Kennedy. So they were taking this action against you because 
of the fact that you had this business relationship with these other 
stores ; is that right ? 

Mr. Gallagher. Yes. 

Mr. Kennedy. And when you continued to make the deliveries, 
was there any damage then done to any of the automobiles in vour 
lot? 

Mr. Gallagher. On November 8 or early morning hours of No- 
vember 9. 

Mr. Kennedy. The same day as Mr. Polen ; is that right ? 

Mr. Gallagher. Yes. 

Mr. Kennedy. Go ahead. 

Mr. Gallagher. We had seven cars splattered with acid. 



10840 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. Seven of the new Pontiiic automobiles ? 

Mr. Gallagjier. Seven of the new Point iac automobiles, yes. 

Mr. Kennedy. Did you ever find out who was responsible for it? 

Mr. Gallagher. We asked the union if they did it, and they said 
no, they didn't do it. 

Mr. Kennedy. Oli, that settled it then i 

Mr. Gallagher, Yes, sir. 

Mr. Kennedy. Did they continue to walk up and down in fronts 

Mr. Gallagher. Yes. 

Mr. Kennedy. After that? 

Mr. Gallagher. Yes, sir, 

Mr. Kennedy. How long did they stay there ? 

Mr. Gallagher. Maybe a few more days, and maybe 5 days. 

Mr. Kennedy. And then they left ? 

Mr. Gallagher. They left. 

Mr, Kennedy. And you heard no more from them ? 

Mr. Gallagher. Well, we had no business. The Anchor Motor 
Freight, all of the cars were diverted from our warehouse, and so we 
were out of business as far as making deliveries. Anchor was de- 
livering the cars to out-of-town dealers. 

Mr. Kennedy. How much business did you lose by the activities 
of the union ? 

Mr. Gallagher. I would say $10,000. 

Mr. Kennedy. What was the damage done to the automobiles and 
the acid thrown on them ? 

Mr. Gallagher. $600 to $700. 

Mr. Kennedy. And you were never directl}' involved in it at all 
yourself ? 

Mr. Galla(;her. Myself, you mean? 

Mr. Ivennedy. With the union? Your company never had a. dis- 
pute with the union directly in tliis whole matter, and you weren't 
involved yourself? This was an attempt to organize the Pontiac 
dealers ? 

Mr. Gallagher. Yes, sir, 

Mr. Kennedy. You were not involved yourself ? 

Mr. Gallagher. Xo. 

Mr. Kennedy. Your people were already members of local 107 ? 

Mr. Gallagher. Yes, sir, and 596. 

Mr. Kennedy. That is all. 

The Chairman. Are there any other questions? 

All right, thank you very much. 

Call the next witness. 

Mr. Kennedy. Mr. Robert Lee. 

The Chairman. Do you solemnly swear that the evidence, given 
before this Senate select connnittee shall be the truth, the whole truth 
and nothing but the truth so help you God ? 

Mr. Lee. I do. 

TESTIMONY OF ROBERT LEE 

The Chairman. State your name and your place of residence or 
occupation. 

Mr. Lee, Robert Lee, 712 Arlington Road, Penn Valley, Pa. My 
business is Robert Lee Pontiac, at Wayne and Shelton Avenues, in 
Germantown, Philadelphia, 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10841 

The Chair3iax. If you can speak a little louder, we will appreciate 
it, Mr. Lee. 

Mr. Lee. I am sorry, I will try. 

The Chairmax. Proceed. 

Mr. Kennedy. Mr. Lee, you operate a used car lot, do you ^ 

Mr. Lee. Along with my new car agency. 

Mr. Kennedy. Your new car agency is a Pontiac dealer ? 

jNIr. Lee. Yes, sir. 

Mr. Kennedy. Were you picketed starting early in Xovember of 
1956? 

Mr. Lee. I and all of the Pontiac dealers had pickets, whatever the 
morning was, unexpectedly. 

Mr. Kennedy. About November 5, 1951:, on or about that time ? 

Mr. Lee. Yes, sir. 

Mr. Kennedy. Prior to that time had any representative of the 
union approached you about joining the union ? 

Mr. Lee. The pickets were a complete shock to me when I saw them 
on that morning. 

Mr. Kennedy. Had anybody from the union, any representative 
approached you ? 

Mr. Lee. At no point either before, during, or after did I have any 
representation made to me by the union. 

Mr. Kennedy. There was no attempt by representatives of the 
union to have you sign a contract ? 

Mr. Lee. None. 

Mr. Kennedy. And did any of your employees approach you and 
indicate that they wished to join a union ? 

Mr. Lee. None. On the contrary, they approached me indicating 
their dislike of the union. 

^Ir. Kennedy. Did any of them join in marching up and down 
with the pickets i 

Mr. Lee. Never. 

Mr. Kennedy. So there wasn't any indication that your employees 
Avere interested in having the Teamsters Union as their bargaining- 
agent ? 

Mr. Lee. Never. As a matter of fact a little bit more than a year 
before, they had rejected another union in an election. 

Mr. Kennedy. Was there any damage done to any of the automo- 
biles on your lot ? 

Mr. Lee. On November 28, 1 can't vouch for the date, I think that 
is correct, at about 11 o'clock at night, 24 cars had acid splattered on 
them, used cars that is. 

(At this point, the following members were present:) Senators 
McClellan and Ervin.) 

Mr. Kennedy. Did you find or ever learn who was responsible 
for it? 

Mr. Lee. Never. 

Mr. Kennedy. How much was the damage that was done? 

Mr. Lee. $1,200. 

Mr. Kennedy. Did you lose business as well as the damage that 
was done to your automobiles ? 

Mr. Lee. Definitely. 

Mr. Kennedy. How much was the loss ? 



10842 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Lee, It is quite impossible to really estimate. The people who 
would not cross what they felt was a picket line — as Mr. Polen said, 
it is impossible to tell the difference between an organizational picket 
line and a strike. But it had to be very harmful. As a matter of 
fact, the day following the acid incident, the pickets w^ere changed. 
They sent me two very special cripples. 

Mr. Kennedy. Do you mean cripples to walk up and down ? 

Mr. Lee. In front of my used-car lot. 

Mr. Kennedy. And there was no way for people to know that 
these were not employees of yours, but just outsiders ? 

Mr. Lee. Everybody thought that I had fired them. 

Mr. Kennedy. The picket lines remained for how long? 

Mr. Lee. A month and a half. 

Mr. Kennedy. Your loss of business during that period of time was 
in the thousands of dollars ? 

Mr. Lee. Many thousands. 

Mr. Kennedy. The picket line ultimately went away, is that right, 
in December? 

Mr. Lee. A few days before Christmas. 

Mr. Kennedy. During this whole period of time, you were never 
approached by a representative of the union or by your employees ? 

Mr. Lee. Never, from either. 

Mr. Kennedy. That is all. 

The Chaikman. Are there any questions? 

If not, thank you very much. 

At this point, the Chair will insert in the record an affidavit from 
Mr. Thomas D. McBride, supplementing his testimony of a few days 
ago. I will instruct the reporter that in the permanent record, print 
this affidavit at the conclusion of Mr. McBride's testimonj' , so it will 
all appear together. 

Mr. Kennedy. Mr. Saxonoff, Ralph Saxonoff. 

(At this point, the following members were present : Senators Mc- 
Clellan and Ervin.) 

The Chairman. You do solemnly swear the evidence you shall give 
before tliis Senate select committee shall be the truth, the whole truth, 
and nothing but the truth, so help you God ? 

Mr. Saxonoff. I do. 

TESTIMONY OF EALPH SAXONOFF 

The Chairman. State your name, your place of residence, and 
3''our business or occupation. 

Mr. Saxonoff. My name is Ralph Saxonoff, I live at Y066 Dorcas 
Street, and I partly own and operate a retail and wholesale wallpaper 
and paint business. 

The Chairman. You waive counsel, do you ? 

Mr. Saxonoff. Yes, sir. 

Mr. Kennedy. Girard Wallpaper & Paint Co. ? 

Mr. Saxonoff. A-r-d, that is right. 

Mr. Kennedy. It is located at'the northeast corner of 13th Street 
and Girard Avenue, is that correct, Philadelphia ? 

Mr. Saxonoff. That is right. 

Mr. Kennedy. Is that anyw^here near the location of Local 596 of 
the Teamsters ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10843 

Mr. Saxonoff. It was. 

Mr. Kennedy. How far away from their headquarters? 

Mr. Saxonoff. It was around the corner from their headquarters. 

Mr. Kennedy. Do you sell paint remover in your place of business? 

Mr. Saxonoff. Yes, sir. 

Mr. Kennedy. I would like to ask you : In November of 1956, do 
your records show or indicate that any paint remover was sold 

Mr. Saxonoff. I believe there was. 

Mr. Kennedy. To anyone ? 

The Chairman. The Chair presents to you what appears to be three 
invoices, bills. I ask you to examine them and state whether you 
identify them. These are dated November 7, November 8, and No- 
vember 8, 1956. 

(The documents were handed to the witness.) 

Mr. Saxonoff. Those are our invoices. 

The Chairman. Those are your invoices ? 

Mr. Saxonoff. Yes, sir. 

The Chairman. They may be made exhibit No. 30--A, B, and C. 

(The documents referred to were marked "Exhibits Nos. 30-A, B, 
and C" for reference, and will be found in the appendix on pp. 11169- 
11171.) 

The Chairman. Will you state what that invoice is ? 

Take No. 1, the one on top. State what it represents. 

Mr. Saxonoff. It represents a gallon of Strip-X. 

The Chairman. A gallon of what ? 

Mr. Saxonoff. Strip-X. 

The Chairman. What is Strip-X? 

Mr. Saxonoff. Paint and varnish remover. 

The Chairman. Paint and varnish remover ? 

Mr. Saxonoff. Yes, sir. 

The Chairman. What is the date of it ? 

Mr. Saxonoff. November 7. 

The Chairman. 1956? 

Mr. Saxonoff. 1956. 

The Chairman. To whom was the invoice issued ? 

Mr. Saxonoff. Local 596. 

The Chairman. Was that a charge item ? 

Mr. Saxonoff. It originally was a charged item. I have no way 
of knowing when it was paid, because I didn't date it. Normally 
we do, but sometimes we don't. 

The Chairman. But it was paid ? 

Mr. Saxonoff. It was paid. 

The Chairman. It was charged to local 596 ? 

Mr. Saxonoff. Yes, sir. 

The Chairman. Do you know personally who made the purchase ? 

Mr. Saxonoff. Honestly, I don't. 

The Chairman. Look at the next one. Wliat does it show? 

Mr. Saxonoff. The next one is a canceled bill. 

The Chairman. A canceled bill ? 

Mr. Saxonoff. That is right. 

The Chairman. What does that indicate? 

Mr. Saxonoff. It indicates it could have been ordered and then 
canceled. 

The Chairman. That is on what date ? Wliat date is that ? 



10844 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Saxonoff, November 8, 195G. 

The Chairman. What does it indicate was ordered ? 

Mr. Saxonoff. Three gallons of Klen-Strip. 

Tlie Chairman. Three gallons of the same product as the first bill 
or invoice covered ? 

Mr. Saxonoff. Yes, sir. 

The Chairman. Do you have another one ? 

Mr. Saxonoff. Yes,*sir. 

The Chairman. What does that show ? 

Mr. Saxonoff. That is the same date. 

The Chairman. What is it? 

Mr. Saxonoff. That is three gallons of the same item. 

The Chairman. Three gallons of the same item ? 

Mr. Saxonoff. Yes, sir. 

The Chairman. Was it actually sold and delivered ? 

Mr. Saxonoff. I believe so. 

The Chairman. To whom was it charged ? 

Mr. Saxonoff. Local 596. 

The Chairman. Was it later paid ? 

Mr. Saxonoff. It must have been, because it was found in our 
paid files. 

The Chairman. Found in your paid files ? 

Mr. Saxonoff. Yes, sir. 

The Chairman. What is the charge for tlie tliree gallons ? 

Mr. Saxonoff. $9.12. 

The Chairman. Would that indicate, since one was canceled — 
what was the amount of the other one ? That was for three gallons ? 

Mr. Saxonoff. Yes. They are both the same. They have both been 
priced the same. 

The Chairman. One is shown to have been canceled I 

Mr. Saxonoff. Yes, sir. 

The Chairman. The second one of that date indicates that after 
ordering and canceling, they changed their mind again and bought? 

Mr. Saxonoff. No. It could be — you see, when we take our orders, 
we put them in one book, and then we copy our orders from the 
book. It could have been that I was busy that day and I could have 
made out duplication bills. 

The Chairman. You can't be positive? 

Mr. Saxonoff. I can't be positive, no, sir. 

The Chairman. When you say you made out duplicate bills, are 
you saying now that that last purchase of three gallons may not 
have been made at all ? 

Mr. Saxonoff. Yes, I believe it should have been paid because of 
the fact that it was found in our paid files. 

The Chairman. In other words, according to your records, every- 
thing indicates that it was purchased, delivered, and paid for ? 

Mr. Saxonoff. Yes, sir. 

Mr. Kennedy. On examination, how much, actually, was pur- 
chased ? The last one you said was three gallons. 

Mr. Saxonoff. Three and one-quarter gallons. 

Mr. Kennedy. One gallon was purchased wlien? 

Mr. Saxonoff. The 7th. 

Mr. Kennedy. And the three gallons? 

Mr. Saxonoff. The 8th. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10845 

Mr. Kennedy. Would you look at those invoices again? Do those 
invoices indicate not only who the charge was made to but who picked 
them up ? 

Mr, Saxonoff. No, sir, only on one invoice. There is some scrib- 
bling there, but I don't know who it is. 

Mr. Kennedy. You don't recognize that name? 

Mr. Saxonoff. No. 

Mr. Kennedy. Would you examine that carefully, please? 

Mr. Saxonoff. I looked at it very carefully. 

Mr. Kennedy. You have never been able to identify the name on 
tliere ? 

Mr. Saxonoff. I never had any reason to. 

Mr. Kennedy. Please return it to me. Would you examine that 
again, please, and tell me if the name on there is not L. Thomas ? 

(The document was handed to the witness.) 

Mr. Saxonoff. Yes ; I guess you could make it out as such. 

Mr. Kennedy. Do you know an L. Thomas as a member of local 
596 ? 

Mr. Saxonoff. No. I know 596. I know a lot of the men ; I have 
seen them. But I don't know L. Thomas. 

Mr. Kennedy. You don't know him as a business agent of local 596 ? 

Mr. Saxonoff. No, sir. 

Mr. Kennedy. That is all. 

The Chairman. Are there any otlier questions? 

Mr. Kennedy. The key date, of course, is the fact that the luerchan- 
dise was purchased on the 7th, and I believe the other date given was 
the 8th, and the acid was thrown, or the paint remover was thrown, 
on these automobiles of these two previous witnesses on the evening of 
the 8th or early morning of the 9th. 

The Chairman. All right. 

Call the next witness. 

Thank you very much, sir. 

Mr. Kennedy. Tlie records of local 596 indicate, Mr. Chairman, 
that the bill was, in fact, sent to local 596; I would like to ask Mr. 
Larry Thomas to appear as the next witness. 

The Chairman. Mr. Thomas, come forward, please. 

(At this point, the following members were present: Senators Mc- 
Clellan and Ervin.) 

Mr. Markowitz. Mr. Chairman, before Mr. Thomas is sworn — I 
think he is out in the hall someplace — I Avould like to make this state- 
ment: I am counsel, sir, my office is counsel, for local 596, and have 
been for several years. I am, of course, aware of the problem of the 
conflict of interest which has been raised by this committee, which has 
been raised by Mr. Carroll before the committee on professional guid- 
ance of the Philadelphia Bar Association. 

No accusation has ever been made to me of the existence of any con- 
flict of interest between my representation of the local on the one hand, 
and Mr. Thomas on the other hand. As late as last Monday, I have 
attempted to inquire of a member of the staff of this committee in 
Philadelphia what subject matters were going to be discussed involv- 
ing local 596, and I could not obtain any such information. From the 
testimony I have heard so far today, I am not aware of, and do not 
believe that there does exist, a conflict of interest between the officers 
of local 596 on the one hand and the local union on the other. 



10846 IMPROPER ACTIVITIES IX THE LABOR FIELD 

I am interested in knowning this committee's position on that 
subject, because it seems to me that Mr. Thomas is entitled to counsel, 
as the chairman has stated, and, if it is necessary, or if the committee 
believes that there does exist a conflict, I would like the opportunity 
of presenting that question to the committee on professional guidance 
of the Philadelphia Bar Association, and having their determination 
of that issue. 

The Chairman. Do I understand that you represent Mr. Thomas ? 

Mr. Markowitz. I do, sir. 

The Chairman. Has he retained you ? 

Mr. Markowitz. No, sir. 

The Chairman. In other words, the union has retained you ? 

Mr. Markowitz. That is right, sir. 

The Chairman. What is Mr. Thomas' position ? Business agent ? 

Mr. Kennedy. Business agent and recording secretary; is that 
right? 

Mr. Markowitz. I am not sure. 

Mr. Kennedy. You represent 596, don't you ? 

Mr. Markowitz. I just haven't gotten notice of his position. 

Mr. Kennedy. How long have you represented 596 ? 

Mr. Markowitz. Three or four years. 

Mr. Kennedy. You don't know" who the business agent and record- 
ing secretary of the union is ? 

'Mr. Markowitz. Mr. Thomas is a business agent, but I don't Imow 
what his exact position is, I don't have that information available. 

The Chairman. Where is the witness ? 

Mr. Markowitz. The witness is here, sir. As you can appreciate, 
Mr. Chairman, I don't want to involve myself in any difficulty with 
the bar association or violate in any way the canons of ethics of the 
American Bar Association. I have my personal opinion, which I 
think I have stated as to the status of the record in this matter at 
this stage, but I want to tread very carefully, and I don't want to 
appear for Mr. Thomas if there is the slightest doubt of the nature 
that this committee has raised. 

The Chairman. The committee will take a 3-minute recess. 

(Brief recess.) 

(At the taking of the recess, the following members were present : 
Senators McClellan and Ervin. ) 

(At the reconvening of the session at the end of the recess, the 
following members were present: Senators McClellan and Ervin.) 

The Chairman. The committee will come to order. 

You are not under oath. I want to ask 3'ou some questions. Do 
you have a lawyer to represent you ? 

Mr. Thomas. I do. 

The Chairman. Wlio is he ? 

Mr. Thomas. Mr. Eichard Markowitz. 

The Chairman. Did you retain him? 

Mr. Thomas. The local retained him. 

The Chairman. The local retained him. 

Mr. Markowttz. May I make a coimnent to the committee in pri- 
vate ? 

The Chairman. Yes. 

(At this point, there was an off-the-record discussion privately 
with the committee.) 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10847 

The Chairman. The committee lias considered this problem, and 
it is becoming an ever-increasing one. Obviously, we will have to 
establish some kind of x)recedent about it. 

I think, certainly, the better propriety is that when members of a 
union who are called here to be questioned as witnesses, the better 
procedure would be, and, certainly, it would be then beyond any ques- 
tion of impropriety, for tlie witnesses who are members of a union, 
who are called in here to testify to secure their own counsel. 

I do not believe it is a proper practice, and I doubt the ethics of it, 
for the union to furnish them an attorney simply when they are not 
charged witli anything, but when the only interest the committee has 
is to get their testimony and to get the truth. If a witness feels that 
his testimony is such that if he answered questions truthfully they 
might tend to incriminate him, I seriously doubt the propriety of 
union dues being used to pay an attorney simply for that purpose. 

Therefore, at least in this instance, based upon the information the 
committee has, and the circumstances attending the information that 
the committee desires from this witness, the Chair is going to rule 
that the union should not, in this instance, pay attorney fees for this 
Avitness. 

Therefore, since it appears that the union has supplied or provided 
the attorney who is here present today to represent the witness, the 
Chair, with the approval of the committee, will not hear his testi- 
mony today, but will defer the taking of this witness' testimony until 
such time as he has had reasonable opportunity to procure an at- 
torney of his own choice. 

There is a question about Mr. Markowitz. I am not charging him 
with any act of bad faith at all. He evidently felt that possibly he 
could represent tliis witness. But I think the committee is going to 
have to establish a procedure here that will take this thing out of the 
realm of speculation or hypothesis with respect to ethics. Hereafter, 
unless the committee overrules the Chair or we change our minds 
about it for some good cause shown, some good reason sufficient to 
cause us to do so, we are going to require that witnesses who appear 
before the committee, wdio are members of a union or officers of a 
miion, if they want personal representation, will have to secure coun- 
sel of their own, counsel not paid for by the union. 

Mr. Markowitz. Senator, of course you understand that I have 
been acting in accordance with the opinion of the professional guid- 
ance committee of the Philadelphia Bar Association, which was in 
existence up until yesterday. 

The Chairman. Mr. Markowitz, there is no criticism at all on the 
part of the committee with respect to you, or directed to you, in con- 
nection with tlie Chair's ruling, none whatsoever. It is a situation 
that has developed here, but it is one that has to be dealt with. It 
becomes obvious it must be dealt with. The Chair is undertaking to 
deal with it according to our best judgment. 

Mr. Markowitz. I would like to point out to the chairman that 
there are two other witnesses in a similar situation. 

Possibly I can discuss that with Mr. Kennedy. 

Mr. Kennedy. I was going to ask you about that. Does the same 
situation apply to them ? 

The Chairman. Name the two witnesses and bring them forward, 
please. 



10848 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Markowitz. Mr. Louis Bertucci and Mr. Ijeon Strausse. 

The Chairman. Counsel reminds me, and I think I made it clear 
but if I didn't, for the record, I will clarify it. I said where wit- 
nesses feel that if they gave a truthful answer to a question, a truthful 
answer might tend to incriminate them, that I did not feel that the 
uion dues-paying members should be required to pay for attorney 
fees of members of the union or of officers of the union under those 
circumstances. Where a witness wants to come in and give the in- 
formation that the committee desires, just to have someone advise 
him with respect to his legal rights, I think that would be all right, 
if he is going to give the testimony. But where he is under the 
compulsion or under the impression that if he gave truthful answers 
to the questions asked that he might be incriminating himself if he 
is in that position, and takes that position, I don't think the union 
dues-paying members ought to have to pay for his attorney fee. 
That is the ruling of the Chair, unless I am overruled. 

I only have one other member present, which is a quorum for the 
purpose of these hearings. 

Mr. Markowitz. I might say. Senator, I do not agree with the 
Chair's ruling. Of course, the Chair has made its ruling, and I 
respect it. 

I would like the record, however, to show that I do not agree witli 
it. I believe the Chair is in error. However, because of the circum- 
stances, I have raised the problem here and presented it to the Chair 
for its determination. 

I understand, sir, that you have suggested to these witnesses that 
they obtain other counsel. I would assume that you will give them 
a reasonable time and postpone their interrogation for the present, 
give them a reasonable time to obtain counsel. 

The Chairman. That is what the Chair stated a few moments ago. 
That is why I called the other two at this time. 

Will you state your names, gentlemen ? You are not under oath. 

Mr. Bertucci. Louis Bertucci. 

The Chairman. What is your name ? 

Mr. Strausse. Leon Strausse. 

The Chairman. Have you gentlemen attorneys? 

Mr. Strausse. Mr. Markowitz. 

Mr. Bertucci. Mr. Markowitz. 

The Chairman. You didn't secure an attorney, but he has been 
provided by the local, I understand, by the union. 

Mr. Strausse. Yes. 

Mr. Bertucci. Yes. 

The Chairman. That was my understanding. I said you are not 
a witness at the moment. I am simply trying to get information on 
which to guide the committee in its procedure. Can you indicate — 
and this should be asked you in private but if you have it in mind 
to do so — can you indicate whether you intend to avail yourself of the 
fifth amendment? 

Mr. Markowitz. I don't know whether that is a fair question to 
ask a witness, sir, in a public proceeding. 

The Chairman. I agree with you. I am just trying to expedite it. 

Mr. Markowitz. I think it probably depends upon the question- 
which is asked, sir. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10849 

The Chairman. I will put it this way. Based upon the ruling of 
the Chair, and you have heard my ruling — have you, gentlemen? 

Mr. Bertucci. Yes. 

Mr. Str^vusse. Yes. 

The Chairman. Based upon that ruling, do you desire now to pro^ 
cure other counsel ? 

JNIr. SiT^AUSSE. Yes. 

Mr. Bertucci. Yes. 

The Chairman. All right. I thought I understood the situation. 

Gentlemen, you will be given reasonable time within which to. 
procure counsel of your own choice, not to be paid by miion dues, 
union funds. You may secure any counsel you desire, as long as it 
does not bring back a situation of conflict of interest. I am not sug- 
gesting any counsel to you or excluding any attorney whom you might 
select. 

A reasonable time means that you should act promptly about the 
matter. You will keep in touch with the committee, with the chief 
counsel, Mr. Kennedy, or Mr. Adlerman, the assistant counsel, and 
let us know promptly when you have secured counsel. 

You will remain under the same subpena, and you will be subject 
to being called, and you will respond to the call of the committee 
when you are notified to appear. Do you agree? 

Mr. Thomas. Yes. 

Mr. Bertucci. Yes. 

Mr. SniAussE. Yes. 

The Chairman. All right. Keep in touch with either Mr. Ken- 
nedy, or Mr. Adlerman, and get counsel as expeditiously as possible. 

Senator Ervin ? 

Senator Ervin. I was going to say, Mr. Chairman, that I think the 
Chair has made a ruling which is advisable in the light of the expe- 
rience we have here. There are involved in here at least three sepa- 
rate interests. One is the interest of Congress in finding out the truth 
in respect to these matters we have been inquiring about, so we can 
determine whether it is necessary in the public interest to enact leg- 
islation to minimize a repetition of these offenses alleged to hav& 
been committed. Of course, Congress is interested in getting tha 
truth. Then you have the members of the union, whose dues ara 
paid in, who are supposed to be represented and have their rights 
protected by union officers, and they are interested in getting the. 
truth, or at least they ought to be. 

Then you have the union officers who are charged, in effect, or sus- 
pected of malfeasance and misfeasance in office, and they are inter- 
ested in suppressing the truth. 

You have the finances of the members, essentially paid in by the. 
members, who ought to be interested in getting the truth, which are 
used to prevent the truth being disclosed. That is the long and short 
of it. There is no way that you can change those facts. I think you 
have the dues of the union members used to protect the officers 
against disclosures of facts and to prevent Congress from ascertain- 
ing the facts. For those reasons, I think that the ruling of the Chair- 
is wise and advisable under the circumstances. 

The Chairman. Are there any other questions or statements ? 



10850 IMPROPER ACTIVITIES IN THE LABOR FIELD 

All right, you are excused, subject to the conditions which the 
Chair has announced. 

Call the next witness. 

Mr. Kennedy. I would just like to say, Mr. Chairman, that yes- 
terday I mentioned that 596 had been put in trusteeship with Ray- 
mond Cohen as trustee in 1955. I believe that actually he took over 
as administrator or assistant administrator in August or September 
of 1 956, rather than in 1955. 

Mr. Markowitz. That information is correct. I so advised Mr. 
Kennedy yesterday afternoon. 

The Chairman. The information that it was 1956 instead of 1955 
is correct ? 

Mr. Markowitz. There was an implication, sir, that Mr. Cohen 
was trustee or administrative trustee at the time of certain incidents 
in 1955, which was incorrect. 

The Chairman. We will let the permanent record be corrected 
accordingly. 

Thank you very much. Is there anything else now ? 

Mr. Kennedy. One more witness. Mr. Julius Wolf son. 

This is a diilerent matter, Mr. Chairman. 

The Chairman. Do you solemnly swear the evidence you shall give 
before this Senate select committee shall be the truth, the whole truth, 
and nothing but the truth, so help you God ? 

Mr. WoLFSON. I do. 

TESTIMONY OF JULIUS WOLTSON, ACCOMPANIED BY COUNSEL, 
EONALD N. RUTENBERG 

The Chairman. State your name, your place of residence, and your 
business or occupation. 

Mr. WoLFSON. My name is Julius Wolfson, 645 Ashbourne Road, 
Cheltenham. I am a garage owner. 

The Chairman. A garage owner ? 

Mr. WoLFSON. Yes. 

The Chairman. Do you have counsel with you ? 

Mr. Wolfson. Yes. 

Mr. RuTENBERG. Roiiald N. Rutenberg, Senator, a member of the 
Philadelphia bar. 

Mr. Kennedy. You operate a garage at 967 North Eighth Street? 

Mr. WoLFSON. Right, sir. 

Mr. Kennedy. How many employees do you have ? 

Mr. WoLFsoN. About eight. 

Mr. Kennedy. About eight employees ? 

Mr. Wolfson. Yes. 

Mr. Kennedy. Are they members of any Teamsters Union ? 

Mr. WoLFsoN. Tliey are members of 596. 

Mr. Kennedy. Wlien did they become members of local 596 ? 

Mr. WoLFSON. I do not remember, sir. 

Mr. Kennedy. About how long ago, approximately ? 

Mr. WoLFSON. I believe in 1955. 

Mr. Kennedy. Did you sign a contract with local 596 at that time, 
1955? 

Mr. WoLFSON. I refuse to answer under the fifth amendment. 

Mr. Kennedy. You refuse to answer what ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10851 

Mr. WoLFSON, The question under the fifth amendment. It may 
tend to incriminate myself. 

Mr. Kennedy. On the question of whether you signed a contract 
with local 596 ? 

Mr. WoLFsoN. Yes, sir. 

Mr. Kennedy. You, as an employer, refuse to answer the question 
as to whether you signed a contract with local 596 ? 

Mr. WoLFSON. Yes, sir. 

Mr. Kennedy. Did a representative or a group of representatives 
from local 596 come to visit you ? 

Mr. WoLFSON, I refuse to answer under the fifth amendment. It 
may tend to incriminate myself. 

Mr. Kennedy. Did you know Mr. Benjamin Lapensohn ? 

Mr. WoLFSON. I refuse to answer under the fifth amendment. I may 
tend to incriminate myself. 

Mr. Kennedy. Did representatives of local 596 come to your garage, 
state that they wanted to organize your employees, and tell you at that 
time that they would put a picket line outside your place of business 
unless you signed a contract ? 

Mr. WoLFSON. I refuse to answer under the fifth amendment. 

Mr. Kennedy. Did Mr. Lapensohn then come along and say that he 
thought he could make some arrangements for you ? 

Mr. WoLFSON. I refuse to answer under the fifth amendment. 

Mr. Kennedy. What you would have to do was to pay a certain 
amount of money ; is that right ? 

Mr. WoLFSON. I refuse to answer under the fifth amendment. 

Mr. Kennedy. Isn't it correct that you were interviewed by an in- 
vestigator of our committee, that the investigator went into this whole 
matter in detail, that you told him about the payments that you had to 
make to Ben j amin Lapensohn ? Isn't that correct ? 

Mr. WoLFSON. I refuse to answer under the fifth amendment. 

Mr. Kennedy. And that these payments were periodic payments ; is 
that right? 

Mr. WoLFSON. I refuse to answer under the fifth amendment. 

Mr. Kennedy. You have a great opportunity, a great chance, Mr. 
Wolf son, to help and assist the committee in its work. 

Is it your position that you do not want to help us in attempting 
to find the truth in this matter ? 

Mr. WoLFSON. I refuse to answer under the fifth amendment, sir. 

The Chairman. Mr. Nash, come forward and be sworn. You do 
solemnly swear the evidence you shall give before this Senate select 
committee shall be the truth, the whole truth, and nothing but the 
truth, so help you God ? 

Mr^NASH. I do. 

TESTIMONY OF GEORGE L. NASH 

The Chairman. State your name, your place of residence, an.d your 
business or occupation. 

Mr. Nash. My name is George L. Nash. I reside at 337 77th Street, 
Brooklyn, N. Y., investigator for the General Accounting Office. 

The Chairman. How long have you been with the General Account- 
ing: Office ? 



10852 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Nash. About 3 years. 
The Chairman. What capacity ? 
Mr. Nash. Investigator, 

The Chairman. Investigator. Do you know Mr. Julius Wolf son,, 
who sits to your right ? 
Mr. Nash. Yes, sir. 
The Chairman. You have been assigned to this committee, have 



you 



Mr. Nash. I have, sir. 

The Chairman. How long have vou been working for the commit- 
tee? 

Mr. Nash. About 9 months, sir. 

The Chairman. 9 months. In the course of your duties with the 
committee, did you have occasion to interrogate Mr. Julius Wolfson ? 

Mr. Nash. I did. 

The Chairman. At what time and place ? 

Mr. Nash. I interrogated Mr. Wolfson on February 13, 1958, at his 
garage, located at 967 North Eighth Street, Philadelphia, 

TESTIMONY OF JULIUS WOLPSON— Resumed 

The Chairman. Mr. Wolfson, do you want to try to cooperate with 
this committee as a good citizen of this country and give us the facts? 
I don't see anything in here that would likely incriminate you, if you 
were shaken down, and had to pay out money to protect yourself. 

If you want to take that position, of course, that is your privilege. 

Mr. Wolfson. I would like to take the position of the fifth amend- 
ment, sir. 

The Chairman. In other words, you are going to take the fifth 
amendment. You are not going to give the committee any informa- 
tion. You are taking the position that if you do give information in 
response to these questions or give evidence and testimony in response 
to them, truthful answers to these questions might tend to incriminate 
you ; is that correct ? 

Mr, Wolfson, That is right, sir. 

TESTIMONY OF GEOEGE L. NASH— Resumed 

The Chairman. Mr. Nash, you say you interviewed Mr, Wolfson 
when ? 

Mr. Nash, On February 13, 1958, 

The Chairman. Will you make a statement to the committee regard- 
ing that interview and the information Mr. Wolfson gave you at that 
time? 

jNIr, Nash, Mr, Wolfson informed me that in April 1954 

Mr, Kennedy, Just a moment. 

The Chairman, It is suggested to the Chair that you wrote a memo- 
randum at the time you talked to him ? 

Mr, Nasii, I did, sir. 

The Chairman. At the time you interviewed Mr, Wolfson ? 

Mr. Nash. I did. 

The Chairman. Did you make a memorandum of his statements at 
that time ? 

Mr. Nash. I did. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10853 

The Chairman. Did you make them in his presence ? 

Mr. Nash. I took notes in his presence, sir. 

The Chairman. You took notes in his presence, the notes from which 
you wrote the memorandum ? 

Mr. Nash. Yes, sir. 

The Chairman. Do }ou have the notes and the memorandum ? 

Mr. Nash. I have the memorandum, sir. 

The Chairman. You have the memorandum. How soon did you 
write up the memorandum after you interviewed him ? 

Mr. Nash. I would say either that day or the following day, sir. 

The Chairman. And you had your notes before you when you pre- 
pared the memorandum ? 

Mr. Nash. Yes, sir. 

The Chairman. All right. Proceed. 

Mr. Nash. I interviewed Mr. Wolfson on Februaiy 13, 1958, at his 
garage, in Philadelphia. At that time, he informed me that in April 
195-1, wlien he was in the office of Teamsters Local 596 

The Chairman. When he was? 

Mr. Nash. In the office of Teamsters Local 596, at 13th and Girard 
Avenue, Philadelphia, negotiating a contract with Bernard Brown, 
who was then secretary-treasurer of the local, and Louis Bertucci, who 
was president of the local, Ben Lapensohn came into the room, took 
Wolfson aside, and asked him, Wolfson, who he knew who could help 
him out of a situation. Wolfson mentioned many names, including 
that of a city official noAv deceased. 

^Ir. Kennedy. I might interrupt, Mr. Chairman. We have the 
name of the city official. He is now, as Mr. Nash points out, deceased, 
and we felt that it is best not to mention it. 

The Chairman. Thename willbe Avithheld. Proceed. 

Mr. Nash. Lapensohn told Wolfson to see this city official and tell 
him what happened. Wolfson did so, and a few days later this official 
advised Wolfson he would have to make a payoff. Wolfson then gave 
this official $750 in cash. Wolfson claims that he borrowed the money 
from a friend. The friend was interviewed and he confirmed that 
from time to time he loaned Wolfson money in cash. In January 1955, 
a few months before the initial contract between Wolfson and local 596 
was to expire, Lapensohn came to Wolfson's garage 

The Chairman. Is that Ben Lapeusohn i 

Mr. Nash. Yes, sir. 

The Chairman. All right. 

Mr. Nash. Lapensohn came to Wolfson's garage and told him that 
he was to enter into a new contract with the local, and the new con- 
tract would have about the same provisions as the old one. At that 
time, Ben Lapensohn asked Mr. Wolfson for $1,500. A week or so 
later, Wolfson gave Lapensolm $750, again in cash. The next day 
Lapensohn left for Florida. About 2 months later, Wolfson met with 
Ben Lapensohn, Bernard Brown, and Edward Walker, business agent 
of local 107, in the offices of the Teamsters Local 107, at 105 Spring 
Garden Street, Philadelphia, to negotiate a new contract. The con- 
tract presented Wolfson provided for increased wages, increased vaca- 
tion time, and payments toward a health and welfare fund. Again 
Ben Lapensohn took Wolfson aside and asked him for another $1,000 
to straighten out the matter. Wolfson refused to make this payment 
and walked out of negotiations. He refused to sign a contract. 



10854 IMPROPER ACTIVITIES IN THE LABOR FIELD 

"Wolfsoii later negotiated a contract with Josepli Cotter, a business 
agent, at more moderate terms than the contract originally presented 
to him by Walker, Lapensohn, and Brown. 

That is the statement he furnished me, sir. 

Wolfson claims that he has no financial records lehiting to these 
payoffs to Lapensohn, and that these payoffs were made in cash. 

The Chairman. What was the total paid Lapensohn ? 

Mr. Nash. $1,500, sir. 

The Chairman. Are there any further questions of this witness? 

Mr. Kennedy. The initial arrangement was made by Lapensolin's 
contact with Mr. Wolfson ; is that correct, and then the suggestion that 
he see the city official ? The city official then told him at a subsequent 
meeting that he would have to make a payoff, and that the payoff was 
to be $750, and Mr. Wolfson then did pay Lapensohn the $750 ; is that 
correct ? 

Mr. Nash. He paid the official the $750. He assumed the $750 was 
passed on to Lapensohn. 

Mr. Kennedy. That was the first payment. Then in 1955, or in 
early 1955, he was again approached for an additional $750: is that 
right? 

Mr. Nash. That is correct. 

Mr. Kennedy. For $1,500? 

Mr. Nash. For $1,500. 

Mr. Kennedy. Lapensohn made that approach at that time? 

Mr. Nash. That is correct. 

Mr. Kennedy. That was not through the city official ? 

Mr. Nash. That is correct. 

Mr. Kennedy. He refused to pay the $1,500 and only paid $750, 
which Lapensohn took shortlv before he Avent to Florida; is that 
right? 

Mr. Nash. That is correct. 

Mr. Kennedy. He was approached again for $1,000 by Lapensohn, 
and he refused to pay that? 

Mr. Nash. That is correct. 

Mr. Kennedy. This is what Mr. Wolfson has told you? 

Mr. Nash. That is correct, sir. 

TESTIMONY OF JULIUS WOLFSON— Resumed 

Mr. Kennedy. What about what JNIr. Nash has related as to his 
consersation with you, is that correct? 

Mr. Wolfson. I refuse to answer under the fifth amendment. 

Mr. Kennedy. Did you in fact pay the city official $750 to be passed 
on to Ben Lapensohn ? 

Mr. Wolfson. I refuse to answer, sir, under the fifth amendment. 

Mr. Kennedy. Did you subsequently give Mr. Lapensohn himself 
some $750? 

Mr. Wolfson. I refuse to answer, sir, under the fifth amendment. 

Mr. Kennedy. At that time, Mr. Lapensohn was a business agent 
of local 107, was he not. 

Mr. Wolfson. I refuse to answer under the fifth amendment. 

Mr. Kennedy. Mr. Chairman, there is some information that this 
is a pattern of the activities of Mr. Ben Lapensohn. We expect that 
we might have some more testimony about this kind of operation at a 



IMPROPER ACTIMTIES IN THE LABOR FIELD 10855 

later time. Local 107 Avas a very powerful union in Philadelphia, 
beyond just the jurisdiction of local 107. It has great control over 
other locals, of Teamsters and other unions in Philadelphia. This 
kind of an operation of Ben Lapensohn of going to these employers 
and shaking them down for labor peace seems to be an operation which 
he used activelj^ during the period of time tliat he had a close associa- 
tion with 107 and particularly with Eaymond Cohen. 

The Chairman. Mr. Wolfson, if you will not deny the statements 
made by this witness, I cannot help but conclude you made the state- 
ments to him. 

Mr. WoLFSoN. I refuse to answer 

The Chairman. And if you made those statements to him, then I 
cannot" lielp but conclude that you are just as guilty as Lapensohn 
and the others of conduct that is reprehensible. You have the 
opportunity now, if you want to make any explanation about it. 

Mr. Wolfson. I refuse, sir, under the fifth amendment. 

The Chairman. You agree you have been given every opportunity 
to clear the record, if the record is not true and sworn to by Mr. Nash ? 

Mr. Wolfson. I refuse, sir 

The Chairman. Are there any other questions ? 

The committee may not be able to resume public hearings this after- 
]ioon. I do not know how soon, in view of some developments this 
morning, how soon we can resume. Possibly tomorrow. Notice will 
be given. Counsel for the committee will be in conference with the 
attorneys for the witnesses that are to be called. We will determine 
when the public meeting will be held. For the present, the commit- 
tee stands adjourned, subject to the call of the Chair. 

(Whereupon, at 12: 30 p. m., the committee recessed, subject to the 
call of the Chair. The following members of the Senate select com- 
mittee were present at the recess: Senators McClellan and Ervin.) 



INVESTIGATION OF IMPROPER ACTIVITIES IN THE 
LABOR OR MANAGEMENT FIELD 



TUESDAY, MAY 6, 1958 

United States Senate, 
Select Committee on Improper Activities 

IN the Labor or Management Fielj), 

Washington, D. C. 

The select committee met at 10 a. m., pursuant to Senate Resolution 
221, agreed to January 29, 1958, in room 357, Senate Office Building, 
Senator John L. McClellan (chairman of the select committee) pre- 
siding. 

Present : Senator John L. McClellan, Democrat, Arkansas ; Senator 
John F. Kennedy, Democrat, Massachusetts; Senator Barry Gold- 
water, Republican, Arizona; Senator Karl E. Mundt, Republican, 
South Dakota ; Senator Carl T. Curtis, Republican, Nebraska; Senator 
Frank Church, Democrat, Idaho. 

Present: Robert F. Kennedy, chief counsel; Jerome S. Adlerman, 
assistant chief counsel ; John B. Flanagan, investigator ; Leo C. Nulty, 
investigator; Herbert J. Rose, Jr., investigator; Ralph DeCarlo, in- 
vestigator ; Ruth Young Watt, chief clerk. 

The Chairman. The committee will be in order. 

(Members of the committee present at the convening of the ses- 
sion were : Senators McClellan and Mundt. ) 

The Chairman. We resume hearings in the Philadelphia matter, in 
which we engaged at the time the committee last recessed. 

Mr. KJENNEDY. Mr. Larry Thomas. 

The Chairman. You do solemnly swear that the evidence you shall 
give before this Senate select committee shall be the truth, the whole 
truth, and nothing but the truth, so help you God ? 

Mr. Thomas. I do. 

TESTIMONY OF LARRY ANDERSON THOMAS, ACCOMPANIED BY 
ALBERT S. OLIENSIS 

The Chairman. State your name, and your place of residence and 
your business or occupation. 

Mr. Thomas. Larry Anderson Thomas, 5708 Delancey Street, Phila- 
delphia, Pa. 

The Chairman. What is your business or occupation ? 

Mr. Thomas. Business agent and recording secretary of Local 596, 
Teamsters, Philadelphia. 

The Chairman. You have counsel present to represent you ? 

Mr. Thomas. I do. 

The Chairman. Counsel, identify yourself for the record. 

10857 



10858 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Ml'. Oliensis. I am Albert S. Oliensis, of Philadelphia, and my 
home address is 8409 Widner Road, Philadelphia 18, and my business 
address is 1 North 13th Street, Philadelphia. 

The Chairman. Thank you very much. 

Mr. I^NNEDY. How long have you been with the Teamsters Local 
596? 

Mr. Thomas. Since 1954. 

Mr. I^NNEDY. What were you doing prior to that time ? 

Mr. Thomas. I worked as a longshoreman. 

Mr. Kennedy. How long have you been in the Teamsters Union — ■ 
just since 1954? 

Mr. Thomas. Correct. 

Mr. Kennedy. And when were you made an officer of the local ? 

Mr. Thomas. I believe in 1954. 

Mr. KIennedy. At the time you came in the local ? 

Mr. Thomas. Well, it must have been several months after, as near 
as I can remember. 

Mr. Kennedy. Were you elected to your position ? 

Mr. Thomas. Pardon me. Senator, may I consult my counsel ? 

(Witness conferred with his counsel.) 

Mr. Thomas. Yes. 

Mr. I^nnedy. You were elected ? 

Mr. Thomas. Yes, sir. 

Mr. Kennedy. And did you have any opposition at the time? 

Mr. Thomas. No. 

Mr. Kennedy. Were you elected in a slate of a number of different 
officers ? 

Mr. Thomas. Yes. 

Mr. Kennedy. Who was the secretary-treasurer at the time? 

Mr. Thomas. Bernard Brown. 

Mr. KJENNEDY. How were you selected to run with Bernard Brown 
on that slate? AVhat I am trying to find out, you had only been in 
the local for several months 

Mr. Thomas. There was a motion made on the floor by one of the 
members. 

Mr, Kennedy. Somebody nominated you ? 

Mr. Thomas. That is right. 

Mr. Kennedy. Nobody nominated anybody in opposition to you? 

Mr. Thomas. None. 

Mr. Kennedy. Who was the recording secretary prior to the time 
you became recording secretary ? 

Mr. Thomas. I don't remember. 

Mr. Kennedy. What kind of work were you doing prior to the time 
you came with the Teamsters Union ? 

Mr. Thomas. I worked as a longshoreman. 

Mr. Ej:nnedy. And then you became what? 

Mr. Thomas. One minute. I am sorry. Senator. I also worked 
as an organizer for the AFL just prior to coming to the Teamsters. 

Mr. Kennedy. Did you change your work when you came with the 
Teamsters ? 

Mr. Thomas. I did. 

Mr. Kennedy. What did you do then ? 

Mr. Thomas. Organized. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10859 

Mr. Kennedy. Tell me, what union were you working for as an 
organizer for the Longshoremen's Union ? 

Mr. Thomas. The IBL, International Brotherhood of Longshore- 
men. 

Mr. Kennedy. And then did the Teamsters employ you as an organ- 
izer at that time ? 

Mr. Thomas. Eight after the election in 1953, I believe, in New 
York Cit> , with the ILA and the IBL. 

Mr. Kennedy. What did that have to do with your becoming a 
member of the Teamsters ? 

Mr. Thomas. Well, it had something to do with it in this sense: 
One of the agents of the IBL was Jack Banks, and he told me that 
I would be able to get a job with the Teamsters, if he recommended 
me. He is now dead. 

Mr. Kennedy. What was the reason that you wanted to leave the 
IBL? 

Mr. Thomas. I didn't leave it. It was all over with. 

Mr. Kennedy. Why didn't you go into the ILA then ? 

Mr. Thomas. I was in the ILA. 

Mr. Kennedy. Why didn't you stay in or go with the IBL? 
Wasn't there any union. Longshoremen's Union in Philadelphia at 
the time ? 

Mr. Thomas. There was. 

Mr. I^nnedy. Why didn't you stay with the Longshoremen's 
Union ? 

Mr. Thomas. Well, I had no more job. 

Mr. Ejjnnedy. They let you go at that time ? 

Mr. Thomas. That is right, they let me go when I first stai*ted 
organizing. 

Mr. Kennedy. And he recommended you for the job with the 
Teamsters ? 

Mr. Thomas. That's right. 

Mr. Kennedy. Wlio was it that hired you as an organizer for the 
Teamsters? 

Mr. Thomas. Bernard Brown. 

Mr. Kennedy. Burney Brown did ? 

Mr. Thomas. Yes, sir. 

Mr. Kennedy. Had you known him prior to that time ? 

Mr. Thomas. JSTo. 

Mr. Kennedy. And who nominated you on the floor as recording 
secretary ? 

Mr. Thomas. I don't recall his name. One of the members. 

Mr. Kennedy. What were you paid as an organizer for local 596 ? 

Mr. Thomas. May I consult with my counsel ? 

(Witness conferred with his counsel.) 

Mr. Thomas. I respectfully decline to answer that question on the 
ground that I am not required to give evidence against myself under 
the fifth amendment. 

The Chairman. You understood the question, did you ? 

Mr. Thomas. I did. 

The Chairman. That you were employed as an organizer, and the 
question was "What salary did you receive as an organizer?" 

Mr. Thomas. I understood it. 



10860 IMPROPER ACTI\7TIES IN THE LABOR FIELD 

The Chairman. You understood it ? 

Mr. Thomas. Yes, sir. 

The Chairman. Will you repeat the question, Mr. Counsel. 

Mr. I^NNEDY. Wliat salary did you receive as an organizer for 
local 596? * 

Mr. Thomas. I respectfully decline to answer the question on the 
ground I am not required to give evidence against myself under the 
fifth amendment of the Constitution. I invoke that privilege. 

Senator Mundt. For the record, you raised a point and I am very 
doubtful that any witness could use the fifth amendment appropriately 
on a question of that kind. There is no crime involved in that. 

The Chairman. The Chair is attempting to proceed, with the per- 
mission of the committee, to order and direct the witness to answer 
the question. That was the order of the Chair, and with the approval, 
of the committee 

Mr. Oliensis. May comisel be heard for a second, please ? 

The Chairman. Briefly. 

Mr. Oliensis. The thought that occurs to me your honor is simply 
this : If he received certain moneys during this period and he did not 
return them and thereby might possibly have evaded his income tax, 
to that extent his answer might tend to incriminate him. 

That, frankly, sir, is what was in the back of my mind. 

The Chairman. It might be. The order of the Chair stands, and 
it is a question, of course, for the courts to resolve and it cannot be 
resolved here. That is why we have lawsuits and why the lawyers' 
profession is a pretty good profession, and pretty profitable at times. 

Let us proceed. 

Mr. Kennedy. Then you became the recording secretary after being 
an organizer for several months. Did you continue as an organizer 
after you became recording secretary ? 

Mr. Thomas. After my election as recording secretary, I also re- 
ceived another office ; business agent. 

Mr. Kennedy. Did you continue your organizing activities ? 

Mr. Thomas. Yes, sir. 

Mr. Kennedy. And what salary or expenses did you receive in your 
new position, of recording secretary and business agent? 

Mr. Thomas. I respectfully decline for the same reason. 

Mr. Kennedy. Now 

The Chairman. Just a moment. Will you state your reason ? 

Mr. Thomas. I respectfully decline to answer the question under 
the ground that I am not required to give evidence against myself 
under the fifth amendment. 

The Chairman. With the approval of the committee, the Chair 
orders and directs you to answer the question. 

Mr. Thomas. I respectfully decline to answer the question under 
the ground that I am not required to give evidence against myself. 

The Chairman. Proceed. 

Mr. Kennedy. Was your local, 596, placed in trusteeship subse- 
quently ? 

Mr. Thomas. Yes. 

Mr. Kennedy. Wlien was that ? 

Mr. Thomas. I don't remember. 

Mr. Kennedy. Was that after you became recording secretary ? 

Mr. Thomas. Yes. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10861 

Mr. Kennedy. For what reason were they put in trusteeship ? 

Mr. Thomas. I don't remember. 

Mr. I^NNEDY. Were you ever told why they were put in trustee- 
ship? 

Mr. Thomas. I don't remember. 

Mr. Kennedy. Did you continue on as recording secretary after 
the local was put in trusteeship ? 

Mr. Thomas. I did. 

Mr. Kennedy. Did you ever make any protest about it being put 
in trusteeship ? 

Mr. Thomas. No. 

Mr. Kennedy, Did all of the officers remain in their positions? 

Mr. Thomas. They did. 

Mr. Kennedy. They did ? 

Mr. Thomas. Yes, sir. 

Mr. Kennedy. You have no idea why they were put in trusteeship ? 

Mr. Thomas. I don't remember. 

Mr. KJENNEDY. Well, you don't have any idea at the present time? 

Mr. Thomas. I don't remember. 

Mr. IvENNEDY. "Wliat were your responsibilities as far as strikes 
were concerned, Mr. Thomas ? 

Mr. Thomas. Pardon me. 

(Witness conferred with his counsel.) 

Mr. Kennedy. When strikes occurred, what were your responsi- 
bilities? 

Mr. Thomas. My duties were to go to the various picket lines and 
see that everything was in order, or orderly, and also to picket. 

Mr. IvENNEDY. In the course of those duties, did you have any 
responsibilities or other duties to inflict any damage on the firm or 
place of business that was being picketed ? 

Mr. Thomas. I decline to answer the question on the ground that 
that I am not required to be a witness against myself. 

Mr. Kjennedy. Were you given any instructions to inflict any dam- 
age on the property of any firm or company that you were picketing ? 

Mr. Thomas. I decline to answer the question on the ground that 
that I am not required to be a witness against myself. 

(At this point. Senator Church entered the hearing room.) 

The Chahiman. The question is here, if you did commit any vandal- 
ism or damage property. The question is : Were you ordered to do it 
or instructed to do it, and was it a part of your duties assigned to you 
by your superiors in the union ? 

In other words, did you just do it on your own volition, or were you 
ordered and instructed to do it, and that is what we are trying to get— 
the difference ? What is your answer ? 

Mr. Thomas. I respectfully decline to answer the question under 
the ground that I am not required to give evidence against myself. 

The Chairman. You won't say, then, or you are unwilling to say 
whether you did it on orders of your superiors, or whether you just 
did it on your own volition ? 

Mr. Oliensis. May I say a word, sir. It would seem to me your 
honor that you are directing yourself toward a conspiracy, and for 
that reason I again advised him, if he saw fit, to invoke the amend- 
ment. 



10862 IMPROPER ACTIVITIES IN THE LABOR FIELD 

The Chairman. The Chair pretty well understands, and I have 
seen so much of this that I know just about what is going on. 

All right, proceed. 

Mr. Kennedy. Specifically, in 1956, did you purchase some paint 
remover from the Girard Wallpaper & Paint Co. 'i 

Mr. Thomas. I respectfully decline to answer the question on the 
ground I am not required to be a witness against myself. 

(At this point, the following members were present: Senators 
McClellan, Mmidt and Church.) 

Mr. Kennedy. And was the purpose of purchasing that paint re- 
mover to throw on the Pontiac automobiles belonging to the Pontiac 
dealers, where you had been on strike ? 

Mr. Thomas. I respectfully decline to answer the question on the 
ground that I am not required to give evidence against myself. 

Mr. Kennedy. Did you receive your instructions to purchase that 
paint remover from any officials of the union ? 

(The witness conferred with his counsel.) 

Mr. Thomas. I respectfully decline for the same reason. 

Mr. Kennedy. Did Mr. Raymond Cohen know at that time that 
the paint remover was being purchased and that it was to be used 
•on these automobiles ? 

Mr. Thomas. I respectfully decline for the same reason. 

The Chairman. The Chair presents to you exhibit No. 29, three 
documents previously submitted to the committee as evidence, made 
exhibit 29A, B, and C. They are bills or invoices showing certain 
purchases. Exhibit 29A has a signature on it. I am presenting 
it to you and asking you to examine the three, exhibits A, B, and C of 
29, and also to examine the signature on one of them, and state 
Avhether you recognize those invoices, and if you recognize the sig- 
nature that you see on the bottom of the one that is on top. 

(The documents were handed to the witness.) 

(The witness conferred with his counsel.) 

(At this point. Senator Mundt withdrew from the hearing room.) 

The Chairman. Have you examined the documents ? 

Mr. Thomas. I have. 

The Chairman. Do you identify them ? 

Mr. Thomas. I respectfully decline to answer the question for the 
same reason. 

The Chairman. "VVliat reason ? 

Mr. Thomas. That I am not required to give evidence against my- 
self under the fifth amendment. 

The Chairman. Is that your signature on the document on top ? 

Mr. Thomas. I decline for the same reason. 

The Chairman. You have examined them. Let the Chair have 
them, please. 

(The documents were returned to the committee.) 

The Chairman. These purchases were made from the Girard Wall- 
paper & Paint Co. The first invoice indicates that the purchase was 
made on November 7, 1956. Did you make that purchase? 

Mr. Thomas. I decline for the same reason. 

The Chair:man. State your reason. I don't want to have to keep 
telling you to do that. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10863 

Mv. TiiocAs. I decline to answer the question on the gromid that 
1 am not required to be a witness against myself under the fifth amend- 
ment. 

The Chairman. Another one of these invoices from the Girard 
Paint Co. shows a purchase made on November 8, 1956. Did you 
make that purchase ? 

Mr. Thomas. I decline to answer the question on tlie ground that 
I am not required to give evidence against myself. 

The CiiAiRMAX. Are you an expert in throwing paint remover on 
cars ? 

Mr. Thomas. I decline to answer the question on the ground tliat 
I am not required to give evidence against myself. 

The Chairman. Is tliat wliy you were employed by that union, to 
carry out their vandalism ? 

Mr. Thomas. I decline to answer the question on the ground tliat I 
am not required to give evidence against myself. 

The Chairman. Are vou proud of tliat kind of pei'f ormance, if you 
didit? ^ 

Mr. Thomas. I decline to answer the question on the ground that I 
am not required to give evidence against myself. 

The Chairman. Is that wliy you were employed by tlie union when 
3'OU first came into it, they needed anotlier person to carry out these 
acts? 

Mr. Thomas. I decline to ;'iis\\-cm- the question on the ground that I 
am not required to be a witnt'^ ■ ;,!;;■ 1 1 ; * myself. 

The ( /HAiR^iAN. Did you have an unelei'standing Avitli tliem that you 
were willing to and that you would perform these acts of vandalism 
if they gave you a jol? ? 

Mr. Thomas. I decline to answer the question on the ground that 
I am not required to give evidence against myself. 

Mr. Kennedy. Within 2 days of the purchase of this paint remover, 
paint remover Avas thrown on the Pontiac automobiles, of Shore Bros. 
Do you know anything about that? 

Mr. Thomas. I decline to answer the question on the ground that I 
am not required to give evidence against myself. 

The Chairman. Do you work out of the headquarters of the local? 

(The witness conferred with his counsel.) 

Mr. TH03IEAS. I do. 

The Chairman. How far is the headquarters of the local from this 
Girard Wallpaper Co. ? 

(The witness conferred with his counsel.) 

Mr. Thomas. Senator, there is two places involved here. 

The Chairman. Which one did you get it from ? 

(The witness conferred with his counsel.) 

Mr. Thomas. There is two different headquarters involved, sir. 

The Chairman. How close is the nearest headquarters to this w^all- 
paper company ? 

(The witness conferred with his counsel.) 

Mr. Thomas. Approximately 13 blocks. 

The CHAiR:k[AN. 13 blocks. The closest one ? 

Mr. Thomas. At the present time, approximately 13 blocks. 

The Chairman. How close is it now ? 

Mr. Thomas. Approximately 13 blocks. 



10864 IMPROPER ACTIVITIES IN THE LABOR FIELD 

The Chairman. How close was it at the time these purchases were 
made in November 1956 ? 

(The witness conferred with his counsel.) 

Mr. Oliensis, Senator, if I may, if you would ask him how close 
was the shop or the office at the date appearing on this invoice, I am 
sure 

The Chairman. That is what I am asking. I said how close was the 
headquartei-s on the 7th of November 1956 or the 8th of November 
1956, the date of the two invoices. 

Mr. Oliensis. Two hundred feet, perhaps. 

The CHAmMAN. Two hundred feet ? 

Mr. Oliensis. Yes. 

The Chairman. Thank you. Proceed, Mr. Kennedy. 

Mr. Kennedy. On another matter, other than the vandalism that oc- 
curred from the throwing of paint remover on automobiles, did you 
ever participate in the beating of any individual after you became a 
union organizer for the teamsters ? 

(The witness conferred with his counsel.) 

Mr. Thomas. I respectfully decline to answer the question on the 
ground that I am not required to give evidence against myself. 

The Chairman. Was that done at the instructions of the officials of 
local 596? 

Mr. Thomas. I respectfully decline to answer the question on the 
ground that I am not required to give evidence against myself. 

Mr. Kennedy. Did you ever participate in the beating of any mem- 
bers of local 596 or other teamsters members or officials ? 

Mr. Thomas. I respectfully decline to answer the question on the 
ground that I am not required to give evidence against myself. 

Mr. Kennedy. That was done at the instructions of the officials of 
596? 

Mr, Thomas. I respectfully decline to answer the question on the 
ground that I am not required to give evidence against myself. 

Mr, Kennedy. To purchase acid and paint remover and throw it 
on automobiles, to destroy property, and to beat up individuals, isn't 
that the reason you were hired by local 596 ? 

Mr. Thomas. I respectfully decline to answer the question on the 
ground that I am not required to be a witness against myself. 

Mr. Kennedy. That is all. 

The Chairman. Are there any questions. Senator ? 

Senator Church. No questions. 

The Chairman. You may stand aside. 

Because of a conflict of meetings of committees, we are going to 
have to recess until 1 : 30 this afternoon. The first meeting of the 
Space Committee, the so-called Space Committee, of the Senate is in 
session, and the Chair feels that he should attend that meeting. 
Therefore, we will recess until 1 : 30 this afternoon. 

(At the recess, the following members were present: Senators Mc- 
Clellan and Church.) 

(Whereupon, at 10 : 35 a. m., a recess was taken until 1 : 30 of the 
same day. ) 

AF'n.KNOON SESSION 

(The hearing was resumed at 1 : 30 p. m., Tuesday, May 6, 1958, in 
the Caucus Room, Senator John L. McClellan (chairman) presiding. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10865 

The Chairmaist. The committee will be in order. 

(Membei-s of the committee present at the convening of the session 
were : Senators McClellan and Church.) 

The Chairman. All right, Mr. Counsel, do you have a statement 
you wish to make ? 

Mr. Kennedy. Mr. Chairman, this afternoon we are going into a 
different phase of Mr. Lapensohn's activities and operations, and that 
deals with the publication of a yearly magazine. 

We are going to inquire into the effect that the yearly magazine 
had on both legitimate labor and businessmen. We have some in- 
formation and some evidence indicating that this magazine and other 
magazines of its kind were used as a shakedown on legitimate busi- 
nessmen, and that on many occasions labor officials under whose 
direction or under whose control perhaps these labor magazines were 
operating were unaware of the fact that the magazines were being 
used in this fashion. 

I think Mr. George Meany has already come out and criticized the 
operation of some of these magazines, but we expect to develop today 
and tomorrow how some of these operations are conducted, and what 
the effect is on both management and legitimate labor. 

I would like to call as our first witness, Mr. Chairman, Mr. James 
McDevitt, who was formerly president of the Pennsylvania Federa- 
tion of Labor, for the purpose of discussing some of these matters. 

The Chairman. Do you solemnly swear that the evidence, given 
before this Senate select committee, shall be the truth, the whole truth, 
and nothing but the truth, so help you God ? 

Mr. McDevitt. I do. 

TESTIMONY OF JAMES L. McDEVITT 

The Chairman. Will you state your name, and your place of resi- 
dence, and your business or occupation ? 

Mr. McDevitt. My name is James L. McDevitt, and my residence 
is 5901 Goldsborough Road, Bethesda, Md., and I am director of 
political education for the AFL-CIO. 

The Chairman. Do you waive counsel, Mr. McDevitt ? 

Mr. McDevitt. Yes ; I do, sir. 

The Chairman. Thank you. 

All right, Mr. Kennedy, you may proceed. 

Mr. Kennedy. Mr. McDevitt, you used to be or you were formerly 
head of the Pennsylvania Federation of Labor ? 

Mr. McDevitt. That is correct. 

Mr. Kennedy. And would you tell us during what period of time 
you held that position ? 

Mr. McDevitt. From April 1938 until approximately April of 
1954, when I put in my formal resignation, but I was on leave of 
absence from the Pennsylvania Federation of Labor from November 
of 1951. 

Mr. Kennedy. In 1954 you came down to your present position, 
did you ? 

Mr. McDevitt. No, I came to Washington in October, actually in 
October of 1951, in my present position. 

Mr. Kennedy. As chairman or president ? 



10866 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. MoDevitt. National director of the Committee on Political 
Education. 

Mr. Kennedy. Have you had anything to do with the situation 
in Pennsylvania since 1951, other than your title that you held until 
1954? 

Mr. McDevitt. Well, while I wasn't located in the State I went 
back occasionally to take care of ce7:tain matters that had arisen 
between the time I came here to Washington until the time my 
resignation was finally accepted. 

Mr. Kennedy. Now, Mr. McDevitt, we have had some testimony 
here regarding the activities of Mr. Lapensohn, particularly as it re- 
lated to Local 107 of the Teamsters Union. We also found in the 
course of our investigation that he operated a magazine in Pennsyl- 
vania from, I believe, approximately 1946 or 1947 up until 1953, and 
that he conducted its affairs with the understanding or with the 
supposition that it was directly afiiliated with the Pennsylvania 
Federation of Labor. 

During this period of time you were president of the Peimsylvania 
Federation of Labor. First I would like to find out from you what 
you know about Mr. Lapensohn's activities as the operator of that 
magazine, and whether he did have the blessing of the Pennsylvania 
Federation of Labor, and how that came into effect initially. 

Mr. McDevitt. Mr. Kennedy, I wonder if I could with your per- 
mision, Mr. Chairman, read a statement before I answer any ques- 
tions ? 

The Chairman. Have you submitted a statement ? 

Mr. McDevitt. No, I just prepared it rather hurriedly. Senator. 

Mr. Kennedy. I am afraid I will have to take the responsibility 
for that. There was a mixup as to the time. 

The Chairman. Without objection, the committee will waive the 
requirement of the rule, in this particular instance, and your state- 
ment is brief, is it ? 

Mr. McDevitt. Very brief. 

The Chairman. You may read it. 

Mr. McDevitp. Thank you. 

I understand the matter now under inquiry by the committee con- 
cerns the issuance of a yearbook by the Pennsylvania Federation of 
Labor and the obtaining by Mr. Benjamin Lapensohn from various 
persons and firms advertisements for inclusion in this yearbook. I 
am here voluntarily for the purpose of furnishing to the committee 
whatever information I possess that may be pertinent to the matter 
imder inquiry. 

The Pennsylvania State Federation of Labor first issued a book, a 
yearbook, over 25 years ago, and such practice continued until the 
year of 1953. Part of this time I was president of the federation, 
having held that office from the year 1938 to 1954. In 1946 Mr. 
Lapensohn was engaged by the Pennsylvania State Federation to 
secure advertisements for its yearbook, and he continued this under- 
taking until the year of 1953. 

He was retained by me on behalf of the federation after an inquiry 
by me into his character, reputation, and ability. Reports I received 
concerning Mr. Lapensohn were good. During the period from 1946 
to 1953 I had no reason to suspect that Mr. Lapensohn might be con- 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10867 

ducting himself in an improper manner, with respect to the obtaining 
of advertisements for the yearbook. Some complaints relating to iso- 
lated activities of salesmen of advertisements were brought to my 
attention during this period, and in each case I made inquiry into 
these complaints and obtained corrective action where such corrective 
action was required. 

These complaints were relatively few in number. The Pennsylvania 
State Federation of Labor published the yearbook as a means of 
supplementing income which was used to defray the costs of legitimate, 
proper, and necessary union activities. As a result of the engagement 
of Mr. Lapensohn, the federation received 40 percent of the gross 
amount obtained through advertisements, and Mr. Lapensohn received 
60 percent of such gross amount. 

Under the arrangements made, all checks for advertisements were 
to be made payable to the Pennsylvania State Federation of Labor. 
These checks were recorded and deposited by the federation. There- 
after 60 percent of the amount of these checks was paid to Lapensohn. 
From the amount he received, Lapensohn paid all solicitation costs 
including salesman's commissions. 

The Chairman. Including what ? 

Mr. McDevitt. Including commissions, salesmen's commissions. 
The federation paid only for the printing and distribution of the 
yearbook. The issuance of the yearbook was discontinued by the State 
Federation of Labor in 1958 by convention action upon recommenda- 
tion of the executive council of the Pennsylvania State Federation. 

The Chairman. Did it publish an issue that year, in 1953? 

Mr. McDevitt. 1953 was the last year. 

The Chairman. It did publish covering 1953 ? 

Mr. McDevitt. Yes, that is right. When the per capita tax paid 
to the federation was raised, the financial needs of the federation no 
longer required the ])ublication of the yearbook. I am here to answer 
any questions the members of the committee or comisel may desire to 
ask. 

If there are any questions I would be pleased to answer them to the 
best of my ability. 

The Chairman. Thank you very much. 

All right, Mr. Kennedy. 

Mr. Kennedy. It might be a good idea, Mr. Chairman, before we 
begin a discussion of the yearbook, if you had the witness identify 
this. 

The Chairman. You just stated that the last publication by the 
State Federation of Labor was in 1953, covering the year 1953. 

I hand you what purports to be a copy of that issue, and will you 
examine it and state if you identify it as such? 

(A document was handed to the witness.) 

Mr. McDevitt. Yes, I do. 

The Chairman. That may be made exhibit No. 31 for reference 
only. 

(Document referred to was marked "Exhibit No. 31," for refer- 
ence and may be found in the files of the select committee.) 

Mr. Kennedy. Now, Mr. McDevitt, this magazine would be put out 
once a year, is that right ? 

Mr. McDevitt. That is correct. 

21243— 58— pt. 28 4 



10868 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. Mr. Lapehsohn's company would publish the mag- 
azine ? 

Mr. McDevitt. No. Mr. Lapensohn had responsibility only for the 
solicitation of advertisements. The printing of the book and the edit- 
ing of it was the responsibility of the federation itself. 

Mr. Kennedy. What about the distribution of the magazine? 

Mr. McDevitt. That was also the responsibility of the federation. 

Mr. Kennedy. Now, were these matters taken out of the 40 percent 
that you received ? 

Mr. McDevitt. Yes, they were. 

Mr. Kennedy, You had to pay for the publishing and the printing 
and the distribution of the magazine ? 

Mr. McDevitt. Yes, sir. 

Mr. Kennedy. Out of that 40 percent, is that correct? 

Mr. McDevitt. That is right. 

Mr. Kennedy. And the income to the magazine came from these ads 
that were placed in it ? 

Mr. McDevitt. Insofar as the publication of the book is concerned, 
that is correct. 

Mr. Kennedy. The magazine itself was not sold ? 

Mr. McDevitt. Never. 

Mr. Kennedy. So that the income came from the ads that the solici- 
tors or Mr, Lapensohn was able to receive from various individuals? 

Mr. McDevitt. Yes, sir. 

Mr, Kennedy. Now, most of the solicitation came from employers, 
did it not? 

Mr. McDevitt, That is correct to the best of my knowledge, 

Mr, Kennedy, The other labor unions or labor unions themselves 
did not place ads in the magazine ? 

Mr, McDe\ttt. It was against our policy, and we didn't want the 
unions to place ads in the book. 

Mr. Kennedy, And the solicitors or Mr, Lapensohn, they were able 
to tell the employers or these firms or companies that they were asso- 
ciated with the Pennsylvania Federation of Labor? 

Mr. McDevitt, They were authorized to tell them that they were 
representing us insofar as the advertisements were concerned, 

Mr. Kennedy. Were they authorized to send out lettei^s over your 
signature ? 

Mr. McDe\t;tt. There was only one letter authorized by me, and 
that was merely to ask the president, or whoever the responsible official 
ol that company was, for an interview. 

Mr. Kennedy. Now, I would like to tell you, Mr. McDevitt, that 
we have some information from various employers and firms indi- 
cating that they received a good number of letters from you that 
would go beyond making merely an appointment, and that they re- 
ceived telephone calls from you, for instance, from somebody who 
identified himself as you, asking for an appointment, or telling the 
recipient of the telephone call that it might be advisable as far as 
their labor relations were concerned for them to accept an interview 
from a member of your staff that would be around to see them. 

Did you make such telephone calls ? 

Mr, McDe\t:tt, Never, under any circumstances, did I make one 
single telephone call in the State of Pennsylvania to any prospective 
advertiser. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10869 

Mr. Kennedy. And the only letters that you wrote were the letters 
that went out to make appointments for these individuals? 

Mr. McDevitt. That is correct. 

Mr. Kennedy. Now, are these some of the letters ? 

Before the chairman presents those to you, you never actually 
signed these letters yourself, did you ? 

Mr. McDevitt. I did not. 

Mr. Kennedy. The letters that went out were signed by someone 
else, with your signature being affixed ? 

Mr. McDevitt. I assume it was. 

Mr. Kennedy. So you really were not aware of what was stated 
in the letter? 

Mr, McDevitt. The only letter that I am familiar with is the one 
that I authorized, that asked for an appointment. 

The Chairman. I hand you here a letter dated January 12, 1948, 
addressed to Mr. C. A. Thomas, and it is on Pennsylvania Federation 
of Labor stationery, and apparently bears your name as the author 
of the letter, and a signature, and I ask you to examine it and state 
if you identify it. It is actually a photostatic copy of a letter. 

(A document was handed to the witness.) 

Mr. McDevitt. No. I did not authorize such a letter. 

(At this point, the following members were present: Senators 
McClellan and Church.) 

The Chaieman. Nor did you sign it ? 

Mr. McDe\t:tt. That is not my signature. 

The Chairman. That letter may be made exhibit No. 32 for 
reference. 

(The document referred to was marked "Exhibit No. 32" for ref- 
erence, and may be found in the files of the select committee.) 

The Chairman. You neither wrote the letter, authorized it, or 
signed it? 

Mr. McDevitt. That is correct. 

The Chairman. Now I hand you a series of three letters on Penn- 
sylvania Federation of Labor stationery. Each is addressed to Mr. 
D. M. Voitsberger, and the first is dated March 18, 1952 ; the second 
is March 20, 1952; and the tliird is March 26, 1953. 

I ask you to examine those letters. They appear to represent you 
as the author, and appear to have signatures. Would you examine 
them and state whether you identify them? 
(The documents were handed to the witness.) 

Mr. McDevitt. The letter of March 18, 1952, and that of March 20, 
1952, were not authorized by me. 

The Chairman. Let those two letters, then, be made exhibit No. 
33, for reference. 

Mr. McDevitt. I didn't authorize the specific language in the letter 
of March 26. 

The Chairman. Wliat year ? 

Mr. McDevitt. 1953. 

The Chairman. Let the letters be made exhibits Nos. 33-A, B, and 
C. in their order. 

(The documents referred to were marked "Exhibits Nos. 33-A, B. 
and C" for reference, and may be found in the files of the select 
committee. ) 

The Chairman. Did you sign any of those letters? 



10870 IMPROPER ACTIVITIES IX THE LABOR FIELD 

Mr. McDevitt. I did not, sir. 

The Chairman. You did not authorize any of the letters, as I 
understand you ? 

Mr. McDEvrrT. There was one letter that we authorized, and that 
was a letter seeking an appointment. That, we did authorize, where 
they asked for an appointment for the representative of our yearbook. 

The Chairman. Do you know the handwriting of the signatures 
that appear on these letters? 

Mr. McDevitt. No; I don't. I can't identify it, Senator. 

The Chairman. You do not know who Avrote them or who may have 
signed the name to them ? 

Mr. McDevitt. No ; I don't. 

The Chairman. Would your secretary, the lady in your office ? It 
appears to be a woman's handwriting. Would you recognize her 
signature ? 

Mr. McDevitt. I am not too sure that I could tell, as against so 
many other signatures, but it would be my guess that that was not her 
signature. 

The Chairman. You don't believe it to be? At this time, at least, 
you don't believe it to be her signature ? 

Mr. McDe\ttt. I don't believe it to be. Senator ; that is correct. 

The Chairman. I am trying to ascertain, if you didn't authorize 
these letters or know anything about them, obviously, somebody was 
carrying on correspondence without your authority and using that as 
an imposition, possibly, upon the people who were contacted and to 
whom the letters were addressed. 

]\Ir. McDevitt. Senator, if I may add, there was only one letter 
authorized for his use, and that was a letter asking for an appoint- 
ment for their representative on the yearbook. 

The Chairman. Is that what the letter of March 26, 1953, says ? I 
will read it. It says : 

Sam Kirsch, of my staff, will call to see you within the next few days. The 
executive board of the Pennsylvania Federation of Labor and I will greatly 
appreciate your extending to him the usual courtesy. Thanking you in advance. 

I see nothing wrong in that letter, if Kirsch was working for you. 

Mr. McDevitt. That is correct, excepting this. Senator, the only 
difference being that I authorized them saying that I would appreciate 
them giving them an interview. I did not include the executive council 
in my authorization for that letter. 

The Chairman. It was just you saying that you would personally 
appreciate it ? 

Mr. McDevitt. That is correct. 

The Chairman. That is the only difference between this letter and 
what you authorized ? 

Mr. McDevitt. That is correct. 

(At this point. Senator Kemiedy entered the hearing room.) 

The Chairman. What is wrong with the other letters? How do 
they differ from what you may have authorized ? 

Mr. McDevitt. Which other letter. Senator ? 

The Chairman. The other two there. You said the last one of 
March 1953. There are two there for the 18th or 20th of March in 
1952, 1 believe. 

Mr. McDevitt. I said that I did not authorize the letter of March 
18, 1952, nor did I authorize the letter of March 20, 1952. 



IMPKOPER ACTIVITIES IN THE LABOR FIELD 10871 

The Cbtaikman. What is there in those letters that is different than 
-what you did authorize ? 

Mr. McDevitt. The difference was the previous exphmation I gave 
you with respect to asking for an interview. 

The CiiAiKMAX. They do say there that you personally would ap- 
preciate it, and tlie courtesies extended, don't they ? 

Mr. JMcDevitt. Yes. We did not authorize the inclusion of the 
second paragraph : 

We are in our HOth year in celebrating the good labor relationship which has 
existed between management and the American Federation of Labor. 

I did not authorize that Icind of a statement. 

The CiiAiRMAX. Is that the only way in which those letters depart 
from your instructions and your authorization? 

Mr. McDevitt. With respect to that particular one, tliat is correct. 

The Chairmax. All right; Mr. Counsel. 

Mr. Kenxedy. Were tliey authorized in these letters to say : 

Mr. Kitsch, of my staff, will be around to see you. 

Mr. MgDe\t;tt. No ; not to use the words "my staff." 

Mr. Kennedy. In fact, Mr. Kirsch, Mr. Lapensohn, and the other 
individuals soliciting the ads were not really members of your staff, 
were they ? 

Mr. McDevitt. No. 

Mr. Kennedy. Weren't they, in fact, working for a private com- 
pany? 

Mr. McDe^t:tt. That is correct. 

(At this point. Senator McClellan withdrew from the hearing 
room. ) 

Mr. Kennedy. I noticed that, in a couple of those letters, that you 
say, "Mr. Kirsch, of my staff'."' Had they been authorized to use 
those words? 

Mr. McDevitt. Not those words ; no. Definitely not. 

Mr. Kennedy. All they were authorized to do was to make an ap- 
pointment and have the letters signed by you ? 

Mr. McDevitt. That is right. 

Mr. Kennedy. The letters were signed and written out of the office 
of Mr. Lapensohn; is that correct? 

Mr. McDem:tt. That is correct. 

Mr. Kex^nedy. They were not written in your office ? 

Mr. McDE\^TT. They were not written in Harrisburg, but written 
in Philadelphia. 

Mr. Kennedy. They were authorized to sign your signature to these 
letters as long as they limited them to an appointment ? 

Mr. McDE^^TT. As long as they limited it to merely asking for an 
appointment. 

Mr. Kennedy. Hundreds and hundreds of these letters went out, 
and, as we will find out when we go into New York, the same procedure 
was followed in that State. We will find, in our study of other States, 
that the same kind of procedure was followed by the letter being 
signed by the head of the federation. 

However, in many cases, these letters went far beyond mere a})point- 
ment letters, and some of the letters are much stronger tlian these that 
have been shown to you. With this evidence brought to your atten- 
tion, and the fact that we also have evidence that individuals made 



10872 IMPROPER ACTIVITIES IN THE LABOR FIELD 

telephone calls to employers and said that they were you, and you- 
were going to send your secretary over to try to straighten out their 
labor difficulties, and then Mr. Kirsch would arrive and take an ad,, 
do you feel that this not only was an imposition on the employer but 
also had an eft'ect on the Pennsylvania Federation of Labor ? 

Mr. McDevitt. I feel very definitely so. 

Mr. Kennedy. Had you known that these things w^ere going on 
at that time ? 

Mr. McDevitt. I did not have knowledge of it, Mr. Kennedy ; no. 

Mr. Kennedy. Mr. McDevitt, in 1947 Mr. Lapensohn appeared be- 
fore a House committee, or information regarding Mr. Lapensohn 
was made available to a House committee. Several witnesses ap- 
peared before the House committee and testified as to his activities of 
going around and shaking employers down with a Mr. Abe Goldberg,, 
who was later involved with Mr. Johnny Dio, and a Mr. "Turk" 
Daniels, who was also a fairly well-known character in Philadelphia. 

For instance, he requested a $32,000 or $36,000 payment, payoff, 
from a group of contractors who were planning to build some prop- 
erty and needed some help and assistance from a labor union. He 
demanded $36,000 for himself. He was rather in the news at that 
time. That was after he had received the contract to go ahead with; 
the Pennsylvania federation. I am wondering why you did not take 
some action at that time, when he was in the news, and end his con- 
tract, end his control over this very sensitive area. 

(At this point. Senator McClellan entered the hearing room.) 

Mr. McDevitt. The answer to that, Mr. Kennedy, is that the inci- 
dent you refer to is not quite as clear in my mind as it might be. I 
do recall, however, directing this to the attention of our general coun- 
sel. Whatever was done at that time was done on the advice of our 
counsel. 

Mr. Kennedy. I don't underetand that. 

Mr. McDevitt. I say, when this incident occurred, the only remem- 
brance I have of it is that I referred the matter to the attention of our 
general counsel, and I was guided by his dire^^tion. That is 11 years 
ago, Mr. Kennedy. 

Mr. Kennedy. I understand that. My question is directed to that 
period of time when this information was available. Mr. Lapensohn 
was then running this magazine. "Why was action not taken by the 
Pennsylvania Federation of Labor at that time to end the connection 
with this individual who was obviously less than upstanding. 

Mr. McDevitt. My only answer to that is, from a bit of a hazy 
memory about it, is that I am under the impression that he was 
cleared of that and we hadn't any grounds to proceed against him 
on it. 

'Sir. Kennedy. At that time, Mr. McDevitt, I believe it was produce 
dealers rather than contractors, but he was trying to shake tliem 
down for at least this $36,000, and when they were tiying to get hold 
of him at that time, he fled the jurisdiction. But Mr. Goldberg and 
Mr. "Turk" Daniels were indicted and were convicted in connection 
with their operation. The question would be why some action was 
not also taken against Mr. Lapensolin at that time, and why he was 
allowed to continue his relationship with the Pennsylvania Federa- 
tion of Labor. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10873 

jNIr. McDevitt. Again, Mr. Kennedy, if he was not determined to 
be guilty, I am afraid it did not leave us much gromid to proceed on. 

Tlie Chairmax. Was he a member of the union ? 

Mr. McDevitt, He was not a member to my knowledge, Senator. 

The CiiAiRMAx. He just had a contract with you? 

Mr. McDevitt. He had a contract with us. 

The Chairman. For what period of time did he have a contract? 

Mr. McDevitt. That went from year to year. We could cancel it 
out at any time. He did not have a signed contract because if any- 
thing happened 

The Chairman. Then if you had any doubt about his character 
and methods of operation, you could have discharged him at any 
time ; couldn't you ? 

Mr. McDevitt. That is correct. 

The Chairman. You don't have to wait until a man is actually 
convicted of crime in order to form some opinion as to his qualities; 
do you ? 

Mr. McDevitt. Xot necessarily. 

The Chairman. Now if you had reports that a man was engaged 
in practices like that and had a contract, working for you, soliciting 
people that your union han contracts with, w^ouldn't you have some 
concern about his character and the kind of representation he was 
making when he contacted these people ? 

Mr. McDevitt. I surely would, Senator. 

The Chairman. Go ahead, Mr. Counsel. I am trj-ing to find out 
about this. 

Senator Church. 

Senator Church, Mr, Kennedy, it is not clear to me, but could you 
explain to me what the relationship between Mr. Lapensohn and Mr. 
Goldberg was, what their connection was with one another ? 

Mr. Kennedy. If you know any further facts, Mr. McDevitt, you 
correct me. 

Senator, Mr. Lapensohn was operating the Pennsylvania Federa- 
tionist. One of the things that he did was to hire Mr, Goldberg and 
Mr. "Turk" Daniels as solicitors for him. They would go around 
to some of the producers and then tell them that if they took an ad 
or made these payments they would no longer have trouble with local 
929 of the Teamsters Union, which was the union that had control 
over the produce dealers. 

Beyond that, a group of the produce dealers had gotten together 
and wanted to erect a new building. He went to them and told them 
that 

Senator Church. He, meaning Mr. Goldberg? 

Mr. Kennedy. No, Mr. Lapensohn. He went to them and said that 
in order to build the building and have it effective, they would have 
to have good labor relations, and if they each got togetlier and paid 
him $250, which would be a total of around $36,000, if each one 
of them paid the $250, they would not have difficulties with local 929. 

Senator Church. May I ask then what followed subsequently? 
Were Goldberg and Daniels indicted ? 

Mr, Kennedy. The House committee that was looking into it tried 
to get hold of Mr. Lapensohn, and Mr. Lapensohn fled the jurisdic- 
tion. They were unable to get him. The district attorney, I believe, 



10874 IMPROPER ACTIVITIES IN THE LABOR FIELD 

then investigated the matter, and indicted Mr. Goldberg and Mr. 
''Turk" Daniels on this and other matters. They were also shaking 
down the produce dealers independently. 

Senator Church. Were Mr. Goldberg and Mr. Daniels convicted? 

Mr. Kennedy. They were. 

Senator Chubch. Mr. Lapensohn was never charged, indicted, or 
convicted ? 

Mr. Kennedy. That is correct. 

Senator Church. Mr. McDevitt, there are one or two questions I 
would like to direct to you. You say you liad a contract with Mr. 
Lapensohn. Under the terms of that contract, he was entitled to 60 
percent of the money that was paid for the advertisements in the 
magazine, and the union was entitled to 40 percent. Had you dis- 
charged Mr. Lapensohn, could that have given rise — that is, had you 
discharged him and a question might have ensued as to tlie propriety 
of the discharge under the contract — could that have given rise to a 
suit against the union for breach of contract and for damages ? 

Mr. McDe\t[tt. I think it could. 

Senator Church. So this is one of the reasons that you referred 
the matter to the general counsel ? 

Mr. McDevitt. I didn't feel qualified, Senator, to pass on it myself. 
It was a legal matter and that was my reason for referring it to the 
general counsel. 

The Chairman. IVhen did this occur? 

Mr. Kennedy. I believe 1947. 

Mr. McDevitt. 1947, as the record goes here. 

The Chairman. As I understood it, your contract with him was 
from year to year. 

Mr. McDevitt. That is correct. 

The Chairman. Was it written ? 

Mr. McDevitt. There was a written exchange between his office and 
ours with respect to the conditions, but it was not a signed contract, 
on the advice of our general counsel. 

The Chairman. Thereafter, then, for 6 years, you renewed the con- 
tract with him ? 

Mr. McDevitt. That is correct. 

The Chairman. All right. 

Mr. Kennedy. I might just say, and this has nothing to do with 
this witness, the counsel of that committee, Mr. Chairman, was Plyman 
Fishback, who was involved in the Cheasty matter and Mr. Hoffa. 

We went into this matter somewhat, in the House committee rec- 
ords, and we went to the House committee to obtain some of the docu- 
ments, the exhibits, and they were all missing. We got hold of the 
accountant for Mr. Lapensohn and went through some of his personal 
records and found all the exhibits from the House committee in his 
own personal records, dealing with all of these matters. 

Senator Kennedy. Do you know how they got there ? 

Mr. Kennedy. No. I just wanted to point out that Mr. Fishback 
was the counsel. 

The Chairman. Do you mean he was counsel for the committee 
that had procured the documents ? 

Mr. Kennedy. He was counsel of the House committee that was 
investigating, and then all these documents that belonged to the 
House of Representatives ended up in Mr. Lapensohn's file. 



IMPROPER ACXniTIHS IX THE LABOR FIELD 10875 

The Chairman. All rialit. 

Senator Kennedy. As 1 understand it, Mr. Lapensohn does not have 
any connection now with any labor organization in Pennsylvania or 
with a national organization, and has had none for some time? 

Mr. McDeviit. None to my knowledge. 

Senator Kennedy. I looked over this speech of George Meany's to 
the International Labor Press Association, December 2, in Atlantic 
City, in which he said : 

So newspapers, magazines, books, and everything else that we have in the 
trade union movement is subject to the same test as every other activity. The 
purpose of welfare funds Is to provide for the welfare of the trade union mem- 
bers, either at time of sickness or distress or time of retirement. The same thing 
is true of a trade union paper, to serve the interests of the members. 

Then he said : 

Most of these yearbooks carry advertisements, and I know In a good many 
cases they are run honestly and decently, and the advertising is the projier 
advertising, in other words ; as a matter of fact, it is subscribed to by em- 
ployers who employ members of our union, and thus advertising is secured in 
an honorable and decent way. On the other hand, we all know there are those 
types of books where the advertising in the book is of prime interest. 

What goes on in the book outside of the advertising is of very little import- 
ance. The methods used to secure the advertising are those that we do not 
approve and no one could approve. And still these books go on year after year,. 

I think Mr. Meany is expressing the viewpoint of responsible trade 
union people. I think this happens not only in the union movement 
but it happens in a lot of other organizations — veterans' organiza- 
tions, manufacturers' organizations and all the rest, and political or- 
ganizations as well — that because abuse of these yearly books wliei'e 
pressure of one kind or another is put on people to take advertising- 
even wdiere there is no gain. 

After all, we in politics get letters every day. I think it is most 
important that the leadership of the AFL-CIO and other groups 
consider carefully and review these books, and make sure that what 
happened in this case, in the Lapensohn case, were obviously operated 
in his best interests, in the form of shakedowns, that that does not 
occur in the areas where the trade unions have responsibility. I 
gather from Mr. Meany's speech that that certainly is his view. 

I am sure after this matter was brought to your attention it is 
certainly your vieAV. 

This is a definite responsibility. The reputation of the federation 
becomes involved, and, therefore, even though people are busy with 
other matters, I am hopeful that they will keep a careful eye on these 
books and make sure that something comparable to this does not 
happen in other areas. 

Is that the view as you understand it ? 

Mr. McDevitt. I am sure those steps have been taken. Senator. 
The president of the American Federation of Labor and the Congress 
of Industrial Organizations has discouraged the use of advertising 
where it was possible for us to avoid it. 

Senator Church. Mr. McDevitt ? 

Senator Kennedy. I have one more question. I think it is ])ar- 
ticularly unfortunate when the names of union officials are brought 
in to give an endorsement to this action, when they are brought in 
without the knowledge of the union official. Isn't that your view? 



10876 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr, McDEViTr. That is my view, and if I had had any knowledge 
of it, I would have gone to our executive council and had his contract 
canceled immediately. 

Senator Kennedy. I think that these contracts where they are 
given 60 percent and the federation gets 40 percent, and you have an 
organization with a high reputation, and also which has extensive in- 
fluence, that that is not a satisfactoi*y way, I would not think, to per- 
mit them to operate in any field, including labor. I think that sub- 
jects them to too much temptation when you divide the funds. It 
would be better to pay them the fee and let them do it, rather than the 
percentage split, which opens the door to abuse, which I think is 
what happened in this case. 

Mr. McDevitt. There is no question about it. But at the time 
we secured their services, none of these advertising agencies would 
accept it under any other basis. That is, they would not take it 
other than on a fee basis. 

Senator Church. Mr. McDevitt, in 1953 when you discontinued 
the use of this yearbook, what was the reason for the discontinuance 
at that time ? 

Mr. McDevitt. The primary reason was the one we exi)ressed so 
often all through the records of the federation itself, both in con- 
vention and more particularly in the executive comicil sessions. We 
were seeking some way of increasing the per capita tax in order that 
we might avoid the necessity for printing the yearbook. There was 
serious efforts made to get away from the necessity of that yearbook. 

Senator Church, And when you were successful in increasing the 
per capita tax, then you discontinued use of the yearbook, is that 
correct? 

Mr. McDem:tt, That is correct. 

(At this point. Senator Kennedy withdrew from the hearing 
room.) 

Senator Church, With your widespread knowledge of union af- 
fairs tlii-oughout the country, do you know whether the practice of 
publishing yearbooks of this kind on a contract basis is a practice 
that is flourishing and continuing to gi'ow in the union movement, 
or is it one that is dymg out ? 

Mr. McDevitt. I would say that it is pretty well diminishing now. 

Senator Church. At the time, then, that you discontinued the 
publication of your own yearbook in Pennsylvania, it was not because 
any information had come to you with regard to the solicitation 
methods of Mr. Lapensolin, but because other sources of funds were 
now available to the miion? 

Mi\ McDevitt. That was the primary reason. But no matter 
how we looked at it, there is always the risk of some of these mi- 
pleasant incidents occurring, and they were always uppermost in 
our minds and we discussed it. Kather than run the risk, we were 
most happy to get away from it as soon as we could get sufficient 
funds. 

Mr. Kennedy. Mr. Chairman, I would just like to point out in 
fairness t.o Mr. McDevitt, that from the study that we have made, 
the practice and procedure that was followed in Pennsylvania has 
been followed in many States. Wliere you have a dishonest group 
u^ m PP^^'^'^ting the magazine, they have freely used the name of 
the officials for purposes of obtaining ads, and this, we have found, 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10877 

was unknown to these union officials. When anything such as this 
was made known to them, they took steps to end the practice and pro- 
cedure. 

Of course, as Mr. McDevitt points out, this, in Pennsylvania was 
ended back as far as 1953. 

In that comiection, in Mr. Meany's speech, he points out here an 
incident that occurred where someone called and said that they were 
George Meany or a representative of George Meany's office, who 
called an employer, I guess within the last year or so, and told the 
employer that he should take an ad if he wished to have good labor 
relations. We will find from witnesses that will follow Mr. Mc- 
Devitt, that this was a procedure used actively in Pemisylvania, that 
people would call and say they were Mr. McDevitt or send letters 
out and say they were Mr. McDevitt, trying to obtain ads. 

The Chairman. Are there any further questions? If not, thank 
you very much, Mr. McDevitt. 

Call the next witness. 

Mr. Kennedy. Burnet Landreth. 

The Chairman. Do you solemnly swear the evidence you shall 
give before this Senate select committee shall be the truth, the whole 
truth, and nothing but the truth, so help you God ? 

Mr. Landreth. I do, sir. 

TESTIMONY OF BURNET LANDRETH III 

The Chairman. Be seated. State your name, your place of resi- 
dence, and your business or occupation. 

Mr. Landreth. My name is Burnet Landreth III. I live at 212 
West Highland Avenue, Chestnut Hill, Philadelphia. I am vice 
president and secretary of Penn's Manor, Inc. Unless you want to 
begin asking questions inmiediately. Senator, perhaps a letter which 
I wrote to the Better Business Bureau of Philadelphia will summarize 
it. 

The Chairman. Let us get a little further information. Wliat is 
the business of Penn's Manor ? 

Mr. Landreth. We are wholesale distributors of garden supplies 
in the Philadelphia area. 

The Chairman. All right, Mr. Counsel, you wanted to ask a 
question before we get to the letter. 

Mr. Kennedy. How many employees do you have ? 

Mr. Landreth. It varies from time to time, seasonally, but it 
seldom exceeds 25. 

Mr. Kennedy. Are you organized or unorganized ? 

Mr. Landreth. We are unorganized, Mr. Kennedy. 

Mr. Kennedy. Your employees are not members of any union? 

Mr. Landreth, No ; they are not. 

Mr. Kennedy. Did you receive a letter on April 29, 1952 ? 

Mr. Landreth. We did. 

Mr. Kennedy. Purportedly coming from Mr. James L. McDevitt? 

Mr. Landreth. Well, it bore that signature. 

The Chairman. Is this the letter that you received, or a photo- 
static copy of it? 

Mr. Landreth. That is the letter, sir, and I have the original here. 

The Chairman. That is a photostatic copy of it? 



10878 IMPROPER ACTIVITIES IX THE LABOR FIELD 

Mr. Landretii, Yes, sir. 

The Chairman. That letter may be made exhibit Xo. 3-i for 
reference. 

(Document i-eferred to was marked ''Exliibit No. 3-1"' for reference 
and may be found in the files of the select committee) . 

]Mr. Kexnedy. That letter stated that Mr. McDevitt was sending 
Mr. Kirsch around to see you ? 

Mr. Landreth. That is correct. 

Mr. Kennedy. Or someone signing Mr. McDevitt's name stated 
that^ 

Mr. Landreth. That is correct. 

Mr. Kennedy. What action did you take at that time ? 

Mr. Landreth. At that time, Being considerably at sea about it, 
we didn't do anything. Eventually, Mr. Kirsch arrived. After a 
rather unpleasant interview with Mr. Kirsch, and another man who 
represented himself as Mr. ]McDevitt's secretary, we wrote immedi- 
ately following that interview a full report to the Philadelphia 
branch of the Better Business Bureau, asking whether or not they 
had had similar reports from other organizations. We were told 
that they had. 

Mr. Kennedy. Noav, do you have a copy of the letter that you 
wrote to the Better Business Bureau ? 

Mr. Landreth. I do. 

Mr. Kennedy. Did that set forth the contact that you had had 
with Kirsch and this other individual who described himself as Mr. 
McDevitt's secretary ? 

Mr. Landreth. It gave the complete story, written at the time that 
it occurred. 

Mr. Kennedy. Now, would you read those paragraphs that bear 
on what occurred at the interview so that the committee can mider- 
stand that ? 

The Chairman. Do you have a copy of the letter ? 

Mr. Landreth. I have a copy. Shall I include that ? 

The Chairman. If you supply it, the v»diole copy of the letter may 
be made exhibit No. 35 and you may read excerpts from it. 

(Document referred to was marked ''Exhibit No. 35" for reference 
and may be found in the files of the select committee.) 

Mr. Landreth. The letter was very brief and it simply said : 

Dear Mr. Landreth : An important matter has developed with the Pennsyl- 
vania Federation of Lahor, and I have asked Sam Kirsch of my staff to see you 
personally vpithin the next few days. 
Thanking you for tliis courtesy, I am 
Very truly yours, 

.Tames L. McDevitt. President. 

Following that, we wrote the better business bureau, as I am about 
to read : 

On Tuesday, May 0, we learned what the important matter really was. Sam 
Kirsch and another man representing liimself as the private secretary to 'yic- 
Devitt arrived in a hrand new 19r)2 Cadillac. 

I may remind you that that was quite something then ; it was 1952. 

Kirsch came into the office while the other man stayed with the car. They 
were soliciting advertisements in a slick-paper book of about 50 pages of large 
size. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10879 

Kirscli admitted frankly, and, in fact, he volunteered the Information, that 
the ads were of no value at all, but stated that Vi^e should take a minimum space 
to show our good will toward the unions. 

I told him of my conversation with the better business bureau — 

and this was a telephone conversation to which I referred — 

and of the letter that you said you had had from George Meany, the national 
secretary-treasui-er of the AFL, in which he disavowed all advertising of such 
nature. 

Kirsch flatly denied that any such letter existed, and all but called me a liar, 
and in very heated terms. He then stated that money from the ads would be 
used to pay for scholarships at Pennsylvania Penn State College in the name 
of Labor's League for Political Education. 

I countered this with the statement that I had been informed that Labor's 
League had at one time had a Communist fringe element, and that at one time 
at least it had been reportedly on the State Department's suspect list. 

Kirsch said immediately "Don't call me a Commie. I am just as good an 
American as you are." I, of course, denied having said anything at all to indi- 
cate he was a Commie, and I demanded that he not put words in my mouth. 

Kirsch then cooled down, and said that even if Labor's League did have a 
Commie influence, it was still doing a fine .job in labor relations, and displayed 
8 by 10 glossies of classes at Penn State with the official Penn State rubber 
stamp on the back of them. 

The alleged secretary of McDevitt was then called in by Kirsch to bolster 
his argument. They displayed tabloid newspapers published in various cities 
by the AFL, all seemingly the same except for the individual mastheads, and 
each copy of which featured a photograph of McDevitt meeting with an official 
of Labor's League for Political Education. 

I said that I was not particularly impressed by this type of tie-in with 
Labor's League. 

The small plump man who said he was McDevitt's secretary, then took me 
by the arm and suggested that we go outside the office for a few quiet words. 
I went out with him and again stated that we were not interested in giving a 
donation. He then accused me of being antagonistic to labor. This I denied, 
but I pointed out that we were a small nonunion shop, we weren't particularly 
in contact with Tuiioas. 

He therefore s;u«l that those who weren't for labor to the extent of a donation 
were against labor. 

By this time Kirsch left the office and joined us outside in the warehouse. The 
two of them went to work in earnest and they insisted that labor was a friend 
to all, and that if people knew what was good for them, they had better be a 
friend of labor. 

When I politely reinsisted that we were not interested in subscribing, I waS 
told that in the future our trucks would not be allowed to either load or unload 
at any union platform anywhere on the east coast or elsewhere. 

I then asked how it was that we had had no trouble in more than 30 years of 
business, and the reply was, the unions did not know about us in the previous 
30 years, but now we do know that you're no friends of labor. 

I plainly and to his face called this an attempted shakedown and a low form 
of attempted blackmail. Mr. McDevitt's secretary then edged toward the door 
and shouted over his shoulder, "You can call it anything you like, but from now 
on just try to unload at any one of our platforms." 

Kirsch on leaving called over his shoulder "Tell this one to Hugh Smith." 

He Avas at that time secretary of the Philadelphia Branch of BBB. 

"and just see how much help you will be able to get from him and his organiza- 
tion." They then told me that we Avill be officially blacklisted. As a matter of 
fact, our firm has no particular feeling one way or the other about labor as such, 
we are too small to really interest the unions, and few of our people have earlier 
worked in unionized plants. 

We like our people and they like us. If the foregoing is any sample of the 
way organized labor operates, it is certainly gaining no converts here. 

That is the end of tlie letter. 



10880 IMPROPER ACTIVITIES IX THE LABOR FIELD 

The Chairman. I hand you here the letter from Mr. George Meany 
to Mr. Hugh Smith, general manager, Better Business Bureau of 
Philadelphia, dated April 15, 1952. I ask you to examine this and 
state if you recognize it or identify it. 

( A document was handed to the witness. ) 

Mr. Landreth. This is a copy of a letter which Mr. Hugh Smith 
sent to us, and I imagine to all other people who contacted the better 
business bureau. 

The Chairman. Who sent it to you, Mr. Smith ? 

Mr. Landreth. Mr. Smith, and it later was made a part of one of 
the better business bureau bulletins that they send out to subscribers. 

The Chairman. Obviously, Mr. Meany, when he found out this 
was going on 

Mr. Landreth. He backtracked or he disavowed it. 

The Chairman. He didn't backtrack, if he hadn't already tracked. 
So what he did was to repudiate it and denounce it. 

Mr. Landreth. Yes, sir. 

The Chairman. That is correct, isn't it ? 

Mr. Landreth. That is correct. 

The Chairman. That may be made exhibit No. 36. 

(Document referred to was marked ''Exhibit Xo. 36," for reference 
and may be found in the files of tlie select committee). 

Mr. Kennedy. Now, would you like to read this last paragraph, 
Mr. Chairman, of Mr. Meany's letter. 

The Chairman. Mr. Meany concluded his letter, wliich is now ex- 
hibit No. 34, as follows : 

We wish to inform you and we hope you will pass along the informatiou 
to the businessmen in your community, the American Federation of Labor does 
not accept paid advertising in any of its publications. 

No one is authorized to solicit advertising in the name of the American 
Federation of Labor for any publication. 

That is the last paragraph of the letter Avhich you just identified i 

Mr. Landreth. Yes, sir. 

Mr. Kennedy. So you took no ad ? 

Mr. Landreth. We took no ad. 

Mr. KJENNEDY. Did you have any visits from these individuals 
again ? 

Mr. Landreth. No, but shortly thereafter we had a similar letter 
to the first one, except this instead of mentioning Sam Kirsch, at 
this time it mentioned James Wooster of my staff, and as far as any 
of us can recall Mr. Wooster never appeared. 

Apparently the word of that first interview with Kirsch reached 
whoever was in charge of these gentlemen, and he did not show up. 

Mr. Kennedy. And did you have any difficulties with the labor 
unions after that ? 

Mr. Landreth. We did, but I do not believe it had any connection 
at all. That was a couple of years later, the local Teamsters tried to 
organize us, and did not succeed. 

Mr. Kennedy. But immediately after that you had no difficulties 
with the unions ? 

Mr. Landreth. No, and we had no difficulties. Even during the 
time that they tried to organize us and put a picket line around us, 
we still received stuff through friendly union drivers who dumped it 
off a mile or so away and our own trucks picked it up. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 1088X 

Mr. Kennedy. And yoii had no evidence, as I understand it, at the 
time other than what this individual said, that he was in fact working 
for McDevitt, is that correct ? 

Mr. Landretii. That is correct. We have had no repercussions at 
all. 

The Chairman. Is there anything further? 

Senator Church. I have one question, please. 

just so that the record may be complete, the specific threats that 
were used in the course of the interview that you would find it dif- 
ficult to use labor platfonns to load and unload your mercliandise, 
and the other specific statements that were made in the nature of 
threats if you didn't take an advertisement — you never encountered 
any difficulty of this kind ? 

Mr. LfcVNDRETH. None whatever. 

Senator Church. That is all. 

Mr. Landreth. Thank you. 

Mr. Kennedy. ^Ir. Voitsberger. 

The Chairman. Do you solemnly swear that the evidence, given be- 
fore this Senate select committee shall be the truth, the whole truth, 
a.nd nothing but the truth, so help you God ? 

Mr. Voitsberger. I do. 

TESTIMONY OF DeFOREST M. VOITSBERGER 

The Chairman. State your name, and your place of residence, and 
your business or occupation. 

Mr. Voitsberger. My name is DeForest M. Voitsberger, and I live 
at 100 North Concord Avenue, Habertown, and I am vice president and 
comptroller of the S. S. White Manufacturing Co. 

The Chairman. What does it manufacture? 

Mr. Voitsberger. Dental equipment and supplies. 

The Chairman. All right, proceed. 

Mr. Kennedy. You are the largest dental manufacturing company 
in the country, isn't that correct ? 

Mr. Voitsberger. Yes, sir. 

Mr. Kennedy. And you have approximately 400 employeas? 

Mr. Voitsberger. In Philadelphia, yes. 

Mr. Kennedy. Out of those 400 employees, only about 40 of them 
are in a union, is that right ? 

Mr. Voitsberger. No, I would say about 165. The 40 are at our 
headquarters, and a small factory in Philadelphia is organized. 

Mr. Kennedy. You have 400 including that small factoiy? 

Mr. Voitsberger. That is right. 

Mr. Kennedy. About 165 of them are organized ? 

Mr. Voitsberger. Yes, sir. 

Mr. Kennedy, In what unions are they ? 

Mr. Voitsberger. The 40 at our headquarters are the Teamstei-s and 
Warehousemen, and our Frankfort factory is a federal union, an in- 
dependent. 

Mr. Kennedy. Only 40 of your employees are actually membei^s of 
a union which is affiliated witli the AFL or CIO ? 

Mr. Voitsberger. That is riglit, in Philadelphia. 



10882 IMPROPER ACTRITIES IN THE LABOR FIELD 

Mr, Kennedy. 1 am talking about just Philadelphia. All of the 
other employees that are members of a union are members of an inde- 
pendent union, a union independent from the AFLr-CIO ? 

Mr. VoiTSBERGER. That is right. 

Mr. Kennedy. And yet you received a letter which purported to 
come from Mr. McDevitt, in 1948, did you not? 

Mr. VoiTSBERGER. Yes, I believe we did. 

ISIr. Kennedy. That was on January 8, 1948. 

The Chairman. I hand you a photostat copy of a letter dated 
January 8, 1948, addressed to you and purported to be from Mr. 
James L. McDevitt. Will you examine it and state if you identify it, 
please? 

(A document was handed to the witness.) 

Mr. VoiTSBERGER. Yes, sir. 

The CsiViRMAN. It may be made exhibit No. 37. 

(Document referred to was made exhibit No. 37 for reference and 
may be found in the files of the select committee.) 

Mr. Kennedy. Do you know if Mr. Kirsch in fact came by to see 
an official of your company ? 

Mr. VoiTSBERGER. Yes, he did. 

Mr. Kennedy. Did he see you ? 

Mr. VoiTSBERGER. Yes, sir ; he did eacli year. 

Mr. Kennedy. Each year ( 

Mr. VoiTSBERGER. Yes. 

INIr. Kennedy. Did he come by in 1948 i 

Mr. VoiTSBERGER. Well, that was prior to the time that I became a 
member of our labor negotiating committee but he did see Mr. 
Thomas. 

Mr. Kennedy^. At that time, after he had the interview with Mr. 
Thomas, you paid $125, is that right, to the Pennsylvania Federa- 
tionist ? 

Mr. VoiTSBERGER. That is right. 

Mr. Kennedy. You received a letter purportedly coming from Mr. 
McDevitt, thanking you for that contribution ? 

Mr. VoiTSBERGER. That is correct. 

Mr. Kennedy. Now, when was the first time that you met Mr. 
Kirsch? Was that 1950? 

Mr. VoiTSBERGER. It was 1950. 

Mr. Kennedy. He came to see you and could you tell the com- 
mittee or relate to the committee what occurred during that conver- 
sation ? 

Mr. VoiTSBERGER. At the time that Mr. Kirsch came to see me, he 
had said that he had received an ad from my predecessor and that 
he would like to continue the advertisement. At that time realizing 
that it didn't means very much as far as our labor relations were con- 
cerned, I stalled him off for a while, but he was so persistent in tele- 
phoning and coming into our office and phoning me from our recep- 
tion desk that I ultimately went along the same as my predecessor, 
although in later years I cut the amount down as far as the size of the 
ad and the amount of the contribution. 

Mr. Kennedy. How much did you take the first year, 1950 ? 

Mr. VoiTSBERGER. I think it was the same as the prior year, $125. I 
don't have mv records with me. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10883 

Mr. Kennedy. You took, I believe, $125, and then it ranged after 
that from $150 to $00? 

Mr. VoiTSBERGER. Yes, sir. 

Mr. Kennedy. Now, did he explain to you at that time that the peo- 
ple behind the Pennsylvania Federationist could perform services for 
you in your labor relations ? 

Mr. VoiTSBERGER. He said to me each time that if we ever had any 
trouble with any of our unions, that they would be very happy to come 
in and settle the differences. I realized at that time that he didn't 
know what he was talking about, because our largest unions are not in 
Philadelphia, and we settle with our large unions and all of the other 
unions fall in line. 

Mr. Kennedy. But he told you that ? 

Mr. VoiTSBERGER. He did tell me that he would help in case we had 
any trouble. 

Mr. Kennedy. Now, you paid him the $120 and did you actually 
put an ad ? 

Mr. VoiTSBERGER. Yes, sir. 

Mr. IvENNEDY. You had an ad in every year ? 

Mr. VoiTSBERGER. Yss, sir. 

Mr. Kennedy. And it appeared there under your name ? 

Mr. VoiTSBERGER. Under our name. 

Mr. I^NNEDY. What was the reason that you did pay ? Was it in 
order to insure that you would not have any labor difficulties ? 

Mr. VoiTSBERGER. That was one of the basic reasons. 

Mr. Kennedy. You felt that you might have problems with the la- 
bor unions unless you did ? 

Mr. VoiTSBERGER. That is true. 

The Chairman. You mean you were trying to buy peace in antici- 
pation of difficulties ? 

Mr. VoiTSBERGER. We were trying to close any avenue and we were 
having difficulty in those early 1950's, and we thought for the small 
amount involved that it might help us. 

The Chairman. It mi^ht prove to be a good investment ? 

Mr. VoiTSBERGER. It might prove to be a good investment. 

Mr. Kjinnedy. Did you take the money that you paid out of your 
advertising budget or out of a different budget ? 

Mr. VoiTSBERGER. Kather out of our donation budget, and not ad- 
vertising because the advertisements wouldn't help us, and the public 
does not buy our goods. 

Mr. I^NNEDY. Would you have contributed if you knew that the 
AFL was only receiving 40 percent out of this amount ? 

Mr. VoiTSBERGER. No, sir, we would not have. 

Mr. Kennedy. Did Mr. Kirsch say that your taking this ad would 
help and assist the labor movement ? 

Mr. VoiTSBERGER. Exactly. 

Mr. Ejinnedy. Did he say anything about the fact it would help 
educate children or anything ? 

Mr. VoiTSBERGER. I dou't recall that, but he made the statement that 
friends of labor advertised in this particular Federation journal. 

(At this point, the following members were present: Senators Mc- 
Clellan, Church, and Curtis.) 

21243— 58— p». 28 5 



10884 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. You did not realize that he was on a commission 
basis ? 

Mr. VoiTSBERGER. Xo ; I did not. I suspected it, but I didn't know 
it. 

The Chairman. You said you would not have taken it if 3'ou had 
known he was getting 60 percent. 

Mr. VoiTSBERGER. I would uot have. 

The Chairman. Xow you say you suspected he was. 

Mr. VoiTSBERGER. I suspected it. I knew that he nuist have been 
getting a commission. Otherwise, he wouldn't do it, but I figured in 
my own mind it was probably 10 percent. 

The Chairman. Senator Church ? 

Senator Church. Xo questions. 

The Chairman. Senator Curtis ? 

Senator Curtis. Xo questions. 

Mr. Kennedy. There is one other matter that I wish to touch on. 

Were you aware of the fact that Mr. Kirsch's magazine changed 
after 1953 ? 

Mr. VoiTSBERGER. Xo, sir. 

Mr. Kennedy. Did vou continue to contribute up until — M'hat, 1956 
or 1957 ? 

Mr. VoiTSBERGER. I think 1957. 

Mr. Kennedy. Were you aware that you were no longer contrib- 
uting to the Pennsylvania Federationist ? 

Mr. VoiTSBERGER. Xo ; I was not. 

Mr. Kennedy. That the Pennsylvania Federationist had in fact 
gone out of business ? 

Mr. VoiTSBERGER. I did not know that. 

Mr. Kennedy. And that Mr. Kirsch had started a new magazine of 
his own, and in fact your money was going to a new magazine called 
the Pennsylvania Labor Journal? 

Mr. VoiTSBERGER. I did not know it. 

The Chairman. Did you not receive copies of the maoaziiip ? 

Mr. VoiTSBERGER. AVe received copies, but it was a big thing. 1 
never had time to look at it except to make sure that for the money we 
gave them, our ad was in there with our name in it. That was all. 

The Chairman. You made no inquiry as to its actual tie-in with the 
federation ? 

^Ir. VoiTSBERGER. Xo, sir. 

Mr. IvENNEDY. Mr. Chairman, that is what actually happened, that 
after 1953, the money that Mr. Voitsberger then gave to the magazine 
went, in fact, to Mr. Kirsch's new magazine, the Pennsylvania Labor 
Journal, as the Pennsylvania Federation magazine went out of busi- 
ness. 

The Chairman. Xo part Avent to the labor organization ? 

Mr. Kennedy. Xo : this was affiliated with another labor organiza- 
tion, the Pittsburgh Central Labor Union. 

Senator Church. Mr. Voitsberger, after 1954, when the Pennsyl- 
vania Federation terminated its contract and went out of the business 
of publishing this yearbook, did Mr. Kirsch come to see you relative 
to the ads that you placed in the magazine after 1954 each year? 

Mr. Voitsberger. Yes : each year. 

Senator Church. Did he continue to represent to 3'ou in the later 
meetings that he had with you that he was still representing a fed- 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10885 

eration, and that the magazine was still being published by the 
federation ? 

Mr. VoiTSBERGER, I assumed so. I don't exactly recall. I remem- 
ber one time that he said something about moving to Pittsburgh, and 
that is why there was a change in the magazine. 

Senator Church. Do you recall that he ever told you that the 
magazine Avas now representing a local or a Pittsburgh union ? 

Mr. VoiTSBERGER. Xo ; I do not recall that. 

Senator Church. Do you think you would have continued to place 
ads in it had this been called to your attention ? 

Mr. VoiTSBERGER. I tliiuk it became a habit with us, starting back 
in the late 19-10's, and we thought it was- ■ 

Senator Church. So you continued it each year ? 

Mr. VoiTSBERGER. Yes. It was more of a nusiance to have him 
telephone and come to see me, when we didn't have really the time to 
see him. We passed the checks on to liim. 

The CiiAiRiMAisr. Did you receive something from Mr. Kirscli when 
he solicited your contribution or your ad ? Did he give you some kind 
of a card? 

Mr. VoiTSBERGER. Ycs ; there was a card. Usually I signed a blank 
which was a contract, to take a certain ad. But originally I think a 
card came into us with rates on it. 

The Chairman. With the rates on it ? 

Mr. VoiTSBERGER. That is right. 

The Chairman. I hand you here what purports to be a photostatic 
copy of one of those cards. Would you examine it and state if you 
identify it ? 

(The document was handed to the witness.) 

Mr. VoiTSBERGER. Ycs, sir ; that is the card. 

The Chairman. What does it say about commissions? 

Mr. VoiTSBERGER (reading:) 

No agency or salesman commission paid. 

The Chairman. Did you ever notice that before ? 

Mr, VoiTSBERGER. No. Xo ; I did not. 

The Chairman. All right. That may be made exhibit 38. 

(The document referred to was marked "Exhibit Xo. 38" for refer- 
ence and will be found in the appendix on p. 11172.) 

Mr. Kennedy. So, Mr. Chairman, at least Mr. Kirsch and Mr. Lap- 
ensohn were operating, and were operating as we have seen so far, 
on a company that w^as completely nonunion, and then Mr. Voits- 
berger, who had a very small percentage of his employees that were 
union, and then the third thing is he was telling them or informing 
them, as far as Mr. Voitsberger was concerned, that no commission 
was being paid to solicitors, which, in fact, was untrue. 

The Chairman. Are there any further questions ? 

Mr. Kennedy. That is all. 

The Chairman. Thank you very much. Call the next one. 

Mr. Kennedy. Mr. Farr. 

The Chairman. Do you solemnly swear the evidence you shall give 
before this Senate select committee shall be the truth, the whole 
truth and nothing but the truth, so help you God ? 

Mr. Farr. I do. 



10886 IMPROPER ACTIVITIES IN THE LABOR FIELD 

TESTIMONY OF ASA H. FAER 

The Chairman. State your name, your place of residence, and 
your business or occupation. 

Mr. Farr. My name is Asa H. Farr. I live at rural delivery 1, 
Belle Meade, N. J. I am vice president of the Kingston Trap Rock 
Co. 

The Chairman. Vice president of the Kingston Trap Rock Co.? 

Mr. Farr. Yes, sir. 

The Chairman. Wliat does that do? Does it manufacture some- 
thing? 

Mr. Farr. We quarry trap rock and are also in the construction 
business, Senator. 

The Chairman. How many employees do you have ? 

Mr. Farr. Approximately 400. 

The Chairman. Altogether? 

Mr. Farr. Yes, sir. 

The Chairman. Did you have approximately that number back in 
1950, 1952, or 1953? 

Mr. Farr. I think so, Senator. Some place in that range. 

The Chairman, In that neighborhood? 

Mr. Farr. Yes, sir. 

The Chairman. All right, Mr. Kennedy. 

Mr. Kennedy. Mr. Farr, your employees were primarily members 
of the Operating Engineers, is that right ? 

Mr. Farr. Operating Engineers and Teamsters, sir. 

Mr. Kennedy. All of your employees are organized members of 
labor? 

Mr. Farr. Yes, sir. 

Mr. Kennedy. And in 1952, the latter part of 1952, did you receive 
a telephone call which purportely came from Mr. James L. McDevitt, 
president of the Pennsylvania Federation of Labor? 

Mr. Farr. I did, sir. 

Mr. Kennedy. "What did this individual that called say to you in 
the telephone conversation ? 

Mr. Farr. That he would like to arrange an appointment for a Mr. 
Kirsch ; that he understood that we had been having a little difficulty 
in unloading some trucks, and he thought that if we would give Mr. 
Kirsch an opportunity to talk with us, that our problem could be 



Mr. Kennedy. He identified himself as Mr. McDevitt and president 
of the Pennsylvania Federation of Labor? 

Mr. Farr. Yes, he did. 

Mr. Kennedy. He said to you that he would like to make an appoint- 
ment to see a Mr. Kirsch ? 

Mr. Farr. That is right. 

Mr. Kennedy. And that he understood you were having some labor 
difficulties in unloading some trucks, is that right ? 

Mr. Farr. That is right, sir. 

Mr. Kennedy. And that he thought that those labor difficulties 
could be eased up? 

Mr. Farr. That is right, sir. 

Mr. Kennedy. Did you agree at that time to see Mr. Kirsch ? 

Mr. Farr. Yes, I did, sir. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10887 

Mr. Kennedy. "Would you speak up a little louder, please ? Were 
you in fact having labor difficulties at that time as far as the unloading 
of your trucks? 

Mr, Farr. Not in the unloading of our trucks, Mr. Kennedy. We 
employ or engage independent truckers. They are either individually 
owned or small owners that have 2, 3, or 4 trucks. The most of them 
are not members of any union. We had hired them to haul stone into 
Pennsylvania. 

We were building the roads for the Fairless works of the United 
States Steel Co. The shop stewards were refusing to permit the non- 
union truckers to come on to the job and unload their materials unless 
they joined the union. 

Mr. Kennedy. So at that time, you were having difficulty with the 
unloading of the trucks, although these were independent contractors 
doing the work? 

Mr. Farr. That is right. 

Mr. Kennedy. And the shop stewards refused to allow the trucks 
to be unloaded because they were being driven by nonunion drivers. 

Mr. Farr. That is right, sir. 

Mr. Kennedy. And you received this telephone call. Did Mr. 
Kirsch in fact come by to see you ? 

Mr. Farr. Yes, he did, sir. 

Mr. Kennedy. And you had a conversation with him about the 
situation ? 

Mr. Farr. Yes, sir. 

Mr. Kennedy. Did he tell you at that time that if you made a dona- 
tion to the Pennsylvania Federationist, he felt that your difficulties 
could be 

Mr. Farr. That if we took an ad in this publication, he felt that our 
difficulties might be eased. 

Mr. Kennedy. Did jou then in fact take an ad ? 

Mr. Farr. Yes, we did, sir. 

Mr. Kennedy. How much did you give at that time ? 

Mr. Farr. $1,000. 

Mr. Kennedy. You made a check out ? 

Mr. Farr. That is right, sir. 

Mr. I^NNEDY. To whom did you make the check payable? 

Mr. Farr. I think to the Federation of Labor. 

Mr. Kennedy. The Pennsylvania Federation of Labor? 

Mr. Farr. I think so, sir. 

The Chairman. I hand you a photostatic copy of the check and ask 
you to examine it. State if you identify it. 

(The document was handed to the witness.) 

Mr. Farr. That is the check, or a copy of it, Senator. 

The Chairman. A photostatic copy of it. It may be made exliibit 
No. 39. 

(The document referred to was marked "Exhibit No. 39" for 
reference, and will be found in the appendix on p. 11173.) 

Mr. Kennedy. Did you take an ad in the magazine ? 

Mr. Farr. Yes, we did, sir. 

Mr. Kennedy. Did you actually have an ad in the magazine? 

Mr. Farr. I understood that there was an ad in it. 

Mr. Kennedy. Did Mr. Kirsch come back and see you afterward, 
later on ? 



10888 IMPROPER ACTIVITIES IN THE LABOR FIELD 

IVIr. Farr. Yes, sir, the next year. 

Mr. Kennedy. During that period of time, had you had any labor 
difficulties ? 

Mr. Farr. No, sir. 

Mr. IvENNEDY. Had the problem that you were having as far as 
unloading these trucks eased ? 

Mr. Farr. It had been eased, sir. 

Mr. Kennedy. So you actually got what you paid for ? 

Mr. Farr. Apparently. 

Mr. Kennedy. And he came back the following year for another 
$1,000? 

Mr. Farr. Yes, sir. 

Mr. I\JENNEDY. IVliat did he tell you at that time ? 

Mr. Farr. Usually not too long before he would appear or before he 
would call for an appearance, we would get word that these truckers 
were still nonunion, and shortly afterward we would usually get a 
call from Mr. Kirsch asking for an appointment. 

Mr. Kennedy. Just prior to the time he came back again in 1953, 
you started having labor difficulties again ? 

Mr. Farr. They didn't actually develop. Word was sent by 1 or 2 
of the truckers that they had been told that they better get themselves 
squared off with the union, and a day or so later we would get a tele- 
phone call. 

Mr. Kennedy. Did you hear again in 1953 from Mr. McDevitt, or 
Mr. Kirsch called ? 

Mr. Farr. Mr. McDevitt called in 1953, too. 

Mr. Kennedy. This was someone describing himself as INIcDevitt ? 

]\lr. Farr. Identifying himself as McDevitt. 

Mr. I^nnedy. And Mr. Kirsch called and Mr. Kirsch came around 
to see you ? 

Mr. Farr. Yes, sir. 

Mr. Kennedy. What did he tell you at that time ? 

Mr. Farr. That our relations had been very good, and that we 
hadn't called them to see whether they could help us in any other way 
or not, and he wondered why we hadn't called. He just wanted to 
renew the ad to continue good relations. 

]Mr. Kennedy. He said if you renewed the ad, that the good rela- 
tions vou had enjoyed with the union would continue? 

JN^CFarr. That is right. 

Mr, Kennedy. Did you take another ad, then ? 

Mr. Farr. Yes, sir, we did. 

Mr. Kennedy. You made out another $1,000 check ? 

Zxir. Farr. That is right, sir. 

Mr. Kennedy. I hand you a photostatic copy of the check and ask 
you if you will identfy it as a copy of the check that you gave at that 
time in 1953. 

( The document was handed to the witness. ) 

Mr. Farr. That is a copy of it. 

The Chairman. That may be made exhibit 39A. 
( The document referred to was marked "Exhibit No. 39A" for refer- 
ence and will be found in the appendix on p. 11174.) 

Mr. Kennedy. I would like to ask you about this check. This check 
you did not make payable to the Pennsylvania Federation of Labor, 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10889 

nor did you make it payable to the Pennsylvania Federationist, but 
rather to Mr. Sam Kirsch himself. What was the reason for that ? 

Mr. Farr. He requested that it be made that vray, Senator. How- 
ever, he gave us a receipt, a signed receipt himself, from the Federa- 
tion of Labor, as I recall it. 

Mr. Kennedy. Did you protest it at that time that it was better for 
you to make it out to the organization to whom you were actually 
paying the money ? 

Mr. Farr. Yes, sir. 

Mr. Kennedy. "VVliat did he say ? 

Mr. Farr. I can't recall exactly what his reasoning was in asking 
that it be made out to him personally. 

Mr. Kennedy. Did you feel at that time that it was going into his 
own pocket, into Mr. Kirsch's own pocket ? 

Mr. Farr. I had begun to feel that way very definitely, sir. 

Mr. Kennedy. Wliy did you continue to pay it? 

Mr. Farr. Insurance, Mr. Kennedy, so far as we were concerned 
at that time, to continue. 

Mr. Kennedy. What you were paying money for was the labor 
peace ; is that right ? 

Mr. Farr. That is right, sir. 

Mr. Kennedy. And you were willing to make this payment, what 
amounts to a payoff, in order to achieve this labor peace ; is that right ? 

Mr. Farr. That is right, sir. 

Mr. Kennedy. Then in 1954, did Mr. Kirsch make a third visit ? 

Mr. Farr. That is right, sir. 

Mr. Kennedy. And you gave him another $1,000 at that time ? 

Mr. Farr. That is right. 

Mr. Kennedy. And that was made payable to the Pennsylvania 
Labor Journal. Did you know what the Pennsylvania Labor Journal 
was ? 

Mr. Farr. No, sir ; I did not. 

Mr. Kennedy. Did you know the Pennsylvania Federationist was 
no longer in existence at that time ? 

Mr. Farr. I did not, sir. 

Mr. Kennedy. Did you know the magazine in which you were pur- 
portedly buying an ad was no longer in existence ? 

Mr. Farr. No, sir ; I did not. 

The Chairman. I present you another photostatic copy of a check 
and ask you to examine it and state if you identf y it. 

(The document was handed to the witness.) 

Mr. Farr. That is a copy of it, Senator. 

The Chairman. That may be made exhibit o9B. 

(The document referred to was marked "Exhibit No. 39B" for refer- 
ence and will be found in the appendix on p. 11175.) 

Mr. Kennedy. Mr. Farr, did you in fact receive an ad in 1953 and 
1954? 

Mr. Farr. No, sir. 

Mr. Kennedy. So you just paid the money with the understanding 
that no ad would be put in ? 

Mr. Farr. That is right. 

Mr. Kennedy. You just gave him the $1,000 ? 

Mr. Farr. That is right. 



10890 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. And you got wliat you bought ? 

Mr. Farr. Apparently ; yes, sir. 

Mr. IvENNEDY. You didn't liave any labor difficulties ? 

Mr. Farr. We finished our job in 1954. We have not been back 
into Pennsylvania. 

Mr. Kennedy. Mr. Chairman, this indicates the danger of this 
kind of an operation, and also the repercussions that it can have in 
the use of a labor official's name, such as Mr. jNIcDevitt, who obviously 
knew nothing about it, and the attempt to shake down individuals 
in the name of the Pennsylvania Federation of Labor, and also in 
the name of Mr. McDevitt. It indicates the dangers that exist. 

The Chairman. As I understand you, you gave the money not for 
an ad, you didn't care whether you had an ad or not. . But you simply 
gave the money m the hope of buying labor peace. In other words, 
that your problems with the union would be less difficult than they 
might be otherwise. 

Mr. Farr. Senator, on the first one, I actually asked for the ad. 

The Chairman. You asked for it ? 

Mr. Farr. Yes, sir. 

The Chairman. But you actually didn't care. You didn't expect 
any return from the ad. 

Mr. Farr. As a result of that ad bein^ in there, we must have had 
1,000 calls in from different organizations and different labor or- 
ganizations. 

The Chairman. Wliat about? 

Mr. Farr. Soliciting ads. 

The Chairman. Soliciting ads? 

Mr. Farr. Yes, sir. 

The Chairman. In other words, somebody concluded that you were 
an easy touch ? 

Mr. Farr. That is exactly right. 

The Chairman. So you began to get other customers or prospective 
solicitors ? 

Mr. Farr. That is right, sir. 

The Chairman. As far as it contributing anything to your busi- 
ness, expecting to get any return from it, any financial return or 
business by reason of it, you didn't anticipate that in the beginning; 
did you ? 

Mr. Farr. No, sir. I would like to state this, Senator, that they 
were not our employees. 

In other words, our employees are organized and members of legiti- 
mate unions. These were people that were engaged in the trucking 
business that we had absolutely no control over. 

The Chairman. You had no objection to your people being organ- 
ized, and they were in the miion ? 

Mr. Farr. No objection at all, sir. 

The Chairman. But they were giving you trouble on the outside? 

Mr. Farr. That is right, sir. 

The Chairman. And these folks would come in and get $1,000 from 
you and ease that problem ? 

Mr. Farr. That is right, sir. 

The Chairman. And that is what they did ? 

Mr. Farr. That is correct, sir. 

The Chairman. Are there any other questions ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10891 

Mr. Kennedy. That is all. 

The Chairman. Senator Curtis ? 

Senator Curtis. This is not directed to this witness. I regret that 
other official appointments prevented me from being in the hearing 
today. Does the staff expect in this hearing to present the figures of 
how much money, if any, actually ended up in the hands of the Penn- 
sylvania Federation of Labor or any labor organization ? 

Mr. Kennedy. We can do that right now, Senator. I think it is a 
good idea. 

Senator Curtis. I would be glad to have that. 

The Chairman. Are there any other questions of this witness? 

Senator Church. 

Senator Church. You testified that the nature of the labor diffi- 
culties you were having, prior to the time that Mr. Kirsch first came 
to you, had to do with unloading trucks that were operated by inde- 
pendent contractors. Is that correct ? 

Mr. Farr. That is right, sir. 

Senator Church. After you took the first advertisement, which 
did, in fact, appear in the publication, and paid the first $1,000, this 
problem eased ; is that correct ? 

Mr. Farr. That is right. Senator. 

Senator Church. Other than the fact that this problem eased, did 
any other information or evidence come to your attention tending to 
link, in your mind at least, tending to link Mr. Kirsch with the fact 
that this problem did ease? Was it just a coincidence that the prob- 
lem did ease that led you to the conclusion that Kirsch had had some- 
thing to do with it, or did you know, directly, that he had had some- 
thing to do with it ? 

Mr. Farr. No, sir ; I did not know directly. 

Senator Church. After that, did you actually get into the same 
problem prior to the time that Mr. Kirsch would come around and ask 
for another $1,000, or did you just g-et these telephone calls prior to 
that, indicating that the problem might be simmering agam? 

Mr. Farr. The latter? 

Senator Church. The latter ? 

Mr. Farr. Yes, sir. 

Senator Church. So, you continued to pay the $1,000 after the first 
time you took an ad, on the assumption, based upon these telephone 
calls, that if you didn't perhaps you would get into trouble again? 

Mr. Farr. That is right, sir. 

Senator Church. Did you endeavor to contact or communicate with 
any of the local union people concerned with this problem to ascertain 
whether, in fact, Kirsch had any connection with them or any dealings 
with them ? 

Mr. Farr. No, sir; I did not. After our problem eased the first 
time, I assumed that there had been a connection. 

Senator Church. And you figured that the $1,000 a year was a good 
investment to preserve the status quo ? 

Mr. Farr. That is right, sir. 

The Chairman. How soon after you gave the first check did you 
sense the easing of the problem ? 

Mr. Farr. Almost immediately, Senator. 

The Chairman. Would that be in a day or two ? 

Mr. Farr. Yes, sir. 



10892 IMPROPER ACTIVITIES IN THE LABOR FIELD 

The Chairman. In fact, did you have any more trouble about the 
trucks being unloaded ? 

Mr. Farr. No, sir. 

The Chairman. Your problem ceased ? 

Mr. Farr. Yes, sir. 

The Chairman. So, when it came time to renew the contract, to get 
another ad, you got some telephone calls ? 

Mr. Farr. That is right. 

The Chairman. What would those telephone calls say ? 

Mr. Farr. That they understood that these truckers were still 
operating nonunion. 

The Chairman. They would just remind you of that ? 

Mr. Farr. Yes, sir. 

The Chairman. And that Mr. Kirsch would be around to see you? 

Mr. Farr. Yes, sir. 

The Chairman. And he would come ? 

Mr. Farr. Yes, sir. 

The Chairman. So, you took the hint and paid off ? 

Mr. Farr. That is right, sir. 

The Chairman. Is there anything further ? 

If not, thank you very much. 

Mr. Kennedy. Mr. Chairman, I might say, as far as Mr. Kirsch, 
he was expected to be a Avitness. He had been interviewed by the staff, 
but, unfortunately, he died of a heart attack about 3 weeks or a month 
ago. 

I would like to call Mr. Ralph DeCarlo to put the figures in that 
Senator Curtis asked for. 

The Chairman. You have been previously sworn in this hearing? 

Mr. DeCarlo. Yes ; I have. 

The Chairman. Remain under the same oath. 

TESTIMONY OF RALPH DeCARLO 

Mr. Kennedy. You examined the ledger sheets of the Pennsylvania 
State Federation of Labor pertaining to the sale of advertisements? 

Mr. DeCarlo. Yes ; I have. 

The Chairman. You are an accountant, are you ? 

Mr. DeCarlo. Yes ; I am. 

The Chairman. With the General Accounting Office? 

Mr. DeCarlo. Yes, sir. 

The Chairman. And you are on loan to this committee, or on leave, 
so that you might work for this committee ? 

Mr. DeCarlo. That is right. 

Mr. Kennedy. And you also examined the annual financial reports 
of the federation ? 

Mr. DeCarlo. Yes, sir. 

Mr. Kennedy. Were you also able to examine certain of the books 
and records of the Pennsylvania Federationist? 

Mr. DeCarlo. No; just the ledger sheets pertaining to the sales 
expenses and the annual reports. 

Mr. Kennedy. The rest of the books 

Mr. DeCarlo. The rest of the books I did not examine. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10S93 

Mr. Kennedy. Could you give us a summary of the financial opera- 
tions of the State Feclerationist as set forth in these annual reports 
from 194G to 1954 i 

Mr. DeCarlo. Yes, sir. 

Mr. Kennedy. Is it through 1954 or up until 1954 ? 

Mr. DeCarlo. It is up to about October 1954, when the Rolee 
Advertising Agency was liquidated. 

Mr. Kennedy. But the last magazine was published in 1953? 

Mr. DeCarlo. 1953. 

Mr. Kennedy. The Kolee Advertising Agency Avas owned by whom ? 

Mr. DeCarlo. Lapensohn. 

Mr. Kennedy. By himself or with his wife ? 

INIr. DeCarlo. With his wife. It was a corporation and they were 
the sole stockholders. 

Mr. Kennedy. Just the two of them, or was there also Mr. Lapen- 
sohn 's brother ? 

Mr. DeCarlo. I don't think so, not in the Eolee Advertising Agency. 

Mr. Kennedy. We will get into more detail on that later. 

Would you give us the records, the financial accounts, of the 
Kolee Advertising Agency, which was operated and owned by Mr. 
Lapensolm for this period of 1946 through 1954 ? 

Mr. DeCarlo. Of Rolee? 

Mr. Kennedy. Of the Pennsylvania Federation. 

Mr. DeCarlo. Yes, sir. A review of the annual reports showed 
that $792,329.10 was received by the Pennsylvania State Federation 
of Labor for advertisements and contributions to the State Federa- 
tionist. Of this amount $481,707.74 was paid in commissions to Ben 
Lapensohn and the Rolee Advertising Agency, representing 60.8 
percent of the amounts collected. 

Mr. Kennedy. Let's go over those figures; $792,329.16 was col- 
lected 'i 

Mr. DeCarlo. Was collected by the Pennsylvania State Federa- 
tion of Labor. 

Mr. Kennedy. $481,707.74 out of this amount was paid in com- 
missions to Mr. Lapensohn or a company owned and operated by Mr. 
Lapensohn ? 

Mr. DeCarlo. Yes, sir. 

Mr. Kennedy. What was tlie cost of printing and distributing 
the magazine ? 

Mr. DeCarlo. The cost to the State Federation of Labor was 
$64,994.75 to print and distribute the Federationist each year. 

Mr. Kennedy. That would be taken out of the amount of money 
that tliey made from the operation ? 

Mr. DeCarlo. That would come out of the $792,000 figure ; that is 
right. 

Mr. Kennedy. What was the net profit realized by the Pennsyl- 
vania State Federation of Labor ? 

Mr. DeCarlo. They realized in net profits $245,626.67, which rep- 
resents about 31 percent of the total amount received. 

The Chairman. That is over a period of what time ? 
Mr. DeCarlo. About 9 years, Senator, from 1946 through 1954. 
Mr. Kennedy. How many copies of the Federationist were actual- 
ly distributed ? 



10894 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. DeCarlo. Our examination of the printers' records disclose 
that in no year were more than 3,500 copies ever distributed. 

Mr. Kennedy. To whom were these copies sent, generally? 

Mr. DeCarlo. Generally to the advertisers, schools, libraries, and 
to the 

Mr. Kennedy. To the locals ? 

Mr. DeCarlos. To the locals. 

Mr. Ivennedy. They would send out a copy to each local ? 

Mr. DeCarlo. I don't know whether each local got one or not. 

Mr. Kennedy. Then generally two and three thousand were sent 
out ; is that right ? 

Mr. DeCarlo. Around 3,000, 1 think, would be a good average. 

Mr. Kennedy. You told us what the Pennsylvania Federation of 
Labor received out of this, and how much was paid to Mr. Lapensohn. 
Then he, in turn, had to pay commissions, is that correct, to some of 
his solicitors ? 

Mr. DeCarlo. That is correct. 

Mr. I^nnedy. Who were the two main solicitors working for him ? 

Mr. DeCarlo. The two main solicitors were Samuel Kirsch and 
John Bokal. 

Mr. Kennedy. How do you spell his name, Bokal ? 

Mr. DeCarlo. B-o-k-a-1. 

Mr. Kennedy. Do you know anything about Mr. Kirsch's back- 
ground ? 

Mr. DeCarlo. Very little. 

Mr. Kennedy. How about Mr. Bokal's ? 

Mr. DeCarlo. Nothing, except that he had some kind of a prison 
record as a confidence man. 

Mr. Kennedy. I will come back to that. How much did each one of 
those two receive ? How much did INIr. Kirsch receive ? 

Mr. DeCarlo. Over the 9-year period, Mr. Kirsch received $120,- 
496.23. 

Mr. Kennedy. How much did Mr. Bokal receive ? 

Mr. DeCarlo. $96,341.54 for Mr. Bokal. 

Mr. Kennedy. From an examination of the records, how much do 
we feel Mr. Lapensohn himself made out of this operation as far as 
profit was concerned ? 

Mr. DeCarlo. Mr. Lapensohn personally benefited from this oper- 
ation by about $197,500.17. 

Mr. Kennedy. Over this period of time? 

Mr. DeCarlo. Over this period of time. 

Mr. Kennedy. That was a profit to him ? 

Mr. DeCarlo. That is right. 

Mr. Kennedy. Did you find that he was milking the funds out of 
the corporation ? 

Mr. DeCarlo. Yes ; in many ways. 

Mr. Kennedy. In order to make it appear to the State Federation 
of Labor that he was, in fact, operating on a close margin ? 

Mr. DeCarlo. That is right, sir. 

Mr. E^nnedy. Many of his own personal expenses were paid out of 
the corporation ? 

Mr. DeCarlo. That is right. They were charged to selling ex- 
penses, travel expenses, office expenses. But many of them appeared 
to be for his own personal needs. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10895 

Mr. IvENNEDY, But it would appear to the State Federation oi 
Labor that, in fact, they were operating very close to the line ? 

Mr. DeCarlo. That is right. 

Mr. Kennedy. We have found from an examination of the books 
and records that he actually made himself, in profit, through milking 
the corporation, through salary, through expenses, about $190,000. 

Mr. DeCarlo. About $197,500. 

Mr. Kennedy. Mr. Chairman, Mr. Bokal is also unable to be a 
witness for the same reason that Mr. Kirsch could not be a witness. 

The Chairman. He died of a heart attack ? 

Mr. DeCarlo. Yes, sir. 

Mr. Kennedy. But he had been arrested some 16 or 17 times. Prior 
to the time he began working for the Pennsylvania Federationist, 
he had served some 4 or 5 different sentences in the penitentiary as a 
confidence man, starting back in 1925, in the Federal Penitentiary 
in Atlanta, Ga. ; and then false pretenses in 1931, in Lewisburg, Pa. ; 
defrauding the mails, grand larceny, grand larceny in the first degree ; 
selling securities in 1939 without a license, and he served 6 months 
for that ; using mails to defraud ; grand larceny in 1940 ; forgery of 
checks in 1942. 

So he was 1 of the 2 chief solicitors for the Pennsylvania Fed- 
erationist. We had a good deal of information on Mr. Kirsch re- 
garding his background and activities when he switched over to this 
Pennsylvania Labor Journal, which he operated in the same way, 
which we expected to bring out. Of course, we will not at this time. 
Are there any other figures on that which you would like to have, 
Senator Curtis? 

Senator Curtis. These figures that you gave have nothing to do 
with the Pennsylvania Labor Journal? 

Mr. DeCarlo. No, sir. 

Senator Curtis. Just for the period they operated as the Pennsyl- 
vania Federationist? 

Mr. DeCarlo. Yes, sir. 

Senator Curtis. Were you able to trace any payments to any labor 
leaders that brought about labor peace? I am referring to the recent 
testimony of Mr. Fair, who paid sizable sums and the threats of labor 
difficulties disappeared. I would like to know who caused those 
difficulties, threatened difficulties, to disappear, and what they got 
of it. 

Do you know that? 

Mr. DeCarlo. No, sir. The Rolee records did not disclose any- 
thing of that nature. I was looking for it. 

Senator Curtis. Did the State federation of labor records show 
it? 

Mr. DeCarlo. I didn't examine all of their records: I just ex- 
amined the ones pertaining to the Federationist. 

Senator Curtis. I can understand you as an accountant would not 
have access to these facts, necessarily, but either 1 or 2 things hap- 
pened : A threatened labor disturbance did not exist, but these people 
running this activity could create talk that one existed, or else if one 
existed certainly somebody received pay for bringing it to an end. 

The Chairman. In one instance, it did exist, because they were un- 
able to unload the trucks. The stewards were interfering, telling them 
they could not unload. I would say that was actually, existing trouble. 



10896 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Senator Curtis. But would the State federation of labor have the 
authority to end that ? 

The Chairman. If the stewards are stewards of the union, they 
would certainly have some control over it. 

Senator Curtis. I would think that would be the prerogative of the 
local union or at least the international union involved over the State 
federation. Is that right ? 

Mr. Kennedy. I would think it would be the local union or the in- 
ternational probably. 

Senator Cuiitis. In other words, I think it would be most helpful to 
the committee if we could find out — and I am not addressing this nec- 
essarily to the witness, if we could find out who settled labor difficul- 
ties for payment on the part of the union. 

I have nothing further of this witness. 

The Chairman. Very well, thank you very much. 

You may stand aside for the present. 

First, do you have the summaries there that you testified from ? 

Mr. DeCarlo. Yes, sir. 

The Chairman. A copy of them may be filed and made exhibit 40. 

(The document referred to was marked "Exhibit No. 40*' for refer- 
ence and may be found in the files of the select committee.) 

The Chairman. Call the next witness. 

Senator Chutjch. Mr. Chairman ? 

The Chairman. Senator Church. 

Senator Chu^rch. Before we get into the question of the next wit- 
ness, I think figures of the kind which have been given to us here tliis 
afternoon would be even more meaningful if we could correlate the 
total amounts of money apparently realize from the sale of advertise- 
ments in this kind of publication with the actual advertisements that 
did appear and the rates known to have been charged for those adver- 
tisements in order to determine how the total figures bear out with 
what M-as actually put into the magazine, as a method for checking or 
better checking the actual handling of the funds involved. 

I am wondering if that has been done in this case. 

The Chairman. Mr. Counsel ? 

Mr. Kennedy. Senator, because this magazine went out of exist- 
ance in 1954, we could not make the studies in this case that we could 
in the case of New York, where they went out of existence just last 
month, after we had some conferences with the federation officials 
in New York State. 

So we were able to break the figures down in far more detail in New 
York. When we go into the operation of that magazine, which was 
also operated by Mr. Lapensolm, we will have figures that bear on 
the question that the Senator raises. 

Senator Church. Thank you. 

Senator Curtis. I do have one more question to ask the witness, 
Mr. Chairman. 

The Chairman. Yery well. 

Senator Curtis. Did the Pennsylvania State Federation of Labor 
receive any money that was paid in where there was no ad published? 

Mr. DeCarlo. Yes, sir; they received contributions from employ- 
ers who did not wish to have their ads put into the magazine. 

The Chairman. I think in your statement with respect to the 
matter it said that these were contributions and advertisements. 



IMPROPER ACTIMTIES IN THE LABOR FIELD 10897 

Mr. DeCarlo. That is riglit. 

Senator Curtis. Do you know how much the so-called contribu- 
tions amounted to that the Federation of Labor received? 

Mr. Df.Carlo. I don't have that information, no, but I believe that 
perliaps Mr. Kennedy may have something, too, on that. 

Senator Curtis. That is all, Mr. Chairman. 

Calling something a contribution does not make it so. The wit- 
nesses that I have heard tliis afternoon were sought out and asked 
for this money. 

The Chairmax. It could be an involuntary contribution. 

Senator Curtis. I think that is a little more respectable word than 
the transaction indicates. 

The Chairman. A stronger word could be used ? 

Senator Curtis. Probably. 

Mr. Kennedy. Senator, we have for the Pennsylvania Labor Jour- 
nal those figures broken down, which was another magazine that was 
operated by Mr. Kirsch, and we will put the figures in for New York 
tomorrow. We do not have them for the Pennsylvania Federationist. 

Would you want them for the Pennsylvania Labor Journal ? Would 
you want those figures ? 

Senator Curtis. If you have them. 

Mr. Kennedy. The number of contributors who requested no ad 
in 1954 was 194. The number of those who wanted an ad is 80. The 
total number was 274. In 1955, 178 wanted no ad, 66 actually put an 
ad in, and the total was 244. In 1956, 134 wanted no ad ; the number 
of advertisers was 56 for a total of 192. In 1957, the number of con- 
tributors who wanted no ad was 108, the number of advertisers was 
47, for a total number of contracts of 155. 

That makes a total for the 4-year period of 614 who wanted no ads 
but who made contributions, who made these payoffs. 

Two hundred and fifty-one actually bought an ad. That makes a 
total of 865 for the Pennsylvania Labor Journal. 

Senator Church. Mr. Chairman, I think it also should be stressed 
in the interest of fairness that since contributions that did not entail 
ads were received by the federation, that here is no evidence here and 
none has been presented this afternoon to show that the federation 
was at all apprised or had knowledge of some of the methods that 
were being used to actually obtain contributions. 

This linkup is certainly necessary if the federation is to be tainted 
at all, and that linkup does not exist here. 

Mr. Kennedy. To the contrary, we have found no information 
that they were aware that this was the kind of operation that Mr. 
Lapensohn was working, or, in fact, that the people in New York 
knew that the same kind of operation was in effect. 

The Chairman. But the fact is there was a swindle going on. They 
may have been using and were using the name of a labor organization 
to help them in perpetuating the swindle. It may clearly indicate 
the need for legislation in that area. 
Call the next witness. 

Mr. Kennedy. Mr. Elmer 

Senator Curtis. I have one more thing. Does the record show that 
the Pennsylvania State Federation did not know the so-called con- 
tributions were coming in from management, management with whom 
various union groups would be negotiating? 



10898 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. I think that they knew that the magazine was being 
put out, and that the magazine was dependent on advertisers, and 
employers were being approached. But tliey had given instructions, 
at least as far as we can learn, that there was no pressure to be used, 
that they were not to hold out the sale of labor peace or anything of 
that kind. That would appear to me to be the crux of this matter. 

Wliat happened was that Mr. Lapensohn and people similar to 
Mr. Lapensolm had an operation which was an imposition not only 
on the employer, but an imposition on the labor officials themselves, 
who were unaware that this kind of racket was going on. Some of the 
employers, such as our previous witness, of course made these pay- 
ments over a period of 2 or 3 years in order to buy labor peace, and 
to end what really amounted to legitimate unionization. 

He paid $1,000 out in order to keep the union away from his door. 
It is a reflection on a matter that needs to be developed from all sides. 

The Chairman. Call the next witness. 

Mr. Kennedy. Mr. Elmer W. Smith. 

(Ab this point, the following members were present: Senators 
McClellan, Church, and Curtis.) 

The Chairman. You do solmenly swear the evidence you shall give 
before this Senate select conmiittee shall be the truth, the whole truth 
and nothing but the truth, so help you God ? 

Mr. Smith. I do. 

TESTIMONY OF ELMEE W. SMITH 

The Chairman. State your name, your place of residence, and your 
business or occupation. 

Mr. Smith. My name is Elmer W. Smith, I live at 1737 West North 
Street, in Bethlehem, Pa. I am assistant to the vice president of the 
public relations department of the Pennsylvania Power & Light Co. 

The Chairman. All right, sir. Proceed, Mr. Kennedy. 

Mr. Kennedy. You are a large electric power and utility company, 
is that right ? 

Mr. Smith. One of the largest in the State of Pennsylvania, yes, 
sir. 

Mr. Kennedy. In 1950, your company paid for an advertisement 
in the Pennsylvania Federationist, $500 ? 

(At this point. Senator McClellan withdrew from the hearing 
room.) 

Mr. SiinTH. We made a contribution of $500 toward the publica- 
tion. 

Mr. Kennedy. You did not take an ad ? 

Mr. Smith. I cannot find a copy of an ad, so I assume it was a 
contribution. 

Mr. Kennedy. In 1951, 1952, and 1953 you continued to make 
your yearly contribution of $500 ? 

Mr. Smith. That is right. 

Mr. Kennedy. You received a letter in June 1950 purportedly 
signed by Mr. James McDevitt, is that right, on June 23, 1950 ? 

Mr. Smith. I am not sure of the date. You have those files. 

Mr. Ivennedy. He stated to you, did he not, that he was going to 
have Mr. Ben Lapensolm come by the office of the company in 1950 ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10899 

Mr. Smith. Well, Senator — Mr. Kennedy, I recall a letter like that 
in the files. But that was prior to my association, I believe, in that 
office. 

Mr. Kennedy. Then there is a letter here of June 30, 1950. 

Mr. Chairman, the first letter of June 23, 1950, is similar to the let- 
ters we have already had. I do not believe it will be necessary to 
make it an exhibit. It simply states that Mr. Ben Lapensohn is com- 
ing by. Then on June 30, 1950, there is a letter addressed to Mr. 
Lewis W. Heath, vice president of Pennsylvania Power & Light Co., 
which I would like the witness to identify. 

Senator Church. Would you please identify this letter for pur- 
poses of inclusion in the record ? 

(The document was handed to the witness.) 

Senator Church. This is a photostatic copy of a letter dated June 
30, 1950, bearing a signature of James L. McDevitt. I wonder if you 
can identify that letter, please. 

Mr. Smith. Yes. That has our receipt stamp, so I am sure it is 
ours. The letter was addressed to us and received by us. 

Senator Church. That letter will be made exhibit 41 for the record. 

(The document referred to was marked "Exhibit No. 41" for ref- 
erence and may be found in the files of the select committee.) 

(At this point, Senator McClellan entered the hearing room.) 

Mr. Kennedy. Prior to reading this letter, Mr. Chairman, I have 
a question for the witness. How many employees do you have? 

Mr. Smith. Approximately 6,500. 

Mr. Kennedy. And are they members of any union? 

Mr, Smith. About 4,000 are members of the independent — the 
employees independent union. 

Mr. Kennedy. That union is not affiliated with the AFL-CIO? 

Mr. Smith. That is not affiliated. It is an independent union. 

Mr. Kennedy. And yet your firm is making this donation to an 
American Federation of Labor magazine, is that right? 

Mr. Smith. Yes. 

Mr. Kennedy. This letter dated June 30, 1950, which has been made 
an exhibit, states 

Dear Me. Heath : Thank you very much for your courtesy extended to Mr. 
Lapensohn and Mr. Bokal of my staff. I am inclosing a monthly bulletin of the 
Pennsylvania Federation of Labor. Please note on page 5 where our organiza- 
tion opposes public and Government ovpnership of electric light and power 
utilities. You may be assured that we will continue in our fight for free enter- 
prise. 

With kind regards. 
Very truly yours, 

James L. McDevitt, President. 

Wasn't it a fact that you were making a contribution because you 
felt that the Pennsylvania Federation of Labor was supporting your 
position on the public power fights? 

Mr. Smith. Mr. Kennedy, I don't know that, but I do know that in 
searching the records and reviewing the files our contributions there 
were for the benefit of area development and for the educational 
program that the Pennsylvania Federation of Labor had. 

Mr. ICennedy. Did you find out what the circulation of the maga- 
maffazine was? 



21243— 58— pt. 28- 



10900 lAIPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Smith. Only from correspondence we Imd in the file, which 
referred to a figure' of 525,000. That was in 1048, 1 believe that letter 
is dated. 

Mr. Kennedy. Did yon ever find out after that that the circulation 
was only 3,500 or 3,000 ? 

Mr. Smith. No, sir, 

Mr. Kennedy. Did you ever inquire into that? 

Mr. Smith. No, sir. 

Mr. Kennedy. Did you ever inquire into where the magazine was 
going, by whom it was being received ? 

Mr. Smith. No. With a figure like that, that was a pretty wide 
distribution. 

Mr. Kennedy. You continued your contributions up through 1954, 
1955, and 1956. Was that always to the same magazine, do you think? 

Mr. Smith. No. I recall that the name of the publication was 
changed. I believe, to where in the last 2 or 3 years it was the Pennsyl- 
vania Trade Unionist. 

Mr. Kennedy. So that the last three contributions that you made 
were to a different magazine, but still associated with Mr. Kirsch ; is 
that right ? He was still the solicitor ? 

Mr. Smith. No, Mr. Bokal, John Bokal called. 

Mr. Kennedy. He had been associated with Mr. Kirsch prior to 
that time. How did you happen to contribute to Mr. Bokal's maga- 
zine then ? 

Mr, Smith. Through his telephone calls. As I recall, on two oc- 
casions he stopped at our office and asked about the continuation of 
our support of the publication. 

Mr. Kennedy. Did he discuss with you at that time — did Mr. 
Kirsch discuss with you — the position of the Pennsylvania Federation 
of Labor on the question of public ownership of power? 

Mr. Smith. You speak of Mr. Kirsch ? 

Mr. Kennedy. Mr. Bokal. Did Mr. Bokal ever mention that, or 
Mr. Lapensohn in his visits with you ? 

Mr. Smith. No. 

Mr. Kennedy, They never did? 

Mr. Smith. No. This Lapensohn, I never did see him. I don't 
know who he is. At no time did we discuss anything regarding the 
power issue. 

Mr. Kennedy. Your whole contact was with Mr. Bokal, is that 
right? 

Mr. Smith. That is right. 

Mr. Kennedy. And in 1954, he told you that he was switching over 
to another magazine, and you continued to make the $500 contribu- 
tions ? 

Mr. Smith. No, I don't recall any such conversation. 

The first we knew of it was when we got a copy of the magazine. 
As I recall it, that is the first we noticed that the name had changed 
from the Pennsylvania Federationist to the Pennsylvania Trade 
Unionist. 

I believe that was in 1954, as I recall. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10901 

Mr. Kennedy. Then on February 15, 1954, j^ou received a letter 
from Mr. Ralph L. Lyons, president of the Harrisburg Building and 
Trades Council, which started in part : 

You are probably aware that we are opposed to further encroachment by the 
Government in the public utility field, for such action tends to destroy the basic 
concept of the free enterprise system and the American way of life. 

Wasn't it a fact that you were making this contribution of $500 for 
the purpose of furthering, or hoping that it would further, the stand 
that the Pensylvania Federation of Labor had taken against public 
power ? 

Mr. Smith. No, I don't know that that is the fact. 

The Chairman. For what purpose were you making the contribu- 
tions ? 

Mr. Smith. Well, Senator, the publication did deal with the State 
of Pennsylvania, the possibilities of industry in Pennsylvania, and 
our support was for the development of Pennsylvania as an industrial 
State. 

Anything that benefited the area that we served, which is 10,000 
square miles, benefited us, too, as a utility company. 

The Chairman. That would be true. Did you take an ad or make 
a donation? 

Mr. Smith. In the first few years of our connection with the Penn- 
sylvania Federation of Labor, we did have ads. But as I recall from 
1950 we did not continue with ads but supported the publication. 

The Chairman. How did you charge off that expenditure ? To ad- 
vertising or donations ? 

Mr. Smith. It was charged as a contribution. 

The Chairman. As a contribution ? 

Mr. Smith. That is right. 

The Chairman. So you had nothing to sell. You were not adver- 
tising anything for sale. You were just contributing to help finance 
the publication of the paper ? 

Mr. Smith. That is right. 

The Chairman. Do you know why, when they wrote you about it, 
they would mention the fact that they were against public power ? 

Mr. Smith. Would you repeat that, sir ? 

The Chairman. Wlien they wrote you about these matters, when 
they had correspondence with you, they would write you that they 
were still against public power. 

Mr. Smith. I suppose their letters did contain that, but at no time 
did we solicit their support for any stand like that. 

The Chairman. Was it ever discussed between you ? 

Mr. Smith. Not between Mr. Bokal and myself, and he is the only 
man I ever had any contact with. 

The Chairman. How would they know your position about public 
power if you did not discuss it with them ? Is it a mystery to you ? 

Mr. Smith. I just did not discuss the matter with Mr. Bokal. 

The Chairman. It seemed to be on his mind, and that must have 
had some appeal to you. Every time he wrote you, he mentioned 
something about it. 



10902 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Smith. I recall Mr. Kennedy referred to a letter even prior to 
Mr. Bokal's contact that contained a statement like that, too. 

The Chairmax. Proceed. 

Senator Curtis. Mr. Chairman ? 

The Chairman. Senator Curtis. 

Senator Curtis. Mr. Smith, I would like to ask you a hypothetical 
question, and the reason I am making it a hypothetical question is 
because I do not want to get involved in details that are not clearly 
established. 

In your opinion, would it be an appropriate expenditure for a 
power company to make an expenditure for public relations that sold 
the general idea of privately owned power systems ? 

Mr. Smith. Yes, Senator. 

Senator Curtis. There would be nothing wrong with that ? 

Mr. Smith. No. 

Senator Curtis. That is my understanding. It might make a dif- 
ference to the recipient of the money, taxwise, if they were lobbying 
for an issue. But if you spent the money to get across to the public, 
even though it was a limited public, your arguments in favor of pri- 
vately owned power, it certainly would be, in my opinion, a legitimate 
advertising expenditure. 

Mr. Smith. I agree with that. 

Senator Curtis. And if that fact was not make known to you, per- 
haps it would be a legitimate expenditure for some other purpose, just 
general goodwill. 

Senator Church. Mr. Smith, if I remember your testimony cor- 
rectly, and please correct me if I am mistaken, j^ou first testified a few 
minutes ago that the reason that the company made this $500 contribu- 
tion, since the company's employees are not unionized or at least are 
not members of a union affiliated with the union that was publishing 
this yearbook, was because you had an interest in the educational pro- 
gram of the union. Then later you said that the reason was that you 
had an interest in industrial development in Pennsylvania, and this 
was handy, which is the reason that you did it, or was it for both of 
these reasons ? 

Mr. Smith. Senator, I believe I did make reference to the industrial 
development and their educational program. Also, I want to clear 
this thought with you. Senator : While we have 6,500 employees, ap- 
proximately, 4,000 are affiliated with the employees independent asso- 
ciation, and since the merger of 2 additional companies in 1953 and 
1956, we have acquired approximately 400 employees who are repre- 
sented by the Utility Workers Union of America, and about 175 em- 
ployees who are affiliated with the International Brotherhood of 
Utility Workers. 

Senator Church. But at the time that you made this contribution, 
you had no employees who were affiliated with the A. F. of L. ? 

Mr. Smith. Not at the start of it, that is right. 

Mr. Kennedy. "Wlien you determined your rates in Pennsylvania, 
when your rates were determined, in the meeting of the utilities com- 
mission, would you include this $500 as an expense ? 

Mr. Smith. Yes. That is an item of expense that was charged to — 
well, as it is referred to — above the line, and considered in the expense 
as ratemaking. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10903 

Mr. Kennedy. Would a donation to the Red Cross, for instance, or 
the blood bank, be considered ? 

Mr. Smith. They are not, Mr. Kennedy. They are referred to, 
charged below the line. But to give contributions to public institu- 
tions, and that sort, or drives, are a benefit to our customers and to 
everybody. But they are not charged above the line. 

Mr. Kennedy. You were making this $500 donation or contribution 
each year to avoid unionization or trouble with the A. F. of L., isn't 
that correct? 

Mr. Smith. No, sir. 

Mr. Kennedy. There was no other reason. You didn't have any 
connection with the A. F. of L. ? 

Mr. Smith. No. 

Mr. Kennedy. You had no employees who were members of the 
A. F. of L. 

Mr. Smith. As I stated before, that was purely for an area devel- 
opment promotion, and toward their educational activities, which 
their letter indicated they were interested in. 

Mr. Kennedy. Then why didn't you place an ad and say you were 
in favor of that, some message saying "Let all young people go to 
school" ; or something like that ? 

Mr. Smith. We did place ads. 

Mr. Kennedy. Not after 1950; you did not place an ad. 

Mr. Smith. We did not. 

Mr. Kennedy. Did you find out what the circulation was? That 
would be a good way of finding out. 

Mr. Smith. As I mentioned before, Mr. Kennedy, our records indi- 
cated they had a big circulation. 

Mr. Ivennedy. All that your records indicate is that in 1953 you had 
a memorandum which expected that this magazine would get to 525,000 
union members. It didn't say it had that circulation, or that that 
many magazines were being sent out or that many magazines were 
being produced. Why didn't you find out how many magazines were 
being distributed in 1950 when you were making this $500 donation? 

Mr. Smith. I can't answer that. 

Mr. Kennedy. Did you find out to whom the magazine was being 
sent? 

Mr. Smith. No, sir ; I do not know. 

Mr. Kennedy. I have here a memorandum on an interview that you 
had with John Bokal, May 10, 1955, which states the merger objec- 
tives : 1, "To eliminate raidings" ; 2, "Not for banding together for 
political gains"; 3, "Will only affect top level"; 4, "AFL to be domi- 
nant because of larger membership." The next one is "Opinion ex- 
pressed will continue that Gov't, should not interfere in private busi- 
ness.'' The last one is "Must maintain Free Enterprise System." 
This is all in your files in connection with the ad that you were taking. 
This is John Bokal, who represents this magazine. Where in there 
were you discussing the fact that you were going to contribute money 
for educational purposes in Pennsylvania ? 

Mr. Smith. Mr. Kennedy, what is the date of that letter again, 
or that note, that reference ? 

Mr. Kennedy, what is the date of that memorandum? 



10904 IMPKOPER ACTIVITIES IN THE LABOR FIELD 

The Chairman. I will hand you the memorandum and see if you 
identify it. This is what purports to be a photostatic copy of it. 
It is dated May 10, 1955. You may examine it and state if you iden- 
tify it. 

(The document was handed to the witness.) 

Mr. Smith. That is my writing. 

The Chairman. That may be made exhibit 42. 

(The document referred to was marked "Exhibit No. 42" for ref- 
erence and will be found in the appendix on p. 11176.) 

The Chairman. I assume the date on it is correct. 

Mr. Smith. Yes. 

Mr. Kennedy. It does not appear in there that you were very con- 
cerned about the educational process. 

Mr, Smith. No, but, Mr. Kennedy, that was, I believe 1 of the 2 
visits that Mr. Bokal made to your office. That is information that 
he had advanced, not that I had asked. I recorded that merely so I 
could discuss it with my superior as a result of the call. I didn't ask 
him any of that information. I had not interest in their union. It 
didn't affect us. 

The Chairman. As I understand, then, you say that he just came 
in and told you these were the advantages of it ? In advertising, you 
would get these advantages ? 

Mr. Smith. No, I don't recall anything like that. 

The Chairman. What Avas he telling you these things for, and you 
makmg a note of it ? 

Mr. Smith. He made his call and asked about our contribution or 
continuance of our contribution. 

(At this point. Senator Goldwater entered the hearing room.) 

Mr. Smith. This is just information in the course of conversation 
which he revealed, passed along to me, and I just made those notes. 

The Chairman. All right. He was giving you these reasons as to 
why you should continue your contribution. 

Mr. Smith. Well, maybe he did. 

(At this point, the follor^ang members were present: Senators 
McClellan, Church, Curtis and Goldwater.) 

The Chairman. You are the one involved in the transaction, and 
you were the one making the notes, and now can you tell us why you 
were making those notes, if it is from his conversation unless it was 
to persuade you to continue making the contribution and these were 
the reasons he gave ? 

Mr. Smith. I didn't know that it was his intention to try to per- 
suade me. 

The Chairman. Why did you think it was of sufficient importance 
to make a note of it ? 

Mr. Smith. That is what we talked about. 

The Chairman. You talked about that in order to lead up to the 
point as to whether you were going to continue to make a contribution, 
is that correct ? 

Mr. Smith. No, I don't think so. 

The Chairman. Can you give us any other reason why such a 
conversation would be held? 

Mr. Smith. Well, Senator, we never asked them to call on us for 
a contribution. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10905 

The Chairman. We have a lot of folks calling on us without our 
asking and then we take into account what to say in the course of the 
elforts to solicit, and obvioush' that is what you did and made notes 
of it? 

Mr. Smith. That is why we made those notes. 

The Chairman. Do you have any other explanation for it? 

Mr. Smith. No. 

The Chairman. You were there ? 

Mr. Smith. I was there, yes, sir. 

The Chairman. And 3^ou heard it and 3'Ou did it, and you made 
the notes, and if you have any better explanation we will be glad to 
have it. 

Mr. Smith. I made the notes. 

Senator Curtis. Of course I can't interpret someone else's notes, 
but this looks like to me a memorandum of what Mr. Bokal said about 
the merger of the AFL-CIO. You have down here — 

Merger objectives : Eliminate raidings, not for banding to go for political pur- 
poses, will only affect top level, and AFL to be dominant cause of larger mem- 
bership, and opinion expressed will continue that Government should not inter- 
fere in private business, must maintain private enterprise system. 

Far be it from me to suggest what somebody else's notes mean, but 
that looks like it is pretty plain, that Mr. Bokal is expressing his 
opinion on the AFL-CIO merger to a representative of a private busi- 
ness that is faced with Government competition in public power. 

Mr. Smith. You are absolutely right, because I didn't ask him those 
questions, and I had no reason to ask him. 

Senator Curtis. I don't think that there is anything wrong in a 
notation of somebody's opinion of what the merger objectives were. 

Mr. Smith. That is right. 

The Chairman. Tlie Chair will say he was simply trying to get 
the man who made the notes and had the conversation to tell us what 
it was all about. That is all I was trying to do, and you didn't seem 
to be able to tell us. I made the suggestion as to what it might be. 

Mr. Smith. It was just a conversation that he advanced, and not I, 
and I didn't ask him. 

The Chairman. All right, proceed. 

Mr. IvENNEDY. It was on a letter. The notes were made on the 
back of a letter which came to the company, with a request that the 
company grant an interview. It stated : 

Dear Mb. Smith : You probably read about out recent convention and the 
problems which are presenting themselves regarding the merging of the Ameri- 
can Federation of Labor and the CIO, and at the same convention other factors 
arising affecting the Pennsylvania trade union movement. I have asked our 
Mr. Bokal to contact you and acquaint you with these matters which I know 
you will be vitally interested in and which have an important effect on your 
labor management relations in your company. 

We want to express our thanks for your cooperation. 

It is signed by Edward Miller. 

On the back these notes are written. This is Mr. Bokal who came 
by to get the $500 contribution to the magazine at that time. 

I w^ant to draw your attention also to a memorandum dated Jan- 
uary 7, 1957, which was about the period of time, as I understand it, 
when you ended your contributions to this magazine, is that right? 

Mr, Smith. That is rijiht. 



10906 IMPROPER ACTH'ITIES IN THE LABOR FIELD 

Mr. Kennedy. It says — 

Over the period of the past 15 years, it has been the practice to contribute to- 
ward the expenses of their annual publication yearbook in amounts from $225 
advanced to $500 in the past 7 years. This publication was originally known as 
the Pennsylvania Federation of Labor Yearbook, and later the Pennsylvania 
Federationist, and since 1954, the Pennsylvania Trade Unionist. 

In 1940 to 1945, ads were submitted and since 1950 contributions were made in 
support of publication. No contributions were made 1946 to 1949. Accordingly 
we desire to discontinue this past practice of support knowing full well the pres- 
sure that will be exerted by their representatives who usually call on us during 
the month of January. 

During the past year his aim was to obtain our agreement to raise our con- 
tribution to $1,000 to meet their rising costs of publication, and defray deficits 
in convention expenses. 

Now attached to that is a handwritten memo saying — 

This is one contribution which as far as I am concerned should be discontinued. 
I have discussed with Ed Brill and he says no reason why not. 

I would think, from these two memos, it was obvious that you felt 
that there was no mention in there of the fact you were helping edu- 
cation in Pennsylvania. 

There is no mention in there of the fact you are trying to bring in- 
dustry into Pennsylvania by making the contribution. It is obvious 
from the fact the word "contribution" is in quotes, and the use of the 
word "pressure" here, that you were paying the $500 in order to better 
your labor-management relations and possibly on the question of 
public power ; isn't that correct ? 

Mr. Smith. I am sure, Mr. Kennedy, that that wasn't the intent. 

Mr. Kennedy. Wouldn't you agree that that is what it appears to 
be? 

Mr. Smith. Maybe I didn't go into the full detail of these con- 
tributions made. That is just a very short memorandum. Therefore, 
I didn't cover all of the points that you called attention to. 

Mr. Kennedy. You don't cover any that you state here are the rea- 
sons in answer to the questions, the reason you were making the con- 
tribution, and you don't cover any of those, and in addition you put 
"contribution" in quotes, and you use the word "pressure." 

Let me ask you this : "When our investigator first interviewed you, 
did you have his conversation bugged or recorded ? 

Mr. Smith. Did I have what? 

Mr. Kennedy. His conversation bugged or recorded. 

Mr. Smith. Oh, no, sir. 

Mr. Kennedy. You did not? 

Mr. Smith. No, sir. 

Mr. Kennedy. Did you have any recording device at all? 

Mr. Smith. No, sir. 

Mr. Kennedy. Would you tell me how you were able, or would 
you identify this for me. 

The Chairman. The Chair has not examined this, but I am hand- 
ing you a file, and as I understand it is a file belonging to your com- 
pany, or to you personally, and here is a memorandum on it, a four- 
page memorandum on yellow sheets. It appears to be signed by you 
and by Mr. Brill. 

Will you examine this document of four pages, and tell us what 
it is, please? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10907 

Mr. Smith. Yes, Senator. That is a statement I prepared after 
Mr. Nash left our office, as a result of our conversation. This is 
merely from memory of what we discussed. 

There was no recording. Both Mr. Brill and I who were present 
during Mr. Nash's visit prepared that memorandum. 

The Chairman. That may be made exhibit No. 43. 

(Document referred to was made exhibit No. 43, for reference, 
and may be found in the files of the Select Committee.) 

The Chairman. You state, then, this was made from memory, 
from your recollection, just so you might keep a record to refresh 
your memory after the conversation or after the interview with the 
staff representative ? 

Mr. Smith. That is absolutely correct. 

Mr. Kennedy. Did you have any recording device at all? 

Mr. Smith. Absolutely we did not ; no, sir. 

Mr. Kennedy. Let me just read you the start : 

Mr. Nash arrived at 1 : 40, appointment 2 o'clock, and after showing his cre- 
dentials, he said this is for the purpose of investigation and he wanted to review 
with me our contributions to the Pennsylvania Federation of Labor and Penn- 
sylvania Trade Unionist since 1945 and also see our file. 

Mr. Smith. After our telephone conversation this morning, I had no idea 
what the purpose of your visit might be, thinking it might be in connection 
with a labor problem. I asked Mr. Edward J. Brill, director of employee re- 
lations to join us in this meeting. 

Mr. Nash. That is all right. While my purpose is about contributions, we 
may get into the subject of your union. What is your full name and title? 

Then there are some brackets, and "answers recorded in his note- 
book." 

May I see your file, and I suppose you have one. 

You remembered all of this conversation ? 

Mr. Smith. Yes, sir. 

Mr. Kennedy. You remembered him saying : 

I suppose you have one? 

Mr. Smith. Yes, sir. 

Mr. Ivennedy. (Continuing reading) : 

Mr. Smith. Yes. we have a file but I am surprised that you should visit us 
on this subject, as we discontinued placing ads and contributions to support 
their annual publications. Is it because we discontinued that you are making 
this check? 

Mr. Nash. No, that is not the reason. I want to go back to 1945. 

Mr. Smith. How did you get my name? 

Mr. Nash. You were contacted by Mr. John Bokal on several occasions for 
contributions. Did you know he passed away? 

Mr. Smith. No, I did not. 

Mr. Nash. Yes, about 6 weeks ago. Did you know he was a confidence man 
with quite a record? 

Mr. Smith. No, I did not. 

Mr. Nash. I never met him. I only saw his picture with a number on it. 
Now, may I see your file, or should I issue a subpena ? 

(Smith called secretary for file and obtained it and Mr. Nash asked for it 
and handed file to him. ) 

Mr. Brill arrived and he was introduced to Mr. Nash. 

Then you continue on page 2 with the same exchange, and the 
names and what Mr. Nash said, and then what you responded to 
him, and what Mr. Nash said, and what Mr. Smith said, and it goes 



10908 IMPROPER ACTIVITIES IN THE LABOR FIELD 

on for 3 or 4 pages. You could remember everything that he said 
to you and everything that you replied ? 

Mr. Smith. Well, I don't know how near accurate it is, but that is 
my recollection of our visit as a result of Mr. Nash's call. 

Mr. Kennedy. Why didn't you just make a regular memorandum 
giving an account as to what had transpired ? 

Mr. Smith. That is just the way I set it up. There was no reason. 

The Chairman. May I ask, have you other memoranda made up in 
that manner, is that your practice to make them up in that manner, 
question and answer ? 

Mr. Smith. Well, Senator, I have never had such an occasion, such 
a visitation for anything like this before, to prepare a review like 
that. 

The Chairman. As a businessman, you do have interviews quite 
often, about business matters and so forth, and I just wondered if this 
was your practice. 

Mr, Smith. I have done that before. 

The Chairman. Question and answer? 

Mr. Smith. Yes, sir. 

Mr. Kennedy. There is no other memorandum in here similar to 
that. 

Mr. Smith. Oh, no, Mr. Kemiedy, that is the first time we ever were 
called on, on a matter like this. 

Mr. IvENNEDY. Some of these questions here, "What customers are 
residential customers?" and you have exchanges here that wouldn't 
possibly be of any interest, or couldn't be of any interest to you. They 
have down here in the memorandum these notes 

Mr. Smith. I have what, sir? 

Mr. ICJENNEDY. You have questions and answers here which 
wouldn't ordinarily be put in any memoranda, unless you had a re- 
cording, or were trying to put down vertabim what had occurred. 

Mr. Smith. Those are the questions that Mr. Nash asked, and to 
my recollection, because I remember full well he asked about our cus- 
tomers, and where they were located, and he said on his own, and I 
believe it is recorded there, or noted, "Yes, you serve Harrisburg," 
and I believe that is part of that. 

Mr. Kennedy. Can you tell us just now what the last five questions 
were that we asked you and what your answers were verbatim ? 

Mr. Smith. You mean now ? 

Mr. Ivennedy. Yes. 

Mr. Smith. We have just reviewed that file there, and you asked 
me whether I had a recording instrument, and I said "no." 

Mr. Kennedy. The last five questions, and I understand you could 
write a memorandum as to what had occurred and what we asked you 
about here, but could you repeat now for the committee the last five 
questions and answers that you gave as you did in this memorandum? 

Mr. Smith. You mean questions you asked me ? 

Mr. Ivennedy. Yes. 

Mr. Smith. Senator, he asked me about the memorandum of May 
10, and you asked me for the files. 

The Chairman. Are there any other questions ? 

You say under oath that you didn't record it, and you didn't have 
any kind of recording device ? 



LSIPROPER ACTIVITIES IN THE LABOR FIELD 10909 

Mr. Smith. That is absolutely correct. 

The Chairman. And no one did record it and these are not from a 
recording, and that is your statement under oath ? 

Mr. Smith. It is absolutely correct. 

The Chairman. It has every earmark of a recorded conversation 
liaving been transcribed. That is the way it looks. 

You state under oath, though, that you didn't do it. All right. 

Senator Goldwater. JSIr. Smith, how much does your company 
spend advertising each year % 

Mr. Smith. I do not have that figure, and I wouldn't want to haz- 
ard a guess. But if it would be helpful, I will obtain that informa- 
tion for you. I don't know. 

Senator Goldwater. What is your total volume ? 

The Chairman. Senator Goldwater, if you would like for him to 
do it, we will permit you to file that.^ 

Senator Goldwater. I thought that you might know it. Wliat is 
your total volume? 

Mr. Smith. About $120 million a year. You mean revenue? 

Senator Goldwater. Yes, your income. 

Mr. Smith. I think that is the figure, $120 million. 

Senator Goldwwter. Will you spend in excess of $1 million in 
advertising ? 

Mr. Smith. I do not know. Senator, what the amount is, whether 
it is that much. 

Senator Goldwater. Are you approached during the year for ads 
in, say, convention programs like the bar association ? 

Mr. Smith. Yes; we have many requests that come in from our 
field offices for advertisements, and for all kinds of publications, 
and on a local basis. 

Senator Goldwater. American Legion conventions, and Veterans 
of Foreign Wars conventions, and bar associations, and medical asso- 
ciations conventions? 

Mr. Smith. Well, I can't name them, but I laiow we get many 
requests. 

Senator Goldwater. Are you rather generous in granting those 
requests ? 

Mr. Smith. No ; we are not, because once we get started with them 
there is just no end to it. It has been the policy of the companjr not 
to support all of these publications that come to us, and especially 
year books. 

I remember the high school year books, such as that, and we have 
had numerous requests to do that but we did not support them for 
fear that we would just be continually plagued with those year books. 

Senator Goldwater. To your knowledge have you had other pres- 
sure type of publications approach you ? 

Mr. Smith. Not to my knowledge, no. 

Senator Goldwater. Have you ever had any letters from this pub- 
lication or others indicating that if you didn't take an ad they could 
run a news story that would be derogatory to your company? 

Mr. Smith. No, Senator, I don't know of anything like that that 
we have ever received, a letter like that. 



1 Shortly after his appearance before the committee Mr. Smith provided the requested 
Information by letter as follows : The company spent for advertising during 1957, $493,105, 
and in 1956, $520,536. 



10910 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Senator Goldwater. I came in late, and I apologize for it, and I 
don't know what the counsel is getting at, but if he believes that this 
type of solicitation of a businessman is something unusual, as a busi- 
nessman I can assure him it is not. 

It is a pest, and it is a pain in the neck, and the fact that you paid 
$500 for an ad in a union booklet is not unusual unless it was accom- 
panied by threats or accompanied by a suggestion that if you did it 
you might benefit at the bargaining table. 

Mr. Smith. No, Senator, there was nothing like that in any of the 
contacts I have had with any of the solicitors from this publication. 
As I stated before, in reviewing the files and going back to the time 
that our contributions started, I can only assume that it started for 
the area development benefits of the State of Pennsylvania, and for 
an educational program which the American Federation of Labor 
supported. 

Senator Goldwater. Let me ask you this: I imagine that your 
labor unions put out rather sizable issues of their press on Labor Day. 
Are you asked to contribute substantially to the Labor Day publi- 
cations ? 

Mr. Smith. No, sir ; I don't know of any contribution that we make, 
Senator, to publications like that. 

Senator Goldwater. That is all. 

Senator Curtis. How many counties in Pemisylvania does your 
company operate in ? 

Mr. Smith. We operate in 29 counties, and about 750 communities 
in that 29-county area. 

Senator Curtis. That is all. 

The Chairman. Call the next witness. 

Mr. Kennedy. Mr. Slattery. 

The Chairman, You do solemnly swear that the evidence you shall 
give before this Senate select committee shall be the truth, the whole 
truth, and nothing but the truth, so help you God ? 

Mr. Slattery. I do. 

STATEMENT OF ROBERT SLATTERY, ACCOMPANIED BY HIS 
COUNSEL, OWEN B. RHODES 

The Chairman. State your name, your place of residence, and your 
business or occupation. 

Mr. Slattery. My name is Bob Slattery, and I live at 716 Mount 
Pleasant Road, Bryn Mawr, Pa. I am a vice president of the Perm 
Mutual Life Insurance Co., of Philadelphia. 

The Chairman. You have counsel with you, do you ? 

Mr. Slattery. Yes, sir. Owen B. Ehodes, 1600 No. 3 Penn Center 
Plaza, Philadelphia, Pa. 

The Chairman. We will proceed. 

Mr. Ivennedy. Mr. Chairman, once again we are making inquiry 
today into the imposition on both labor, legitimate labor officials, as 
well as businessmen, by some of these publications which turned out 
to be racket publications, and we called this witness, as well as other 
witnesses, who can throw some light on the contributions that they 
made and why they made the contributions. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10911 

Now, Mr. Slattery, your company received a letter from Mr. Mc- 
Devitt, or purportedly from Mr. McDevitt, president of the Pennsyl- 
vania Federation of Labor, in February of 1950 ? 

Mr. Slattery. Yes, sir. 

Mr. IvENNEDY. Here is a copy of the letter. 

The Chairman. I hand you a photostatic copy of the letter counsel 
has referred to, dated February 14, 1950, and I will ask you to examine 
it and state if you identify it as a copy ? 

(A document was handed to the witness.) 

Mr. Slattery. I identify it; yes, sir. 

The Chairman. It may be made exhibit No. 44. 

(Document referred to was marked "Exhibit No. 44," for reference, 
and may be found in the files of the select committee.) 

Mr. IvENNEDY. It is dated February 14, 1950 : 

Dear Me. Adams : A very important matter has developed within the Pennsyl- 
vania State Federation of Labor, AFL, which I am sure is of great concern to 
both of us. 

I have asked my personal representative, Mr. Sam Kessler, to contact you and 
you may expect to hear from him within the next few days. 

Any courtesy extended to him will be greatly appreciated. 

That is signed, purportedly, by Mr. McDevitt. 

Senator Curtis. Is that Mr. McDevitt's signature? 

Mr. Kennedy. No ; it is not. 

Senator Curtis. Did he authorize it ? 

Mr. Kennedy. No. 

Senator Curtis. He didn't know anything about it? 

The Chairman. That is his testimony. 

Senator Goldwater. Is that the same James L. McDevitt who is 
head of political education for the AFL-CIO ? 

Mr. Kennedy. The same one. 

Senator Curtis. Was it typed in his office ? 

Mr. Kennedy. No. 

Senator Curtis. Wlio is the stenographer down here ? 

Mr. Kennedy. The stenographer where ? 

Senator Curtis. The letter purports to be dictated by JLM, and 
then a colon, and M JL. 

Mr. Kennedy. She was Mr. Lapensohn's secretary. All right ? 

Senator Curtis. I don't know whether it is all right. 

Mr. Kennedy. I mean is it all right for me to continue ? 

Senator Curtis. Yes. 

Senator Goldwater. Have you checked with her to make sure that 
that is not Mr. McDevitt's signature ? 

Mr. Kennedy. We have checked and found that these letters went 
out over this signature, and that it was not Mr. McDevitt's signature. 

Senator Curtis. Well, doesn't this cover the same period of time 
where Mr. McDevitt's organization made something over $200,000 
profit out of this thing? 

Mr. Kennedy. I think we have already gone into that. 

The Chairman. We have that all in the record here. 

Senator Curtis. I know it is in the record, but I can't understand 
why he wouldn't know anything about it when it was turning up a 
profit all of the time. 



10912 IMPROPER ACTIVITIES IN THE LABOR FIELD 

The Chairman. He knew about it, and he says he knew about the 
arrangements. They arranged for Lapensohn, and he made a contact 
with him in which he got 60 percent of any moneys they received for 
ads, and the union got 40 percent, and they put out a yearbook which 
they didn^t publish any more after 1953. 

Mr. Lapensohn had*^ a contract each year to do the soliciting, and 
to get the ads or contributions to go in this yearbook. Mr. Lapensohn 
got 60 percent, and the union got 40 percent. 

Now, Mr. McDevitt testified and we showed him a number of these 
letters, and he denied the signature, and he denied that he authorized 
the sending of these letters as they were written. He said that he 
did authorize them to write a letter and say that their representative 
would call on them. 

Senator Curtis. But he did authorize the contract with Lapensohn ? 

The Chairman. Oh, yes. They had a contract, and it was just by 
exchange of letters, but it ran from year to year, and they renewed it 
at the end of each year, and that is substantially what the record shows 
here this afternoon. 

Now, Mr. McDevitt testified with respect not to every one of these, 
but the signatures are the same, and he testified positively he did not 
sign them. 

Senator Curtis. It is strange he didn't get an answer to some of 
them that would call his attention to them. 

The Chairman. He said he did not authorize them to be signed. I 
think the answer came by the fellow calling on them right away. 

Mr. Kennedy. They were just appointment letters, and as we 
pointed out at the beginning, this was a procedure and a practice that 
was not only used in Pennsylvania but it has been used in other States, 
and we are inquiring into the results of this procedure and practice, 
and in the course of our investigation we found that as to many of 
the union officials who were connected with it, there were improper 
activities going on by the paper or magazine which was unknown to 
them. 

Mr. McDevitt has testified that he was in that position and we will 
find the officials in New York were also in that position. 

(At this point, tlie following membei^ were j^resent: Senatoi-s 
McClellan, Curtis, and Goldwater.) 

Senator Curtis. Has it been established whether or not the sta- 
tionery used was reproduced by Lapensohn's outfit, or whether it 
was furnished by Mr. McDevitt's Pennsylvania Federation of Labor ? 

Mr. Kennedy. I believe that all of this stationery which they 
used, which Mr. Lapensohn's organization used, was all printed up 
by them and the cost was paid by them. 

Senator Curtis. Whose address is Colonial Building, 1237-9 Mar- 
ket Street, Philadelphia ? 

Mr. IvENNEDY. That used to be Mr. Lapensohn's office. 

Senator Goldwater. Was Mr. Lapensohn a union member? 

Mr. KJENNEDY. He was a businessman. 

Senator Goldwater. There are a lot of people who go around 
the country promoting deals like this. The woods are full of them. 
What is particularly bad about him ? I don't defend him, but I 
don't know anything about him. 

Mr. Kennedy. We have had 9 days of hearings on him, Senator., 

Senator Goldwater. I have been busy with your brother. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10913 

Mr. Kennedy. He did a lot of tilings. 

Senator Goldwater. I am serious. Has he a criminal record ? 

The Chairman. He is, at least now, a fugitive from justice, as I 
term it, because we can't get him; we can't find him; he is sailing 
tlie higli seas. As soon as he found out we wanted him, he made 
his getaway. 

Senator Goldwater. Is there something different in tliis opera- 
tion than in a normal operation of this type that goes on? In 
fact, you Avill probably find a number of firms downtown who have 
been in on a deal like this. I am sure there are some in every city. 
Is there sometliing particular about this ? 

Mr. Kennedy. We were inquiring into the propriety of this type 
of operation, w^here the sole purpose appeared to be just a money- 
making scheme, and there was not a service that they were per- 
forming, particularly, for the working man. 

Mr. George Meany has alread condemned a number of these pub- 
lications. We have been inquiring into Mr. Lapensohn's activities. 
We found that he operated this magazine in Pennsylvania. We 
found that what he was doing was an imposition on many busi- 
nessmen; that he was also doing things that were improper and 
which were an imposition on the Pennsylvania Federation of Labor. 
He then set up a magazine in New York State, the New^ York Fed- 
erationist. We have been inquiring into those activities and have 
found that it is very possible he might have misappropriated large 
sums of money. 

We are trying to develop all of that because of the question as to 
wiiether this kind of magazine, as apart from legitimate labor news- 
papers, are proper, and whether it isn't really an organized shake- 
down of employers. 

Senator Goldwater. Then you are interested in Mr. Lapensohn's 
personal connection w^ith this, ratlier than the system of raising 
money by this means ; is that correct ? 

Mr. Ivennedy. No. I would think that we are also interested in 
the system followed by the Lapensohn organization in Pennsylvania, 
Avhich was also followed by the Lapensohn organization in New York. 
We have found that it was followed by a number of different organi- 
zations throughout the country. I don't believe that the full facts 
liave been known to legitimate labor. We felt that relating these 
facts before the committee w^ould give an idea to the members of the 
committee, to the Members of Congress, as to whether legislation was 
needed in order to deal with this system, which amounts, really, to a 
racket. 

Senator Goldwater. The Junior League in my city, I think, made 
$23,000 off of the same type of a deal. We pay for an open golf 
tournament every year by the same methods. I would hate to see 
you, by this, stop what is a rather productive way of getting money 
for charity and hospitals and other things. If there is sometliing 
wrong with Mr. Lapensohn, himself, I would like to dig further into 
it. But, as a businessman, I see it going on every year in rather sub- 
stantial quantities. 

The Chairman. Let the Chair ask whether he thinks this would be 
wrong. We have had testimony this afternoon of a businessman 
paying $1,000 a year because they suggested to him they could ease 



10914 IMPROPER ACTIVITIES IN THE LABOR FIELD 

his labor troubles, and they immediately eased. He said he was pay- 
ing simply for that purpose. I think it is a shakedown. 

Senator Goldwater. If that is the case, I certainly have no objec- 
tion. I am not objecting. I am trying to find out, Mr. Chairman. 
This is not an unusual thing. It goes on at all levels. But if it is 
connected with threats or deals, then, certainly, it is phony. 

The Chadrman. That is the testimony. This fellow Lapensohn 
was involved in strikes and in violence and other things up there. 
He has connected the whole thing by showing how far his operations 
extended. He has imposed on unions and on business. 

Senator Goldwater. If a businessman contributes, as a result of a 
threat, or, to put it another way, if a businessman contributed because 
he has been told that he can get something out of the union by doing 
it, the businessman is to blame. But if the businessman has con- 
tributed, as he does, to many other publications of this type, I cannot 
see what it is. 

The Chairman-. Without arguing the point, I will accept, for the 
moment, your statement that the businessman is to blame. But this 
committee is charged with looking into both businessmen and labor, 
with respect to this. If a practice is going on like that, I don't know 
how you can describe it as anything less than extortion. 

Senator Goldwater. If that is the case, it is true. But I would not 
want the implication to go out that, on all of the publications of this 
type, any businessman who puts an ad in a labor newspaper on Labor 
Day, or who puts an ad in the Junior League magazine, might be said 
to be doing it because of pressure, and thereby condemned in a general 
way. 

The Chairman-. I have never felt that anyone should judge all labor 
unions by what we have exposed in some few. But, nevertheless, 
where it does occur, and where these things happen, they are improper 
practices. I wouldn't convict all labor unions on what we may have 
developed here and may hereafter develop. But we do find these things 
occurring. I think this particular thing may be the basis for legisla- 
tion that is needed. Where people will go around and use the name of 
the union, and hold out an inducement of labor peace and so forth, I 
think it might well be the subject of legislation, when they take pay 
for it, and on the basis that they can take care of their labor problems. 
Anyway, the record is made so far. Proceed with the witness. 

Mr. Kennedy. Mr. Slattery, you received this letter that we dis- 
cussed, purportedly written by Mr. McDeviee. Then Mr. Samuel 
Kirsch came by to see your compeny, did he not ? 

Mr. Slattery. Yes. May I say, Mr. Kennedy, that I dod not come 
back with the Penn Mutual until May of 1950. 

This letter was in February of 1950 and was addressed to the presi- 
dent of the company. As I understand it, Mr. Kirsch then did come in 
to see him; Kirsch was referred to the advertising division of our 
company. 

Mr. Kennedy. Then did you get in touch with the better business 
bureau in Philadelphia, your company ? 

Mr. Slattery. Then sometime, someone in the company got in 
touch with the better business bureau. 

Mr. Kennedy, Did they give you a report on Mr. Lapensohn and 
on the Pennsylvania Federationist ? 

Mr. Slattery. A report was in our files. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10915 

Mr. IvENNEDY. That was highly critical of this operation, was it 
not? 

Mr. S LATTERY. YcS. 

Mr. Kennedy. And pointed out that the solicitors for the Pennsyl- 
vania Federationist worked on a commission basis, that there had been 
complaints as to the way they operated, and that Mr, Lapensohn gen- 
erally had a bad reputation. 

Mr. Slattery. But 1 did not see that 

Mr. Kennedy. 1 just asked you wiietlier that was there. 

Mr. Slattery. Yes. 

Mr. Kennedy. And that Mr. Lapensohn was receivinir ^>^^ i)er'cent 
of all the receipts that came from the ads that he was able to place; 
is that right ? 

JNIr. Slattery. Yes. 

Mr. Kennedy. Despite this rather critical report of Mr. Lapen- 
sohn and his activities, your company agreed to take a $250 ad each 
year ; is that right ? 

Mr. Slatterv. About that, yes. I think it was $225 the first year 
and $250 the next year. 

Mr. Kennedy. It was $225 in 1950, is that right, and $250 each 
year after that? 

Mr. Slattery. Yes. 

Mr. Kennedy. You had received one of these cards, had you not, 
which stated that there was no commission, no agency or sa^ sman 
commission paid? 

You received one of those cards ? 

Mr. Slatit.ry. I think so. 

Mr. Kennedy. But you knew from the better business bureau, in 
fact, a commission was paid Mr. Lapensohn and those wn , . ..Ked 
for liim ? 

TVfv S'.^ttery. I did not Iniowthat. 

Mr. Kennedy. You were not aware of that from the better busi- 



j^pcc 'tn •(>au 



Mr. Slattery. No, sir; I absolutely was not. 

iSLi: ivENNEDY. You Continued to pay the $250 each year until 1954? 

Mr. Slattery. Yes, sir. 

Mr. Kennedy. Did you receive an ad ? 

Mr. Slattery. No ; we did not put an ad in. 

Mr. Kennedy. Are your employees organized ? 

IMr. Slattery. No, sir. 

Mr. Kennedy. They are not members of the AFL-CIO. You just 
paid the $250? 

Mr. Slattery. As a contribution to the Pennsylvania Federation 
of I^abor. 

Mr. Kennedy. Did you pay it in order to insure that you would 
not have difficulties with the A. F. of L. ? 

INIr. Slattery. I did not. It was a contribution to the Pennsyl- 
vania federation. 

Mr. Kennedy. Why were you anxious to contribute to the Ameri- 
can Federation of Labor ; you, who were not orgmized ? 

Mr. Slattery. I felt it was a good organization. 

Mr. Kennedy. You felt it was a good organization ? 

Mr. Slattery. Eight. 

21243— 58— pt. 28 7 



10916 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. Did you send $250 in prior years to the American 
Federation of Labor ? 

Mr. Slattery. No. 

Mr. Kennedy. You just liked the American Federation of Labor; 
is that ri^ht? 

Mr. Slattery. The Pennsylvania Federation of Labor was a local 
organization. "We were domiciled in the State of Pennsylvania, and 
I felt it was a good thing to do. 

Mr. Kennedy. You fdt you were just making a contribution to the 
Pennsylvania Federation of Labor, the labor organization; is that 
right? 

Mr. Slattery. Yes, sir. 

Mr. Kennedy. That is despite the fact that in the files of your 
company there was a detailed memoranduin showing that the Penn- 
sylvania Federationist, the magazine itself, almost amounted to a 
racket operation, in which Mr. Lapensohn was making the money? 

Mr. Slati'ery. I never heard of Lapensolm until October of 1957. 
I didn't see that report until October 1957. 

Mr. Kennedy. Would you have made the contribution if you had 
seen your own report? 

Mr. Slattery. I don't laiow. I may have. 

Mr. Kennedy. You might have made it anyway ? 

Mr. Slattery. Yes. 

Mr. Kennedy. For what reason would you want to give Mr. Lapen- 
sohn this $250 ? 

Mr. Slatit:ry. Well, Lapensohn wasn't calling on us. Mr. Kii-sch 
was the man that came to see us. 

Mr. Kennedy. But this report shows that the Pennsylvania Fed- 
erationist, the magazine for which Mr. Kirsch worked, was, in fact, 
run by Mr. La]3ensolm, and that he had been involved in this Dock 
Street produce-area racketeering. They stated that Mr. Lapensohn 
received 60 percent of all of the advertising receipts. You still would 
have made the contribution. 

Mr. Slatiery. Let's say I would have considered it. 

Mr. Kennedy. Isn't it a fact that the reason you were paying $250, 
and why you would still consider it, is the fact that you wanted to 
remain on the friendly side of labor? 

Mr. Slattery. No. 

Mr. Kennedy. It doesn't make any sense that you suddenly start 
contributing $250 to this organization, or your company. What was 
it charged to in your books ? 

Mr. Slattery.' Advertising. 

Mr. Kennt^dy. You didn't get an ad, did you ? 

Mr. Slattery. No. 

Mr. Kennedy. It just doesn't make any sense. 

Senator Clt^tis. Mr. Chairman? 

The Chairman. Senator Curtis. 

Senator Curtis. Who can make an inquiry of the better business 
bureau, anybody? 

Mr. Slattery. I am not sure, sir. I think perhaps you have to be 
a contributing member of the better business bureau. 

Senator Curtis. I was just wondering whether JNIr. McDevitt liad 
made an inquiiT of the better business bureau. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10917 

Mr. Kennedy. I would like to point out, Mr. Chairman, we have 
liad a number of complaints about this kind of ojjeration from busi- 
nessmen, and we felt that this sort of operation as run by Lapen- 
sohn in Pennsylvania and run by Lapensohn in New York was a 
sliakedown. 

We had some assistance with the first 3 or 4 witnesses who appeared 
l>efore the committee, but once again, businessmen, when they are 
asked to contribute and help and assist the committee and answer 
({uestions occasionally are not willing, otlier than to send in these 
anonymous letters. 

It seems to me, Mr. Slattery, that your company just didn't sud- 
denly get religion and decide in 1950 they would make a contribution 
of $250 every year to the American Federation of Labor. 

You didn't enjoy or like labor unions that much that you just de- 
cided for the company to make a voluntary contribution of $250. 

Tlie reason that you made the contribution, obviously, was for the 
reason that you wanted to remain on friendly terms with the labor 
union. 

The Chairman. Have you any comment, Mr. Witness? 

Mr. Slattery. Sir? 

The Chairman. Have ^ou uny comment ? 

(At this point, Senator Curtis left the hearin«- room.) 

Mr. Slattery. I have said we are not organized. There was no 
threat of organization. You say why did we suddently get religion. 
The president of the conipany received a letter over the signature of 
Mr. McDevitt, Avho vrus president of the Pennsylvania Federation of 
Laljor, that someone was going to call. We made the decision that 
it was a good thing to contribute to the Pennsylvania Federation of 
Labor. 

The Chairman. Let me ask you just for information, and you may 
be correct, how could you make a contribution of that kind and charge 
it off to advertising ? 

JNIr. Slattery. We had originally 

The Chairman. You got ho advertising, as I understand it. 

Mr. Slattery. No. 

The Chairman. How can that be properly charged to advertising 
us a business expense? 

Mr. Slattery. We had originally thought of putting an ad in 
wlien the check went out in February of 1950 — in August. In Au- 
gust, I believe, of 1950, they \yanted to get the ad. We decided that 
we didn't want to put an ad in because it might subject us to other 
solicitations, and we didn't want to get into that. 

The Chairman. Then you continued to put ads in there, or to make 
contributions after that, did you not ? 

Mr. Slattery. Yes, sir. They were renewals. 

Tlie Chairman. You had already decided that you were not going 
to put an ad in before you made the other contributions. "Wliat I mean 
is that you charge it to advertising. I don't know whether it is a 
legitimate deduction, if it is just a contribution, a gift, to someone. 

I do not know how you could deduct that from your income tax. 
You don't know either, do you? 

Mr. Slati^ery. I don't think we are subject to those same laws. 

The Chairman. Mavbe not. 



10918 IMPROPER ACTIVITIES IN THE LABOR FIELD 

All right. Is there anything further ? 

Mr. Kennedy. Mr. Chairman, there is a memorandum which ap- 
pears in the files of this company dated July 31, 1950, and which says: 

Dear Mr. Adams: You will recall that in February of this year, we were 
approached for an advertisement in the yearbook to be published by the Penn- 
sylvania Federation of Labor. We subsequently entered into a contract for a 
one-half page at $225. 

While in the process of preparing the copy, we learned of some facts through 
Miss Barber, which would make it unwise for our ad to appear in this publication. 

I am sure you would want to read the attached. 

The attached was this memorandum of the better business bureau. 
It was based on the fact that the organization, as I understand it, no 
longer took an ad. 

Mr. Slai^ery. The reason we didn't take the ad, put the ad in, was 
because we did not want to subject ourselves to other solicitations. 

The Chairman, This is from your files, and it is on your stationery. 
Wlio is W. J. Probst? 

Mr. Slaitery. He used to be in the advertising division, Mr. Chair- 
man. 

The Chairman. This says : 

While in the process of preparing the copy, we learned of some facts through 
Miss Barber, which would make it unwi.«;e for our ad to appear in this publlcatioa. 
I am sure you will want to read the attached. 

Was this memorandum attached, the memorandum from the busi- 
ness bureau? 

Mr. Kennedy. Yes. 

Mr. Slattery. Senator, that entire memorandum was in the file of 
the advertising division, and the president had never seen it. 

The Chairman. Who is Mr. Adams? 

Mr. Slattery. He is the President of the Penn Mutual. 

The Chairman. Here is a letter addressed to him, calling it to his 
attention. 

Mr. Slattery. It was within the 

The Chairman. Would you identify those two items, the letter and 
also the attached. 

(Documents were handed to the witness.) 

The Chairman. Is that a photostatic copy of the original memoran- 
dum? 

Mr. Slattery. Yes. 

The Chairman. Is that a photostatic copy of that which was at- 
tached to it? 

Mr. Slattery. Yes. 

The Chairman. They may be made exhibit No. 45-A and B. 

(Documents referred to were marked "Exhibits No. 45-A, and B, 
and may be found in the files of the select committee.) 

The Chairman. Are there any other questions? 

If not, thank you very much, Mr. Slattery. 

The committee will stand in recess until 10:30 in the morning. 

(AVliereupon, at 4:30 p. m., the committee recessed to reconvene 
at 10:30 a. m., Wednesday, May 7, 1958.) 

(Members of the committee present at the taking of the recess were 
Senators McClellan and Goldwater.) 



INVESTIGATION OF IMPROPER ACTIVITIES IN THE 
LABOR OR MANAGEMENT FIELD 



WEDNESDAY, MAY 7, 1958 

United States Senate, 
Select Committee on Improper Activities 

IN the Labor or Management Field, 

Washington, D. O. 

Tlie select committee met at 10 : 30 a. m., pursuant to Senate Reso- 
lution 221, agreed to January 29, 1958, in the Caucus Room, Senate 
Office Building, Senator John L. McClellan (chairman of the select 
committee) presiding. 

Present : Senator John L. McClellan, Democrat, Arkansas ; Senator 
Irving Ives, Republican, New York; Senator Barry Goldwater, Re- 
publican, Arizona ; Senator Sam J. Ervin, Jr., Democrat, North Caro- 
lina; Senator Carl T. Curtis, Republican, Nebraska; Senator Frank 
Church, Democrat, Idaho. 

Also present : Robert F. Kennedy, chief counsel ; Jerome S. Adler- 
man, assistant chief counsel; John B. Flanagan, investigator; Leo C. 
Nulty, investigator; Herbert J. Rose, Jr., investigator; Ralph De- 
Carlo, investigator ; Ruth Young Watt, chief clerk. 

The Chairman. The committee will come to order. 

(At the convening of the session, the following members were pres- 
ent : Senators McClellan and Ervin.) 

The Chairman. Call the next witness. 

Mr. KJENNEDY. Mr. Chairman, I thought it might be well if we 
called a member of the staif of the committee and put into the record 
what information we have regarding Mr. Lapensohn's own finances 
during the pertinent period, during the period of time in which we 
are interested. 

I would like to call as the first witness Mr. Ralph DeCarlo. 

The Chairman. Come forward, Mr. DeCarlo. 

TESTIMONY OF EALPH DeCARLO— Resumed 

The Chairman. You have been previously sworn, Mr. DeCarlo. 

Mr. Kennedy, you may proceed. 

Mr. Kennedy. Mr. DeCarlo, you have gone through those books 
and records of Mr. Lapensohn that were made available by his ac- 
countants ? 

Mr. DeCarlo. Yes ; I have. 

Mr. Kennedy. Which were not all inclusive ; is that correct ? 

Mr. DeCarlo. Yes, sir. 

Mr. Kennedy. There were some books and records missing during 
the pertinent period of time ? 

10919 



10920 IMPROPER ACTIVITIES IN THE L.\BOR FIELD 

Mr. DeCarlo. Yes, sir. 

Mr. Kennedy. But you were able to put together some figures, from 
the books and records that you were able to examine, as to the state of 
Mr. Lapensolin's finances during the period of time in which we are 
interested ? 

Mr. DeCarlo. Yes, sir. 

Mr. Kennedy. He filed a net worth statement, did he not, with 
the Broad Street Trust Co. in Philadelphia, on Februaiy 9, 1956? 

Mr. DeCarlo. Yes, sir. 

Mr. Kennedy. And what was that net worth statement ? What did 
that show ? 

Mr. DeCarlo. He showed a net worth at that time of $323,538.25. 

Mr. Kennedy. And this is during the time that he was acting as 
a business agent for local 107 ? 

Mr. DeCarlo. Yes, sir. 

Mr. Kennedy. So at that time as a business agent for local 107, he 
was worth $323,538.25, according to his own figures. 

Mr. DeCarlo. Yes, sir. 

Mr. ICennedy. During the period of time 1953-57, during that 
period, for most of that time he was working for local 107; was he 
not? 

Mr. DeCarlo. Yes, sir. 

Mr. Kennedy. He started working for 107 in 1954 and continued 
through 1956. But during that 5-year period, have you been able to 
determine what the income of Mr. Lapensohn was ? That is, that you 
have found from his books and records, not from his income-tax 
return ? 

Mr. DeCarlo. From the books and records that were made avail- 
able, I have determined that he received $843,953.78 during that 
period, and he spent $836,881.95. Those expenditures, incidentally, 
except for a few insignificant amounts, do not include food and cloth- 
ing for himself, his wife, and their two sons. 

Mr. Kennedy. So that is $843,953.78, which he had as income, and 
he spent $836,881.95? 

Mr. DeCarlo. That is correct. 

Mr. Kennedy. That is for that 5-year period, and for at least 3 out 
of those 5 years he was working for local 107 ? 

Mr. DeCarlo. Between 21^ and 3 years ; yes, sir. 

Mr. Kennedy. During that period, was there income from uniden- 
tifiable sources ? 

Mr. DeCarlo. Yes, sir; included in that $843,953.78, there was 
$97,060.81, the source of which we could not determine. 

Mr. Kennedy. In addition to that, was there a good deal of cash 
used by Mr. Lapensohn during that period of time ? 

]Mr. DeCarlo. During the years 1955 and 1956, Lapensohn's de- 
posits of cash greatly exceeded any prior period or any subsequent 
period. During that time, he deposited $36,438.33 in cash, of which 
$19,080.59 came from imidentified sources. 

Mr. Kennedy. Let me go through those figures again. For 1955 
and 1956, his deposits of cash amounted to $36,438.33 ? 

Mr. DeCarlo. That is right. 

IMr. Kennedy. Of which $19,090.59 came from unidentified 
sources ? 

Mr. DeCarlo. Correct, sir. 



lAlPROPEK ACTIVITIES IN THE LABOR FIELD 10921 

Mr. IvEXXEDr. And this was, you say, greatly in excess of the cash 
that ^vas available to him in prior years and the following year, 1957, 
when he was finished with local 10/ ? 

Mr. DeCaklo. Yes, sir. 

Mr. Kennedy. Do you have some examples, i2 or 3 examples, of the 
kind of deposits of cash that he had ? 

Mr. DeCarlo. Yes; on April 13, 1955, he made a cash deposit of 
$5,200. Of this amount, $4,297.65 could not be identified. On Sep- 
tember 28, 1955, he deposited $2,700 in cash, of w^hich $2,608.30 could 
not be identified. 

On September 26, 1956, he deposited $2,500 in cash, none of which 
could be identified. 

On May 27, 1955, he deposited $1,000 in cash, none of which could be 
identified. 

Mr. Kenxedy. And there are other instances? 

Mr. DeCaklo. There are many others, yes, sir. 

(At this point, Senator Ives entered the hearing room.) 

Mr. Kennedy. Were you able to determine from the kind of busi- 
ness transactions that Mr. Lapensohn had in connection with local 
107 what sort of work he was doing for them ? Could you give us an 
outline of that? 

Mr. DeCarlo. The only evidence of work that I could find Avas 
the fact that he paid many of the police fines for officers and members 
of local 107. He paid several magistrate fines. 

Mr. Kennedy". How many fines did he pay for traffic violations, 
for instance ? 

Mr. DeCarlo. Well, he paid to the city of Philadelphia, by his own 
personal checks, 123 fines totaling $512, most of which appeared to 
be for traffic violations. Lapensohn noted the names of the persons 
for whom he was paying the fines on 35 of these checks, and 26 of 
these names were identified as officers and members of locals 107 and 
596. 

Mr. Kennedy. So he paid 123 fines totaling $512 for traffic viola- 
tions for other individuals, is that right ? 

Mr. DeCarlo. That is right, sir. 

The Chairman. Over what period of time ? 

Mr. DeCarlo. Most of that occurred during 1955 and 1956. There 
were a few prior and a few subsequent, but not many. 

Mr. Kennedy. Did he also pay fines to magistrates in Philadelphia ? 

Mr. DeCarlo. Yes, sir. He paid 4 fines to magistrates totaling 
$297.18, 2 of which were for members of local 107. 

Mr. Kennedy'. What about bail bonds ? 

Mr. DeCarlo. That is w^liere he spent most of his money. During 
1955 and 1956, Lapensohn paid for the bail bonds of at least 21 mem- 
bers of locals 107 and 596. He issued 11 checks totaling $1,665 in 
payment for these bail bonds under which the total amount of bail 
was $21,900. 

Mr. Kennedy. Would you give those figures again, please? 

Mr. DeCarlo. He issued 11 checks totaling $1,665 in payment for 
the bail bonds, under which the total amount of bail was $21,900. 

(At this point. Senator Curtis entered the hearing room.) 

Mr. Kennedy. This was for at least 21 members of locals 107 and 
596; is that right? 

Mr. DeCarlo. That is correct, sir. 



10922 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. Is there any explanation for his activities in this 
field of paying for traffic violation fines, paying magistrate fines, 
for paying for the bail bonds for the individuals ? 

Mr. DeCarlo. Except that I noted that during the period of time 
he was issuing these checks in payment for these fines and bail 
bonds, about that same period the acts of violence were taking place 
in Philadelphia, most of them in connection with the Horn & Hardart 
strike. I believe that some of the staff investigators found that there 
were about 80 acts of violence during that period. 

Mr. Kennedy. So he was a business agent acting in the capacity 
of a fixer, or also as a go-between between the law enforcement agen- 
cies in Philadelphia and the members of locals 107 and 596? 

Mr. DeCarlo. I tliink that is a very good description of his duties. 

T\Tv KKN^-T^.nv. Where tliey crot into difficulty, got into trouble, and 
nothing could be done, he paid the fine and paid the charge out of 
his personal checks, is that right? 

Mr. DeCarlo. That is riglit. 

Mr. Kennedy. But it would appear also that he was being amply re- 
warded by 107 for these services. 

Mr. DeCarlo. Well, there were those 13 checks, the purpose of 
which could not be identified, which was brought out during the hear- 
ings on 107. 

Mr. Kennedy. Did we find out also that he had many business 
dealings, financial dealings, with officials of 107? 

Mr. DeCarlo. Yes. I found that he issued 25 of his personal checks 
to union officials or members, or on their behalf, totaling $30,687.51. 
This is exclusive of the fines and bail bonds. 

Ml'. K'-'^^nedy. Was he also in the insurance business as well as work- 
ing for 107? 

Mr. DeCarlo. Yes, he was selling insurance. For instance, during 
1955 and 1956 he sold $15,559.34 worth of msurance, of which $8,064.50 
was sold to local 107. 

Mr. Kennedy. Local 107 or the members of 107? 

Mr. DeCarlo. To local 107 and a few of the members. 

The Chairman. Let me ask you this question: Was he drawing a 
salary from 107 at that time? 

Mr. DeCarlo. Yes, sir. 

The Chairman. He was an employee ? 

Mr. DeCarlo. He was an employee. 

The Chairman. Drawing a salary ? 

Mr. DeCarlo. Drawing a salary. 

The Chairman. And also selling insurance and making a profit off 
of that? 

Mr. DeCarlo. Yes, sir. 

Mr. Kennedy. In addition, he had all these checks amounting to 
a considerable amount of money drawn to him over this period of 
time, which are completely unexplained in the records of 107. 

Mr. DeCarlo. Yes, sir. 

Mr. Kennedy. I believe that is all, Mr. Chairman, at this time. 

The Chairman. Are there any questions from any member? 

Senator Curtis. Yes, Mr. Chairman. 

The Chairman. Senator Curtis. 

Senator Curtis. I was a few moments late. To what extent did 
you audit Mr. Lapensohn's books, over what period of time? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10923 

Mr. DeCarlo. From 1953 through 1957. 

Senator Curtis. Did it involve liis personal books and the business 
organization that he had set up, both ? 

(At this point Senator Ives withdrew from the hearing room.) 

Mr. DeCarlo. My testimony today is on his personal books plus 
what information I took from the various corporations that he has 
under his control. In other words, the funds that he drew from them 
and the funds that he put into it. 

Senator Curtis. I am not limiting to your testimony today, but I 
want to know for background information. Have you audited all 
of Mr. Lapensohn's business transactions that you had access to ? 

Mr. DeCarlo. All with respect to his personal business during that 
period and Rolee Advertising Agency. 

Senator Curtis. And these companies or advertising agencies that 
he had? 

Mr. DeCarlo. Yes, sir. 

Senator Curtis. You have. What did you find, if anything, in ref- 
erence to transactions carried on by him in cash as distinguished be- 
tween checks and drafts? 

Mr. DeCarlo. Well, as between his various corporations, he had a 
few cash transactions but nothing unusual. 

Senator Curtis. Did you find evidence of personal income coming 
to him in cash ? 

Mr. DeCarlo. Yes, sir; from the numerous cash deposits that he 
made to his personal checking accounts during 1955 and 1956. 

Senator Curtis. Were those sizable amounts? 

Mr. DeCarlo. Yes, sir. 

Senator Curtis. Were you able to trace the origin of them ? 

Mr. DeCarlo. No, sir. 

Senator Curtis. Did he pay his day-to-day expenses in cash, do you 
know ? 

Mr. DeCarlo. Evidently, because I saw no evidence of invoices or 
anything else, or checks, except for his house rental. He paid that by 
check. He paid some insurance premiums by check. Most of his large 
business transactions were by check. 

Senator Curtis. Did you find any evidence of financial transactions 
between Mr. Lapensohn and the Pennsylvania State Federation of 
Labor ? 

Mr. DeCarlo. Yes, sir. 

Senator Curtis. What did you find ? 

Mr. DeCarlo. I found that Mr. Lapensohn, as the owner of Rolee 
Advertising Agency, was paid something in the neighborhood of 
$481,000 as commissions for sales of advertisements and contributions 
to the State Federation. 

Senator Curtis. He paid commissions to them ? 

Mr. DeCarlo. The State Federation of Labor paid them to Lapen- 
sohn. 

Senator Curtis, How would they be paid ? 

Mr. DeCarlo. By check. 

Senator Curtis. Who would sign those checks ? 

Mr. DeCarlo. Mr. Earl Bohr. 

Senator Curtis. Just one signature ? 

Mr. DeCarlo. I don't remember. I am pretty certain that Earl 
Bohr sifmed them. 



10924 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Senator Curtis. Many of those checks have a signature and a coun- 
tersignature ; is that true ? 

Mr. DeCarlo. Yes, sir ; many of them do, 

(At this point, Senator Churcli entered the hearing room.) 

Senator Curtis. Did you find any other transactions with the State 
federation of labor ? 

Mr. DeCarlo. No, sir. 

Senator Curtis. With any officers in the State federation of labor? 

Mr. DeCarlo. I found one transaction, sir, with an officer of the 
State federation of labor. 

Senator Curtis. What was the nature of that transaction? 

Mr. DeCarlo. It was a $500 check from Ben Lapensolin to James 
L. McDevitt. 

Senator Curtis. Wliat was the date of that ? 

Mr. DeCarlo. I don't recall, sir. We have a copy of the check. It 
is exhibit 499. 

Senator Curtis. Were you able to trace what the purpose of it was ? 

Mr. DeCarlo. No, sir. 

Senator Curtis. Did you interview either of the parties, the payer 
or the payee ? 

Mr. DeCarlo. No, sir ; I did not. 

Senator Cutitis. Did you find any evidences of any financial transac- 
tions between Lapensohn and Food Fair Stores ? 

Mr. DeCarlo. No, sir; I found no evidence of any transactions 
between Lapensohn and Food Fair Stores in Lapensohn's records. 

Senator Curtis. Did you find any financial transactions that you 
could trace between Lapensohn and McDevitt other than the $500 
check ? 

Mr. DeCarlo. No, sir. 

Senator Curtis. And any other officer in the State federation of 
labor? 

Mr. DeCarlo. No, sir. 

Senator Curtis. That is all. 

Mr. Kennedy. Senator, I interviewed Mr. McDevitt on that matter. 
Would you like to hear the situation? You asked him whether he 
interviewed him. I did interview him. 

Senator Curtis. Yes, I would like to hear it. I have been reading 
Mr. McDevitt's testimony of yesterday. It may be that I will want 
to cross-examine him about some other matters, too. But I would 
be glad to hear what counsel has to say. 

Mr. Kennedy. As he explained it to me, he received the $500 at 
the time of his marriage, and it was a wedding gift from Mr. Lapen- 
sohn. 

Senator Curtis. It was a gift ? 

Mr. Kennedy. It was a wedding gift from Mr. Lapensohn to IVIr. 
McDevitt. That is Mr. McDevitt's report. 

Senator Curtis. That is a rather sizable gift under somewhat in- 
appropriate circumstances. That is all. 

The Chairman. Call the next witness. 

Mr. Kennedy. Mr. Reuben Miller. 

The Chairman. Do you solemnly swear the evidence you shall give 
before this Senate select committee shall be the truth, the whole truth, 
and nothing but the truth, so help you God? 

Mr. Miller. I do. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10925 

TESTIMONY OF REUBEN H. MILLER 

The Chairman. State your name, your place of residence, and your 
business or occupation. 

Mr. Miller. Reuben H. Miller, 2918 Croyden Road, Harrisburg; 
State employment, with the Commonwealth of Pennsylvania. 

The Chairman. You are employed by the State ? 

Mr. Miller. I am, sir. 

The Chairman. In what capacity ? 

Mr. Miller. I am in the department of labor — industi-y and public 
relations. 

The Chairman. Thank you very much. Do you waive counsel ? 

Mr. Miller. Yes, I do, sir. 

The Chaikvian. All right, Mr. Kennedy. 

xMr. Kennedy. Mr. Miller, how long have you worked for the State 
of Pennsylvania? 

Mr. Miller. 21 years. 

Mr. Kennedy. In 1948 or thereabouts, were you contacted by the 
Pennsylvania State Federation of Labor officials to do some work for 
them in connection with their periodical? 

Mr. Miller. Yes, sir. 

Mr. Kennedy. By whom were you contacted? 

Mr. Miller. By President McDevitt. 

Mr. Kennedy. What did he request of you at that time? 

Mr. Miller. That their public relations man had passed away in 
the month of August, and he asked me if I wouldn't come over there 
on a part-time basis and do their monthly publications, which was an 
8 to 16 pages item, and do their annual publication and other public 
relations work. 

Mr. Kennedy. At that time, what department were you working 
for? 

Mr. Miller. Labor industry. 

Mr. Kennedy. Did you take that position ? 

Mr. Miller. Yes, I did. 

Mr. Kennedy. Did you go along? 

Mr. Miller. I did, sir. 

Mr. Kennedy. What work were you then doing for the State Fed- 
eration of Labor ? 

Mr. Miller. I was doing public relations work for the State 
federation. 

The Chairman. Was that at the same time you were working for 
the State? 

Mr. Miller. That is right, sir, in the evenings, Saturdays and 
Sundays. 

Mr. Kennedy. Did you ultimately start doing some work for the 
Pennsylvania Federationist ? 

Mr. Miller. That came about approximately a year later when I 
was asked to do advertising work by Mr. Lapensohn, and I cleared 
that with Mr. McDevitt. I did some advertising work in the nearby 
areas. 

Mr. Kennedy. In the Harrisburg areas ? 

Mr. Miller. That is right, sir. 

Mr. Kennedy. Were vou soliciting advertising for the magazine 
then ? 



10926 IMPROPER ACTIVITIES IN THE L.\BOR FIELD 

Mr. Miller. That is right. 

Mr. Kennedy. Were you also acting as a public relations man, or 
one of the public relations men, for the State Federation of Labor? 

Mr. Miller. That is right. I was the only one, sir. 

Mr. Kennedy. And you were also soliciting ads for the Pennsyl- 
vania Federationist ? 

Mr. Miller. That is right. 

Mr. Kennedy. And you were also working for the Department of 
Labor in Pennsylvania ? 

Mr. Miller. That is right. 

Mr. Kennedy. From whom would you solicit these ads ? Did you 
solicit ads from the State of Pennsylvania officials ? 

Mr. Miller. I didn't, not from the officials. From the depart- 
ments. 

Mr. Kennedy. From the various State of Pennsylvania depart- 
ments ? 

Mr. Miller. They had advertising budgets and agencies, and I 
solicited in the form of a letter to the various departments, asking if 
they would place an ad with the Federationist. I got this lead from 
the Pennsylvania Newspapers' Association. They had the ads from 
the various departments, and I thought that it might be a source of 
advertising for the Federationist. 

The Chairman. What were your duties at that time for the State ? 

Mr, Miller. I was in procedure work, sir. 

The Chairman. What do you mean by that ? 

Mr. Miller. Procedure analyst. Growth procedures for the de- 
partment that I was connected with. 

The Chairman. Were you in a position to make any decisions with 
respect to policy ? 

Mr. Miller. No, sir. I was one of the minor employees in the 
department. 

The Chairman. What was your salary at that time ? 

Mr. Miller. Between four and five thousand dollars a year. 

The Chairman. From the State ? 

Mr. Miller. Yes, sir. 

The Chairman. You were not in a position of policymaking ? 

Mr. Miller. No, sir. 

Mr. Kennedy. "Wliat was your official position ? 

Mr. Miller. At that time I was a procedure analyst. 

Mr. Kjinnedy. And what would you receive as far as these com- 
missions, while you were working for the Pennsylvania Federa- 
tionist? 

Mr. Miller. During the year, I would earn about — 1 year about 
$800. 

Mr, Kennedy. What percentage would you receive ? 

Mr, Miller. 30 percent. 

Mr. Kennedy. Were most of the ads that you sold, sold to the 
departments of the State of Pennsylvania ? 

Mr. Miller. Well, I would say about half of them, sir. 

Mr. Kennedy, And you continued on in this capacity, working for 
the State and working for the Federation of Labor, and working as 
a solicitor for the Pennsylvania Federationist to what period of 
time? 



l^VIPROPER ACTRITIES IN THE LABOR FIELD 10927 

When did you discontinue that? 

Mr. JkliLLER. Up until 1950. At that time they offered me full 
employment, but I declined it because I had had some 15 years with 
the Commonwealth. 

Mr. Kennedy. So you discontinued your association with the Penn- 
sylvania Federation of Labor? 

Mr. :Miller. That is right, sir. 

Mv. Kennedy. And also with the Pennsylvania Federationist? 

Mr. jMiller. No, I continued that up until 1953, on a declining 
basis. The departments and some of the advertisers just discon- 
tinued their placement of advertising. 

Mr. Kennedy. Did you begin your own magazine_ then ? 

Mr. Miller. In 1952 I was approached by the building construction 
trades in the area, and I contracted to do a publication for them. 

That is, the complete publication. Then it continued in 1953. 

Mr. Kennedy. What was that publication called ? 

Mr. IViiLLER. At first it was called the Building Construction Trades 
Annual and then it was called the Pemisylvania Trade Unionist. ^ 

Mr. Kennedy. What were your financial arrangements then with 
the Harrisburg Building and Construction Trades Council? 

Mr. Miller. To pay them — to do the publication and pay all the 
expenses of printing and to pay them from $3,000 to $4,000. 

Mr. Kennedy. Under the initial contract, how much were you to 
give them, what percentage ? 

Mr. Miller. Initially it was 20 percent. 

Mr. Kennedy. You were to keep 80 percent and they were to get 
20 percent? 

Mr. Miller. That is right. 

Mr. Kennedy. You were to be the official publication of the Harris- 
burg Building Trades Council? 

Mr. Miller. That is right. 

Mr. Kennedy. Later, you made another agreement that you would 
pay them anywhere from $3,500 to $4,500? 

Mr. Mn.LER. That is right, plus the publication, which ran around 
$4,000 in printing, and all the mailing, et cetera. 

Mr. Kennedy. What was the circulation of the publication? 

Mr. Miller. About 80p. 

The Chairman. Is this the publication to which you refer, this 
document ? 

Mr, Miller. Yes, sir. 

The Chairman. That may be made exhibit No. 46. 

(The document referred to was marked "exhibit No. 46" for ref- 
erence, and may be found in the files of the select committee.) 

Mr. Kennedy. Did you employ some solicitors? 

Mr. Miller. I did, sir. 

Mr. Kennedy. Did you employ John Bokal ? 

Mr. Miller. In 1953, when he left the federation, he offered to 
come with the publication which I had, and I employed him. 

Mr. Kennedy. Did you know at that time that he had this long 
criminal record? 

Mr. Miller. No, sir. I want to emphasize that I knew nothing of 
his record whatsoever. 

(At this point. Senator Goldwater entered the hearing room.) 



10928 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. And you sent out letters, did you not, over the sig- 
nature of Edward H. Miller, secretary-treasurer? 

Mr. Miller. That is right, sir. 

Mr. Kennedy. Did he give you permission to send out these letters ? 

Mr. Miller. Originally, he did, just for appointment letters, and, 
of course, then we had followup letters. The original agreement on 
letters was with the predecessor, Mr. Stewart. 

The Chairman. Who gave you permission to send out the letters? 

Mr. Miller. The appointment letters were a general practice, and it 
was understood that I would send them out. That was the secretary- 
treasurer, Mr. Miller, Edward Miller. 

The Chairman. Edward Miller, secretary-treasurer of the 

Mr. Miller. Of the building trades. Senator. 

INIr. Kennedy. What about Ralph Lyons ; did you send letters out 
over his signature, also ? 

Mr. Miller. I did. 

Mr. Kennedy. He is president of the Harrisburg Building Council ? 

Mr. Miller. He isn't now. He was at the time. 

Mr. Kennedy. Did he give you permission to send the letters out ? 

Mr. Miller. He didn't, but it was part of the arrangement of co- 
operation which the building trades gave initially, and those letters 
were f ollowups as a result of conversations by our solicitor. In other 
words, if our solicitor would talk to anyone and make some arrange- 
ments, then we could follow up. 

]Mr. Kennedy. Did you have permission to send out a letter such as 
this to Mr. Smith, of the Pennsylvania Power & Light Co. : 

Dear Mr. Smith : You have probably read about our recent convention and 
the problems which were presenting themselves regarding the merging of the 
American Federation of Labor with the CIO. At the same convention, other 
problems arose affecting the Pennsylvania trade-union movement. I have asked 
our Mr. John Bokal to contact you and acquaint you with these matters, which 
I know you will be vitally interested in, which have an important effect on the 
labor-management relations in your company. 

That is, certainly, more than an appointment letter. 

Mr. Miller. It wasn't the usual appointment letter, but we did send 
out letters of different types. 

Mr, Kennedy. This would have a very strong effect, I would think, 
on the individual who received the letters, who has difficulties or 
problems that he might have to face with labor unions. Here is 
another letter to Mr. Huebner, of the Pennsylvania Power & Light Co. 

We want to take this opportunity to commend you for the support which you 
and your company have given the labor movement in the past, and the building 
trades of the A, F. of L, in particular. You are probably aware that we are 
opposed to further encroachment by the Government in the public-utility field, 
for such action tends to destroy the basic concepts of the free-enterprise system 
and the American way of life. 

Then you go on in the rest of the letter. They are far more than 
appointment letters. You didn't have authorization to send out those 
kind of letters, did you ? 

Mr. Miller. That letter was a result of a contact with, I think it 
was, Mr. Bokal, and we then made the offer — I am not sure — made 
the offer to have them write or have them take space in our publication. 

Senator Church, I don't believe these answers are responsive to 
the question. The question is did you have authority from the labor 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10929 

council to write these letters, the letters that have been specifically 
referred to. 

Mr. Miller. The authority may have been in more of a broad 
nature, in that they authorized the solicitation of advertising, and the 
extent of the solicitation was such that in these cases we asked for 
space ; we asked for the sale of space. It was f ollowup correspondence. 

Mr. Kennedy. In that connection, let me read the first paragraph 
of a letter of February 9, 1957, to Mr. Palmer. 

Dear Mr. Palmer: We wish to express our sincere thanks for the courtesy 
extended to our representative, Mr. John Bokal, who spoke to you relative to 
the renewal of yonr advertisement in our official publication. As Mr. Bokal 
explained, the proceeds from the support which comes from the Pennsylvania 
Trade Unionist provides for our educational and community participation pro- 
grams, which are so vital to our organization. 

With the merger of the A. F. of L. and CIO, we have undertaken to enlarge 
our program for our membership during the coming year. 

All they were receiving from this periodical was $3,000 to $3,500. 

Mr. Miller. That is right, sir. 

Mr. Kennedy. This is completely misleading, in this paragraph. 
Don't you agTee on that ? 

Mr. Miller. I do. I mean it was misleading — it was not mislead- 
ing in a sense that they weren't doing things in that direction. 

Mr. Kennedy. But, at tlie beginning, you were getting 80 percent 
of all of the proceeds, going to a private organization which had 
nothing to do with labor unions and, after you changed that contract, 
they were only getting $3,000 to $3,500. 

Mr. Miller. That is right. 

Mr. Kennedy. Yet you were trading on the idea that you were a 
labor publication and that all of this money was going to help the 
labor unions themselves. It was completely misleading. Don't you 
agree? 

Mr. Miller. I think so ; yes, sir. 

Mr. Kennedy. And you didn't have the authorization to send those 
kinds of letters ; did you ? 

Mr, Miller. No, I would say not. 

The Chairman. Mr. Miller, I hand you these three letters that 
counsel has referred to, and I ask you to identify them. They are 
photostatic copies of the original. 

(The documents were handed to the witness.) 

The Chairman. Do you identify those letters ? 

Mr. Miller. Yes, sir. 

The Chairman. They may be made exhibit No. 47, A. B, and C. 

(The document referred to was marked "Exhibit No. 47, A, B, and 
C" for reference, and may be found in the files of the Select Com- 
mittee. ) 

The Chairman. As I recall, the power company actually didn't 
have any ads run ; did they ? 

Mr. Miller. No, sir. 

The Chairman. You were not advertising for them. You were 
just getting $1,000 out of them ; weren't you ? 

Mr. Miller. $250 and then $500 ; $250 once and then $500. 

The Chairman. So you were just getting a contribution, out of 
which you got 80 percent? 

Mr. Miller. That was circulation advertisement, out of which 



10930 IMPROPER ACTIVITIES IN THE LABOR FIELD 

The Chairman. Did you print any advertisement for them at all ? 

Mr. Miller. No, they requested that we do not. 

The Chairman. That is the point I am making. It actually did 
not go for an advertisement, but was just a donation. That is what 
it amounted to ; wasn't it ? 

Mr. Miller. Yes, sir. 

The Chairman. You rendered no service in return for it; did you? 

Mr. Miller. That is right, sir. 

The Chairman. Proceed. Senator Curtis. 

Senator Curtis. Mr. Miller, how long were 3'ou an employee of 
the State of Pennsylvania ? 

Mr. Miller. Twenty-one years. 

Senator Cltrtis. What were those years? 

Mr. Miller. 1938 to the present. 

Senator Curtis. You still are ? 

Mr. Miller. Yes. 

Senator Curtis. Is that a civil service appointment? 

Mr. Miller. Yes, sir. 

Senator Curtis. Wliat is jour present job description ? 

Mr. Miller. Public relations in the Department of Labor and In- 
dustry. 

Senator Curtis. The Department of Labor and Industry? 

Mr. Miller. That is right. 

Senator Curtis. What was it back in the late 1940's and early 1950's? 

Mr. Miller. Procedure analyst. 

Senator Curtis. What does a procedure analyst do ? 

Mr. Miller. We prepare procedures for the operations of the 
department that I was connected with. 

Senator Curtis. I want to get these terms straight. The Pennsyl- 
vania Federationist, that was Lapensohn's publication? 

Mr. Miller. That was the Pennsylvania Federation of Labor's 
official publication. That was the one that Mr. Lapensohn did adver- 
tising for. 

Senator Curtis. I see. But the paper belonged to the Pennsylvania 
State Federation of Labor ? 

Mr. Miller. That is right, sir. 

Senator Curtis. But that was the publication that Mr. Lapensohn 
w^orked through and for ; is that correct ? 

Mr. Miller. That is right. 

Senator Curtis. Did he have another publication at the same time ? 

Mr. Miller. He had a publication later, in New York. He had a 
publication. 

Senator Curtis. No, I mean in Pennsylvania. 

Mr. Miller. No, sir. 

Senator Curtis. Who first talked to you about going to work on a 
part-time basis and selling ads or receiving contributions for this 
State Federationist ? 
_ Mr. Miller. Well, I was with the State Federation of Labor at the 
time, doing their public-relations work. Mr. Lapensohn approached 
me when I was in tlie office of the president of the federation, the 
then president, and asked me whether I would do this advertising in 
the Harrisburg area. That was in 1948. 

Senator Curtis. When did you first take up part-time work for the 
Pennsylvania State Federation of Labor? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10931 

Mr. Miller. It was in 1948. 

Senator Curtis. Did you approach them or did they approach you ? 

Mr. Miller. They approached me. 

Senator Curtiss. They knew where you worked ? 

Mr. Miller. That is right. 

Senator Curtis. Who approached you ? 

Mr. Miller. Mr. McDevitt. 

Senator Curtis. What position did he hold then? 

Mr. Miller. He was president of the Pennsylvania Federation. 

Senator Curtis. Where did he approach you ? 

Did he come to your office ? 

Mr. Miller. No, he asked me to come to his office. 

Senator Curtis. He called you up ? 

Mr. Miller. That is right. 

Senator Curtis. What did he say to you ? 

Mr. Miller. He just asked me to come to the office, and when I 
arrived there, he told me that their public-relations man had died the 
week before, and asked if I would do the work until they could secure 
a full-time man. 

That was to be on a part-time basis. 

Senator Curtis. What was the nature of your duties ? 

Mr. Miller. To put out a monthly publication, which was a tabloid- 
size paper, anywhere from 8 to 12 pages, and then to put out an annual 
publication. 

Senator Curtis. Wliat was this tabloid called ? 

Mr. Mn^LER. The Pennsylvania Federationist, but that did not con- 
tain any advertising. 

Senator Curtis. It bore the same name as the 

Mr. Miller. As the annual publication, but did not contain any 
advertising. 

Senator Curtis. That was an informational bulletin of some kind ? 

Mr. Miller. It was an informational paper that went to each of the 
local organizations' several officers in the organization. 

Senator Curtis. When did you first meet Lapensohn ? 

Mr. Miller. I met Lapensohn at the end of that year. 

Senator Curtis. What year ? 

Mr. Miller. That is, 1948. 

Senator Curtis. Where did you meet him ? 

Mr. Miller. In the federation offices. 

Senator Curtis. Wlio introduced you ? 

Mr. Miller. He introduced himself, and I had known that he was 
coming, because he brought the advertising copy that I had to pre- 
pare for the publication. 

Senator Curtis. In that first period that you knew Lapensohn, were 
you ever with him when Mr. McDevitt was present ? 

Mr. Miller. Yes, sir ; I was. 

Senator Curtis. Hacl Mr. McDevitt told you about Mr. Lapensohn ? 

Mr. Miller. In what respect ? 

Senator Curtis. Well, who he was, what the connection was ? 

Mr. Miller. Yes, that he was the advertising agent for the State 
federation, and that he would supply the copy from which I was to 
prepare the publication. That is, ] ust the advertising copy. 

Senator Curtis. You gathered they were friends ? 

21243— 58— pt. 28 8 



10932 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. MiLLKR, Yes, I did, sir. 

Senator Curtis. Then when did you begin tlie activity of soliciting 
ads for the Pennsylvania Federationist under or in conjunction with 
Mr. Lapensolm and his associates? 

Mr. Miller. That was in 1949. 

Senator Cui^tis. Who first mentioned to you that you might under- 
take such an activity ? 

Mr. Miller. Well, it was mentioned by Mr. Lapensohn in the pres- 
ence of the officers of the federation. 

Senator Curtis. Who were those officers? 

Mr. Miller. Mr. Bohr and Mr. McDevitt. 

Senator Curtis. ^Vliat was the first name ? 

Mr. Miller. Bohr. lie is the secretary-treasurer. 

Senator Curtis, x^nd Mr. McDevitt ? 

Mr. Miller. That is right, sir. 

Senator Curtis. Where did that meeting take place ? 

Mr. Miller. In Mr. McDevitt's office. 

Senator Curtis. In Mr. McDevitt's office ? 

Mr. Miller. It was the forward part of the building. I worked in 
the back part. 

Senator Curtis. And what was the discussion at that time ? 

Mr. Miller. Well, I don't recall it clearly, but Mr. Lapensohn 
asked if I would be interested in doing solicitation of advertising in 
the Harrisburg area since, as I recall it, he stated that that area was 
not covered. He didn't have any one solicited in the area. 

Senator Curtis, ^^^lat did Mr. McDevitt say about it ? 

Mr. Miller. Well, what I said was that if it would be all right with 
the federation, I would try. I said I never did that kmd of work but 
I would try to do it if it was possible. 

Senator Curtis. You said that in the presence of Mr. Bohr tind 
Mr. McDevitt and Mr. Lapensolm ? 

Mr. Miller. That is right, sir. 

Senator Curtis. Did the federation officers make a reply at that 
time ? 

Mr. Miller. Well, I asked the question, and it was approved, and 
then I received an authorization, that is, an official authorization, to 
do advertising, which was sigiied by President McDevitt. 

Senator Curtis. Mr. ^IcDevitt gave you a paper signed by him ? 

Mr. Miller. As an official representative of the federation to 
solicit advertising. 

Senator Curtis. You know it was his signatui-e? 

Mr. Miller. Well, I don't know whether it was his signature, sir. 
It was given to me in the office. I don't knoAv whether he signed it 
or his secretary signed it. 

Senator Curtis. But you are pretty sure that Lapensohn's secretary 
didn't sign it ? 

Mr. Miller. That is right, I am pretty sure of that. 

Senator Curtis. What did that say ? 

Mr. Miller. It just said — I think, as I recall it, it Avas a To-T^Hiom- 
It-May-Concern letter, that I represented the Pennsylvania Federa- 
tion of Labor in the solicitation. 

Senator Curtis. When were you first informed that you were em- 
powered to receive money where there was no ad taken ? 



IMPROPKK ACTIVITIES IN THE LABOR FIELD 10933 

Mr. Miller. You are saying when did they have circulation ad- 
vertising ? We called that circulation advertising. 

Senator Curtis. No ; I say when did anyone tell you that you were 
empowered to leceive money from business concerns who took no ad? 

Mr. Miller. Well, that was a practice before I came, sir. 

Senator Curtis. Who told you about it ? 

Mr. Miller. No one did, except that they could either take an ad 
or not take an ad. 

Senator Citrtis. Hoav did you find that out ? 

Mr. Miller. Just by discussing it. Before I started, I discussed 
that with Mr. Lapensohn, and it was a common practice. 

Senator Curtis. Did you ever discuss that with Mr. McDevitt? 

Mr. Miller. I didn't discuss it with Mr. McDevitt directly, but I 
am sure he was aAvare of the fact, yes, sir. 

Senator Curtis. While your discussion with Mr. Lapensohn was 
going on, was Mr. McDevitt present for any of those conversations? 

Mr. Miller. Regarding the circulation advertising, or these con- 
tributions ? 

Senator Curtis. I am talking about the practice of calling on 
businesses, getting money from them, and they taking no ad. Did 
Mr. McDevitt know about that? 

Mr. Miller. Yes, sir. 

Senator Curtis. And you are pretty sure he knew about that? 

Mr. Miller. I am positive, sir. 

Senator Curtis. What makes you say that ? 

Mr. Miller. Because half of our advertising was that kind of ad- 
vertising. Half of the funds that were received from the book. I 
know, because I prepared the advertising copy. Half of it was what 
was known as circulation advertising. I may say here that that was 
mostly at the direction of the people that we sold the advertising to. 
They insisted that their ad not appear in the book, because they 
didn't want to have other solicitations. 

They made it in this form. But they wanted it to be known as 
advertising. Now, I don't know why they wanted that, but they 
wanted it to be known as advertising, but they didn't want their ad 
to appear. 

Senator Curtis. And Mr. McDevitt knew about this ? 

Mr. Miller. Yes, sir. It is common practice in these publications. 
There are many publications, not just labor publications but all pub- 
lications. There are several hundred in Pennsylvania. 

Senator Curtis. What other publications do that? 

Mr. Miller. Well, there is the magistrates, the Chief of Police — 
which is the largest publication in Pennsvlvania. They have four 
books. They have an Eastern Chief of Police, a Western Chief of 
Police, and a Central Chief of Police book. There are the political 
publications. There are the veterans' publications ? 

Senator Curtis. What political publications? 

Mr. Miller. Well, the various publications on a local basis, which 
may be Republican or Democratic publications. They do the same 
thing. I mean, they take the position that "We want to give an ad, 
but we don't want our ad to appear, because we don't want anyone 
else to solicit us." There are about 200 of these publications that have 
been functioning for 50 years, of various sorts. They are in every 



10934 IMPROPER ACTIVITIES IN THE LABOR FIELD 

State in the Union. This practice of not accepting — of calling it cir- 
culation advertising and not putting an ad in is a common practice 
among businessmen. I mean, any man in business is aware of that 
kind of practice. 

Senator Curtis. Do the businessmen come to those publications and 
ask to pay for an ad not to be published ? 

Mr. Miller. They don't come to the publications, but when the pub- 
lications come to them — and as I said, there are several hundred in 
Pennsylvania — they have, in many large companies, what is known 
as institutional advertising. In other words, you take a large com- 
pany, like the Pennsylvania Power & Light. I don't know what their 
budget is, but it may be around a million dollars. They may have, 
say, $40,000 or $50,000 of that as institutional advertising. When a 
person comes to them and solicits for these annual publications, and, 
as I say, it is veterans — it goes right down the line — there isn't an 
organization in Pennsylvania that at one time or another didn't use 
this type of solicitation. 

This isn't just labor publications. The point I want to make is that 
when you come to them, they ask for your presentation. You make 
your presentation. In many instances, like the power and light com- 
pany, they have a committee that reviews all the requests they get. I 
would venture to say that the power and light company may get any- 
where from 3 to 500 requests during a given year. 

They have to parcel that money out, that $40,000 or $50,000 out to 
the various publications, and they do it mostly without advertising. 
That is the point I want to make. They use the advertising fund, they 
call it advertising, but they don't take an ad, because they don't want 
solicitation from other publications whom the}- don't want to give 
funds to. 

Senator Curtis. Then the business concern, if they say no to a vet- 
erans publication, there is always the danger, or at least they might 
feel that, that it would create ill will if they didn't make it ? 

Mr. Miller. That is correct, and the same for the police chiefs or 
the magistrates. The county commissioners in Pennsylvania have one 
of the largest publications in Pennsylvania. 

In fact, last year, the professional architects aslred me if I would 
be interested in publishing their book. The Gold Star Mothers wanted 
a publication. 

Senator Curtis. And if a businessman turned them down, it would 
look like he was unsympathetic; wouldn't it? 

Mr. Miller. That is right, sir. 

Senator Curtis. Then whether this practice is good or bad. it is not 
initiated by the business concerns ; is it ? 

Mr. Miller. It is initiated by the organizations that desire to raise 
funds, and they find — and to haVe a publication. Some of them desire 
a nice publication that they can show there their affiliated organiza- 
tions. It gives them a certain stature. 

Senator Curtis. In other words, it comes to the businessman as a 
touch for a cause? 

Mr. Miller. As a means of raising funds ; yes. _ And the business- 
man uses it, rather than as a contribution, he uses it as advertising, in 
his budget. You take the Pennsylvania Power & Light. They use 
that as advertising, although it is a contribution. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10935 

Senator Curtis. In other words, we will assume tliat the vast ma- 
jority of these people represent a cause of considerable merit 

Mr. Miller. That is right, sir. 

Senator Curtis. Or at least so accepted by the public, if they have 
no chance of investigating it, and to prevent from being classified as 
hostile to such a thing, the businessman responds ? 

Mr. Miller. I imagine — I wouldn't say hostile. I would say that 
some businessmen have a sincere desire to help these organizations. 

Senator Curtis. Mr. McDevitt Imew how this was operating. 

Mr. Miller. It was operating the same as any of the other publica- 
tions ; yes, sir. He did Icnow it. 

Senator Curtis. He knew about it ? 

Mr. Miller. Yes, sir. 

Senator Curtis. And he knew about how appointments were set up 
ahead of time for the solicitors to go in and see the businessman ? He 
knew the general practice ? 

Mr. Miller. Yes; the general practice in that line of work; yes, 
sir. 

Senator Curiis. He knew about the letters you would write in 
advance ? 

Mr. Miller. Well, yes ; he did know that appointment letters were 
being made ; yes, sir. 

Senator Curtis. And he knew about what was said, in them? 

Mr. Miller. He did, sir. 

Senator Curtis. Suppose the chief of police in their publication 
implied that certain services would be withheld, or that certain in- 
vestigations might be made, if an ad were not taken. Would you 
consider that proper ? 

Mr. Miller. I would not, but I would not — I don't know the people 
that solicit, but there are probably 2,000 or 3,000 solicitors in Penn- 
sylvania that solicit for various publications. I don't know their 
practices in solicitation, sir. I couldn't say. 

Senator Curtis. I am just using that as an illustration. I have no 
reason to suggest that the chiefs of police of Pennsylvania have done 
anything unethical, or either way. I just don't know. 

Mr. Miller. They solicit m their uniform, the police or the fire- 
men. 

Senator Curtis. These letters that have been placed in evidence 
here the last day or two, which you now tell me Mr. McDevitt knew 
all about, they did carry a promise to help give the businessman labor 
peace, didn't they? 

Mr. Miller. No, sir, I wouldn't say they carried a promise. They 
were in the same nature as any of these other publications, a promise 
of good will, similar, say, to the police publications or the county 
commissioner publications or the architect's publications. 

Good will to the organization. It was a similar good will. 

Senator Curtis. I want to see the last three letters, Wliat is your 
first name, Mr. Miller? 

Mr. Miller. Reuben. 

Senator Curtis. Who is Edward H. Miller ? 

Mr. Miller. He is the secretary-treasurer of the Building and 
Construction Trades Council. That is a later publication that I did. 



10936 IMPROPER ACTIVITIES IX THE LABOR FIELD 

Senator Curtis. Were any implications made that it would be 
unwise for a business concern not to give the Pennsylvania Federa- 
tionist some money ? 

Mr. MiLLEU. No, sir. Not from my knowledge and not in my solici- 
tations. I would solicit, just to give my own personal experience, 
and, of course, I can't speak for anyone else, and I would contact, 
maybe, 15 or 20 firms before one would take an ad. It wasn't in a 
sense of any way but the presentation of the facts and their consider- 
ation of them. 

Senator Curtis. Do you deny that an impression was not given that 
by doing this it would help in their labor relations ? 

Mr. Miller. Well, it wasn't as far as my sales, and I can only 
speak for myself. 

I never gave that impression, sir. I spoke entirely of the programs 
of the federation, and that was it. 

Senator Curtis. If it did, if here officers and leaders of the federa- 
tion or any trade council or anybody else were getting money for 
personal profit that does help businessmen in their labor relations, it 
seems to me it would be highly unethical, because these officers have an 
obligation to their own members, and to not have a conflict of interest 
and not be in collusion with management, and not accepting favors, 
gifts, contributions, wedding presents and so on from people with an 
adverse interest. 

If you actually helped businessmen to sell their product, that is a 
different thing. I can understand, with the power company, that if 
you could sell the idea to your own membership or to a segment of the 
population of Pennsylvania, that private power companies were a good 
thing, there would be no conflict of interest so far as collusion over 
labor peace is concerned. Certainly, a company has a right to adver- 
tise their own product, and that would be a legitimate expenditure 
and a legitimate chargeoff in their tax return. 

Do you think that Mr. McDevitt knew fully about the operation of 
the Pennsylvania Federationist ? 

Mr. Miller. With reference to the types of advertising we sold ? 

Senator Curtis. How the whole thing operated. 

Mr. Miller. I think he knew as far as the basic, broad approach 
to it, that advertising was being sold for the federation. I wouldn't 
say he knew every contact that was made. He wouldn't know any 
of them, as a matter of fact, sir. 

Senator Curtis. And he would probably know about what the total 
business was that was done in a given time, wouldn't he? 

Mr. Miller. Yes, sir, he would know that. 

Senator Curtis. Do you think that his name was being used as 
pi-esident of the State federation of labor, as an entry and in making 
contacts ? 

Mr. Miller. He authorized appointment letters. 

Senator Curtis. Did he authorize anybody else to give appointment 
letters in his behalf ? 

Mr. Miller. No, sir. 

Senator Curtis. Do you have some of those letters that were in evi- 
dence yesterday with Mr. McDevitt's name on them, Mrs. Watt ? 

Mr. Reporter, read the last question and answer, please. 

(The last question and answer were read by the reporter, as re- 
quested.) 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10937 

Mr. Miller. I wish to clarify that last statement. That is, he did 
authorize the advertising agency. By anyone else, I meant other 
than the agency to send out appointment lettei-s. Mr. McDevitt au- 
thorized to advertising agency. 

Senator Cltrtis. What was the name of that advertising agency? 

Mr. Miller. The Rolee Advertising Agency. 

Senator Curtis. Who was the head of tliat? 

Mr. MiLi^ER. Mr. Lapensohn. 

Senator Curtis. Mr. McDevitt did authorize Mr. Lapensohn to send 
out letters in his name ? 

Mr. Miller. Yes, appointment letters. 

Senator Curtis. Appointment letters ? 

Mr. Miller. That is right. 

Senator Curits. Do you know about that other than the fact that 
you just know it happened? Did you ever hear that discussed? 

Mr. Miller. No. That is a matter of practice in this type of pub- 
lication. I mean, that is the general practice. 

Senator Curtis. Did Mr. McDevitt ever have occasion to see any 
of those letters that were sent out ? 

Mr. Miller. Well, now, if you are speaking of letters other than 
appointment letters, Mr. McDevitt had no knowledge of those. 

Senator Curtis. I am talking about appointment letters. 

Mr. Miller. Just the simple appointment letter, yes, he was aware 
of it. 

Senator Curtis. Of the contents ? 

Mr. Miller. Yes, sir. 

Senator Curtis. How would he be aware of the contents? 

Mr. Miller. Because it was a form letter. The basic appointment 
letter, as I recall it, was a 3- or 4-line letter, saying that ''So and so 
will call on you and we will appreciate any courtesy extended to him," 
something of that nature. 

Senator Curtis. Here is one, Avhich is marked "Exhibit 37," signed 
James L. McDevitt, and it is to Mr. Duval, of the S. S. White Dental 
Manufacturing Co. 

Dear Mr. Duval : I will appreciate your granting an interview with Mr. Sam- 
uel Kirsch of our staff at your earliest convenience. He will call to see you, 
and the subject he will discuss will be of mutual interest. Thanking you for 
any consideration that may be extended, I am, 
Respectfully yours, 

•Tames L. McDevitt. 

Mr. Miller. That was the appointment letter, generally. Some- 
thing like that. 

Senator Curtis. He would know about that ? 

Mr. Miller. No, he didn't know who these letters were going to. 

Senator Curtis. He would know that that type of approach, that 
that wording would be used ? 

Mr. Miller. That is right, sir. 

Senator CuRns. Here is one to Mr. Charles H. Landreth. presi- 
dent of the Penn's Manor Co., Inc., Cornwall Heights, Pa. This is 
exhibit 34. 

Dear Mr. Landreth : An important matter has developed with the Penn- 
sylvania Federation of Labor, and I have asked Sam Kirsch, of my staff, to see 
you personally within the next few days. Thanking you for the courtesy, I am, 
Yours truly, 

James L. McDevitt. 



10938 IMPROPER ACTIVITIES IN THE LABOR FIELD 

He would know that such letters were being sent ? 
Mr. Miller. That is right. 

Senator Curtis. Here is another one, exhibit 44, this is to Mr. 
Adams of the Penn-Mutual. 

Dear Mr. Adams : A very important matter has developed with the Penn- 
sylvania State Federation of Labor, A. F. of L., which I am sure is of great con- 
cern to both of us. I have asked my personal representative, Mr. Sam Kessler, 
to contact you, and you may expect to hear from him within the next few days. 
Any courtesy extended to him will be greatly appreciated by me. 
Very truly yours, 

James L. McDevitt. 

He would know about that sort of a letter going out ? 

Mr. Miller. No, he would not, sir. That is not within the scope 
of the original appointment letter. It may vary somewhat. I didn't 
get the full implication of the letter you just read. I wouldn't say 
that it went that far. 

He allowed an appointment letter. 

Senator Curtis. To go out bearing his signature ? 

Mr. Miller. As the president of the organization, which I would 
say is a normal practice in these publications. 

Senator Curtis. When you undertook to sell ads and make other 
collections, did you have any discussion as to who was making the 
profit out of this activity ? 

Mr. Miller. I didn't have any discussion. I knew that the Rolee 
Advertising Agency was the agency handling the publication, and 
that the federation and the Rolee Advertising Agency was profiting 
by the publication, yes, sir. 

Senator Curtis. Did you know about how it was divided, approxi- 
mately ? 

Mr. Miller. Yes, yes, I did. 

Senator Curtis. Did these businessmen knoAv that ? 

]\Ir. Miller. Well, I think there was an assumption tliere that can 
be gathered from what I stated before, that most businessmen know 
that these publications are operated by various advertising agencies 
or concerns that handle these publications, and that the solicitor is 
paid and the person operating the publication is also paid, yes, sir. 

Senator Curtis. Did Rolee Advertising and Lapensohn make more 
money out of this activity than did the State Federation of Labor? 

Mr. Miller. No, sir. 

Senator Curtis. They didn't ? 

Mr. Miller. Not from my general knowledge, because I think Rolee 
Advertising received 60 percent, but he had to pay out 30 to 35 per- 
cent in commissions, and he operated the office, et cetera. 

So he would not be — he might. No, let me reconsider that. 

The federation did have to pay for the publication. That contract 
called for the federation putting out the publication instead of the 
soliciting agency. So I would say it would be about the same, or maybe 
sliglitly less for the federation. I am not sure of that figure. I 
wouldn't know the detailed figures. 

Snator Curtis. Do you suppose all these business concerns realized 
that? 

Mr. Miller. Do they realize what the percentage was ? I wouldn't 
know, sir. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10939 

Senator Curtis. When they are touched for some other cause, 
whether it is the chief of police, their organization, or whether it 
is the veterans, is it sort of generally known that a substantial por- 
tion of the profit goes to some one other than the organization that 
is sponsoring it, the sponsoring organization ? 

Mr. Miller. I couldn't say that it is generally known, but I think 
organizations that advertise in these publications, if they do it to 
any degree, are aware that the person that is soliciting is a sales- 
man, and he is selling space. Certainly he has to be paid for his 
efforts. 

Senator Curtis. Yes. I think it would be generally accepted that 
all services performed, all goods furnished, would have to be paid 
for, and that sometimes tlie overhead might be very high, and maybe 
the organization in whose name this activity is carried on does not 
get too much of it. 

But here you have a situation where they don't get all the profit. 

(At this point. Senator Ervin withdrew from the hearing room.) 

Mr. Miller. Wlio doesn't get all the profit, sir ? 

Senator Curtis. Pennsylvania State Federation of Labor. 

Mr. Miller. They get all the profit that is agreed to in the original 
contract. 

Senator Curtis. Yes. But they agree that somebody else shall 
have part of the profit. 

Mr. Miller. The advertising agency. 

Senator Curtis. Yes. 

Mr. Miller. That is right. 

Senator Curtis. They don't just agree that salaries and expenses 
and goods purchased and so on will be taken care of, but that the 
advertising agency makes a profit above that. Over what period of 
time did you run a publication ? 

Mr. Miller. From 1952 to the present time. 

Senator Curtis. And what is the name of that publication? 

Mr. Miller. The Pennsylvania Trade Unionist. 

Senator Curtis. For what labor group is that published ? 

Mr. Miller. It is the Building and Construction Trades. 

Senator Curtis. What is your contract with them ? 

Mr. Miller. That I do a publication for them. I give them three 
to four thousand dollars. It has been varied during the years. 

Senator Curtis. A year? 

Mr. Miller. Yes. And the publication, the publication which you 
saw, which runs about 4,000. 

Senator Curtis. You give them about 4,000 copies of the publi- 
cation ? 

Mr. Miller. No. The cost of the publication, in other words, this 
varies from the Federationist, where the Federationist did the publi- 
cation I do the publication as the agency, because they don't have 
anyone to do it. 

Senator Curtis. In other words, you do the publication ? 

Mr. Miller. And I give them $4,000, $3,000 to $4,000 in cash. 

Senator Curtis. And how many copies, then, do you give to them 
for distribution ? 

Mr. Miller. Well, I distribute it for them. It runs between 600 
and 800 copies. They give me a mailing list. 



10940 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Senator Ci'RTIs. GOO and 800 copies? 

Mr. Miller, That is right, si r. 

Senator Curtis, And for tlie rii>"ht to do tliis in tlieir name, you 
give them $3,000 or $4,000 a vear ? 

Mr, Miller. Tliat Ls right. 

Senator Curtis. How much do you make out of it ? 

Mr, Miller. I have averaged about $6,000 or $7,000 a year. 

Senator Curtis. That is after you have paid the expenses ? 

Mr. Miller. That is after I have paid my commissions and the cost 
of printing, and all the other things. 

Senator Curtis. That is about tlie same ratio as Lapensohn. 

Mr, jSIiltj^r. That is right. 

Senator Curtis. How many people do you employ ? 

]\Ir, Miller, One, 

Senator Curtis. Who is that? 

Mr. Miller. "Well, at the present time it is a man by the name of 
Seigel, Lester Seigel. 

Senator Curtis. Does he luxve any other employment ( 

Mr. Miller. No, sir ; that is his full-time employment. 

Senator Curtis. Do you pay him on a commission or a salary ? 

Mr. Miller. That is right. 

Senator Curtis. "V\^iicli ? 

Mr. iMiLLER. I pay him on a commission. 

Senator Curtis. AVliat commission do you give him ? 

Mr. Miller, Forty percent. 

Senator Curtis, "Who signs the letters of appointment for him ? 

Mr. Miller, I do. 

Senator Curtis, Whose name do you sign ? 

Mr, Miliar. The secretary-treasurer of the building-consti-uction 
trades. 

Senator Curtis. Wliat is his name ? 

Mr. Miller. Edward Miller. 

Senator Curtis. Who composes the letters ? 

Mr, Miller, Well, it is the regular appointment letter. 

Senator Curtis, Are all of them alike ? 

Mr. Miller, No ; they are not. "V^^iere it deals with a foUowup, then 
I will vary it to try to sell the advertisements. 

Senator Curtis. You compose the letters and sign the secretary's 
name to them ? 

Mr. Miller. That is right. 

Senator Curtis. Has he ever asked to see any of those letters or 
copies ? 

Mr. Miller. No : he hasn't. 

Senator Curtis. But he knows about them ? 

Mr, Miller, Yes, sir ; he does. 

Senator Curtis, And generally who you are sending letters to? 

Mr. Miller. That is right, to employers. 

Senator Curtis. And you would say that in any of the letters that 
have been referred to here in the testimony, whatever you said in 
there was in accord with your permission from the secretary-treasurer ? 

Mr. Miller. That is right. 

Senator Curtis. Was that the same pattern followed by Mr. Lapen- 
sohn and Mr. McDevitt? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10941 

Mr. Miller. No; I think in Mr. McDevitt's case, he restricted the 
letters to appointment letters. 

Senator Curtis. But they did vary as to the wordage ? 

Mr. Miller. They did vary as to the wordage. 

Senator Curtis. But you know that Mr. McDevitt authorized the use 
of his signature ? 

Mr. Miller. Just for appointment letters. 

Senator Curtis. But he authorized Mr. Lapensohn or his agent to 
use that signature ; didn't he ? 

Mr. Miller. To use the signature for appointment letters; yes, sir. 

Senator Curtis. When did Bokal go to work for you ? 

Mr. Miller. In 1953, 

Senator Curtis. Where did you first meet him ? 

Mr, MiLixER. When I was with the State federation. 

Senator Curtis. Where did you meet him ? 

Mr. Miller. In the State federation building. 

Senator Curtis. In whose office ? 

Mr. Miller. Well, it was in my office. 

Senator Curtis. Did Mr. McDevitt know him ? 

Mr. Miller. Yes, sir; he did. 

Senator Curtis. How long had he known him ? 

Mr. Miller. I think he knew him from the time he started to work. 
I think it was a practice — and I can't be sure — a practice that when a 
person was put on to sell this advertising, that he did meet with the 
president of the organization, just an introduction. 

Senator Curtis, "^^^len did Bokal start to sell ? 

Mr. Miller. For the State Federation of Labor? 

Senator Curtis. Yes. 

Mr. Miller. I don't know. I think it was stated here yesterday 
that he started in 19J:7. 

Senator Curtis. May I see that list of arrests of Mr. Bokal? 

Did you read it all in ? 

Mr. IvENNEDY. I didn't read it. I summarized it yesterday. 

Do you want to see it ? 

Senator Curtis. Yes. I would like to see the dates. 

The Chairman. In the meantime, may I ask the witness 1 or 2 
questions ? 

Senator Curtis. Surely. 

The Chairman. Was any list of prospective clients given to you ? 

Mr. Miller. No, sir. No list of clients. 

The Chairman. I mean, the labor miion didn't furnish you a list 
to go see these particular people? 

Mr. MiLixER. No, sir. 

The Chairman. The}^ never furnished you a list at any time? You 
were free to solicit generally ^ 

Mr. Miller. 
know the person who we were to see. 

Senator Goldwater. May I ask a question, Mr. Chairman, while 
they are looking for that list? 

The Chairman. Senator Goldwater. 

Senator Goldwater. Mr, Miller, you have had experience in putting 
these publications out, as I believe you testified. 

Mr. Miller, That is ri^ht. 



10942 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Senator Goldwater. When you Avant to get an article written for 
one of these magazines by George Meany, how do you go about that? 

Mr. Miller. Well, there are several ways. There are articles that 
are issued by the national A. F. of L., at the time, the CIO, which 
are for general publication, say as a Labor Day message or what 
have you. Other than that, it was usually by the State Federation. 
They would write President Meany to prepare an article which dealt 
probably directly with Pennsylvania. 

Senator Goldwater. Mr. Meany might not have known about what 
was supposed to have been going on with this publication in 1954, 
but sometime in the past, it might have been last year, he said, re- 
ferring to these books : 

What goes on in the book outside of the advertising is of very little impor- 
tnnce. The methods used to secure the advertising are those that we do not 
approve and no one can approve, and still these boolis go on year after year. 

Mr. Meany had a statement in the 1954 Federationist. Were you 
working for the organization at that time when that was obtained? 

Mr. ^IiLLER. The 1954 publication? I think the article used there 
was the Labor Day message. 

Senator Goldwater. That is right. But was his permission neces- 
sary ? 

Mr. Miller. No, sir ; that is not necessary. That is public. That 
is in their regular press release. 

Senator Goldwater. How about Mr. William Schnitzler? 

Mr. Miller. The same. It was a Labor Day message. 

Senator Goldwater. This was a Labor Day statement? 

Mr. ISIiLLER. Yes. 

Senator Goldwater. But your procedure, when you want state- 
ments from either leaders of labor or leaders of management or leaders 
of government, is to ask them for a statement ? 

Mr. Miller. To request it. Those were the only two where we used 
Labor Day messages. The rest were requested and they were pre- 
pared for the publication. We sent a copy of the publication with the 
request so that they could have an idea of what was said before, and 
the type of publication. 

Senator Goldwater. And you did not use the permission of these 
men to run their statements ? 

Mr. Miller. Well, all the others 

Senator Goldwater. No, I mean of the two I have referred to. 

Mr. Miller. No, sir. 

Senator Goldwater. You would just run them ? 

Mr. Miller. Yes, sir. 

Senator Goldwater. That is all. 

Senator Curtis. Mr. Miller, you said that Mr. Bokal went to work 
for the State Federationist in 1947 or 1 948 ? 

Mr. Miller. I think it was stated here yesterday that it was 1947. 
I don't know when he started. I came in 1948. 

Senator Curtis. But you do believe that Mr. McDevitt knew him 
well? 

Mr. Miller. Not well, sir. I say that he had met him. I don't 
know how well he knew him. 

Senator Curtis. Prior to the time you went to work ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10943 

Mr. Miller. He didn't work out of the Harrisburg office. He 
worked out of the Philadelphia office— out of the advertising agency's 
office. 

Senator Curtis. Did he ever discuss with you Mr. Bokal's long 
criminal record of several pages, run-ins with the law ? 

Mr. Miller. Mr. McDevitt, I am sure, and myself — I could swear 
to that — we did not know of his record. 

Senator Curtis. As a matter of fact, his last sentence — I guess he 
got probation on part of it — just ended in 1945. Certainly somebody 
coming to work would be asked where they had worked, where they 
spent their time and where they had lived, don't you think? 

Mr. Miller. As J stated, people were employed by Mr. Lapensohn, 
not by Mr. McDevitt. They were employed by the advertising agency. 
They did make a practice of just introducmg the individual to the 

President, since he was representing the Pennsylvania Federation of 
labor. 

Senator Curtis. Did he do a pretty good job ? 

Mr. Miller. Mr. Bokal ? 

Senator Curtis. Yes. 

Mr. Miller. Yes, 1 would say he did. 

Senator Curtis. It says here his criminal specialty is stock swin- 
dler, and larceny. I don't know how that would equip him for sell- 
ing ads, when there are no ads printed. That is all, Mr. Chairman. 

Senator Church. Mr. Chairman? 

The Chairman. Senator Church. 

Senator Church. Mr. Miller, did you testify a few minutes ago that 
you had recently had an offer from the Association of Architects in 
Pennsylvania to do a similar magazine for them ? 

Mr. Miller. That was last year. 

Senator Church. Last year ? 

Mr. Miller. Yes. 

Senator Church. With that magazine, would the arrangement 
have been comparable to the arrangements you had with the labor 
organization ? 

Mr. Miller. Yes. Wliat we offered them was 25 percent. 

Senator Church. You offered them 25 percent. You would take 75 
percent, and you would publish the magazine and pay the costs. What- 
evpi' bnlnnce there was, would be net profit to you ? 

Mr. Miller. That is right, sir. 

Senator Church. And you would solicit in much the same manner as 
you solicited for the labor organization, among employers, among 
businesses? 

Mr. Miller. That is right. In fact, the person who secured the con- 
tract—I believe he offered a few percent higher — has done the book 
for him. 

Senator Church. In any of your personal experience, in contacts, 
doing business on this basis, you never made it a point to say to the 
prospective advertiser, "I am getting 75 percent of this and the federa- 
tion is getting 25 percent," did you ? 

Mr. Miller. In my capacity as a solicitor, no, I did not. I mean I 
represented the organization, and just presented it that way. 

Senator Church. That is all. Thank you. 

The Chairman. Thank you very much. Call the next witness. 



10944 IMPROPER ACTIVITIES IX THE LABOR FIELD 

Mr. Kennedy. Mrs. Eleanor Lefkowitz. 

The Chairman. You do solemnly swear that the evidence you shall 
give before this Senate select committee shall be tlie truth, the whole 
truth, and nothing- but the truth, so help you God? 

Mrs. Lefkowitz. I do. 

TESTIMONY OF ELEANOR LEFKOWITZ 

The Chairmax. State your name, your place of residence, and your 
business or occupation, please. 

Mrs. Lefkowitz. Eleanor Lefkowitz, 138-41 60th Avenue, Flush- 
ing, N. Y. 

The Chairman. Speak a little louder, if 3'ou will. 

You waive counsel ; do you ( 

Mrs. Lefkowitz. Yes ; I do. 

Mr. IvENNEDY. Mrs. Lefkowitz, you were the oHice manager for Mr. 
Ben Lapensohn in New York : is that correct f 

Mrs. Lefivowitz. Yes ; I was. I ran liis office. 

Mr. Kennedy. Do you still hold tliat position ( 

Mrs. Lefkowitz. No; I don't. 

Mr. Kennedy. When did you end employment tliere ( 

Mrs. Lefkowitz. I left in January 1958. 

Mr. Kennedy. You worked there from wlien i 

Mrs. Lefkow^itz. From October 1949 until January 1958. 

Mr. I^NNEDY. Mr. Chairman, we are now going into the magazine 
operation in New York, and Mrs. Lefkowitz is the fiist witness in 
connection with that. 

The Chairman. You worked from 1949 to 1958 ; is that correct 'i 

Mrs. Lefkowitz. That is correct. 

Mr. Kennedy. "WHiat was the company called in New York? 

Mrs. Lefkowitz. Rolee Publications. 

Mr. Kennedy. R-o-l-e-e ? 

Mrs. Lefkowitz. That is right. 

^Ir. Kennedy. And did you start to work for him sliortly after that 
was set up ? 

Mrs. Lefkowitz. I think they were set up in February or March of 
1949 and I started to work for them in October. 

Mr. Kennedy, "\\niat was their business ? 

Mrs. Lefkowitz. They operated, they published the New York Fed 
erationist, which was the annual publication of the New York State 
Federation. 

Mr. Kjennedy. You published that yearly ; is that right '? 

Mrs. Lefkowitz. That is right. 

The Chairman. Will you identify these magazines which 1 present 
to you ? There are nine of them. Will you state if you identify those 
as the publications that you are testifying about for the period of 
9 years '^ 

(Items were handed to the witness.) 

Mrs. Lefkov>^itz. Yes ; I do. 

The {^HAiRMAN. They may be made exhibit No. 48. 

Tliey can be numbered letterwise according to the year of the pub- 
lication. 

(Items referred to were marked as Exhibits No. 48-A tli rough I. 
;ind may be found in the files of the select committee. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10945 

Mr. Kennedy. Would you tell the committee a little bit about the 
setup in the office, how would you operate, and a little of the back- 
ground, as far as this publication is concerned ? 

Mrs. Lefkowitz. Well, it was an office that had an outer office and 
five small offices, all of which had doors to them, and various labor 
solicitors would use the small offices to make their telephone calls to 
prospective clients. 

Mr. IvENNEDY. You had a number of solicitors that were working in 
there ? 

Mi's. Lei^kowitz. Yes. 

Mr. Kennedy. How many solicitors did you have working? 

Mrs. Lefkowitz. Well, there were somewhere around 4 or 5 in the 
office usually. 

Mr. Kennedy. Would they be there all the year round or would 
they be there for part of the year ? 

Mrs. Lefkowitz. Part of the year. They would go away and come 
back again. 

Mr. Ivennedy. And these solicitors, did they always use their own 
name when they would be soliciting advertising? 

Mrs. Lefkowitz. No; sometimes they used anotlier name. 

Mr. KJENNEDY. What would be the reason for that? Did you know? 

Mrs. Lefkowitz. I didn't know. I was given to understand that 
they sometimes solicited for CIO publications, and, therefore, couldn't 
use the same name for both publications. 

Mr. Kennedy. For instance, you had a solicitor by the name of 
David M. Lyons; is that right? 

Mrs. Lefkowitz. That is right. 

Mr. Kennedy, What other name did he use ? 

Mrs. Lefkowitz. He also used the name of George Mason. 

Mr. Kennedy. And Irving Halperin? 

Mrs. Lefkowitz. He used the name of Lee Randall. 

Mr. Kennedy. And Harry Jasloe? 

Mrs. Lefkowitz. He used the name of Henry Bell, I think. 

Mr. Kennedy. Michael Kirk? 

Mi-s. Lefkowitz. Mike Duffy. 

Mr. Kennedy. Maurice Schab ? 

Mrs. Leitvowitz. Ed Wilson. 

Mr. Kennedy. And George Seister ? 

Mrs. Lefkowitz. He uses his own name. 

Mr. Kennedy. Did he ever use the name George Moore ? 

Mrs. Lefkowitz. Not that I know of. 

Mr. Kennedy. These solicitors would make their telephone calls 
from the office ; is that right ? 

Mrs. Lefkowitz. That is right. 

Mr. Kennedy. And did you know of any occasion when they would 
say that they Mr. Murray of the New York Federation of Labor? 

Mrs. Lefkowitz. The only one that I know of that used Mr. Mur- 
ray's name was David Lyons. 

Mr. Kennedy. David M. Lyons? 

Mrs. Lefkowitz. That is right. 

Mr. Kennedy. He would call these various prospective :v"counts 
and tell them that he was Tom Murray; is that riglit? 

Mi>;. Lefk;owitz. Yes. 



10946 lAIPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. President of the New York Federation of Labor, and 
that he was calling about this particular matter ? 

Mrs. Lefkowitz. That is right. 

Mr. Kennedy. When they would make these telephone calls, would 
they discuss any of the issues that might be of interest to the prospec- 
tive account? 

Mrs. Lefkowitz. For the most part, I didn't hear their solicitation 
because they used to work behind closed doors. Occasionally I would 
hear Mr. Lyons speak with power companies and use the power legis- 
lation. But I never heard the complete conversation. 

Mr. Kennedy. That would be that the Federation of Labor was 
opposing the public power; is that right? 

Mrs. Lefkowitz. Thai is right. 

Mr. Kennedy. Wlien he was calling the power companies, he would 
point that out? 

Mrs. Lefkowitz. That is right. 

Mr. Kennedy. Was there also the idea that the labor movement 
against communism and they should help fight communism ? 

^Irs. Lefkowitz. On occasion, yes. 

Mr. Kennedy. Those are the two. Good roads — did they use that? 

Mrs. Lefkowitz. Yes, for a small period of time. 

Mr. Kennedy. That they were in favor of better roads ? 

Mrs. Lefkowitz. That is right. 

Mr. Kennedy. And they would use that in connection with con- 
tractors? 

Mrs. Lefkowitz. Yes. 

Mr. ICennedy, So they used these three arguments with the pros- 
pective accounts, is that right? 

Mrs. Lefkowitz. Yes. 

Mr. Kennedy. Wliat was the circulation of the magazine? 

Mrs. Lefkowitz. In numbers I don't know. They mailed the mag- 
azine to all the advertisers and to advertising agencies. 

Mr. Kennedy. Was there any general circulation of the magazine? 

Mrs. Lefkowitz. No. 

Mr. Kennedy. You do not know what numbers the magazine was 
circulated in ? Was it 3,000 or 4,000 ? 

Mrs. Lefkowitz. Well, I can only say that 1 year they published 
perhaps 2,300 and another year 3,200. Most of them were mailed out. 

Mr. Kennedy. So it was anywhere from 2,000 to, maybe, 3,500? 

Mrs. Lefkowitz. That is right. 

Mr. Kennedy. What about the advertising where individuals 
would take an ad or pay money but they didn't want an ad actually 
put in the magazine? Could arrangements be made for that? 

Mrs. Lefkowitz. Yes ; it could. 

Mr. Kennedy. Would you explain that? 

Mrs. Lefkowitz. Well, if a company didn't want their name to ap- 
pear in the advertisements, they contributed to the circulation of 
the publication. 

Mr. Kennedy. "^AHiat would they be told? 

Mrs. Lefkowitz. They had the choice of using an advertisement, 
but it was my understanding that a great many firms didn't want to 
use the advertisement because other labor publications would solicit 
them right afterward. 

(At this point. Senator Church left the hearing room.) 



IMPROPER ACTIVITIES EST THE LABOR FIELD 10947 

Mr. Kennedy. They would just be making a contribution to tlie 
magazine ; is that right ? 

Mrs. Lefkowitz. That is right. 

Mr. Kennedy. Do you know if any of these people thought or 
understood they were contributing to a magazine that was actually 
run and operated by the New York Federation of Labor? 

Mrs. Lefkowitz. Well, I think on the front piece of the Federa- 
tionist there is a small statement that says that the New York Federa- 
tionist is owned and operated by the New York State Federation of 
Labor. That vras the impression. 

Mr. Kennedy. When, in fact, the New York Federationist was 
owned and operated by the Rolee Publications which, in turn, made a 
payment to the New York Federation of Labor? 

Mrs. Lefkowitz. Well, I have always been given to understand 
that the New York State Federation owned the publication. I didn't 
know otherwise. But it was run by the corporation that handled the 
advertising and all the expenses. 

Mr. Kennedy. Do you know what the financial arrangements were 
between the New York Federation of Labor and the Federationist? 

Mrs. Lefkowitz. Yes. The New York Federation of Labor re- 
ceived 25 percent and Rolee Publications received 75 percent. 

Mr. Kennedy. And the work that was done was actually all out of 
your office ; was it not ? 

Mrs. Lefkowitz. That is right. 

Mr. Ivennedy. The only thing that the New York Federation of 
Labor received was the payment of 25 percent for the use of their 
name? 

Mrs. Lefkowitz. That is right. 

Mr. Kennedy. "Wlien these solicitors were going out, did they bring 
photostats of checks from various companies to show to prospective 
clients ? 

Mrs. Lefkowitz. Occasionally they would. 

Mr. Kennedy. And these checks would amount anywhere from $500 
up? 

Mrs. Lefkowitz. Yes. 

Mr. Kennedy. That would show that other large companies had 
contributed to the magazine ? 

Mrs. Lefkowitz. Yes. 

Mr. Kennedy. Do you know, on the question of advertising service, 
the circulation payment, what percentage of the accounts just made 
contributions to the magazine rather than taking advertising? 

Mrs. Lefkowitz. I don't know, sir. 

Mr. Kennedy. What would happen to the money when it came into 
the office, Mrs. Lefkowitz, when the individual would bring his 
money in ? 

Mrs. Lefkowitz. Checks were sent to the NeAv York State Federa- 
tion of Labor in Albany, usually weekly, and then the Albany office 
would send the 75 percent share back to Rolee Publications. 

Mr. Kennedy. Was all the money sent up to the New York Federa- 
tion of Labor ? 

Mrs. Lefkoavitz. No. 

Mr. Kennedy. That was what was supposed to have been done, is 
that right? 

21243— 58— pt. 28 9 



10948 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mrs. Lefkowitz. That is right. 

Mr. Kennedy. Was that in fact done in all cases ? 

Mrs. Lefkowitz. Not always ; no, sir. 

Mr. Kennedy. Let's go to the question of cash. Was there any of 
the cash that was left out ? 

Mrs. Lefkowitz. There was cash brought into the office that was 
never sent up ; yes, sir. 

Mr. Kennedy. Would you explain that to the committee, how that 
was done ? Certain accounts would pay in cash, would they ? 

Mrs. Lefkowitz. That is riglit. Certain accounts would pay in cash. 
They would send it to the office, and it was given, usually, to a solicitor, 
and the solicitor would turn it over to me to put in the safe next to my 
desk. 

Mr. Kennedy. Why wouldn't you send the money up ? 

Mrs. Lefkoavitz. I was instructed not to send the money up. 

Mr. Kennedy. By whom were you instructed not to send the money 
up? 

Mrs. Lefkowitz. Ben Lapensohn. 

Mr. Kennedy. What did he tell you ? What were your instructions 
about this money, this cash that came in i 

Mrs. Lefkowitz. Well, when I received it, to put it in the safe, and 
that is what I did. 

Mr. Kennedy. How much money would be involved in these cash 
payments ? 

Mrs. Lefkowitz. Well, it could be as small as $20 or $25, it could 
be as large as $500, and I think it went to $1,000. 

Mr. Kennedy. What happened to this money? Was this still in 
the safe? 

Mrs. Lefkowitz. No; I can only assume what happened to it. I 
went to lunch, and when I came back I found the money wasn't in 
the safe. 

Mr. Kennedy, Who had access to the safe ? 

Mrs. Lefkowitz. Well, Mr. Lapensohn had access to the safe. He 
would have been there while I went to lunch. I would only assume 
that he took it. 

Mr. Kennedy. You put the money in the safe, and on occasion 
when you would come back from lunch the money would be gone 
from the safe ? 

Mrs. Lefkowitz. That is right. 

Mr. Kennedy. Did you ever raise a question with Mr. Lapensohn 
about the money ? 

Mrs. Lefkowitz. I didn't; no. 

Mr. Kennedy. It was just clear to you ? 

Mrs. Lefkowitz. It had to be, because if I left the office and he 
wasn't tliere, I would lock the safe. 

Mr. Kennedy. How much money was involved in these cash trans- 
actions ? 

Mrs. Lefkowitz. Do you mean the total amount of money in- 
volved ? 

Mr. Kennedy. Yes ; I suppose you wouldn't have an exact amount. 

Mrs. Lefkowitz. I wouldn't have exact knowledge; no, sir. 

Mr. Kennedy. Can you give us any idea of it ? 

Mrs. Lefkowitz. It might have been $1,500 in 1 year, that would 
be possible, or it might have been $2,000. I never kept track of it. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10949 

Mr. Kennedy. Beyond that, beyond the cash, was all the other 
money sent up to the New York Federation of Labor ? 

Mrs. Lefkowitz. No; it wasn't. 

Mr. Kennedy. Could you tell the committee what happened in 
connection with some of the other money ? 

Mrs. Lefkowitz. Well, a few years back, I was informed that an- 
other bank account had been opened called the New York Federa- 
tionist, and I was instructed to put certain checks into the accomit 
of the New York Federationist. 

Mr. I^nnedy. This was a bank account set up by Mr. Lapensohn 
himself. 

Mrs. Lefkowitz. That is right. 

Mr. KJENNEDY. It was in New York ? 

Mrs. Lefkowitz. Yes. 

Mr. Kennedy. What bank was it at ? 

Mrs. Lefkowitz. At the Trade Bank & Trust Co. 

Mr. Kennedy. Called the Federationist? 

Mrs. Lefkowitz. That is right. 

Mr. Kennedy. And you were instructed to take some of these checks 
that ordinarily you would send to the New York Federation of Labor, 
you w^ere instructed to take those checks and deposit them in the bank 
account ? 

Mrs, Lefkowitz. That is right. 

Mr. Kennedy. The checks were made out to the New York Federa- 
tion of Labor. How would you then be able to deposit them in the 
bank account of the New York Federationist ? 

Mrs. Lefkowitz. I was instructed to obtain rubber stamps and 
endorse them, "New York State Federation of Labor, pay to the 
New York Federationist." 

Mr. Kennedy. Did you go out and purchase the rubber stamp for 
that purpose? 

Mrs. Lefkowitz. I don't remember whether I went out to purchase 
it. I know that we did obtain it. 

Mr. Kennedy. You did go out and get the stamp ? 

Mrs. Lefkowitz. We did get the stamp. 

Mr. Kennedy. Mr. Chairman, these are the invoices for the pur- 
chase of the stamp, and these are the reproductions of the stamp 
itself. 

The Chairman. I present a photostatic copy of the invoice for the 
stamp to which you have been testifying. Would you identify it, 
please ? 

(A document was handed to the witness.) 

Mrs. Lefkowitz. Yes. 

The Chairman. That may be made exhibit 49. 

(Document referred to was marked "Exhibit No. 49," for reference 
and will be found in the appendix on p. 11177.) 

The Chairman. Now I hand you the stamp imprints of the 3 
stamps — was it 3 that you purchased ? 

Mrs. Lefkowitz. Yes. 

The Chairman. You obtained three? 

Mrs. Lefkowitz. Yes. 

The Chairman. Would you identify this, please? 

( Documents were handed to the witness.) 

Mrs. Lefkowitz. Yes ; I identify this. 



10950 IMPROPER ACTIVITIES IN THE LABOR FIELD 

The Chairman". That may be made exhibit 49-A. 

(Documents referred to were marked "Exhibit No. 49-A," for ref- 
erence and will be found in the appendix on p. 11178.) 

Mr. Kennedy. That special bank account was established about 
1953, is that right? 

Mrs. Lefkowitz. Approximately that time. I don't remember the 
date. 

Mr. Kennedy. How much money did you deposit in that bank 
account ? 

Mr. Chairman, we will have another witness who will give the exact 
amount, but I would like to get from this witness the approximate 
amount. 

Mrs. Lefkowitz. In the period of a year, I would say approximately 
$30,000. 

Mr. Kennedy. That would be approximately $30,000 each year? 

Mrs. Lefkowitz. That is right. 

The Chairman. Each year ? 

Mrs. Lefkowitz. I don't remember whether it was every year, but 
I do know that there was 1 or 2 years where there was approximately 
$30,000. 

The Chairman. Let's see. You began making these deposits, or 
this account was opened in 1953, did you say ? 

Mrs. Lefkowitz. I guess so. 

The Chairman. That is the best of your recollection ? 

Mrs. Lefkowitz. Yes. 

The Chairman. And that continued on through when ? 

Mrs. Lefkowitz. 1957. 

The Chairman. About 4 years? 

Mrs. Lefkowitz. I don't believe here was an money deposited in 
that account in 1957. I don't recall. 

The Chairman. You don't think any was deposited in 1957? 

Mrs. Lefkowitz. I don't think so ; no. 

Mr. Kennedy. We have the exact figures. I will put a witness on 
for that immediately. 

Who instructed you to purchase these rubber stamps ? 

Mrs. Lefkowitz. Mr. Lapensohn. 

Mr. Kennedy. Who instructed ou to set up this bank accomit ? 

Mrs. Lefkowitz, Mr. Lapensohn. 

Mr. Kennedy. Who instructed you to deposit this money that was 
supposed to go to the New York State Federation of Labor into this 
special account ? 

Mrs. Lefkowitz. Mr. Lapensohn. 

Mr. Kennedy. Did any of that money end up with the New York 
Federation of Labor ? 

Mrs. Lefkowitz. Yes. 

Mr. Kennedy. How was that handled ? 

Mrs. Lefkowitz. Usually several months later, usually after the 
beginning of the following year, Mr. Lapensohn would obtain bank 
checks for a sum, usually the amount that was paid in prior years for 
advertising by a certain corporation, and send that bank check up 
to Albany. 

Mr. Kennedy. "Wliat would that mean? Wliat do you mean by 
a certain corporation ? Any corporation ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10951 

Mrs. Lefkowitz. Any corporation. If a corporation, for instance, 
had a $500 ad, and even if they might have sent a check for $1,000, 
the $500 was sent up to the New York State Federation of Labor in 
Albany in the form of a bank check. 

Mr. Kennedy. Was that a relatively minor part of the $30,000, 
approximately, that was deposited in the bank account ? 

Mrs. Lefkowitz. Yes. 

Mr. Kennedy. That is, the amount that was sent up. Is that right ? 

Mrs. Lefkowitz. Yes. 

Mr. Kennedy. Mr. Chairman, I think in order to clarify the record 
completely on this, it might be well if we called two witnesses, Mr. 
Robert Dunne and Mr. Charles Wolfe, to put the actual figures in the 
record. 

The Chairman. Can Ave take a recess now until 2 o'clock. 

Mr. Kennedy. I would like to get this point cleaned up. 

Senator Cuetis. Did you have anything to do with the Pennsyl- 
vania transaction ? 

Mrs. Lefkowitz. No, sir ; I did not. 

Senator Curtis. You don't know anything about that? 

Mrs. Lefkowitz. No^ sir. 

Mr. Kennedy. I will just put these figures in on this particular 
transaction, and then we will recall you later ; tomorrow. 

The Chairman. Have you gentlemen been sworn ? 

Mr. Dunne. No, sir. 

Mr. Wolfe. No, sir. 

The Chairman. Do you and each of you solemnly swear that the 
evidence you shall give before this Senate select committee shall be 
the truth, the whole truth, and nothing but the truth, so help you 
God? 

Mr. Wolfe. I do. 

Mr. Dunne. I do. 

TESTIMONY OF ROBERT E. DUNNE AND CHARLES E. WOIEE 

The Chairman. State your name. 

Mr. Dunne. I am Robert E. Dunne. I am a staff member of this 
committee on loan from the permanent Subcommittee on Investiga- 
tions. 

Mr. Wolfe. I am Charles E. Wolfe. I am an investigator for the 
General Accounting Office, assigned to the committee staff. 

The Chairman. All right, Mr. Kennedy. 
^ Mr. Kennedy. Mr. Dunne and Mr. Wolfe, you made an examina- 
tion of the bank accounts of the Rolee Advertising Co. and also of 
the special bank account that was set up by Mr. Lapensohn that the 
previous witness discussed? 

Mr. Dunne. Yes. 

Mr. Kennedy. That was in whose name ? 

Mr. Dunne. That was in the name of the New York Federationist. 

(At this point. Senator Gold water left the hearing room.) 

Mr. Ivennedy. How much money, by year, went into this bank 
account ? 

Mr. Dunne. The hulk of the money was diverted during the years 
1952 through 1956. 



10952 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. How much money was diverted during that period 
of time ? 

Mr. Dunne. $149,427.03. 

Mr. Kennedy. Do you have it broken down by year ? 

Mr. Dunne. Yes. In 1952, $34,587.03; 1953, $30,850; 1954, $38,375; 
1955, $32,910; 1956, $10,000. 

Mr. Kennedy. In addition to those years, was there other money 
diverted by Mr. Lapensohn ? 

Mr. Dunne. In 1949, $2,500 was diverted ; in 1950 

Mr. Kennedy. These years that you are talking about prior to 
1953, this was done through his regular bank accounts ? 

Mr. Dunne. That is right. The special account had not been 
opened. 

1950, $2,500 ; in 1951, $500 ; in 1957, $500. 

Mr. Kennedy. So from 1949 to 1952, there was diverted $6,495 that 
we can prove ; is that correct ? 

Mr. Dunne. That is correct. 

Mr. Kennedy. And in 1957, another $500 ? 

Mr. Dunne. That is correct. 

Mr. Kennedy. So the total was $156,422.03 ; is that correct? 

Mr. Dunne. That is correct. 

Mr. Kennedy. Was any of that returned or given to the New York 
State Federation of Labor ? 

Mr. Dunne. Actually, the total amount — what I gave you was net 
figures — the total amount withheld was one-hundred-and-sixty-seven- 
thousand-odd dollars, and ultimately $11,100 of that was sent to the 
New York State Federation of Labor. 

Mr. Kennedy. So this is the clear amount that was stolen by Mr. 
Lapensohn ; is that correct, $156,422.03 ? 

Mr. Dunne. Right. 

Mr. Kennedy. He did take another $11,000 which was returned; 
is that right ? 

Mr. Dunne. That is correct. 

Mr. Kennedy. This money should have all gone to the New York 
State Federation of Labor ? 

Mr. Dunne. Yes, sir. 

Mr. Kennedy. And then, in turn, the New York State Federation 
of Labor would have returned to Lapensohn or his company 75 per- 
cent of this ; is that right ? 

Mr. Dunne. Yes. 

Mr. Kennedy. So, actually, this $156,422.03 was the amount of 
money that was diverted from its proper source? 

Mr. Dunne. Yes, sir. 

Mr. Kennedy. And then, actually, the amount of money that Mr. 
Lapensohn took was how much? That would be 25 percent of that. 
Do you have that figure ? 

Mr. Dunne. It is about $39,000. 

The Chairman. As I understand, all of the money that went into 
this special account, of all of that Lapensohn was actually entitled to 
75 percent of it. So when he was taking all of it, he was taking the 
other 25 percent ; is that correct ? 

Mr. Kennedy. Under the terms of the contract, Mr. Chairman, all 
of this money initially belonged to the New York Federation of Labor. 
They in turn would pay him back 75 percent. 



IIVIPROPER ACTIVITIES IN THE LABOR FIELD 10953 

The Chairman. I understand. So, actually, under the contract, 
75 percent of it was his, and he was entitled to receive it back ? 

Mr. Kennedy. That is correct. 

The Chairman. So the misappropriation or the embezzlement or 
withholding was only of 25 percent of the total ? 

Mr. Kennedy. That is correct. 

The Chairman. He sent in $11,100, is that right, finally? 

Mr. Dunne. That is correct, sir, of the greater sum of $167,000. 

The Chairman. I know, but did he get 75 percent of that back ? 

Mr. Dunne. Yes, sir. 

The Chairman. Of the $11,000, he got 75 percent of that back ? 

Mr. Dunne. Yes, sir. 

The Chairman. All right. 

Mr. Kennedy. He diverted $156,422.03, and he misappropriated, 
stole, whatever term we might use 

Mr. Dunne. $39,105.51. 

The Chairman. Are there any questions. Senator Curtis ? 

Senator Curtis. No questions. 

The Chairman. Thank you very much. 

Thank you, Mrs. Lef kowitz. We will conclude your testimony after 
lunch. 

The committee will stand in recess until 2 o'clock. 

(Whereupon, at 12 : 25 p. m., the committee recessed, to reconvene 
at 2 p. m. the same day.) 

(Members of the committee present at the taking of the recess were 
Senators McClellan and Curtis.) 

afternoon session 

(The select committee reconvened at 2 p. m., after the expiration of 
the recess.) 

(Members of the committee present at the reconvening of the session 
were : Senator Ives (presiding) and Senator Curtis.) 

Senator Ives. The committee will be in order. 

I believe you have somebody that you are questioning, have you? 
Would you call him in. 

Mr. KJENNEDY. Would Mrs. Lefkowitz return to the stand, please. 

TESTIMONY OF ELEANOE LEFKOWITZ— Resumed 

Senator Ives. I believe you have already been sworn, Mrs. Lef- 
kowitz. 

Counsel, will you proceed. 

Mr. Kennedy. We were talking this morning, and I have just a few 
more questions, about the various arguments that the solicitors would 
make to their possible accounts, and we mentioned the roadbuilding 
program, the public power, and I believe communism. 
^ When the letters were going out to these various accounts, were the 
signatures of Mr. Murray, who was president of the New York Fed- 
eration of Labor, were they signed to those letters ? 

Mrs. Lefkowitz. For a certain number of years, they were, 

Mr. Kennedy. They would be signed to all of the letters ? 

Mrs. Lefkowitz. Yes, sir, 

Mr. Kennedy. Who would put his signature on the letters ? 



10954 IMPROPER ACTIVITIES IN THE LABOR FIELD 

]Mrs. Lefkowitz. I did. 

Mr. Kp:nnedy. You actually wrote the signatures ? 

Mrs. Lefkowitz. Yes, sir. 

Mr, IvENNEDT. "Wlio directed you to do that ? 

Mrs. Lefkowitz. Mr. Lapensohn. 

Mr. Kennedy. Did that continue up until you left there in 1958 ? 

Mrs. Lefkowitz. No. About 1954 or 1955, and I don't remember 
when, we were instructed by letter from Mr. Murray not to use his 
signature except on appointment letters. 

Mr. Kennedy. Just on appointment letters, but they were being used 
on every letter up to that point ? 

Mrs. Lefkowitz. Yes, sir. 

Mr. Kennedy. Now, on occasion, would they also send out resolu- 
tions that Mr. Lapensohn or those working for him claimed had been 
adopted by the New York Federation of Labor ? 

Mrs. Lefkowitz. Yes, they did. 

]Mr. Kennedy. Did you know that on occasion some of those resolu- 
tions had never even been introduced into the New York Federation 
of Labor, let alone adopted ? 

Mrs. Lefko^vitz. I had no way of knowing. 

Mr. Ivennedy. You didn't know which ones were the phony reso- 
lutions ? 

Mrs. Lefkowitz. No. 

Mr. Kennedy. You know they were sending out resolutions ? 

Mrs. Lefkowitz. Yes, sir. 

Mr. Kennedy. And signing a letter from Tom Murray, and the 
letter would say that "This resolution has been introduced and adopted, 
and I am sure that your sympathy would be the same along with this 
resolution" ? 

Mrs. Lefkowitz. Yes, sir. 

(At this point. Senators McClellan and Church entered the hearing 
room. ) 

Mr. Kennedy. Now, I have one other matter that I want to ask 
you about, and we will go into some of those letters that were signed 
with Mr. Murray's signature with a later witness, but I would like to 
ask you about Lawrence Greenberg. 

Were you familiar with the transaction involving Mr. Lawrence 
Greenberg ? 

Mrs. Lefkowitz. No, I was not. 

Mr. Kennedy. Did vou know that there was a loan listed on the 
books of $5,000 to Mr. Greenberg ? 

Mrs. Lefkowitz. Yes, sir, that I knew. 

Mr. Ivennedy. Do you know how that loan came about. Mr. Law- 
rence Greenberg was the accountant for Eolee ? 

Mrs. Lefkowitz. He was. 

Mr. Kennedy. Do you know how that loan of $5,000 was repaid? 

Mrs. Lefkowitz. Yes. 

Mr. Kennedy. Let us get the date of the loan, first. I tliink it was 
February 18, 1954. 

Mrs. Lefkowitz. Yes, sir. At various times, a check would be 
drawn for expenses on the Eolee Publications checking account, and 
the check was cashed, and the cash was held in the office until a sizable 
amount of money was gathered. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10955 

Mr. IvENNEDY, Just let me ask: At whose instructions would the 
check be drawn ? 
Mrs. Lefkowitz. Mr. Lapensohn had instructed me to do that. 
Mr. IvENNEDY. And to whom was the check made out ? 
Mrs. Lefkowitz. It was drawn to "Cash." 

Mr. Kennedy. For how much ? 

Mrs. Lefkowitz. Let me correct that, please. It was not drawn 
to "Cash," and sometimes it was drawn to either Ben Lapensolin or 
Jack Shore, for expenses. 

Mr. Kennedy. Jack Shore was the brother-in-law of Mr. Lapen- 
sohn ; is that right ? 

]\Irs. Lefkow^itz. Yes. 

Mr. Kennedy. And he operated in the office, also ? 

Mrs. Lefkowitz. That is right. 

Mr. Kennedy. He knew about all of these affairs that were going 
on? 

Mrs. Lefkowitz. I imagine he did. 

Mr. Kennedy. At least he knew, for instance, about this bank ac- 
count that was discussed this morning ? 

Mrs. Lefkowitz. Yes, sir. 

Mr. Kennedy. Either Lapensohn or Shore would instruct you to 
make out this check each week ; is that right ? 

Mrs. Lefkowitz. Mr. Lapensohn had told me to make out a weekly- 
expense check and, when the check was cashed, the money was held 
in an envelope until there was an amount gathered and then rede- 
posited as a return to the loan amount. 

Mr. Kennedy. Let me understand this. You would make out the 
check on the instructions of Mr. Lapensohn each week, probably; is 
that right? 

Mrs. Lefkowitz. That is right. 

Mr. Kennedy. That would be for approximately $100 ? 

Mrs. Lefkowitz. That is right. 

Mr. Kennedy. That would be listed on the books as an expense ? 

Mrs. Lefkowitz. That is right. 

Mr. Kennedy. Actually, you would keep the $100 in an envelope ? 

Mrs. Lefkowitz. Yes, sir. 

Mr. Kennedy. You would go along for a period of time, and col- 
lect these $100 expense amounts each week ; is that right ? 

Mrs. Lefkowitz. Yes, sir. 

Mr. Kennedy. You would keep them in the bank account and then, 
after you had a considerable amount of this money, say, I believe the 
first amount was some $1,200, then you deposited that in the bank 
account ? 

Mrs. Lefkowitz. That is right. 

Mr. Kennedy. And marked that on the books as a repayment of the 
loan to Greenberg ? Is that right ? 

Mrs. Lefkowitz. Yes, sir. 

Mr. Kennedy. That was all done at the instructions of Mr. Lapen- 
sohn ? 

Mrs. Lefkowitz. That is right. 

Mr. Kennedy. Now, was that done on several different occasions? 

Mrs. Lefkowitz. Yes, sir; it was. 



10956 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. EIennedy. Just on this $5,000 loan, this procedure of repaying 
the loan was followed on several different occasions? 
' Mrs. LErK0\viTz. That is right. 

Mr. IvENNEDY. $1,200 was on July 23, 1954, and then there was ac- 
tually an amount of $1,500 that was deposited in 1954, July 23, 1954, 
as a repayment of the loan, of which $1,200 came from this accumu- 
lated expense- account money ? 

Mrs. Lefkowitz. I would imagine so. 

Mr. IvJENisTEDT. And then, on July 28, 1955, there was $1,000 that 
was repaid, which included $900 in cash and $100 by personal check of 
Jack Shore, and then, on May 10, 1957, $400 was repaid ? 

Mrs. Lefkowitz. Yes, sir. 

Mr. Kennedy. That was also accumulated from these monthly 
checks by Lapensohn and Shore ? 

Mrs. Lefkowitz. Yes, sir. 

Mr. Kennedy. As of September 30 1957, there was a balance of 
$2,100 that was still outstanding on the loan. That is from our 
records. 

Senator Curtis. Were all of the transactions, such as telephone 
calls and letters written and so on, handled in your office — did they 
pertain to activities in the State of New York only ? 

Mrs. Lefkowitz. No. Some of them pertained, or some calls were 
made, to firms outside of tlie State of New York. 

Senator Curtis. Where would that be ? 

Mrs. Lefkowitz. All over the country. 

Senator Curtis. Oil over the country ? 

Mrs. Lefkowitz. Yes; sir. 

Senator Curtis. Over how wide an area ? 

Mrs. Lefkowitz. Well, from coast to coast. 

Senator Curtis. He had other publications in other States'? 

Mrs. Lefkowitz. No ; these calls were made on behalf of advertis- 
ing in the New York Federationist. 

Senator Curtis. They would solicit firms from outside ? 

Mrs. Lefkowitz. Yes, sir. 

Senator Curtis. But they all pertained to the publication in New 
York? 

Mrs. Lefkowitz. That is right. 

Senator Curtis. Now, in these telephone convereations that you 
would overhear, did you ever hear anything said that would intimate 
that they could settle labor difficulties or avoid labor difficulties ? 

Mrs. Lefkowitz. No, sir ; never. 

Senator Curtis. You never did ? 

Mrs. Lefkowitz. No, sir. 

Senator Curtis. Do you know of any situation where they did assist 
an employer who was having any kind of labor difficulty? 

Mrs. Lefkowitz. Not that I know of . 

Senator Curtis. Were many of these advertisers scattered all over 
the country ? 

Mrs. Lefkowitz. Yes ; they were. 

Senator Curtis. Wliy would they be buying an advertisement in a 
local publication in New York ? 

Mrs. Lefkowitz. I wouldn't know. 

Senator Curtis. Did the solicitors travel over wide area, or was 
this just the telephone soliciting? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10957 

Mrs. Lefkowitz. The telephone solicitations. 

Senator Curtis. Were they successful, and did they get some ads ? 

Mrs. Lefkowitz. Yes ; in some cases they were. 

Senator Curtis. From the west coast, for instance ? 

Mrs. Lefkowitz. I don't remember, or I don't think that they got 
them from anybody in California, but they did get them from various 
States out of New York. 

Senator Curtis. From Chicago and beyond there ? 

Mrs. Lefkowitz. I think that they did. 

Senator Curtis. What would they say to these advertisers that 
were far removed from the jurisdiction of the operation? 

Mrs. Lefkowitz. For the most part I did not hear the solicitations, 
because, as I think I explained this morning, they very often made 
the solicitations by telephone behind closed doors. 

Senator Curtis. You would place the call ? 

Mrs. Lefkowitz. No ; they would place the calls themselves. 

Senator Curtis. So while you would know the calling was going 
on, and sometimes to whom and where, you wouldn't know what the 
subject matter of the conversation was ? 

Mrs. Lefkowitz. Not necessarily, no, sir. 

Senator Curtis. That is all. 

Mr. Kennedy. That is all. 

The Chairman. Are there any further questions ? 

If not, thank you very much. 

Call the next witness. 

Mr. Kennedy. Mr. Chairman, I would like to call now Mr. Henry 
A. Jaslow, who has been a solicitor for several of these magazines, 
and he has cooperated with the committee, and he will relate how a 
solicitor operated and how he was able to get some of these ads. 

The Chairman. All right, Mr. Jaslow, will you be sworn. 

You do solemly swear that the evidence you shall give before this 
Senate select committee shall be the truth, the whole truth, and noth- 
ing but the truth, so help you God ? 

Mr. Jaslow. I do. 

TESTIMONY OF HENRY A. JASLOW 

The Chairman. State your name, and your place of residence, and 
your business or occupation. 

Mr. Jaslow. Henry A. Jaslow, 1607 St. Jolins Place, Brooklyn, an 
advertising solicitor. 

The Chairman. You are in the advertising business ? 

Mr. Jaslow. No, sir ; I am a salesman. 

The Chairman. You are an advertising salesman ? 

Mr. Jaslow. Yes, sir. 

The Chairman. Do you waive counsel ? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. Now, as I stated at the beginning, Mr. Chairman, 
Mr. Jaslow has cooperated with the committee, and he has answered 
our questions as a number of solicitors have, and we are just calling 
him to explain how they operated. 

You worked for the Trade Union Courier — and these are approxi- 
mate years — from 1942 to 1943 ; is that right ? 

Mr. Jaslow. Yes, sir. 



10958 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mv. Jasix)w. Yes, sir. 

Mr. Kennedy. Then the New York City CIO Council Year Book, 
1943-44? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. And then 1945-53 for the Labor Chronical, put out 
by the Central Trades and Labor Council of Greater New York? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. And for about 2 years, between 1952 and 1954, you 
worked for the New York Federationist ? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. At the present time, you are working for the Car- 
penters' State Journal ; is that right ? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. And also for the Building and Construction Trades 
Council of Greater New York ? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. What is the name of the magazine they put out ? 

Mr. Jaslow. Which one ? 

Mr. Kennedy. Well, the Building and Construction Trades Coun-. 
oil. 

Mr. Jaslow. The Building Trades Coimcil of Greater New York, 
Long Island, and Vicinity. 

Mr. Kennedy. Wliat is the name of their magazine ? 

Mr, Jaslow. That is the name of it. 

Mr. Kennedy. And from each one of those, as you would operate, 
you would get a commission ? 

Mr. Jaslow. Pardon me, the name of the book is Official Directory 
of the Building and Construction Trades Council. 

Mr. Kennedy. It is official directory of those ? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. Now, your name is Henry A. Jaslow, J-a-s-1-o-w, is 
that right ? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. You come from Brooklyn, N. Y. ? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. And for these various magazines, for which you 
have worked, you received anywhere from 30 to 35 percent of the ads 
that you were able to place ; is that right ? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. Most of the work that you would do would be done 
by telephone ? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. And you often operated out of your own office ? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. And you now work for two of these magazmes ? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. Now, would you explain to the committee how this 
magazine is operated or run ? You would have a group of solicitors 
working for each one of these magazines such as yourself, and they 
would make these telejDhone calls ; is that right ? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. You were just a professional man who worked for 
a magazine, just professional ad men ; is that right ? 

Mr. Jaslow. Well, that is what you call it ; yes, sir. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10959 

(At this point, the following mmbers were present: Senators Mc- 
Clellan, Ives, Church, Curtis.) 

Mr, IvENNEDY. And you would not actually be working for a labor 
union itself, but you would be working for a promoter ? 

Mr. Jaslow. That is right. 

Mr. IvENNEDY. Can you give the committee a sample as to what 
you would say on the telephone when you would call up someone and 
try to get an ad in the paper? 

Mr. Jaslow. Well, most of my phone solicitations, we would have 
a variation of all these other books. I would go to work and call 
up a man and ask him if there was any rason why he couldn't do 
for us what he did for the publication that we had in front of us, 
that we felt he wouldn't want to be partial. 

Mr. Kennedy. What would you say to him? You would call him 
up. How would you start the conversation ? 

Mr. Jaslow. I would introduce myself. 

Mr. Kennedy. What would you say? Wlio would you say you 
were ? 

Mr. Jaslow. That I was so and so from this particular publication. 

Mr. Kennedy. You used different names with the various publica- 
tions, is that right? 

Mr. Jaslow. Yes, sir, 

Mr, Kennedy, You would have a particular name, depending upon 
the publication for which you worked ? 

Mr, Jaslow, Yes, sir. 

Mr. I^JENNEDY. That is so that you could solicit from the same in- 
dividual for different publications ? 

Mr. Jaslow. I beg your pardon ? 

Mr. IvENNEDY. That would be so you could give four different pub- 
lications from the same individual, so they would not tie you to 
the same publication, is that right ? 

Mr. Jaslow. Yes, sir, 

Mr. IvENNEDY, You would call him up, and the name you used with 
the New York Federationist was Bill Hart, and you would sav "This 
is Bill Hart," 

Mr. Jaslow, Yes,isr, 

Mr, Kennedy, Then what would you say ? 

Mr, Jaslow, On the State federation setup, they would go to work 
and send this appointment letter out. 

Mr, Kennedy, That letter would go out under Mr, Murray's 
signature ? 

Mr, Jaslow, I don't know who signed it. As you just said, and 
as you know, I operated my own office, and I used to call up Mrs. 
Lefkowitz and give her the names of the accounts we had filed, tliat 
we were going to call, because each man's accounts were protected. 
She would send out appointment letters. I believe she used to send 
ftie a copy or a list of the cards and I would call them and ask them 
if they got the letter. Because I would introduce myself "This is 
Mr. Hart of the New York State Federation of Labor." 

Mr. Kennedy. You woukl say "This is Mr. Hart of the New York 
State Federation of Labor" ? 

Mr. Jaslow. Yes. 

Mr. Kennedy. Tlieii how would you go ? 



10960 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Jaslow. "You have gotten our letter, haven't you?" "Yes, 
sir." 

"I was asked to call you and. see if we could get the same coopera- 
tion that you have given the other publications. We figure you don't 
want to show any partiality, especially since we are the parent body 
of New York State." 

Mr. Kennedy. Especially we are what? 

Mr. Jaslow. The parent body of the New York State federation, 
of the New York State labor unions. 

Mr. I{j;nnedy. Wliat if he said "I am not sure that I want an ad, 
Mr. Hart." Then what would you say ? 

Mr. Jaslow. I would just try to convince him that the money was 
being used for his own benefit, and we would be using it, since the 
New York State federation was the legislative body, the money he 
was to be contributing would be beneficial for legislation to be enacted 
that would be beneficial to both labor and management. 

Mr. Kennedy. What were some of the samples of what you were 
doing that would be helpful ? 

Mr. Jaslow. I have never had anyone ask me that question. 

Mr. IvENNEDY. Nobody asked you ? 

Mr. Jaslow. No, sir. 

Mr. Kennedy. Nobody asked you what you were lobbying for or 
what the federation was lobbying for ? 

Mr. Jaslow. All I would say would be legislation beneficial to 
labor and management. 

Mr. Kennedy. Nobody ever asked you what you had in mind ? 

Mr, Jaslow. No. After all, I would call up Eleanor, and she would 
send out a letter confirming that, that it was for labor legislation. 

Senator Ives. Mr. Chairman, may I interrupt there a moment, 
please ? 

How did you find the New York State Federation of Labor 
regarded by people you were approaching ? 

Mr. Jaslow. I was never told anything about it. 

Senator Ives. I mean, how did they regard the federation of labor? 
Did they criticize it, did they damn it, or did they do anything like 
that ? Did they praise it, did they show confidence in it ? 

Mr. Jaslow. Do you mean the businessmen I approached? 

Senator I\rES. Yes. 

Mr. Jaslow. I don't think I ever had anyone yet that said any- 
thing against it. 

Senator Ives. Against the federation of labor ? 

Mr. Jaslow. That is right. 

Senator I^t:s. I know I have been acquainted with them and their 
officers for quite a number of years, and I know they have enjoyed a 
very fine reputation in the State of New York. I wondered if you 
ran into any criticism of them. 

Mr. Jaslow. No, sir. That is what I said. I have never had any- 
body criticize. 

Senator I\tes. Thank you. 

Senator Cuetis. Mr. Chairman ? 

The Chairman. Senator Curtis. 

Senator Curtis. These people that you called, they were given to 
Mnderstand that you were calling for the State federation of labor? 
Mr. Jaslow. Yes, sir. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10961 

Senator Curtis. Were they employers of Labor ? 

Mr.jASLOw. Yes, sir. 

Senator Curtis. And how much would you ask them for ? 

Mr. Jaslow. Well, I would quote them the rates which were $500 
down to $100, and if they told me it was too much, I would ask them 
if they would go to work and contribute it toward circulation. 

Senator Curtis. What did you mean by that ? 

Mr. Jaslow. Well, that is what I was told, that it was going toward 
the circulation. Mr. Lapensohn had instructed me on that. 

Senator Curtis. That meant that they contributed their money but 
took no ad ? 

Mr. Jaslow. That is right. 

Senator Curtis. Did they know how that money was being divided? 

Mr. Jaslow. The employer ? 

Senator Curtis. No, the man you got it f ronu 

Mr. Jaslow. I don't think he did. 

Senator Curtis. How would you make up your lists as to who 
you would call ? 

Mr. Jaslow. As I said, I would have copies of the Courier, the 
CIO City and State Yearbook, the Central Trades and Labor Council 
Chronicle. 

Senator Curtis. Would the impression ever be left that if they said 
"no," they wouldn't have anything to do with it, it might be an un- 
friendly act toward labor ? 

Mr. Jaslow. No, sir. 

Senator Curtis. What would they gather about the discrimination ? 

Mr. Jaslow. I don't laiow. I never went into that. There was a 
lot more that I didn't sell than I did sell. 

Senator Curtis. What did the man who purchased space or made 
a contribution get in return for his money ? 

Mr. Jaslow. As far as I knew, he would get a copy of the yearbook 
when it came out. 

Senator Curtis. That is all ? 

Mr. Jaslow. That is all. 

Senator Ives. Will the Senator yield on that ? 

Senator Curtis. Yes. 

Senator Ives. Did any of them ever ask you how large the circu- 
lation of this publication was ? 

Mr. Jaslow. No, sir, not that I remember. 

Senator In'es. Never ? 

Mr. Jaslow. They never did. 

Senator Curtis. Did any of them ever ask you to help them out on 
any of their labor problems ? 

Mr. Jaslow. No, sir. 

Senator Curtis. Did any of them ever ask you if you were able to 
help them out? 

Mr. Jaslow. No, sir. 

Senator Curtis. So far as you know, the business people that you 
contacted responded because you did contact them? 

Mr. Jaslow. I will say "yes," because I contacted them, and I found 
the fact that they got the letter on the New York State Federation 
of Labor letterliead, and the officers listed on the letterhead was all 
they were interested in, and they knew it was going to an official party, 
that was my experience. 



10962 IMPROPER ACTIVITIES IX THE LABOR FIELD 

Senator Curtis. I am sure the entire committee appreciates your 
frankness here. I do not know just exactly what the legal and moral 
status is of this practice going on. We had one witness this morning 
that pointed out that activities such as described here were not limited 
to labor, but that many charities, some of them very worthwhile, and 
other public organizations are engaged in the same thing. It seems 
to me that unless there was some arrangement that the man who con- 
tributed the money would get some special favors from labor, that 
certainly the individual who contributed the money should not be 
condemned for contribution. 

He was sort of put on the spot and touched for the money; isn't 
that correct? 

Mr, Jaslow. Well, I can't answer for him. Senator, I am only going 
by the way I used to get my ads. I always felt and believed that the 
mere fact that they got the State Federation of Labor letterhead is 
what really sold them. That was my impression, and that was what 
I had found from my experience. 

Senator Cuetis. I think if there is any censuring to be done here, and 
this is, of course, not a censuring committee, and I do not know to what 
extent we could recommend laws about it, it would be to censure the 
people who got the money, and not the victims of the touch. 

That is all, Mr. Chairman. 

The Chairman. All right, Mr. Kennedy. 

Mr. Kennedy. You were talking about the fact that you might 
point out to some of these individuals on the telephone, the legislation 
which the Federation of Labor was interested in ? 

Mr. Jaslow\ That is right. 

Mr. Kennedy. Which would be what sort of things ? 

Mr. Jaslow. I didn't explain anything. I would just say that they 
would enact labor legislation which was beneficial to both management 
and labor. What it was I didn't know. But the mere fact that 
I said beneficial I thought answered the entire thing. 

Mr. Kennedy. What about the letters that went out? Did they 
then follow up on that idea ? 

Mr. Jaslow. As I understood it, yes. 

Mr. Kennedy. And they would explain the particular piece of leg- 
islation ? 

Mr. Jasloav. Well, I don't know what it was, but it would be along 
that line. 

(At this point. Senator Curtis withdrew from tlie hearing room.) 

Mr. Jaslow. I told them that we were the lobbying body for New 
York State. 

Senator Ives. May I ask a question there ? 

Do you know anything at all about the New York State Federation 
of Labor ? 

Mr. Jasloav. Xo, sir, except that I understood it was the lobby- 
ing bod}' for the American Federation of Labor. 

Senator Ives. You think the New York State Federation of Labor 
is the lobbying body ? 

Mr. Jaslow. Well, the legislative body, that they lobby for legis- 
hition. 

Senator Ives. Do you know what the St-ite Federation of Labor 
stands for or Avhat it is? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10963 

Mr. Jaslow. I know that they represent the entire State Federation 
of Labor unions, but I understood that they were strictly the legis- 
lative body. 

Senator Ives. Who was the legislative body ? 

Mr. Jaslow. The State Federation of Labor. I mean for the 
American Federation of Labor, the New York State Federation of 
Labor. 

Senator Ives. I take it you don't know much about union organi- 
zation, do you ? 

Mr. Jaslow. I don't. 

Senator Ives. Well, that is not exactly what it is. I will not con- 
sume the time here explaining to you what it is, but that is not really 
what it is. To a certain extent, the State Federation of Labor is 
interested in legislation in the New York State Legislature, but that 
is not its chief function. 

It is only a tiny part of its function. 

Mr. Jaslow. Well, I don't know the entire functions, Senator, that 
was all I had used in my solicitation. 

Senator Ives. Well, I would have thought that somebody would 
have given you a little more information than that. 

Mr. Jaslow. Nobody did. 

Senator I\^s. Who hired you to go into this ? 

Mr. Jaslow. Mr. Lapensohn. 

Senator Ives. He did himself ? 

Mr. Jaslow. Yes, sir. 

Senator Ives. Nobody in the State Federation of Labor ever con- 
tacted you at all ? 

Mr. Jaslow. I never met anybody from the State Federation of 
Labor. 

Senator Ives. Except Mr. Lapensohn told you there was such an 
organization, you wouldn't even have known there Avas one? 

Mr. Jaslow. Well, I knew there was one, but I never met anyone 
from the New York State Federation of Labor. 

Senator Ives. I could explore that a lot further. I will not take 
the time. Thank you. 

Mr. Kennedy. You would get in touch, then, with the office, under 
this arrangement, and they would write out the letter dealing with 
the specific legislation for which the labor federation was going 
to lobby. 

Mr. Jaslow. That is right. 

Mr. Kennedy. This was not your idea, but instructions that were 
given to you, is that right ? 

Mr. Jaslow. I had taken it up with Mr. Lapensohn, because he 
asked me what I told them, and I told him. I think at one time when 
I started, he asked me to go to work and sort of form a letter along 
what I was saying, and I gave it to him and lie had it made up and 
sent it out. 

Mr. Kennedy. You did a pretty good job for this, did you not? 

You were a good solicitor? You had a good deal of experience? 

Mr. Jaslow. I have had experience, yes, sir. 

Mr. Kennedy. Don't your friends call you Jazz ? 

Mr. Jaslow. Well, that was many years ago. I was a youngster. 



21243— 58— pt. 28 10 



10964 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. KJENNEDY, Was that based on your ability on the telephone in 
selling these ads ? 

Mr. Jaslow. Pardon ? 

Mr. Kennedy. Was that based at all on your abilities over the 
telephone ? 

Mr. Jaslow. No. That was a name that I had when I was a child. 

Senator Church. Was that based on your ability on the dance 
floor? 

Mr. Jaslow. No, it is a derivation of my name, Jaslow. 

Mr. Kennedy. "Wliat would you say to the individual then about 
what kind of an ad he should receive ? 

Mr. Jaslow. Pardon ? 

Mr. Kennedy. ^Vliat would you say to the individual about the ad 
he should put in ? 

What would you tell him about the rates ? 

Mr. Jaslow. They would ask me, "Well, how much of an ad do 
you want?" 

And of course, I would ask him for the largest amount, and he 
would ask me if I had anything smaller, and I would go right down 
the line. 

Mr. Kennedy. What was the largest you had ? 

Mr. Jaslow. A full page. 

Mr. Kennedy. How much was that ? 

Mr. Jaslow. $500. 

Mr. Kennedy. Then you would go down. What is the next after 
that? 

Mr. Jaslow. $2.50 for a half page. 

Mr. KENNEDY. Would any of them want to contribute more than 
$500? 

Mr. Jaslow. I have never had any. 

Mr. Kennedy. $500 was the most? 

Mr. Jaslow. I don't think I ever sold even a $500 ad for the fed- 
eration or even a $250 ad. 

Mr. Kennedy. Then did you explain to them that it wasn't neces- 
sary for them to actually take an ad, but they could just make a con- 
tribution ? 

Mr. Jaslow. Yes, if they told me it was too much, the advertising 
rate. 

Mr. Kennedy. Did you tell them at that time that Mr, Murray 
would be very appreciative if they made a contribution ? 

Mr. Jaslow. No. I never used Mr. Murray's name. 

Mr. Kennedy. Ti^ien you first called, who did you say you were 
from ? 

Mr. Jaslow. Just the New York State Federation of Labor. 

Mr. Ivennedy. Were you a union member yourself? 

Mr. Jaslow. No, sir. 

Mr. Kennedy. Have you ever been in the union ? 

Mr. Jaslow. No, sir. 

Mr. Kennedy. You have never been in the union ? 

Mr. Jaslow. No, sir. 

Senator I^-ES. What would you have done if somebody had asked you 
where the Federation of Labor was located in New York? 

Mr. Jaslow. I never had anvone ask me. 



IMPROPER ACTIVITIES EST THE LABOR FIELD 10965 

Senator I\tes. I will repeat the question. What would you have 
done if someone had asked you that ? 

Mr. Jaslow\ I would have n;iuied Mr. LajDensohn's office. 
Senator Ives. Thank you. 

Senator Chukch. Mr. Jaslow, in your solicitations did you sell 
many ads or did you secure many contributions for circulation pur- 
poses which did not entail an actual running of an advertisement in 
this magazine ? 
Mr. Jaslow. Yes, sir. 

Senator Chukch. That was a frequent practice ? 
Mr. Jaslow. Yes, sir. 

Senator Church. Could you give us any estimate as to the percent- 
age in your own business of those firms that did make contributions but 
asked that no ad be run in the magazine roughly ? 

Mr. Jaslow. No, I couldn't give you roughly, but I would say the 
majority of them were. 

Senator Church. The majority actually didn't run ads in the maga- 
zine, though they did pay a contribution ? 
Mr. Jaslow. Yes, sir. 

Senator Church. Mainly, your pitch, so to speak, to those you con- 
tacted was cast in the form to suggest to them that you were a repre- 
sentative, a direct representative, of the New York State Federation 
of Labor, and you were dealing for them and speaking for them, and 
they were left with the impression that they were dealing through you 
with the federation, is that right ? 

Mr. Jaslow. Well, I didn't have to tell them that, because the 
aj)pointment letter said that Mr. so and so "of my staff will contact 
you in the next few days." 

And it was signed by Mr. Murray. So I didn't have to tell them 
that. 

Senator Church. In your telephone conversations, j^ou didn't do 
anything or say anything to disenchant them, is that right ? 
Mr. Jaslow. That is right ; yes, sir. 

Senator Church. I have one more thing, Mr. Jaslow. What did 
you mean on the average to you personally in income from your 
commissions ? That is, by the year. 

Mr. Jaslow. I honestly cannot tell you offhand. I don't remember, 
because it is 4 or 5 years ago I was there. But I would say that with 
the State federation of labor I may have averaged about $75 a week. 
This is just a guess. I am not sure. 
Senator Church. I appreciate that. 

But you received 30 to 35 percent of the cost of the advertisement 
or of the amount contributed, is that right ? 
Mr. Jaslow. That is right, yes, sir. 
The Chairman". Who paid for the telephone calls ? 
Mr. Jaslow. Pardon me ? 

The Chairman. Who paid for the telephone calls ? Wlio were they 
charged to ? 

Mr. Jaslow. Well, when I was with the State federation of labor 

The Chairman. Were you ever with it ? 

Mr. Jaslow. I mean working for Mr. Lapensohn, I should say, 
Senator. Mr. Lapensohn made an arrangement whereby he would 
pay 10 percent additional for the cost of my telephone, office rent, 
and so forth. 



10966 EVIPROPER ACTIVITIES IN THE LABOR FIELD 

The Chairman. So you did not necessarily get 30 percent net, or 
did you ? 

Mr. Jaslow. Well, yes. It would run about that, because my ex- 
penses would run, I would say, from 10 to 15 percent. Senator. 

The Chairman. So you got approximately 30 percent net? 

Mr. Jaslow. That is right, 25 to 30 percent, I would say. 

The Chairman. Very well. 

Mr. Kennedy. At the present time you are working for the Build- 
ing and Construction Trades Council of Greater New York ; is that 
right? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. Do you use the same kind of procedure with them ? 

Mr. Jaslow. Well, with the Building and Construction Trades 
Council this book has been in existence 52 years, and I would also fol- 
low the same procedure of getting all of these other publications. 

Mr. Kennedy. What kind of publications would you get? 

Mr. Jaslow. Like the Courier. 

Mr. Kennedy. That is the one that is run by Mr, Raddock ? 

Mr. Jaslow\ Yes. 

The Central Trades, the New York State Federation of Labor, the 
Nassau-Suifolk Building Trades Council. 

Mr. Kennedy. Did you take the names 

Mr. Jaslow. Those that were in the construction industry. 

Mr. Kennedy. What would you say to those individuals? 

Mr. Jaslow. The same thing, would they do for us, since we are 
the governing body of the Building Trades Union, sponsor an ad in 
our official directory and yearbook. 

Mr. Kennedy. Would you tell them, "We have some men working 
out there" and that kind of thing ? 

Mr. Jaslow. No; they knew they were employing the men in the 
building industry, and that is why I only called on the people engaged 
ui the building and construction industry. 

Mr. Kennedy. You only called on the contractors ? 

Mr. Jaslow. Only on those engaged in the building and construc- 
tion industry. 

Mr, Kennedy. And those are the individuals or companies which 
had employees that were members of these particular unions ; is that 
right? 

Mr. Jaslow. Of the building trades miions ; yes, sir. 

Mr. Kennedy. Would you also get names of the contractors who 
had just gotten contracts and who would be needing employees, who 
would be needing these union men, men that belonged to the union ? 

Mr. Janslow^ The agency used to subscribe to the Dodd's reports. 

Mr. Kennedy. What would those reports contain ? 

Mr. Jaslow. They would have different reports of new buildings 
going on, and who the general contractor was who had this contract, 
what painter had that contract, and so forth, and they would distribute 
them to the men, 

Mr. Kennedy. So you would find out from these reports as to who 
had just received contracts ? 

Mr. JASLOw^ That is right. 

Mr. Kennedy. And you would take those names and call those 
people up. These are contractors who were in the midst of trying to 
secure some employees, to secure some men to go to work for them ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10967 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. You would call them up and ask them for an ad; is 
that right? 

Mr. Jaslow. That is right. 

Mr. Kennedy. And was the same kind of procedures used for the 
Carpenters State Journal ? 

Mr. Jaslow\ That is right ; that is my procedure since I have been in 
the business. 

Mr. Kennedy. Would you also tell them that you worked for the 
Carpenters ? 

Mr. Kennedy. Yes. They all used to get letters. 

Mr. Kennedy. Would you call them up and tell them you were 
actually working for the Carpenters ? 

Mr. Jaslow. That is right. 

Mr. Kennedy. Actually, you were not, but you were working for 
this particular periodical ? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. But you were not. You were actually working for 
the Carpenters or Building Trades 

Mr. Jaslow. I told them I was working for the Building Trades 
Council. 

Mr. Kennedy. That is from the instructions you received ? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. This is a f airlj^ common procedure, is it not ? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. And you have many of these kinds of publications 
active in New York, dealing particularly or associated with unions ? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. It is a source of income, and there are a number of 
people such as yourself who are around soliciting ads? 

Mr. Jaslow. Yes, sir. 

Mr. Kennedy. All right. 

The Chairman. Is there anything further ? 

(At this point. Senator Curtis withdrew from the hearing room.) 

The Chaieman. If not, thank you very much. Call the next wit- 
ness. 

Mr. Kennedy. I might finish now with Mr. Dunne and Mr. Wolfe, 
Mr. Chairman, to put all the figures of the New York Federation in. 

Mr. Jaslow. Am I free to go home ? 

Mr. Kennedy. Yes. Thank you very much. 

TESTIMONY OF EGBERT E. DUNNE AND CHARLES E. WOLFE— 

Resumed 

The Chairman. You gentlemen were sworn this morning. You 
will remain under the same oath. 

Mr. Kennedy. Mr. Dunne, I would like to ask you about the New 
York Federationist and how much their gross income was during the 
period of time that it was operated and run by Mr. Lapensohn. He 
ran it through the Kolee Co. ; is that right ? 

Mr. Dunne. Yes, sir. 

Mr. Kennedy. What was the income, the gross income, for the 
New York Federation ? 



10968 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Dunne. The gross income received by Kolee Publications on 
behalf of the New York State Federation of Labor for the years 1949 
througlU957 was $1,167,637.33. 

Mr. Kennedy. How much was returned to Mr. Lapensohn out of 
that $1,167,000? 

Give us those figures again, $1,167,637.33 ? 

Mr. Dunne. Yes, sir. 

Mr. Kjennedy. How much of that was returned to Rolee, legiti- 
mately ? 

Mr. Dunne. Under the terms of the agreement, 75 percent was to 
have been returned, and that was $758,412.32. 

Mr. Kennedy. And in addition to that he received 

Mr. Dunne. He diverted from the regular channel and deposited 
in this special bank account, or by other means, obtained $156,422.03. 

Mr. Kennedy. How much then did he get altogether out of this 
publication ? 

Mr. Dunne. $914,834.35. 

Mr. Kennedy. Would you repeat that figure ? 

Mr. Dunne. $914,834.35. 

Mr. Kennedy. So Mr. Lapensohn himself gi-ossed just under a mil- 
lion dollars out of this publication ; is that right ? 

Mr. Dunne. Yes, sir. 

Mr. Kennedy. And the New York Federation of Labor grossed how 
much out of the j)ublication ? 

Mr. Dunne. Just over a quarter of a million, $252,802.98. 

(At this point, Senator Ervin entered the hearing room.) 

Mr. Kennedy. We had some discussion here about the amount of 
money that came in as far as ads were concerned and how much money 
came in as far as circulation was concerned. Do you have that broken 
down ? 

Mr. Dunne. Yes, sir ; about 44 percent of the money received was 
from concerns which did not want any ad to appear. 

Mr. Kennedy. Forty-four percent of all the money that was received 
by this publication was from concerns who stipulated that no ad should 
be placed ? 

Mr. Dunne. Or that their names should not be placed. 

Mr. Kennedy. Or that their names should not be used. They were 
just making a donation ? 

Mr. Dunne. Yes, sir. 

Mr. Kennedy. Seventy-five percent of which went to Mr. Lapen- 
sohn? 

Mr. Dunne. Yes, sir. 

Mr. Kj:nnedy. How much is that ? 

Mr. Dunne. $467,053.50. 

Mr. Kennedy. Ajid how much was i-eceived where the ads were 
actually put in ? 

Mr. Dunne. $586,717.38. 

Mr. Kennedy. Would you repeat that figure ? 

Mr. Dunne. $586,717.38. 

Mr. Kennedy. And the former figure for 44 percent was how much? 
Mr. Dunne. $463,353.50. 

Mr. Kennedy. We have broken it down, Mr. Chairman, that only 
22 cents of any dollar given by management ever went to any labor 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10969 

organization, and 78 cents went for the cost of getting the ad or to Mr. 
Lapensohn. 

The Chairman. Are there any further questions? If not, gentle- 
men, thank you. Call the next witness ; 22 percent and T8 percent. 

Mr. Kennedy. Mr. Chairman, we had an atlidavit here from Mr. 
Murray, which Mr. Dimne has, and which I would like to have placed 
into the record. 

Senator Ives. May I raised a question there? That was Thomas A. 
Murray ? 

Mr. Kennedy. Yes. 

Senator Ives. He has since passed away, you know. 

Mr. Kennedy. Yes, Senator ; I do. Then we are calling Mr. Han- 
over who is the officer immediately under Mr. Murray, who will go 
into the matter in further detail. But I think for an understanding of 
how this operated, I think it would be very helpful. 

The Chairman. The affidavit is quite long. The affidavit may be 
printed in the record at this point. The Chair is not going to read it 
now. You may refer to it. 

That affidavit was obtained by a member of the staff. 

Was that you, Mr. Dunne ? 

Mr. Dunne. Yes, sir. 

The Chairman. The affidavit will be made a part of the record at 
this point. 

(The document referred to follows :) 

State of New Yoek, 

County of Neto York, ss: 

Thomas A. Murray, having been duly sworn, deposes and says, that — 

I was born in 1879 in New York City and have been in the labor movement 
my entire adult life. I became an apprentice bricklayer when I was about 15 or 
16 years of age and laid bricks for 15 to 20 years. 

During these years I held minor posts in local 37 of the Bricklayers, Masons, 
and Plasterers International Union in New York City. 

In 1936 I became president of the Building and Construction Trades Council 
of Greater New York and vicinity. I was elected to a vice-presidency of the New 
York State Federation of Labor, AFL — hereinafter called the "federation" — in 
the early 1940's. I became president of the federation in 1943 and have been 
president since that time. 

The American Federation of Labor chartered in each State a State federation 
of labor, the principal function of which is to promote legislation helpful to the 
working men and women and the labor movement, and to oppose legislation 
that is considered detrimental to them. 

It also acts as liaison between AFL unions within the State and various State 
departments and agencies. Each State has such an organization and it is 
usually located in the State capital. The New York State Federation of Labor 
maintains its principal office in Albany, N. Y. 

The organization is comprised of those local unions in the State who desire 
to voluntarily affiliate with the federation. The federation exists primarily on 
a per capita tax dues payment made by those local unions who affiliate. 

Those delegates designated by participating vmions meet in convention once 
each year. The proceedings of that convention are printed and published shortly 
after the convention is over. For a great number of years it was the practice of 
the federation to defray the cost of the printing of these proceedings and to add 
to a slight degree to its annual income by selling advertisements in that volume 
which contained the printed record of the proceedings. 

From the time I assumed the presidency of the organization in 1943 until 
1949, the job of securing the advertising had been contracted to an individual. 
He would solicit the ads and receive a commission of about 35 percent of the 
gross ads written. 

The federation was obligated to edit the volume and advertisements, as well 
as pay the cost of printing and distribution. The net profit to the federation 



10970 IMPROPER ACTIVITIES IN THE LABOR FIELD 

after deducting the amount paid the individual for producing the advertisements 
ran about $6,000 a year. 

It was known by the officials of the federation in the late 1940's that the 
Pennsylvania State Federation of Labor utilized an organization which pro- 
duced a nicer year book and which brought in more income to their organiza- 
tion. 

Since we knew that Harold Hanover, our secretary-treasurer, had been try- 
ing for some time to secure the services of this organization so as to produce 
a better book and increase our income, in late 1948 Ben Lapensohn, who produced 
the Pennsylvania Federation's book, offered to secure all advertising, edit and 
pay all printing costs and distribute the book for a fee of 65 percent of all ad- 
vertising written, the remaining 3.5 percent under his proposal was to be a net 
profit to the federation. 

On January 28, 1949, after discussing in our executive council and after 
meeting with Mr. Lapensohn, a formal contract was entered into. Mr. Jack 
Shore, Mr. Lapeusohn's associate, was present during all of these preliminary 
discussions as was our then counsel, the late Francis X. Sullivan. This formal 
contract provided generally the same terms noted in Mr. Lapensohn's offer above 
referred to except that Mr. Lapensohn's organization was to receive 75 per- 
cent of the gross advertising and the federation was to receive 25 percent, 
with a guaranteed minimum of $25,000 during the first year. 

While the original contract provided that in the subsequent years, Mr. Lap- 
ensohn's share was to be reduced to 65 percent and the federation's share to be 
increased to 35 percent, because of his complaint of increased production costs 
that clause of the contract was never made effective and the contract was modi- 
fied accordingly. 

For the time that Mr. Lapensohn's organization did this work for us, it 
received 75 percent of the gross advertising written. The income to the fed- 
eration since that time substantially increased, and I think the federation has 
received no less than $18,000 each year ; some years more. 

Immediately after executing the contract, the contract was assigned to a 
corporation they formed called Rolee Publications, Inc. — hereinafter called 
Rolee. The proceedings of the State convention were thereafter published sepa- 
rately and the format of the Rolee Publication was one which contained arti- 
cles by prominent people in both labor, government, and management, with 
accompanying advertising material. 

Consequently, there was a minimum of supervision of the activities of Rolee 
by officials of the federation. The book came out each year in about Novem- 
ber and during the summer months the officials of the federation would approve 
the proposed articles which were to appear. 

In accordance with the terms of the formal contract, all checks were to have 
been payable to the New York State Federation of Labor and forwarded by 
Rolee to our Albany office. Mr. Hanover was in charge there. The checks 
received were deposited in a federation account and a check drawn on that 
account for 75 percent of the amount of the checks received from Rolee was 
sent to Rolee. 

Other than the bookkeeping functions just mentioned and the approval of the 
articles, the federation's officials had little to do with publication. Occa- 
sionally it was necessary to discuss the activities of certain of the ad solicitors 
retained by Rolee when complaints were received. 

From the beginning of the operation with Rolee permission was granted to 
it to send out an introductory letter over my name. This letter provided: 

"I have asked Mr. to contact you with reference to our annual 

publication, published for the New York State Federation of Labor, and any 
courtesies extended to him would be gratefully appreciated by us. You may 

expect to hear from Mr. within the next few days. 

"Cordially yours," et cetera. 

On several occasions it came to my attention that this form of letter had 
been changed and that the solicitors had been using my name improperly. On 
these occasions I called Mr. Lapensohn or Mr. Shore and told them to stop 
these tactics. 

It also came to my attention that his solicitors were on occasion posing as 
me in telephone conversations with prospective advertisers. Again I would 
bring these matters to the attention of Mr. Lapensohn or Mr. Shore and demand 
that this type of ad soliciting be stopped. There were not many of these in- 
stances, but they happened throughout the years from 1949 until 1957. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10971 

On March 29, 1955, and after a particularly aggravating situation had been 
called to my attention, and which I later refer to herein, I wrote to Mr. Lapen- 
sohn and formally advised him that he was prohibited from using my name 
either in correspondence or in telephone conversations in the solicitation of ads. 

Exhibit 1 attached to this affidavit purports to be a letter bearing the written 
signature "Tom," over my name, addressed to Earle Bunting of the National 
Association of Manufacturers. Mr. Bunting was then the president of the NAM. 
I do not know Mr. Bunting and to the best of my knowledge have never met him, 

I was shocked that a type of letter that would call him by his first name and 
appear to give the impression that I was a personal friend would go out over my 
name. Until shown to me by representatives of the Senate select committee I 
was unaware of the existence of this letter and of this type of ad soliciting. 

Exhibits 2 and 3 attached purport to be letters to the president of the Florida 
Power Corp. over my name and they refer to the proposed development of power 
in upstate New York and the St. Lawrence seaway project. These letters pur- 
port to give my views on these subjects. I did and still do have views on these 
matters, but I understand that the purposes of these letters was solely concerned 
with securing of funds from the organizations to which they were addressed, 
either for advertisements or by way of contributions. 

I never authorized nor would I authorize the improper use of my name on that 
basis for the solicitation of funds, particularly from out-of-State corporations. 

Exhibit 4 attached is a letter over my name to the president of the Florida 
Power & Light Co., acknowledging the receipt of $500. I never authorized such 
a letter, and the federation never organized a national campaign against the 
proposed St. Lawrence seaway project, although its position thereon was clearly 
understood in our State. 

Exhibit 5 attached is an earlier letter to this president, purportedly over my 
signature, and was never authorized by me. 

I understand, and there has been exhibited to me carbon copies of letters which 
would reflect that my name was used indiscriminately in securing advertising 
from the New York State Department of Commerce. I had no knowledge of 
this solicitation and I certainly never authorized it. 

Attached hereto as exhibit 6 is a letter purportedly over my signature to the 
president of the Missouri Public Service Corp. In it it states that I had a 
conversation with the president of that corporation concerning the opposition of 
the federation to the St. Lawrence seaway project. I don't know the president, 
nor have I ever spoken with him. I never authorized anyone to speak in my 
behalf on this subject. 

There have been shown to me carbon copies of letters to other officials which 
give the impression that I telephoned those officials personally to solicit adver- 
tisements or contributions for the publication put out by Rolee. I never made 
such telephone calls nor authorized anyone to do it in my behalf. 

Attached as exhibit 7 is a letter purportedly over my signature to Mr. J. J. 
Delaney, Sr., which in part says that the activities of the federation are con- 
cerned with the promotion of better relationships between labor and manage- 
ment and for scholarships for children of members and for the elimination of 
communistic and subversive elements within the ranks of labor. 

The federation has never had a scholarship fund. It has been opposed to 
communistic and subversive elements both within the labor movement and out- 
side the labor movement. Our activities in this area were carried out by the fed- 
eration on its own and it never sought outside help and particularly funds or con- 
tributions for this purpose. 

Attached hereto as exhibit 8 is a letter purportedly over my signature or 
signed by someone in my behalf to Mr. Cornelius J. Kell.y of the Anaconda Coi)- 
per & Mining Co., which states in part that the funds derived fi-om contributions 
to our publications are used for "our civic obligations throughout the State, as 
well as for convention expenses." 

While it may have been that some of the funds received by the federation from 
Rolee and which went into the federation's general funds were used to defray 
convention expenses, the federation never solicited or intended to solicit for 
funds to enable it to carry out "civic obligations throughout this State." 

Exhibit 9 attached is a letter purportedly over my signature to Mr. E. W. 
Henrichs of the American Concrete Pipe Co. In it there is the statement, among 
other things, that the federation has established scholarships in various colleges. 
This statement is completely false, and was never authorized by me. 

In March 1955, Dean M. P. Catherwood of the School of Industrial and Labor 
Relations of Cornell University, of which university I am a trustee, advised me 



10972 IMPROPER ACTIVITIES IN THE LABOR FIELD 

that solicitors for our publication had stated that the proceeds of advertisements 
or contributions were to be used to sponsor free courses in labor at Cornell. 

After investigation I ascertained that the material emanated from Rolee. The 
proof which was presented to me in this matter was so clear that it prompted me 
to inmiediately write my letter above referred to and dated March 29, 1955, pro- 
hibiting Mr. Lapensohn and his solicitors from using my name either in cor- 
respondence or telephone conversations in ad soliciting. I, of course, advised 
Dean Catherwood of the falsity of the claim. 

If I had known of these matters which I above referred to and which were 
called to my attention by the representatives of the Senate select committee, I 
undoubtedly would have recommended to the executive council of the federation 
that our relationships with Rolee and Messrs. Lapensohn and Shore be severed. 

Howevex', except for the occasional vague complaints received throughout the 
years and the complaint from Dean Catherwood, which I promptly acted on, I 
was totally unaware of the extent to which my name was being misused. I am 
grateful to the representatives of the Senate select committee for calling them 
to my attention. 

The action taken by the federation after these facts were brought to our atten- 
tion were prompt and effective. 

A meeting of the executive council of the federation was called and the facts 
which we had learned were disclosed to the members of the council. A resolu- 
tion was unanimously adopted declaring the contract with Rolee for the publica- 
tion of the book terminated and, further, for cause, canceled, directing the 
officers to immediately notify all those who advertised in the book for the year 
1957 of the action taken by the federation and of its purpose to discontinue the 
issuance of such a book and declaring that the federation shall not publish, 
authorize the publishing of, or participate in the publishing of any book in which 
there are paid advertisements. 

Another resolution was also unanimously adopted under which the federation 
authorized and directed the making of a thorough investigation of the actions 
of Rolee, Lapensohn, and Shore to determine what recourse is available against 
them. 

Following this meeting the letter to the advertisers in the 1957 book was 
promptly sent. Copies of the resolutions aforementioned, and of the letter sent 
to the advertisers and other material bearing on the action taken by the federa- 
tion are being forwarded to the counsel to the Senate select committee by the 
counsel to the federation. 

Naturally I have made a careful study to see what safeguards could be set 
up which would guarantee that the federation, if it issued or sponsored a book 
which contained advertisements, would be saved from the embarrassment which 
it now feels. 

If solicitors are used the federation would always be subject to the possibility 
of a solicitor misrepresenting the facts to prospective advertisers and this even 
through the federation itself might employ the solicitor. 

Certainly if an independent publisher or promoter was to be used, the chances 
of adequate control of the representations would be even less certain. 

Therefore, it is my opinion, that as far as the federation is concerned it should 
not participate in the publication of any further books in which there is paid 
advertising. 

I offer this affidavit to the Senate select committee as some evidence of my 
readiness and my willingness to cooperate with it. 

Thomas A. Mueray. 

Sworn to before me this 15th day of April 1958. 

James V. Stahl, 
Notary PuUic State of New York, No. 60-3804210, 

Qualified in Westchester County. 

Term expires March 30, 1959. 

Exhibit 1 

October 6, 1950. 
Mr. Earl Bunting, 

National Association of Manufacturers, 
14 West 49th Street, New York, N. Y. 

Dear Earl: Mason tells me that he has been unable to have your secretary 
make an appointment for him. Please try and see him as soon as possible. 

Best regards. 
Sincerely, 

Thomas A. Murray. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10973 

Exhibit 2 

June 11, 1951. 
Mr. A. W. HiGGiNS, 

President, Florida Power Corp., 

101 Fifth Street, St. Petersburg, Fla. 
Dear Mr. Higgins : I trust that you have found an opportunity to read my 
recent letter and its enclosures pertaining to the proposed St. Lawrence seaway 
project. 

You will agree that this is a vicious piece of legislation, and we must all do our 
share to defeat the administration's proposal to create authorities In the various 
States. If you can take a few minutes of your time to drop me a few lines and 
give me an expression of your attitude on these very vital matters, I will be 
very appreciative. 

Looking forward to hearing from you, I remain, 
Cordially yours, 

, President. 



Exhibit 3 
Mr. A. W. Higgins, 

President, Florida Power Corp., 

101 Fifth Street, St. Petersburg, Fla. 

Dear Mr. Higgins : We in the American Federation of Labor are opposed to 
any encroachment of Government on privately owned and operated utility com- 
panies. We are opposed to all forms of authorities, such as the Tennessee Valley 
Columbia River, California, Arkansas, Missouri, Ohio, Atlantic Seaboard, and 
the St. Lawrence Seaway. Any form of Government authorities, no matter in 
which State of the Union, is in direct competition with free enterprise. 

Our unions call for curtailment of Government encroachment into any form 
of free enterprise and the return to taxpaying, privately owned companies that 
have the right to expansion in order that the communities they serve receive 
the best services at the lowest costs, without Government intervention. We in 
labor vigorously oppose the threat to our personal liberties for which we have 
fought in the past. We have learned that the first victims of public owner- 
ship are the labor unions and their members. 

At the present time, we are staging an all-out fight to defeat the contemplated 
St. Lawrence seaway, and will continue to oppose all efforts that will endanger 
free enterprise. "We must all hang together, or assuredly, we shall hang 
separately." 

We will greatly appreciate an expression from you on our campaign. 
Cordially yours, 

, President. 

Enclosures. 



Exhibit 4 

June 1, 1951. 
Mr. McGregor Smith, 

President, Florida Power & Light Co., 

25 Southeast Second Avenue, Miami, Fla. 
Dear Mr. Smith : We acknowledge receipt of your check in the amount of 
$500. 

It is gratifying to know that you are in accord with our national campaign 
against the proposed St. Lawrence seaway project and the creation of the vari- 
ous authorities, which is so vital to all concerned. 

Assuring you of our appreciation of your support and thanking you for same, 
I remain, 

Cordially yours, 

, President. 



10974 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Exhibit 5 

May 2, 1951. 
Mr. McGregor Smith, 

President, Florida Power (G Light Co., 

25 Southeast Secmid Avenue, Miami, Fla. 
Dear Mr. Smith : We in the American Federation of Labor are opposed to 
any encroachment of Government on privately ovi^ned and operated utility com- 
panies. We are opposed ot all forms of authorities, such as the Tennessee Val- 
ley, Columbia River, California, Arkansas, Missouri, Ohio, Atlantic seaboard, 
and the St. Lawrence seaway. Any form of Government authorities, no matter 
in which State of the Union, is in direct competition with free enterprise. 

Our unions call for curtailment of Government encroachment into any form 
of free enterprise and the return to taxpaying, privately owned companies that 
have the right to expansion in order that the communities they serve receive 
the best services at the lowest costs, without Government intervention. We in 
labor vigorously oppose the threat to our personal liberties for which we have 
fought in the past. We have learned that the first victims of public ownership 
are the labor unions and their members. 

At the present time, we are staging an all-out fight to defeat the contemplated 
St. Lawrence seaway, and will continue to oppose all efforts that will endanger 
free enterprise. "We must all hang together, or, assuredly, we shall hang 
separately." 

An expression from you will be greatly appreciated in our present campaign. 
Cordially yours, 

, President. 

Enclosures. 



Exhibit 6 

May 5, 1952. 
Mr. Ralph J. Gkeen, 

President, Missouri PuiUc Service Corp., 
Warrensturg, Mo. 
Dear Mr. Green : I enjoyed my chat with you today and, as per your instruc- 
tions, enclosed please find contract and rate card for the 1952 edition of the New 
York Federationist, and our latest brochure. 

This is our only medium of procuring funds to enable us to campaign against 
the proposed legislation that is pending regarding hydroelectric power being 
generated in the Missouri Valley and St. Lawrence seaway power ijrojects. 
In the event these measures are passed by the Congress, we will have another TVA 
created with taxpayers' moneys and the utility companies forced out of business 
in these areas. 

This situation is vital to all concerned to use every effort to have these vicious 
bills killed at this session of Congress. I was pleased to read in your letter 
that you were in accord with the position we have taken in these matters. 

Assuring you of our appreciation of any aid we receive from you, either as an 
advertisement or donation, and awaiting an early reply, I remain. 
Cordially yours, 

, President. 

Enc. 

Exhibit 7 

November 30, 1953. 
Mr. J. J. Delaney, Sr., 
Coyne and Delaney, 

832 Kent Avenue, Brooklyn, 2V. Y. 
Dear Mr. Delaney: Confirming your telephone conversation with Bill Hart 
of my staff, I am enclosing contract and rate card. 

The New York State Federation of Labor is the parent and governing body of 
the American Federation of Labor in this State. It represents all the local 
unions, with a total membership of more than 1,500,000. 

Among our activities are the continued promotion of better relations between 
management and labor, scholarships for children of union members and the 
elimination of subversive and communistic elements within the ranks of labor. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10975 

We deeply appreciate your interest in the worli we are doing and trust you 
will sign the enclosed contract and return it to us at your early convenience. 
Cordially yours, 

, President. 

Exhibit 8 
Mr. Cornelius J. Kelly, 

Anaconda Copper Mining Co., 

25 Broadway, Nexc York, N. Y. 
Dear Mr. Kelly: The purpose of Mr. Martin's visit was to ascertain if you 
would be kind enough to take space with us for our forthcoming 1949 labor 
management edition of the New York State Federation of Labor. We are 
endeavoring to make this issue the finest labor publication ever published. 

We have listed about a dozen of some of the most prominent industrialists 
that are preparing articles for this edition. These names will be mentioned by 
our prominent labor ofiicials. 

The funds derived from this book will be used to take care of our civic obli- 
gations throughout the State as well as for convention expenses to be incurred 
at Niagara Falls next summer. 
We cannot put too much stress on how much we appreciate your cooperation. 
Awaiting your reply, we remain, 
Cordially, 

For Thomas A. Murray, President. 



Exhibit 9 

June 22, 1949. 
Mr. E. W. Henrichs, 

American Concrete Pipe Co., 
132-58 S2d Avenue, 

Flushing, Long Island, N. Y. 
Dear Mr, Henrichs : Confirming your telephone conservation with Mr. J. Ed- 
wards, the oflBcers of the New York State Federation of Labor would like very 
much to have the Ameriacn Concete Pipe Co. aid us by taking an advertisement 
in the 1949 convention labor management edition of the New York Federation- 
ist owned by the New York State Federation of Labor. 

At the present time our extensive program for 1949 will be fighting communism 
in labor, education of labor by establishing scholarships in various colleges and 
forming arbitation committees to meet with management. 

Rate card and contract are herewith enclosed. Any help received from the 
American Concrete Pipe Co. will be greatly appreciated. 

As you know, our convention will be held the first week of August in Syracuse, 
N. Y. 

Cordially, 

, President. 

The Chajeman. Call the next witness. You may refer to any part 
of it. 

Mr. IvENNEDY. It explains all of these letters, which are important 
for an understanding. 

The Chairman. Counsel, you may read excerpts from it, then, so 
as to acquaint the committee. 

Mr. Kennedy. I don't think it will take more than 5 minutes. 

Could I just take excerpts? 

The Chairman. Yes. Read whatever is necessary to give us the 
pertinent parts of it. 

Mr. Kennedy. Mr. Murray gives his background and then : 

It was known by the officials of the federation in the late 1940's that the 
Pennsylvania State Federation of Labor utilized an organization to produce a 
nicer yearbook and which brought in more income to their organization. Since 
we knew that, Harold Hanover, our secretary-treasurer, had been trying for 
some time to secure the services of this organization so as to produce a better 



10976 IMPROPER ACTIVITIES IN THE LABOR FIELD 

book and increase our income. In late 1948, Ben Lapensohn, who produced the 
Pennsylvania federation's book, offered to secure all advertising, edit and pay- 
all printing costs, and distribute the book for a fee of 65 percent of all advertis- 
ing written, the remaining 35 percent under his proposal was to be a net profit 
to the federation. 

Then he goes on to explain after that that the percentage was in- 
creased for Mr. Lapensohn to 75 percent and the federation received 
only 25 percent because of Mr. Lapensohn's explanation that there 
were increased costs that he didn't foresee. 

From the beginning of the operation with Rolee, permission was granted to it 
to send out an introductory letter over my name. This letter provided — 

and I quote : 

"I have asked Mr. to contact you with reference to our annual 

publication published from the New York State Federation of Labor, and any 
courtesies extended to him would be gratefully appreciated by us. You may ex- 
pect to hear from Mr. within the next few days. 

"Cordially yours' 

"Tom Murray." 

On several occasions, it came to my attention that this form of letter had 
been changed and that the solicitors had been using my name improperly. On 
these occasions I called Mr. Lapensohn and Mr. Shore and told them to stop 
these tactics. It also came to my attention that his solicitors were on occasion 
posing as me in telephone conversations with prospective advertisers. 

Again I would bring these matters to the attention of Mr. Lapensohn or Mr. 
Shore and demand that this type of soliciting be stopped. 

There were not many of these instances, but they happened during the years 
from 1940 until 1957. 

On March 29, 1955, after a particularly aggravating situation had been 
called to my attention, and which I later refer to herein, I wrote to Mr. 
Lapensohn and formally advised him that he was prohibited from using my 
name either in correspondence or in telephone conversations in the solicitation 
of ads. 

Then he goes through some of the letters which are of some 
importance. 

Exhibit 1 attached to this aflBdavit purports to be a letter bearing the written 
signature "Tom" over my name, addressed to Earle Bunting of the National 
Association of Manufacturers. Mr. Bunting was then the president of the NAM. 
I do not know :\Ir. Bunting and to the best of my knowledge have never met him. 
I was shocked that a type of letter that would call him by his first name and 
appear to give the impression that I was a personal friend would go out over my 
name. Until shown to me by representatives of the Senate select committee, I 
was unaware of the existence of this letter and of this type of ad soliciting. 

Exhibits 2 and 3 attached purport to be letters to the president of the Florida 
Power Corp. over my name and they refer to the proposed development of power 
in upstate New York and the St. Lawrence seaway project. These letters purport 
to give my views on these subjects. I did and still do have views on these 
matters but I vanderstand that the purpose of these letters was solely concerned 
with the securing of funds from the organizations to which they were addressed, 
either for advertisements or by way of contributions. 

I never authorized nor would I authorize the improper use of my name on 
that basis for the solicitation of funds, particularly from out-of-State 
corporations. 

Exhibit 4 attached is a letter over my name to the president of the Florida 
Power & Light Co. acknowledging the receipt of $500. I never authorized such 
a letter, and the federation never organized a national campaign against the 
proposed St. Lawrence seaway project, although its position thereon was clearly 
understood in our State. 

Senator Ives, May I break in there just a minute in that connection. 
I want to say that during my period of service in the Legislature of the 
State of New York, as I recall the State Federation of Labor was 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10977 

consistently opposed to the St, Lawrence seaway project. There may 
have been a time when they were not, but I do not recall it. 

Mr. Kennedy. This letter, Mr. Chairman, dated June 1, is directed 
to Mr. Smith, president of the Florida Power & Light Co., and it says : 

Dear Mr. Smith : We acknowledge receipt of your check in the amount of $500. 
It is gratifying to know that you are in accord with our national campaign against 
the proposed St. Lawrence seaway project, and the creation of the various author- 
ities which is so vital to all concerned. 

Assuring you of our appreciation of your support and thanking you for same, 
I remain, 

Cordially yours, 

Tom Murray. 

That is the letter to which he refers here, where he says he never 
authorized such a letter, and the federation never organized a national 
campaign against the proposed St. Lawrence seaway project. 

The Chairman. It shows the tactics, however, being used ? 

Mr, Kennedy. That is correct. [Reading:] 

Attached hereto as exhibit 6 is a letter purportedly over my signature to the 
president of the Missouri Public Service Corp. In it it states that I had a con- 
versation with the president of that corporation concerning the opposition of the 
federation to the St. Lawrence seaway project. I don't know the president nor 
have I ever spoken with him. I never authorized anyone to speak in my behalf 
on this subject. There have been shown to me carbon copies of letters to other 
officials which give the impression that I telephoned those officials pei'sonally to 
solicit advertisements or contributions for the publication put out by Rolee. 
I never made such telephone calls nor authorized anyone to do it in my behalf. 

Attached as exhibit 7 is a letter purportedly over my signature to Mr. J. J. 
Delaney, Sr., which in part says that the activities of the federation are concerned 
wuth the ijromotion of better relationships between labor and management and 
for scholarships for children of memi lers and for the elimination of communistic 
and subversive elements within the ranks of labor. 

The federation has never had a scholarship fund. It has been opposed to com- 
munistic and subversive elements both within the labor movement and outside 
the labor movement. Our activities in this area were carried out by the federa- 
tion on its own, and it never sought outside help and particularly funds or contri- 
butions for this purpose. 

Attached hereto as exhibit 8 is a letter purportedly over my signature or signed 
by someone in my behalf to Mr. Cornelius J. Kelly, of the Anaconda Copper & 
Mining Co., which states in part that the funds derived from contributions to our 
publications are used for '"our civic obligations throughout the State, as well as 
for convention expenses." 

While it may have been that some of the funds received by the federation from 
Rolee and which went into the federation's general funds were used to defray 
convention expenses, the federation never solicited or intended to solicit for 
funds to enable it to carry out, "civic obligations throughout this State." 

Exhibit 9 attached is a letter purportedly over my signature to Mr. E. W. Hen- 
richs of the American Con<>rete Pipe Co. In it there is the stat'ment among 
other things that the federation has established scholarships in various colleges. 
This statement is completely false and was never authorized by me. 

In March 1955, Dean M. P. Catherwood of the School of Industrial and Labor 
Relations of C<n-nell University, of which university I am a trustee, advised me 
that solicitors for our publication had stated that the proceeds of advertisements 
or contributions were to be used to sponsor free courses in labor at Cornell. 

After investigation I ascertained that the material emanated from Rolee. The 
proof wliich was presented to me in this matter was so clear that it prompted 
me to immediately write my letter above referred to and dated March 29, 1955, 
prohibiting Mi-. Lapensohn and his solicitors from using my name either in 
correspondence or telephone conversations in ad soliciting. I, of course, advised 
Dean Catherwood of the falsity of the claim. 

If I had known of these matters which I have above referred to and which 
were called to my attention hy the representatives of the Senate select commit- 
tee, I undoubtedly would have recommended to the executive council of the 



10978 IMPROPER ACTIVITIES IN THE LABOR FIELD 

federation that our relationship with Rolee and Messrs. Lapensohn and Shore 
be sevored. 

However, except for the occasional vague complaints received throughout the 
years and the complaint from Dean Catherwood which I promptly acted on, I 
was totally unaware of the extent to which my name was being misused. I am 
grateful to the representatives of the Senate select committee for calling them 
to my attention. 

The action taken by the federation after these facts were brought to our at- 
tention was prompt and effective. A meeting of the executive council of the 
federation was called and the facts which we had learned were disclosed to the 
members of the council. 

A resolution was unanimously adopted declaring the contract with Rolee for 
the publication of the book terminated and further, for cause, canceled, directing 
the officers to immediately notify all those who advertised in the book for the 
year 1957 of the action taken by the federation and of its purpose to discon- 
tinue the issuance of such a book and declaring that the federation shall not 
publish, authorize the publishing of, or participate in the publishing of any book 
in which there are paid advertisements. 

Another resolution was also unanimously adopted under which the federation 
authorized and directed the making of a thorough investigation of the actions 
of Rolee, Lapensohn, and Shore to determine what recourse is available against 
them. 

The Chairman, All of this took place, am I correct, after this 
committee's interest in the matter ? 

Mr. IvENNEDY. After we had interviews with Mr. Murray in which 
we pointed out that these matters had been taking place. 

The Chairman. We brought these things to his attention? 

Mr. Kexnedy. That is correct. 

Then on page 12, he said : 

Naturally, I have made a careful study to see what safeguards could be set 
up which would guarantee that the federation, if it issued or sponsored a book 
which contained advertisements, would be saved from the embarrassment which 
it now feels. 

If solicitors are used the Federation would always be subject to the possibility 
of a solicitor misrepresenting the facts to prospective advertisers and this even 
though the federation itself might employ the solicitor. 

Certainly if an independent publisher or promoter was to be used, the chances 
of adequate control of the representations would be even less certain. There- 
fore, it is my opinion that as far as the federation is concerned it should not 
participate in the publication of any further books in which there is paid 
advertising. 

It is signed by Thomas Murray. 

The Chairman. The affidavit has been printed in full in the record. 

Mr. Kennedy. There are certain parts that don't bear at all on this 
matter, that I would like to exclude when the affidavit is in, which 
would be more appropriate if Mr. Murray was still alive. 

The Chairman. Without objection, it can be deleted. 

Mr. Kennedy. It is nothing reflecting on him. 

The Chairman. It may be better to keep it out of the public record, 
then, if that is so. 

Without objection, that part of it can be deleted. 

Call the next witness. 

Mr. Kennedy. Mr. Hanover. 

The Chairman. Will you be sworn ? 

You do solemnly swear that the evidence you shall give before this 
Senate select committee shall be the truth, the whole truth, and noth- 
ing but the truth, so help you God ? 

Mr. Hanover. I do. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10979 

TESTIMONY OF HAROLD C. HANOVER, ACCOMPANIED BY HIS 
COUNSEL, AARON BENENSON AND FRANK BEARUP 

The Chairman. State your name, your place of residence and your 
business or occupation. 

Mr. Hanover. My name is Harold C. Hanover, and I am secretary- 
treasurer of the New York State Federation of Labor, and I reside 
at 168 Windermere Boulevard in the city of Buffalo, N. Y. 

The Chairman. You have counsel, Mr. Hanover? 

Mr. Hanover. I have Mr. Benenson, and associate counsel, Mr. 
Bearup. 

The Chairman. Will you gentlemen identify yourselves? 

Mr. Benenson. Aaron, A-a-r-o-n, Benenson, B-e-n-e-n-s-o-n, 521 
Fifth Avenue, New York City. 

Mr. Bearup. My name is Frank Bearup, B-e-a-r-u-p, I am a lawyer 
of Albany, New York, and my office is at 75 State Street. 

The Chairman. Thank you. 

All right ; Mr. Kennedy, you may proceed. 

Mr, Benenson. May I ask permission for Mr. Hanover to make a 
comparatively short statement to begin this ? 

The Chairman. Has the rule been complied with ? 

Mr. Kennedy. Yes ; it has. 

The Chairman. All right. The rule has been complied witli, and, 
Mr. Hanover, you may read your statement. 

Mr. Hanover. I am secretary-treasurer of the New York State 
Federation of Labor, and have held that position continuously since 
about 1945. I have been active in the labor movement all my life, 
beginning from the time when I joined my local Carpenters Union 
through the period that I was elected to local union office and then 
to the important position that I now hold. 

My responsibility to the trade-union movement has motivated me 
in my appearance here as a voluntary witness to help this committee 
in its investigation so far as I am able. 

Before 1949, for many years, the federation had published a printed 
copy of the proceedings of its conventions, which were distributed 
to all affiliated unions. To defray some of the expenses of the pub- 
lication and of the federation, advertising was solicited. 

An advertising representative was hired to manage this work, and 
he received 35 percent of the amount paid by the advertisers, the 
federation bearing all of the expense of editing, printing, distribution, 
et cetera. 

Under this arrangement, net f)roceeds to the federation did not 
exceed $5,000 to $6,000 per year. Sometime in the late forties, the 
officers of our federation learned that the Pennsylvania Federation 
of Labor sponsored an annual journal which was handled by a firm 
which turned out an attractive official book and brought it substan- 
tial income. 

I, myself, spoke to the representatives of the Pennsylvania federa- 
tion about it and, at fii-st, they took the position that they wislied the 
exclusive representation of the people who were handling this work 
for tliem. 



21243— 58— lit. 28- 



10980 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Sometime in the latter part of 1048, however, I3en Lapensohn, who 
had been heading this work, solicited the New York State federation 
and offered to publish an annual journal for it. 

The late Thomas A. Murray, president of the federation, the late 
Mr. Sullivan, then counsel to the federation, and I negotiated with 
Lapensohn and Shore, his principal assistant, and a contract was 
reached, a copy of vrhich has been furnished the committee. 

This contract and its modifications have prevailed up to and includ- 
ing 1057. It was understood that all advertisers' checks woukl be sent 
to our office at the federation which would deposit them to its own 
account and draw^ the proper percentage to the Rolee Co., Lapen- 
soliu's publishing company, to whom this contract was assigned. 

So far as I knew, this'^procedure was followed, and it was only 
after the disclosures were made by your representatives during this 
investigation that I learned that Lapensohn was an unconscionable 
rogue who has misused the good name of the State federation and 
its officers and imposed on our advertisers, whose funds, in appar- 
ently quite a few instances, were converted and stolen. 

Tliese disclosures came as a complete shock to the late Mr. Murray 
and me, and to the executive council of the State federation, to 
whom all his information was imparted. 

We have learned that the publisher not only converted substantial 
sums of money, but, what is worse, that its solicitors made gross 
misrepresentations to prospective advertisers — apparently, to the 
point even of leading some of them to believe that the policies of the 
federation would be influenced by taking advertisements in our 
journal. 

I unequivocally state that neither I, as secretary-treasurer, or Mr. 
Murray, as president, or any other officer of the federation ever al- 
lowed our advertisers or contributors to influence the policy of the 
federation. 

Nevertheless, I am embarrassed to find, from the disclosures made 
to me by your committee's representatives, that the traditional posi- 
tion of the federation on certain public issues was utilized by Lapen- 
sohn and Shore to promote advertising and contributions largely for 
the private pocket of the promoters. 

Thus, it was well known that the overwhelming majority of the 
members of the federation and of its constituent unions were in favor 
of private development of power and opposed to the St. Lawrence 
seaway development and the public development of power. 

During the period of the 1940's, many resolutions on the subject 
were introduced at the meetings of the federation. True, a few up- 
state unions, and particularly those located in the area of the St. Law- 
rence River, were in favor of the seaway development and of public 
developmeiit of power. 

However, the great majority of our affiliated unions, especially 
those whose activities were centered in New York were strongly op- 
posed. 

The opposition of unions like the construction, utility, and elec- 
trical workers, those most directly involved, grew in veliemence dur- 
ing the period of 1949 and 1950, when the enabling treaty for St. 
Lawrence and Niagara power development was signed between the 
United States and Canada. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10981 

These unions were anxions to avoid being placed in tlie plight of the 
unions of Government workers whose ability to take economic ac- 
tion on behalf of their members was entirely circumscribed, and 
whose wages and conditions largely do not bear comparison with 
unionized workers in private industry. 

The reason, therefore, that the officers of the federation sup- 
ported resolutions in favor of private power, so overwhelmingly cle- 
sired by their members, is obvious, and the fact that some companies 
which favored private power were advertisers in our journal had no 
weight on this policy question. 

You can, therefore, understand my chagrin when your representa- 
tives disclosed to us the gross misrepresentations that had been made 
to prospective advertisers, and the conversions and thefts of the sums 
paid out by them. 

None of these actions came to my attention during the time that 
the federation had dealings with Lapensohn. 

We are grateful to the committee for disclosing to us the condi- 
tions which existed with relation to our journal. Your revelations 
have already brought about energetic action. 

The executive council of the federation, on my motion and that 
of the late Mr. Murray, adopted a resolution canceling and termi- 
nating all arrangements for publication of the journal. 

Advertisers have been advised that there will not be another 
journal sponsored by the federation, and that no one is authorized to 
solicit advertising or subscriptions in any form in the federation's 
name. 

The federation has resolved that it will not publish or participate 
in the publication of any journal in which there are paid advertise- 
ments. 

The executive council has, further, authorized its officers to retain 
such professional services as are required to bring whatever crimi- 
nal or civil actions are in order against the publisher of the journal 
or its officers, agents, or employees who are responsible for the mat- 
ters that have been brought to light. 

Mr. Kennedy, your counsel, has indicated in answer to our request, 
that he will cooperate with us in getting the facts so as to enable 
us to accomplish these resolutions. Copies of all these resolutions 
and letters will be filed with your committee. 

From this experience, the dangers implicit in the acceptance of 
paid advertising by union publications, journals, or papers are made 
abundantly clear. Perhaps, precautions can be devised to avoid them 
but I myself could not see how we could be guaranteed that abuses 
like those disclosed here would not recur if the State federation again 
published a journal. 

The executive council of the State federation agrees with me and, 
therefore, unanimouslj^ adopted its resolution to end the publication 
of the journal. 

In conclusion, we in the State federation feel that this committee 
has rendered all of us great service by this investigation. 

The Chairman. Thank you very much, Mr, Hanover. It is a little 
gratifying to the committee to learn that sometimes its eti'orts and 
hard work and expenditures we are making of taxpayers' money is 
getting some results and is in some quarters appreciated. 



10982 IMPROPER ACTIVITIES IN THE LABOR FIELD 

I am <zlad to know that you liave taken the action you have. I wish 
you could give us a little more information about Mr. Lapensolin, 

Do you know when he departed for an extended journey? 

Mr. Hanover. I could not say, sir. I have answered the question to 
Mr. Dunne previously. 

The Chairman. I am sure you have. Naturally we would be a 
little bit interested in having him occupy the position you now occupy 
and ask him a few questions. 

Mr. Hanover. I don't doubt that, sir. 

The Chairman. I don't know how soon he is going to be available 
to us. I understand, too, that the district attorney, Mr. Hogan, in 
New York, is making a thorough investigation of his activities, par- 
ticularly with respect to this. 

I think that you folks are cooperating with the district attorney, too, 
are you not ? 

Mr. Hanover. We shall, sir, in every respect. 

The Chairman. And I know this committee will. Let us hope 
now that this will point up this practice that is going on. Particu- 
larly since we are investigating management-labor relations, I trust 
all other unions will take warning and realize that practices like this 
can do unionism a great deal of harm. 

I note the fact that you condemn it, and we are surprised you didn't 
find out about it a lot sooner. It seems to me that maybe you were 
not quite as alert as you might have been. But be that as it may, I 
trust you are sincere and I know you are, that we have rendered a 
service to your union. 

I am sure we have rendered a service to your union. I am sure we 
have rendered a service to a lot of businessmen who were not keen 
about making contributions, but with the pressure on them that way, 
they felt, like one said here, it might be a good investment to make a 
contribution. 

I do not believe you want to get money that way. 

Mr. Hanover. No, sir. 

(At this point the folio wmg members were present: Senators Mc- 
Clellan and Ervin.) 

The Chairman. It smacks of improper practices to me, though I 
could use a stronger term than that. I think that is what we want 
to do, to preserve decent unionism, and eliminate these improper 
practices that are hurting the working people of this country, in fact, 
it is hurting the country. 

You can't hurt them without hurting the whole comitry. 

Counsel ? 

Mr. Kennedy. You approved, Mr. Hanover, during this period of 
time, of the fact that money was being procured by Mr. Lapensohn 
for contributions rather than just for ads ? 

Mr. Hanover. I wouldn't say it that way, Mr. Kennedy. I don't 
say that we ever approved anything like that. But common practice 
in the advertising field, as we knew it before, with the old book, was 
that contributions are made to what is known as circulation. Some- 
times that is probably put into a single ad and sometimes it is sent in 
just as circulation. I wouldn't say we approved it, Mr. Kennedy. 

Mr. Kennedy. Did you know that these solicitors were going to 
many countries which had no union employees at all ? 

Mr. Hanover. No, sir. That is a revelation. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10983 

Mr. Kennedy. On this circulation, yon say that you knew that they 
were going out getting money for circulation. Did you inquire into 
whom they were approaching for this circulation money? 

Mr. Hano^^r. We did, for the first year or two, watch the situation 
pretty carefully, and then frankly, Mr. Kennedy, the income was 
fairly good and it became a routine situation. 

I will be very frank with you. It became routine after about 2 years. 

Mr. Kennedy. The income was so good that you did not want to 
make any further study or investigation ? 

Mr. Hano\^r. It wasn't a case of not wanting to.^ We are a limited 
organization in the number of employees, and we just did not go in 
beyond the auditor taking a look at that account twice a year. 

Mr. Kennedy. It is potentially, and I am sure you agree, Mr. Han- 
over, a very explosive situation, is it not ? 

Mr. Hanov-er. I don't think we ever appreciated fully how explosive 
it was. I am amazed, after hearing what potentially w^as supposed 
to be one of our employees here today, whom I never even heard of. 

Mr. Kennedy. What you heard here were employees of labor unions, 
or people who could describe themselves as employees of labor unions, 
representatives of labor unions, going around to employers and col- 
lecting money. Just on the face of it, it amounts to what is a shake- 
down, particularly, Mr. Hanover, as you are having individuals who 
are not even taking ads. That is $500,000, at least, there, which is a 
shakedown. 

Mr. Hanover. I wish to point this out again, Mr. Kennedy, that 
we had no knowledge of the background of Mr. Lapensohn. We 
thought he did such a good job for the Pennsylvania Federation, their 
book was a beautiful thing, and our book, we thought, was excellent, I 
never had a complaint of a shakedown, with the exceptions of a better 
business bureau complaint, which I turned over to our president, who 
handled the situation. 

Mr. Kennedy. Don't you see just from the facts themselves, that 
that is what it amounts to? Don't you see that at the present time, 
Mr. Hanover ? 

Mr. Hanover. I certainly do. 

Mr. Kennedy. Because of the economic pressures that can be put 
by unions on companies. It is just as obvious as can be. 

Mr. Hanover. I certainly agree with you, sir. 

Mr. Kennedy. I don't understand why for a period of 8 years in 
New York and a period of approximately the same time in Pennsyl- 
vania, why some union official did not take some action on it, other 
than the fact that they were all having their salaries paid. 

That is what it comes down to, basically, that that is wdiat tlie money 
was being used for. Other than that, I would think that investigation 
or studj^ would reveal all of these things. 

The Chairman. I was going to ask what did the union spend this 
money for? 

According to the records your federation got some $252,000 out of it. 

What account did that money go into so far as the union was 
concerned? 

Mr. Hanover. Very frankly, with us it meant the difference in ex- 
panding our organization from 2 people to 5 people, and from taking 
a little rental which we had, a rental building, and taking another 



10984 IMPROPER ACTIVITIES IN THE LABOR FIELD 

biiildinf!: and remodeling it and having a headquarters of our own in 
the city of Albany. 

Tlie Chairman. The State federation, the New York Federation? 

Mr. IIano\'er. The money primarily went for that and the increase 
in salaries ; yes, sir. 

The Chairman. It was used to pay the salaries of the State federa- 
tion officers? 

Mr. HAN0^^R. And an increase in staff, sir. 

The Chairman. An increase in staff? 

Mr. Hanoa'er. That is right. 

The Chairman, And for remodeling a building? 

Mr. Hanover. That is right, sir. 

The Chairman. Did you buy the building out of these funds ? 

Mr. Hanover, We bought tlie building, I believe, prior to — yes — 
we bought the building prior to. 

The Chairman, Prior to the beginning of this activity ? 

Mr. Hanover. That is right, sir. 

The Chairman. And then you used the funds to remodel it ? 

Mr, Hano^t.r. We used such funds as we had at the time. 

The Chairman. Do you have a complete record of these funds, how 
you used them ? 

Mr. Hanover. I believe that it can be shown without too much 
difficultj^ 

The Chairman. I am asking did you keep a financial record of these 
funds and can you account for them ? 

Mr. Hanover. Yes. May I point this out so that it will be more 
clear ? 

The Chairman. There is no question about the use of the funds 
after you got them, such as you got? 

Mr. Hanover. That is right. 

The Chairman. They were used for legitimate purposes, to pay 
your salaries, to employ more people, and to remodel a building. 

Mr. Hanover. And to maintain that building, sir. 

The Chairman. All of it went for union purposes ? 

Mr. Hanoatr. It went for those purposes, exclusively, sir. 

The Chairman. Except you got gypped by the guy that did the 
collecting ? 

Mr. Hanover. Terribly. 

The Chairman. I think you union people ought to look into these 
things more carefully. 

I do not understand it. I do not mean that this applies to all 
unions, but we find over and over where these things occur which are 
improper. We have an ex-convict mixed up in this. That is why I 
take the position that I think there should be a law to prohibit these 
unreformed convicts from having positions of trust and authority in 
labor unions. 

Mr. Hanover. May I make a comment, sir ? 

The Chairman. I would be glad for you to, 

Mr. Hano\t:r. We didn't know a thing about that until the revela- 
tions came out from this committee. 

The Chairman. We have found in the course of our investigation 
of a limited number of unions that apparently not much investiga- 
tion is made ; except in some of them I think, or it has been indicated, 
that one of the requisites with respect to qualifications is that you 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10985 

have to be some kind of a thug, or racketeer, or musclemaii, or ex- 
convict, to get one of those positions by appointment, at least in some 
places. I am not cliarging that against all unions. I am sure it does 
not prevail in many. But it seems to me there is a duty resting upon 
the high officials of unionism to make a little check on the kind of men 
you employ and place in authority to represent the union. 

Mr. Kennedy. You can correct me if I am wrong, but some 47 
percent of the total receipts of tlie New York State Federation of 
Labor were from this New York Federationist, from Mr. Lapensohn. 

Mr. Hanover, I think that is close, sir. 

Mr. Kennedy. That is over this period of time. 

Mr. Hanover. Yes. 

The Chairman. What did the other come from ? 

Mr. Hanoater. From the per capita tax. 

The Chairman. The per capita tax of your members ? 

Mr. Hanover. From our affiliated local unions, and it had not 
changed since 1865. It was ver}^ low. 

Mr. Kennedy. Do you believe it was the fact that in practice you 
and the group in Pennsylvania were receiving so much money from 
these periodicals and were dependent on these periodicals, do you 
think tliat was the reason that you did not make an investigation ? 

Mr. Hanover. I do not think in our case it was the reason. I think 
in our case we felt that we were doing business with two honorable 
people. 

Mr. Kennedy. The fact is that you didn't make any kind of a study 
on what you admit now was a potentially very dangerous situation. 
You made no study, you had no supervision at all over the situation. 

Mr. Hanover. Mr. Kennedy, for a year or two we checked as best 
we could. 

Mr. Kennedy. After that time. 

Mr. Hanover. After that time, we checked as best as we could 
through our auditor. 

Mr. Kennedy. But after that, you had no control over this situ- 
ation whatsoever. 

Mr. Hano\^r. Beyond that, I have to be very frank and state that 
we did not, sir. 

Mr. Kennedy. I believe at the beginning you stated that you were 
receiving a considerable amount of income from these. 

Mr. Hanover. That is correct, sir. 

Mr. Kennedy. Mr. Chairman, this is the contract, a copy of it. 

The Chairman. Would you identify this document for us, please, 
sir. 

(The document was handed to the witness.) 

Mr. Hanover. That is a copy of the original document, sir. 

The Chairman. That is a photostatic copy of the contract between 
the State federation and Eolee Publishing Co. 

Mr. Hanover. Yes. 

The Chairman. That may be made exhibit 50. 

(The document referred to was marked "Exhibit No. 50" for ref- 
erence, and may be found in the files of the select committee.) 

The Chairman. Is there anything further? 

Mr. Kennedy. That is all. 

The Chairman. Have you any questions. Senator Ervin ? 

Senator Ervin. No. 



10986 IMPROPER ACTIVITIES IN THE LABOR FIELD 

The Chairman. Thank you very much. 

Mr. Kennedy. I wish to refer to clause 9 of the contract. This is 
on the subject of misdirection of funds. 

The Chairman. Clause 9 of this contract between the New York 
State Federation of Labor and the Kolee Co. reads as follows : 

All checks for subscriptions and advertisements are to be payable to the New 
York State Federation of Labor, and shall be forwarded to the secretary- 
treasurer at the main oflSce of the federation at 15 South Hawk Street, Albany, 

N. y. 

So the conversion of those funds was a violation of the contract ; is 
that correct ? 

Mr. Kennedy. That is correct. 

The Chairman. Call the next witness. 

Mr. Kennedy. Mr. Trimble. 

The Chairman. Come forward, Mr. Trimble. 

Do you solemnly swear the evidence you shall give before this Sen- 
nate select committee shall be the truth, the whole truth, and nothing 
but the truth, so help you God ? 

Mr. Trimble. I do. 

TESTIMONY OF HEKRY W. TRIMBLE, JR. 

The Chairman. State your name, your place of residence, and your 
business or occupation. 

Mr. Trimble. My name is Henry W. Trimble, Jr. My residence 
is 9 Duryea Road, in Upper Montclair, N. J. I am secretary of In- 
ternational Business Machines Corp., a New York corporation. 

The Chairman. Thank you very much. You waive counsel, do 
you, Mr. Trimble ? 

Mr. Trimble. Yes, sir. 

The Chairman. Proceed, Mr. Kennedy. 

Mr. IvENNEDY. You are secretary to the IBM Co. ? 

Mr. Trimble. Yes, sir; I am the secretary of the corporation. 

Mr. Kennedy. How many employees does IBM have ? 

Mr. Trimble. 85,000 worldwide, of which 61,000 are in the United 
States. 

Mr. Kennedy. Are any of them members of any unions ? 

Mr. Trimble. None. 

Mr. Ivennedy. You are completely unorganized ? 

Mr. Trimble. Well, in this country ; I am not fully familiar with 
abroad. 

Mr. Kennedy. As far as the United States is concerned, as far as 
the 61,000? 

Mr. Trimble. Yes, sir. 

Mr. Ivennedy. IBM made certain payments to the New York 
federation ? 

Mr. Trimble. Yes, sir. 

Mr. Kennedy. And that started in 1949 ; is that right? 

Mr. Trimble. I believe it was earlier than 1949. I believe it started 
around 1939. 

Mr. I\j:nnedy. Well, as far as the contributions to the New York 
federation, they started in 1949; did they not? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10987 

Mr. Trimble. Let me say that for a number of years during the 
war, we took advertisements in tlie New York Federationist, and we 
did not take any in 1948, and we commenced again in 1949. 

Mr. ICennedy. Ail right. Then we will start in 1949, after Mr. 
Lapensohn took over. You made a $5,000 payment to the New York 
Federationist? 

Mr. Trimble. "We took 2 advertisements at $2,500 each ; yes, sir. 

Mr. Kennedy. Did you actually have advertisements in ? 

Mr. Trimble. No, sir; they were contributions to the expenses of 
publication. 

Mr. Kennedy. You paid $5,000 in 1949 ? 

Mr. Trimble. A total of $5,000, yes, sir. 

Mr. Kennedy. With the understanding there would be no ad ? 

Mr. Trimble. Yes, sir. 

Mr. Kennedy. In 1950, how much was it ? 

Mr. Trimble. How much ? I believe it was 2 advertisements, again 
complimentary with no copy, of $2,500 each. 

Mr. Kennedy. A page ad cost $500. 

Mr. Trimble. Well, the amount was written as an advertising con- 
tract of $2,500. 

Mr. Kennedy. It might have been written as an advertising con- 
tract, but the ad only cost $500. So you took 10 ads. 

Mr. Trimble. Perhaps that is so. 

Mr. Kennedy. Here you are a nonunion company and you are tak- 
ing 10 ads in a union publication ? 

Mr. Trimble. I am not sure we took 10 ads. 

Mr. Kennedy. Well, a page ad is $500. Then in 1951, $2,600? 

Mr. Trimble. These were contributions to the publication of the 
magazine; they were entered as advertising, and on an advertising 
contract submitted to us by the publication. 

Mr. IvENNEDY. Were they charged as deductible expense in the 
business ? 

Mr. Trimble. I am not familiar with how they were charged, sir. 

The Chairman. I don't get any deductions for making gifts to an 
individiial. That's what this amounts to. You got no ads, you got 
no service. 

Mr. Trimble. Let me say that these were on advertising contracts 
submitted by the union. I believe your counsel has copies of them. 

The Chairman. I understand that. You write a contract that is 
advertising, but, in fact, it is nothing but a gift. 

Mr. Trimble. There is no copy, correct. 

The Chairman. All right. 

Mr. Kennedy. 1949, $5,000; 1950, $5,000; 1951, $2,500; 1952, $2,500; 
1953, $2,500 ; 1954, $2,500 ; 1955, $2,500. 

Mr. Trimble. Eight. 

Mr. Kennedy. Did you discontinue after that ? 

Mr. Trimble. Yes, sir. 

Mr. Kennedy. For a total of $22,500 ? 

Mr. Trimble. Yes, sir. 

Mr. Kennedy. What possible explanation can you make, can the 
IBM Co. make, for contributing $22,500 to an organization, to the 
New York Federationist, when none of your employees were members 
of the union ? 



10988 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. TiuMnLE. Well, during this period, we made extensive adver- 
tising and contributions to many, many publications including about 
56 labor publications. There were a total all told, I believe, of 300 
different publications of different kinds. This was one part of that 
program. 

Mr. Kennedy. We are talking nov»^ about from 1049 on. What I 
am trying to find out is why you, with no union employees, made such 
a large payment over this period of time, $22,500 to this labor organi- 
zation newspaper or magazine. 

Mr. Trimble. Well, as you have stated, Mr. Kennedy, these were 
$2,500 pieces. The total over that period, the amount you said, is 
right. As far as the amounts go, we did not regard them as unusual, 
and I have no explanation other than we were requested to contribute 
that amount toward circulation, and we did so. 

Mr. IvENNEDY. You paid for 45 full-page ads for which you didn't 
receive one ad. 

Mr. Trimble. No copy was submitted during those years; I am 
sorry. I believe in 1 or 2 of the years there was copy, there was 
advertising copy. That was true in prior years, prior to 1948, I 
know. 

Mr. I^NNEDY, You state here there is a memorandum from Inter- 
national Business Machines to Tom Murray, which states in part — 

We do not wish to have any space in the book, nor is there to be any mention 
of our company name. 

Mr. Trimble. Eight. 

Mr. Kennedy. It is very clear. 

Mr. Trimble, As I say, perhaps you have not seen the prior years 
to that, but there Avas copy in those years. 

Mr. Kennedy. This was 1952, I believe, did you have any from 
1949, after Mr. Lapensohn took over the magazine ? 

Mr, Trimble. I don't believe so. I am not quite sure. I don't 
believe so. 

Mr. Kennedy. Isn't it a fact that you were just attempting through 
the payment of this money to keep the labor unions happy ? 

Mr. Trimble. No, sir, certainly not. 

Mr. Kennedy. What other possible explanation can there be? 

Mr. Trimble. As I say, the company has a program of goodwill 
advertising in general in many different kinds of publications, m- 
cluding labor publications. 

The Chairman. Let me ask you a question in that connection? 

Mr. Trimble. Yes, sir. 

The Chairman. I assume you thought actually you were going to 
get nothing in return, so far as advancing your business, other than 
through goodwill ; is that correct? 

Mr. Trimble. That is correct. It is a goodwill program. 

The Chairman. You didn't think an ad was worth anything, you 
didn't want an ad ? 

Mr. Trimble. No, sir. 

The Chairman. Couldn't you have at least put in something com- 
plimentary to the labor organization and i^aid for that so that he who 
read might know your sentiments ? 

Mr. Trimble. Often we did. 

The Chairman. I am sure of that. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10989 

Mr. Trimble. And often we put in patriotic ads, such as "Buy War 
Bonds" and that type of thing. 

The CiiAiR^iAx. Why not take advantage to get that much out of 
it, at least. 

Mr. Trimble. As I say, some times ^xe did and some times we did 
not. 

The CriAiRMAisr. Obviously you didn't in this instance. 

Mr. Trimble. No, we didn't. 

The CiiAiRMAx. What is the real reason ? 

Mr. Trijmble. There is no real reason at all. It was just our prac- 
tice not always to have copy in our ads. It is not only true in this 
publication 

The Chairman. Well, how about this publication 

Mr. Trimble. May I finish, sir ? 

The Chairman. Yes. 

Mr. Trimble. It is not only true in this publication, but in other 
publications which had, again, this goodwill advertising and which 
had nothing to do with the labor organizations. I have collected 
some statistics that show that in about three-quarters of the cases in 
labor publications and nonlabor publications we do not have any 
copy, nor do we have a complimentary-type ad with a name signed 
to it. I would be glad to submit that. 

Senator Ervin. I have difficulty identifying the nature of the In- 
ternational Business Machines. Is that your company ? 

Mr, Trimble. Yes, sir. 

Senator Ervin. I have difficulty telling whether you are a hard- 
headed bunch of businessmen or a softhearted bunch of businessmen 
or a business organization or an eleemosynary institution. Can you 
help me and tell me which one of those things you fit ? 

Mr. Trimble. AVell, we like to think of ourselves as hardheaded 
businessmen. We also realize that we have certain responsibilities as 
a corporation, both in the field of charitable contributions and in other 
fields. 

Senator Ervin. If I was one of your stockholders, I would think 
you were acting rather peculiarly when you gave $2,500 annually to 
an organization for advertisements and then told them you didn't 
want any advertisements. 

Mr. Trimble. If you take the fraction of the advertising budget 
that these amounts represent, it comes to a very small amount of the 
total advertising budget, as you can imagine. Some amount was 
set aside for this, what we call, goodwill advertising, which is akin 
to institutional advertising, where you will just have your name with 
no product connection. It is another form. 

Senator Ervin. It looks like to me that the advertising would be 
rather fictitious, to take and make an entry on the records that you 
had disbursed $2,500 for advertising to a certain publication, when 
you had informed that publication that you didn't want any adver- 
tisement. That is a rather startling kind of a thing. 

Mr. Trimble. We supported the publication but we did not have 
any advertising copy. I believe that is a fair statement. 

Senator Ervin. According to your testimony, you made an expendi- 
ture of $2,500, which the company apparently represented to its stock- 
holders as a disbursement for advertisement purposes, and at the same 



10990 niPROPER ACTIVITIES IN THE LABOR FIELD 

time you notified the organization, from which your stockholders 
thouirh you were getting advertising, that you didn't want advertising. 

Isn't that a fact? 

Mr. Trimble. I am sorry, sir. I lost you a little bit down the trail. 
I think perhaps I can say it in my own words. There were many in- 
stances, and this New York Federation is one, where we supported the 
publication of a periodical or yearbook and had no copy in it. We did 
it for what we thought were good business reasons; namely, that it was 
all part of what we call good-will advertising. 

Senator Ervin. In other words, you were just purchasing good will 
from them for $2,500 and seeking nothing else ? 

Mr. Trimble. I don't like the word "purchase," but I agree with you 
that it was a good-will effort. 

Senator Ervin. That would be an awfully nice way to be able to 
grant good will. I have always had a kindly feeling toward Santa 
Claus, but this is a little better. 

Mr. Trimble. As you know, every corporation also has many chari- 
table contributions which are requested of it. 

The CHAiRMAisr. During that period of time, were any efforts made 
to organize your company ? 

Mr. Trimble, No, sir. We have never had an effort made to organ- 
ize our company. 

The Chairman. That is what I thought. 

Senator Er\in. That is what puzzled me. If your company thought 
that it was a laudable thing to make a gift of $2,500 to a Federation 
of Labor, a federation representing labor men, I wonder why your 
company didn't think labor was good enough to invite them to come in 
and organize your people. 

Mr. Trimble. Well, I guess we could speculate about that, sir. I 
don't think we would have ever considered $2,500 to being any par- 
ticular inducement to labor. We never even, of course, considered 
making such inducement. But a size of this amomit I don't think we 
would regard as very seriously. 

Senator Ervin, You thought it just enough to get a little good will ? 

Mr. Trimble. Well, it was part of a program. 

Senator Era^n. And there was absolutely no hope or expectation 
on the part of your company that these contributions to good will 
would have any effect of preventing the organization into labor 
unions of the folks that work for your company ? 

Mr. Trimble. No, sir. 

Senator Ervix. That was the most remote thing from the contem- 
plation and imagination of the officials of your company in making 
these contributions ? 

Mr. Trimble. I believe that is quite a fair statement. 

Mr. Kennedy. In that connection, whose good will were you 
attempting to purchase? 

Mr. Trimble. I don't really know whose good will it was. 

Mr. Kennedy. Whose good will were you attempting to get? 

Mr. Trimble. Let me try to answer you as best I can. I don't 
know that we had in mind anybody's specific good will at this time. 

Mr. Kennedy. You paid $22,500 from IBM, for nobody's good 
will ? Just for good will but nobody special ? 

Mr. Trimble. Very often we do the same thing for the Red Cross 
and other organizations. 



ijmproper activities in the labor field 10991 

Mr. IvENNEDY. Do jou coiisider the New York Federal ionist in 
the same categoiy as the American Red Cross ? 

Mr, Trimble. As I say, there are some 56 labor publications as part 
of the three hundred-odd during this period that we followed similar 
practice with. 

Mr. IvENNEDY. That does not answer the question. Maybe we 
should go into all those, too, but we happen to be discussing this one 
where you paid $22,500. Whose good will were you attempting to 
purchase or obtain ; Mr. Murray's ? 

Mr. TRI3IBLE. I frankly do not know. I was not with the company 
at that time. 

Mr. Ej3nnedy. What is the motto of your company ? 

Mr. Trimble. "Think". 
. Mr. Kennedy. Did they think before tliey made the payment? 

Mr. Trislble. That is a veiy good question. 

Mr. Kennedy. I think they did. 

Mr. Trimble. Not to my knowledge. 

The Chairman. Is there anything further ? 

Senator Ervin. If they continue these tilings, I thinlc I could pick 
out a lot of organizations which to my mind would more properly be 
classified as proper recipients of charity, and if you don't object, I 
will send you the names of a few of them. 

Mr. Trimble. I might assure you that we have quite a few. 

Senator Ervin. I miglit add that there are many other organiza- 
tions that really stand in need of monetary sustenance as well as 
prayer. 

Mr. Trimble. Right. Fine. 

The Chairman. All right. Thank you. 

Mr. Trimble. Thank you. 

The Chairman. Call the next witness. 

Mr. Kennedy. Mr. Carl Nixon. 

The Chairman. You do solemnly swear that the evidence you shall 
give before this Senate select committee shall be the truth, the whole 
truth, and nothing but the truth, so help you God ? 

Mr. Nixon. I do. 

TESTIMONY OF GAEL NIXON 

The Chairman. State your name, your place of residence, and 
business or occupation. 

Mr. Nixon. My name is Carl Nixon. I reside at 963 East Avenue, 
Rochester, N. Y. I am an attorney with offices at 31 Exchange Street, 
Rochester, N. Y. 

The Chairman. I assume you waive additional counsel ? 

Mr. Nixon. Yes, sir. 

The Chairman. Proceed. 

Mr. Kennedy. You are also general counsel of the Rochester Gas & 
Electric Co. ; is tliat right ? 

Mr. Nixon. Yes, sir. 

Mr. IvENNEDY. And a director ? 

Mr. Nixon. I am a director; yes, sir. 

Mr. IvENNEDY. I would like to ask you where any payments were 
made by the Rochester Gas & Electric Corp. to the Rolee Co. or to 
any of its officials ? 



10992 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Nixon. No, sir. 

Mr. I\JENNEDY. Were tliere any payments made directly or in- 
directly ? 

Mr. Nixon. I don't know the name Ilolee at all. I came to tell you 
about a 

Mr. Kennedy. The Pennsylvania Federation ? 

Mr. Nixon. No ; I don't know them at all. 

Mr. Kennedy. We will start all over again. 

Mr. Nixon. All right. 

Mr. Kennedy. Were there any payments made directly or indirect- 
ly by the Kochester Gas & Electric Co. to Mr. Lapensohn, to the Rolee 
Co., or to the New York Federation ? 

Mr. NixoN. There was a payment made indirectly to a man who 
gave his name to me as George Mason, who represented that he was 
the representative of the New York State Federationist, which was 
the magazine being published for the American Federation of Labor 
in New York State, as I understood it. 

Mr. Kennedy. Would you explain how that came about, please? 

Mr. NixoN. Yes; I will. Mr. Mason called me on the telephone 
and said that Mr. Bebe had told him to call me. Mr. Bebe was then 
president of the Rochester Gas & Electric Corp. 

Mr. Kennedy. That is iVlexander Bebe ? 

Mr. NixoN. That is correct. 

Mr. Bebe previously told me that I might get a call from a man 
named Mason. Bebe explained that he had heard from Mr. Thomas 
E. Murray that Mr. Mason would be calling on him, and he hoped he 
would be given sympathetic consideration. 

Mr. Mason had called Mr. Bebe soliciting an ad in this book. Mr. 
Bebe would not give him an ad. Bebe had reported to the directors 
this incident, and he said he would like to help the AFL because 
they had been helpful to the private enterprise companies which 
were trying to develop Niagara, but that he felt that he could not take 
an ad in the name of the company for quite a different reason than 
I have heard since I have been here this afternoon, and that is that 
the signature of the Rochester Gas & Electric Corp. to an ad in a 
booklet gotten out by the American Federation of Labor would be 
interpreted in some circles among their employees that the company 
approved membership in the AFL. The company was not organized. 

Mr. Kennedy. None of your employees were members of any labor 
organization ? 

Mr. NixoN. No, sir. 

(At this point. Senator Curtis entered the hearing room.) 

Mr. Nixon. I told him I couldn't do anything. Mason called me sev- 
eral times. He told me that he had called other directors and they 
had referred him to me. 

One director, John Boylin, did call me, and told me that Mason 
had called him, that he wished he could do something. I told Mason 
that we appreciated what they had done, we appreciated their atti- 
tude, but we couldn't put an ad in for the reason — I told him frankly 
why I didn't want to sign our name. 

He suggested that I sign my name to it and I said no for the same 
reason. I was known as a director for the company, and I was also 
attorney for the telephone company in Rochester, which is organized, 
and I have had some labor work. 



IMPROPER ACTI\'rnES IN THE LABOR FIELD 10993 

I told him I wouldn't do it. He still persisted. He called me 
several times. Finally I told him that I would take a page ad. The 
page ad that I supposed I was taking was $1,000. But I would give 
him the monej^ in cash and I didn't want my name published or the 
Rochester Gas & Electric. 

I sent him $1,000 in cash to an address on East 40th Street or some 
place that I understood to be the address of the New York State Fed- 
eration of Labor. I made two payments after that in 2 later yea rs of 
$500 each, both in cash, both to George Mason, who was known to me 
by that name as a representative of the New York State Federation. 

The Chairman. Have you seen him here? 

Mr. Nixon. I never have seen him in my life. 

The Chairman. I thought we had someone here using that name? 

Mr. Kennedy. His name is really Mr. Lyon. 

Mr. NixoN. I was told the man is dead, but I only knew him as 
"Mason." 

Mr. Kennedy. He just recently died. 

You paid $1,000 in cash on March 11, is that right, in 1955 ? 

Mr. Nixon. Yes, sir. 

Mr. Kennedy. And on April 27, 1956, another $500 in cash ? 

Mr. Nixon. Yes, sir. 

Mr. Kennedy. On March 15, 1957, another $500 in cash? 

Mr. Nixon. That is right. 

Mr. Kennedy. Where did you get that cash from ? 

Mr. Nixon. I got it out of my own bank or my own pocket. 

Mr. Kennedy. For what reason did you pay the money? 

Mr. Nixon. Well, frankly, I did it because I thought some of the 
directors would like to have something done, because we were appre- 
ciative of their support. They had passed resolutions which I now 
understand were fakes, but we didn't know it tlien. We had published 
them, and we were doing whatever we could to arouse support in favor 
of the private enterprise bill. There were 2 or 3 of them at different 
times, and it was actually, I would say, recognition of some help that 
was given to us in an attempt to get some favorable legislation. 

Mr. Kennedy. You paid some $2,000 in cash because you were grate- 
ful to the New York Federation of Labor? 

Mr. Nixon. Well, I paid it out of my pocket because I wanted to 
do what I could to keep the gas and electric company in good standing, 
so to speak, with these unions. 

The Chairman. I want to thank you for your frankness. I think 
that is the way to tell it. You paid it because you thought it was a 
good investment to keep them off your neck? 

Mr. Nixon. That isn't right. I don't want to be misunderstood 
that way. They had helped us in this matter of private development 
in Niagara, and we were appreciative of their efforts, and we thought 
they should be supported. 

The Chairman. If I get you correctly now, it was a token of 
appreciation? 

Mr. Nixon. Yes, sir. 

The Chairman. Something to recognize what the}' liad done, and 
you said, "I will give you this because I appreciate it. You are on 
the right side." 

Mr. Nixon. There is nothing implicit in it that they would continue 
to do it, and tliev were on record and that is all there was to it. 



10994 IMPROPER ACTIVITIES EST THE LABOR FIELD 

Mr. Kennedy. Is that the kind of procedure that you follow ? If a 
labor union or labor organization does something you like, you go and 
pay some money to them ? 
Mr. Nixon. No, sir. 

Mr. IvENNEDY. That is what you did in this case ? 
Mr. Nixon. That is correct. 

Mr. Kennedy. You gave them $2,000 in cash and you didn't even 
use a check ? 

Mr. Nixon. That is correct. 

Mr. Kennedy. What possible explanation can you have for that? 
Mr. NixoN. For not using a check ? 

Mr. Kennedy. No. 1, for not using a check, and No. 2, for making 
a payoff to a labor organization for performing some services that you 
liked. 

Mr. NixoN. It wasn't a payoff. It was recognition, and apprecia- 
tion of a position that they had previously taken. 
Mr. Kennedy. Why did you use cash ? 

Mr. NixoN. I told you that I didn't want my name on any sucker 
list, and I didn't want my name in that book, and the Rochester Gas 
& Electric Corp. didn't M^ant its name in the book for the reason that 
it might have been interpreted as a "go-ahead" signal for organizing 
by AFL organizers. 

Mr. Kennedy. Your name wouldn't necessarily be in the book any 
more if you paid by check or by cash ? 

Mr. NixoN. I don't know how they handled it at all, and I didn't 
want any indication that either I or Rochester Gas & Electric Corp. 
had given that money. 

Mr. Kennedy. Did you make arrangements for any of the other 
companies that you represented up there to make any payment ? 

Mr. Nixon. No, sir; and so far as I know none of them were 
solicited. 

Mr. Kennedy. T^Hiat about the Eastman Kodak ? 
Mr. Nixon. I know nothing about them. 
Mr. Kennedy. Do you know if they paid some money ? 
Mr. Nixon. I don't know a thing about it, 
Mr. Kennedy. Do you represent them ? 
Mr. Nixon. Yes, sir. 

Mr. Kennedy. According to your records, they did. Are they or- 
ganized or unorganized ? 
Mr. Nixon. Unorganized. 

Mr. Kennedy. They paid $1,000 by bank cashier's check. Each 
year they made a payment. Do you Imow why they did that? 
Mr. Nixon. I don't know anything about that. 
Mr. Kennedy. Each year they paid that. 

Mr. Nixon. I think j\Ir. Dunn told me that the Rochester Telephone 
Co. gave something, and I didn't know the amount, and I don't even 
know it now. 

Air. Kennedy. This $2,000, Mr. Chairman, was never even entered 
in the books of Rolee. It was a complete diversion, and, of course, 
you assisted that by paying cash ? 

, Mr. Nixon. I have no doubt about it, and I am very sorry about it, 
but I didn't know then what I know now. 

. Mr. Kennedy. Did you know that if it had gone to the proper 
sources, 75 percent of it was going to private organizations ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10995 

Mr. Nixon. I didn't know what the internal workings of the 
organization were. 

Mr. IvENNEDY. Did you think it was all going to the AFL ? 

Mr. Nixon. I thought it was. 

Mr. Kennedy. You thought you were making a payment to the 
AFL of $2,000 in cash? 

Mr. Nixon. They had purposes, and they indicated they were doing 
certain work, and I heard tliem talking about anticommunism. That 
was one thing Mason mentioned to me, and I heard nothing about 
school scholarships, and I didn't know what they were going to use 
it for. 

Mr. Kennedy. They had been against public power and you were 
grateful to them ? 

Mr. Nixon. They were in favor of the private development of 
Niagara, and I don't know whether they are against public power or 
not. In this particular situation they were in favor of Niagara de- 
velopment by private companies, 

Mr, Kennedy. If you liked the way they were performing, why 
hadn't you made an offer of the $2,000 as a token of appreciation, 
rather than to wait until they came to you ? 

Mr. Nixon. I don't think that anybody would be likely to do that. 

Mr. Kennedy. I am just trying to understand if it was a token 
of your appreciation. 

Mr. Nixon. It was a token of appreciation after we had been asked 
to put in an ad at a price of $1,000, We didn't put the ad in, but I 
still felt they were entitled to some recognition. 

Mr. Kennedy. Were you reimbursed for that by the company ? 

Mr. Nixon. No, sir. 

The Chairman. I would like to ask counsel, if this $2,000 or any 
part of it ever went to the American Federationist, or to the New York 
Federation ? 

Mr. Kennedy. None of this money went to the New York Federa- 
tion of Labor, and no tax was paid on the money at all. 

The Chairman. There is no record of it, then ? 

Mr, Kennedy. There is no record. It is not entered in the books 
of the corporation, Kolee. 

The Chairman. Nor entered in the books of the federation? 

Mr, Kennedy, That is correct. 

The Chairman, There is no record of it. It was probably just 
put in the fellow's pocket, 

Mr. Kennedy. The same situation was followed by the IBM. Only 
a small percentage of that ever went to the New York Federation 
of Labor. Most of that, I believe some $15,000 of that, was also 
diverted. 

The Chairman. You businessmen will need to get to be a little 
smarter. You run a business, but you certainly are a victim of some- 
thing here. 

Mr, Ivennedy. It is also consistent, Mr. Chairman, because here 
was a payment by cash under these circumstances. It is most 
suspicious. 

Senator Curtis. Did you liave a feeling, throughout this transac- 
tion, that you were dealing with the AFL ? 

Mr. Nixon. Yes, sir. 

21243— 58— pt. 28 12 



10996 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Senator Curtis. The New York Federation of Labor ? 

Mr. Nixon-. Yes, sir. 

Senator Curtis. Their statewide organization ? 

Mr. Nixoisr. The New York State organization, affiliated, I suppose, 
with the AFL. 

Senator Curtis. If tliere is something wrong with the transaction, 
you had to pay, and somebody else gained ; is that right ? 

Mr. Nixon. I don't understand you. 

Senator Curtis. You received no gain out of the transaction? 

Mr. Nixon. Not that I Jmow of ; no, sir. 

Senator Curtis. That is all. 

Mr. Kennedy. Mr. Chairman, we have one of these resolutions 
here, and could we have Mr. Dunne place this in the record and give 
an explanation of it? 

TESTIMONY OF EOBERT E. DUNNE— Resumed 

Senator Ervin. You have been sworn, have you ? 

Mr. Dunne. Yes, sir ; I have been sworn. 

Mr. ICJENNEDY. Just explain, in brief, what it is. 

Mr. Dunne. This is a series of documents. Tlie first is a letter 
dated September 17, 1954, on the letterhead of the New York State 
Federation of Labor, the 46th Street address which was Rolee Publi- 
cations, signed by George Mason, director of publicity, to Mr. Climer, 
of the Goodyear Tire & Rubber Co., soliciting his assistance in a 
campaign to better good roads. 

He enclosed a copy of a resolution on the resolution form of the 
New York State Federation of Labor, in which, according to the 
resolution it was approved on July 22, 1954, at the 91st Annual Con- 
vention of the New York State Federation of Labor, and concerned 
better roads for America. It was resolved — 

That the New York State Federation of Labor use its best efforts to cause the 
earmarking of gasoline and toll taxes throughout the Nation for the construc- 
tion and maintenance of roads and highways and to prevent the diversion of 
such funds to other uses. 

An examination of the records of the State federation of labor re- 
flected that this resolution is a complete fraud, and it never existed 
and was never introduced and never passed. The resolution of sim- 
ilar number concerned widows' pensions, and had nothing to do with 
good roads. 

There is a letter addressed to Mr. Murray, at the New York State 
Federation of Labor, address of Rolee Publications, enclosing Good- 
year Tire & Rubber Co.'s check of $500 as a contribution. This was 
diverted by Rolee, and a forged endorsement put on, and the money 
deposited in a special bank account. 

There is a letter, then, thanking Mr. Arden E. Firestone, of Good- 
year Rubber, for his $500 contribution, with the forged signature of 
Thomas Murray. 

Senator Ervin. You say a forged signature ? 

Mr. Dunne. Yes, sir. 

Senator Curtis. How do you know that? 

Mr. Dunne. It is signed by Mrs. Lefkowitz. 

Senator Curtis. That doesn't make it a forgery. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10997 

Mr. Kennedy. She said she did it on the instructions of Mr. Lapen- 
sohn, and they never had nny authorization to send out such letters, 
according to the affidavit of Air. ^\lurray. 

Senator Curtis. I thought } ou were talking about the endorsement 
of the check. 

Mr. Dunne. There is a forged endorsement on the check, also, 
Senator. It is made pa5^able to the New York State Federation of 
Labor, and Mrs. Lefkowitz has testified earlier that, at Mr. Lapen- 
sohn's instructions, she had cause to be prepared a rubber stamp 
reading : "New York State Federation of Labor, pay to the order of 
New York Federationist," and they opened a special bank account 
in the name of New York Federationist, and diverted many of these 
checks, several hundred of them. 

Senator Curtis. That wouldn't be a forgery of the lady involved. 

Mr. Dunne. It was a forgery of the organization's name. 

Senator Curtis. I realize it is not their signature, but I wouldn't 
think it is a forgery, so far as the lady that performed the physical 
act. 

Mr. Kennedy. She received her instructions from her employer, 
and she did not know that this was going to occur, but, in fact, as 
we examined the contract between the federation of labor and the 
Federationist, as we examined what happened to these funds, we find 
that Mr. Lapensohn set up this special bank account, and he bought 
some stamps, and he instructed her to deposit this money in the bank 
account, and then he used it himself. 

Senator Curtis. I am not discussing Mr. Lapensohn at all, but I 
don't think this lady that testified here is guilty of forgery. 

Mr. Ivennedy. I am not saying she is. 

Senator Curtis. If it is a forgery, somebody forged. 

Mr. Kennedy. I would say it was done by Mr. Lapensohn. 

Senator Ervin. As I understood what the witness was answering 
me about a forgery there, it was a forgery of a letter. 

Mr. Dunne. And on the check, also. 

Senator Ervin. Let the record show that the papers that the wit- 
ness has identified as photostatic copies wnll be made exhibit 51. 

(Document referred to was marked "Exhibit No. 51" for reference.) 

Mr. I^JENNEDY. Mr. Chairman, we have two witnesses that we have 
to finish up from local 596, and it has nothing to do with this matter 
that we have here, and I would like to call both of them at the same 
time. 

That is Mr. Bertucci and Mr. Strauss. 

Senator Er\tn. Do you solemnly swear the evidence, given before 
this Senate select committee shall be the truth, the whole truth, and 
nothing but the truth, so help you God ? 

Mr. Bertucci. I do. 

Mr. Strauss. I do. 

TESTIMONY OF LOUIS BERTUCCI AND LEON STRAUSS, ACCOM- 
PANIED BY THEIR COUNSEL, ALBERT S. OLIENSIS 

Senator Ervin. Let each one of the witnesses give their names, 
starting on the right. You give your name and address, and your 
business or occupation. 



10998 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Bertucci. Louis Bertucci, 2718 East Cambria Street, Philadel- 
phia, Pa., president of the Teamsters Local 596. 

Senator Em^N. And the other witness will give his name and his 
address and his business or occupation. 

Mr. Strauss. Leon Strauss, 1904 South 21st Street, business agent 
and trustee of local 596. 

Senator Er\tn. Each one of you gentlemen, are you represented 
by counsel ? 

Mr. Oliensis. I am appearing as counsel. I am Albert Oliensis 
and I live at 8409 Widiner Road, Pliiladelphia; and I am an attorney 
at law, and my office is at 1 North 13th Street, Philadelphia. 

Senator Ervin. Will you proceed, counsel ? 

Mr. Kennedy. You are the attorney for these two individuals and 
you have nothing to do with the union ? 

Mr. Oliensis. Nothing whatsoever. 

Mr. Kennedy. Your fees being paid by these individuals ? 

Mr. Oliensis. It is, sir. 

Mr. Kennedy. Now, Mr. Bertucci, how long have you been presi- 
dent of local 596 ? 

Mr. Bertucci. Since 1954. 

Mr. Kennedy. How long have you been in local 596 ? 

Mr. Bertucci. Since the middle of 1953. 

Mr. KJENNEDY. What were you doing prior to that ? 

Mr. Bertucci. Truckdriver for 23 years, 

Mr. Ivennedy. AVliat local were you a member of prior to that 
time ? 

Mr, Bertucci. Local 107 of Philadelphia. 

Mr. KJENNEDY. After going into 596, you became president within 
a year or so ? 

Mr. Bertucci, Yes, sir. 

Mr. Kjennedy. Did you have any opposition ? 

Mr. Bertucci. No, 

Mr, Kennedy, You did not ? 

Mr, Bertucci, No, 

Mr. Kennedy. Who spoke to you about running for president 
prior to the time you ran ? 

Mr. Bertucci. A few of our members, and Mr. Anthony Morisko, 
who was secretary -treasurer, and Ed Slisch, who was president, who 
is deceased now, and Morisko resigned for bad health. 

Mr, Kennedy, They all had a conference together ? 

Mr, Bertucci, Yes, sir. 

Mr. I^NNEDY. And you put up Mr. Larry Thomas, who also ran 
at that time, and it was a new slate that was elected ? 

Mr, Bertucci. Yes, sir, 

Mr. IvENNEDY, You didn't have any opposition ? 

Mr. Bertucci, No, sir. 

Mr, KJENNEDY. Did you have conferences with Mr. Raymond Cohen 
prior to that time ? 

Mr. Bertucci. No, 

Mr. Kennedy. You knew Mr. Cohen prior to that time ? 

Mr, Bertucci, Yes, sir, 

Mr. I^NNEDY. What arrangements did you have as far as salary 
and expenses were concerned ? 

Mr. Bertucci. Pardon me, sir. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 10999 

(Witness consulted with counsel.) 

Mr. Oliensis. Would your honors indulge us for just a second. 

(Witness consulted with counsel.) 

Mr. Bertucci. I respectfully decline to answer the question on the 
ground I am not required to give evidence against myself, under the 
fifth amendment. 

Mr. IvENNEDY. You wou't tell us what your salary or your expenses 
were, is that right ? 

Mr. Bertucci. That is right. 

Mr. IvENNEDY. Because it might tend to incriminate you, if you 
gave a truthful answer, is that correct ? 

Mr. Bertucci. Yes, sir. 

Mr. I^nnedt. As president, were you aware of any of the acts of 
vandalism or violence that occurred in connection with the strikes 
of local 107 or 596? 

Mr. Bertucci. Sir, I respectfully decline to answer the question 
on the ground I am not required to give evidence against myself, 
under the fifth amendment. 

Mr. I^nnedt. Did you know Mr. Benjamin Lapensolin ? 

Mr. Bertucci. Yes, sir. 

Mr. Kennedy. Did you have any financial transactions with him? 

Mr. Bertucci. No. 

Mr. Kennedy. Were you ever aware of the fact that he ever re- 
ceived any money from any employer ? 

Mr. Bertucci. No. 

Mr. Kennedy. You had no information along that line ? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. Have you ever received any money from any em- 
ployer yourself ? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. Were you aware that the paint remover was being 
purchased by Mr. Larry Thomas? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. You were not aware of that ? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. That purchase of paint remover was not done at 
your instructions, is that right? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. Did you know that the paint remover had been 
thrown by Mr. Larry Thomas on any of the Pontiac automobiles? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. Did you know prior to the time that the paint re- 
mover was tlirown on the Pontiac automobiles, that it was to be 
done ? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. You were completely unaware of the whole situa- 
tion, is that correct? 

Mr. Bertucci. Yes, sir. 

Mr. Ivennedy. Do you know anyone else who participated, or any 
of those who were responsible for throwing the paint remover on the 
automobiles ? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. Were you ever told by any member of the union that 
he had participated in that act of vandalism ? 



11000 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. BepwTucci. No, sir. 

Mr. Kennedy. Did Mr. Larry Thomas ever discuss tliis witli you? 

Mr. Bertucci. No, sir. 

Mr. KJENNEDY. He never discussed or never mentioned it before? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. How is it that union funds could be used to purchase 
the paint remover without your knowing ? 

Mr. Bertucci. I respectfully decline to answer the question on the 
ground I am not required to give evidence against myself, under the 
fifth amendment. 

Mr. IvENNEDY. Did you know after tlie event occurred, that that 
paint remover had been used by Mr. Larry Thomas to throw it on the 
automobiles ? 

Mr. Olinesis. May I ask Your Honors' indulgence a second. 

(Witness consulted with counsel.) 

Mr. Bertucci. I don't know how it was paid. 

Mr. Kennedy. You don't know how it was paid for ? 

Mr. Bertucci. No. 

Mr. I\JENNEDY. Was it possible to get checks ? Do you sign checks 
on 596? 

Mr. Bertucci. Yes, sir. 

Mr. I^NNEDY. When you made it to Girard Paint Go., you didn't 
know what you were paying for ? 

Mr. Bertucci. No, sir. 

(At this point, the f olloAving members were present : Senators Mc- 
Glellan, Ervin and Gurtis.) 

Tlie Chairman. Who approved the bill ? 

(The witness conferred with his counsel.) 

Mr. Bertucci. I respectfully decline to answer the question on the 
ground that I am not required to give evidence against myself under 
the fifth amendment. 

The Chairman. You must have approved it. You are the president. 

Do you approve the bills of the local before they are paid ? 

(The witness conferred with his counsel.) 

Mr. Bertucci. I never approved the bill or any other bill. 

The Chairman. I didn't understand you. 

Mr. Bertucci. I never approved it. 

Mr. Oliensis. He said "I never approved the bill," 
^ The Chairman. Whose duty is it, among the officers, to approve the 
bills for payment? 

Mr. Bertucci. The trustees. 

The Chairman. Who is the trustee ? 

Mr. Bertucci. Leon Strauss, Franklin Furbee, and Charley Flynn. 

The Chairman. Do they approve all bills before they are paid? 

Mr. Bertucci. Yes, sir. 

The Chairman. And then who pays them after they are approved ? 

Mr. Bertucci. I do. 

The Chairman. You as president sign the checks ? 

Mr. Bertucci. x\long with the trustees. 

^ The Chairman. Along with the trustees. And they approved this 
bill before you paid it ? 

Mr. Bertucci. Pardon me, sir. 

(The witness conferred with his counsel.) 

Mr. Bertucci. I never saw the bill. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11001 

The Chairman. You never saw the bill ? 

Mr. Bertucci. Right. 

The Chmrman. Did you see the check that paid it ? 

Mr. Bertucci. I liave never seen it. 

The Chairman. You are not saying that somebody forged the check 
and paid it, are you ? 

(The witness conferred with his counsel.) 

The Chairman. The party who sold the paint remover, the busi- 
ness that sold it, testified that the bill was paid by the union. 

How do you pay your bills, in cash or check ? 

Mr. Bertucci. Check. 

The Chairman. Tlien if this bill was paid by the union, it would 
be paid by check, is that right ? 

(The witness conferred with his counsel.) 

Mr. Bertucci. I never seen the bill. 

The Chairman. You have never seen it ? 

Mr. Bertucci. No, sir. 

The Chairman. I believe we have it here. It is an exhibit. 

Mr. Kennedy. It is coming up. 

Was the union under trusteeship at that time ? 

Mr. Bertucci. Yes, sir. 

Mr. Ivennedy. Who was administering the union ? 

Mr. Bertucci. Raymond Cohen. 

Mr. Kennedy. Would he have to approve these bills ? 

Mr. Bertucci. Yes, sir. 

Mr. Kennedy. Or would it be the trustees, such as Mr. Strauss ? 

Mr. Bertucci. He is the administrative trustee. 

Mr. Kennedy. So he would be the one that would have to approve 
it? 

Mr. Bertucci. Both. 

Mr. Kennedy. Both the trustees and him ? 

Mr. Bertucci. Right. 

Mr. Kennedy. The three trustees and him ? 

Mr. Bertucci. Yes. 

Mr. Kennedy. And then you signed the check ? 

Mr. Bertucci. Right. 

Mr. Kennedy. But you never knew anything about that? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. Did you ever give instructions to have any act of 
vandalism performed in your union by any of the members of your 
union? 

Mr, Bertucci, No, sir. 

Mr. Kennedy. Did you ever — other than geting into a fight, did 
you ever go out yourself and perform any act of vandalism, such as 
throwing paint remover or causing damage to personal property ? 

Mr. Oliensis. With reference to the question of the fight, are you 
referring to the Horn & Hardart transaction ? 

Mr. Kennedy. I said other than fights. 

(The witness conferred with his counsel.) 

Mr. Bertucci. No, sir. 

Mr. Kennedy. You did not ? 

Mr. Bertucci. No, sir. 

The Chairman. IVliat was that you were taking the fifth amend- 
ment on a while ago ? 



11002 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Bertucci. Salary and expenses. 

The Chairman. You liave answered these other things pretty 
frankly. What is there about your salary or the money you get out 
of the union that might incriminate you? I just can't quite under- 
stand a witness coming in here and testifjnng about everything and 
then saying he can't tell what his salary is without being incriminated. 
It does not make sense. 

(The witness conferred with his counsel.) 

Mr. Oliensis. Your Honor, if I may explain for the witness, sir, 
his income tax returns were made up for him by an auditor and he is 
not sure that the tax return is absolutely correct and he is afraid to 
give an answer. 

The Chairman. If it isn't correct, they will find out some day and 
he will have to answer then, I expect. 

Mr. Oliensis. I am sure they will, sir. 

The Chairman. That wasn't the purpose of the question. We 
asked, of course, trying to find out how union funds are being used. 
That is what we are concerned about primarily. 

(The witness conferred with his counsel.) 

Mr. Bertucci. We were paid by the union. 

The Chairman. Sir? 

Mr. Bertucci. We were paid by the union. 

The Chairman. I am sure you were paid by the union, a salary, I 
assume. What is your salary ? 

Mr. Bertucci. Pardon me, sir. 

(The witness conferred with his counsel.) 

Mr. Bertucci. $125. 

The Chairman. A week ? 

Mr. Bertucci. Yes, sir. 

The Chairman. $125 a week. Is that all of your income from the 
union ? 

Mr. Bertucci. Yes, sir. 

The Chairman. You have not any other income from the union? 

Mr. Bertucci. No, sir. 

The Chairman. Do you get expenses ? 

Mr. Bertucci. No, sir. 

The Chairman. That is the total compensation and reimbursement 
you get ? 

Mr. Bertucci. Yes, sir. 

The Chairman. I don't see any reason why you couldn't tell it. 

Mr. Kennedy. You didn't receive any other moneys ? 

Mr. Bertucci. No, sir. 

The Chairman. It is a peculiar situation. 

Mr. Oliensis. I think the witness may have misunderstood and 
thought you were not only referring to the present but for the entire 
past history and transactions, for the years going back. 

The Chairman. All I am asking about was liis salary. Maybe 
some of that should have been gone into. For the moment I was only 
asking about his salary. I thought it was an unusual thing to answer 
most everything else and couldn't say what his salary was. 

Mr. Oliensis. Well, relax. I find that folks who are trying to tell 
the truth don't have anything to be very nervous about. 

Mr. Kennedy. Have you received any moneys from the union other 
than your salary since you became president ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11003 

Mr. Bertucci. No, sir. 

Mr. Kennedy. You haven't received any expenses ? 

Mr. Bertucci. Excuse me. 

(The witness conferred with his counseL) 

Mr. Bertucci. Just to come here. 

Mr. Kennedy. What ? 

Mr. Bertucci. Just to come down to the Senate committee. 

Mr. Kennedy. You never received expenses other than that? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. The only money you have ever gotten out of the 
union is $125 a week ? 

Mr. Bertucci. A week ; yes, sir. 

Mr. Ivennedy. That is all the money you have ever gotten from 
696? 

Mr. Bertucci. Yes, sir. 

Mr. Ivennedy. Have you ever received any money from lOY? 

Mr. Bertucci. No, sir. 

Mr. Ivennedy. Has Eaymond Cohen ever paid you any money? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. Has he ever given you any money ? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. What about Mr. Ben Lapensohn ? Can you explain 
why he made arrangements on your bail bond ? 

(The witness conferred with his counsel.) 

Mr. Kennedy. Let's have the truth on this, now. 

Mr. Bertucci. I don't know. 

Mr. Kennedy. AVho made the arrangements, initially ? 

Mr. Bertucci. Pardon me, sir. 

(The witness conferred with his counsel.) 

Mr. Bertucci. I don't know. 

Mr. Kennedy. Whom did you discuss it with ? 

You are under indictment now, are you not, for assault and bat- 
tery and three different matters ? 

Mr. Bertucci. Yes, sir. 

Mr. Kennedy. Who made the court arrangements, Mr. Bertucci? 

(The witness conferred with his counsel.) 

Mr. Oliensis. Would you clarify the question ? What do you mean 
by "arrangements" ? 

Mr. Kennedy. Who made arrangements with the law-enforcement 
agencies so far as your bail bond was concerned ? 

(The witness conferred with his counsel.) 

Mr. Kennedy. I want to expedite this. 

Mr. Bertucci. I don't know. 

Mr. Kennedy. Whom did you discuss it with ? Who got the lawyer 
for you ? You are president of your union. 

(The witness conferred with his coimsel.) 

Mr. Bertucci. Sir, I respectfully decline to answer the question on 
the ground I am not required to give evidence against myself under 
the fifth amendment. 

Mr. Kennedy. Do you mean on the question of who got the lawyer 
for you, you decline to answer that question ? 

Mr. Bertucci. I respectfully decline to answer the question on the 
ground I am not required to give evidence against myself under the 
fifth amendment. 



11004 EVIPROPER ACTIVITIES IN THE LABOR FIELD 

Mr, Kennedy. Did you discuss this matter with Raymond Colien? 

Mr. Bertucci, I respectfully decline to answer the question on the 
ground I am not required to give evidence against myself under the 
fifth amendment. 

Mr. Kennedy. On the question of your expenses, and your state- 
ment that you never received expenses from the union at any time, 
did you go to the Miami convention ? 

Mr, Bertucci. I respectfully decline to answer the question on the 
ground I am not required to give evidence against myself under the 
fifth, 

Mr. Kennedy. Let me ask you whether you received any expenses. 
You stated under oath before the committee that you never received 
any expenses, I am asking you whether you received any expenses 
during the period September 1, 1957, and December 1, 1957. 
(The witness conferred with his counsel,) 

Mr, Oliensis. Mhj I have your indulgence ? 
(The witness conferred with his counsel,) 

Mr, Berttjcci. I made a mistake. They paid my way to Miami, to 
the convention. 

The Chairman. Who? 

Mr. Bertucci. The union. 

The Chairman, Wlio paid it ? 

Mr, Bertucci. The union. 

The Chairman. The union paid your expenses to the Miami con- 
vention ? 

Mr. Bertucci. Right. 

Mr. KJENNEDY. How much money did you receive for that ? 

Mr. Bertucci. $1,000. 

Mr. Kennedy. $1,000? 

Mr. Bertucci. Right. 

Mr. Kennedy. Did you have to pay vour transportation out of 
that? 

Mr. Bertucci. Yes, sir. 

Mr. Kennedy. Wlio paid for your transportation? 

Mr. Bertucci. Out of the money. 

Mr. Kennedy. Out of what ? 

Mr. Bertucci. Out of the $1,000. 

Mr, Kennedy. How did you get down there ? 

Mr, Bertucci. By train. 

Mr, Kennedy, Did you all go together ? 

Mr. Bertucci. No. 

Mr. Kennedy. You went by yourself ? 

Mr. Bertucci. Yes. 

Mr. Kennedy. Did the other individuals all go down together? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. How did they go down ? 

Mr. Bertucci. I don't know. ' 

Mr. Kennedy. Do you know if they hired a plane ? 

Mr. Bertucci. I don't know. 

Mr. Kennedy. Who paid you the $1,000 expenses ? 

Mr. Bertucci. My union. 

Mr, Kennedy. 596 ? 

Mr. Bertucci. Right. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11005 

Mr. Kennedy. How long were you down there? Was it a 6-day 
convention ? 

Mr. Bertucci. Pardon me. 

(The witness conferred with his counsel.) 

Mr. Bertucci. About 3 weeks. 

Mr. Kennedy. About 3 weeks ? 

Mr. Bertucci. Yes, sir. 

Mr. Kennedy. What were you doing down there the other 2 weeks ? 

(The witness conferred with his counsel.) 

Mr. Bertucci. On convention business. 

Mr. I'lentnedy. What do you mean convention business ? What was 
the convention business? Did you go down there prior to the con- 
vention ? 

Mr. Bertucci. Yes. 

Mr. Kennedy. How long prior to the convention did you go down 
there? 

Mr. Bertucci. About 4 days. 

Mr. Ivennedy And liow long after the convention did you stay 
down there ? 

Mr. Bertucci. About four. 

Mr. Kennedy. Did you use any of the money to purchase any ma- 
terial for the campaigns that were going on ? 

(The witness conferred with his counsel.) 

Mr. Bertucci. No, sir. 

Mr. Kennedy. Who did you support in the campaign ? Wlio did 
you support in the election ? 

Mr, Bertucci. Pardon me. 

(The witness conferred with his counsel.) 

Mr. Bertucci. Jimmie Hoffa. 

Mr. Kennedy. Did you pay any of that money out in Miami while 
you were down there ? 

Did you make any purchases for anything? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. You did not ? 

Mr. Bertucci. No, sir. 

Mr. Ivennedy. That $1,000 was just for your own personal ex- 
penses? 

Mr. Bertucci. Yes, sir. 

Mr. Kennedy. Did you use it all ? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. Did you return some of it ? 

Mr. Bertucci. It will be returned, some of it. 

Mr. Kennedy. How much money ? 

(The witness conferred with his counsel.) 

Mr. Bertucci. I don't have the figures yet. 

Mr. Kennedy. You have been back a good deal of time. Wlien 
are you going to get the figures together ? 

Mr. Bertucci. Yes, sir. 

Mr. Kennedy. When are you going to get the figures together to 
find out how much you should return ? 

Mr. Bertucci. In another week or so, as soon as we get back and 
have our meeting. 

Mr. Kennedy. As soon as what ? 



11006 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Bertucci. As soon as we get back to Philadelphia, sir. 

Mr. IvENNEDY. Then you will figure out how much should be re- 
turned ? 

Mr. Bertucci. Eight. 

Mr. IvENNEDY. You don't remember how much you spent down 
there? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. Who made the arrangements that you were going to 
get $1,000 for going down there? 

(The witness conferred with his counsel.) 

Mr. Kennedy. Who made the arrangements that you were going 
to get $1,000? 

(The witness conferred with his counsel.) 

Mr. Bertucci. Sir, I respectfully decline to answer the question 
on the ground I am not required to give evidence against myself 
under the fifth amendment. 

Mr. Kennedy. Was that done by Mr. Cohen ? 

Mr. Bertucci. Sir, I respectfully decline to answer the question 
on the ground I am not required to give evidence against myself 
under the fifth amendment. 

Mr. Kennedy. I think you have been very helpful to us so far. 
I wish you would continue to answer the question. 

(The witness conferred with his counsel.) 

Mr. Kennedy. What did you say ? 

Mr. Bertucci. Nothing. 

Mr. Kennedy. You said something. 

Mr. Bertucci. I am talking to him. 

Mr. Oliensis. I didn't hear it, sir. 

Senator Curtis. What hotel did you stay in? 

Mr. Bertucci. Sir, I respectfully decline to answer the question 
on the ground I am not required to give evidence against myself 
under the fifth amendment. 

Mr. Oliensis. I hope my actions make clear my position here, sir. 

Senator Curtis. Perhaps the witness is nervous and confused. I 
can understand it is not an every day occurrence that someone is 
asked to appear before a congressional committee. 

My question was, and all I wanted to know was, just on the name 
of the hotel. What hotel did you stay at ? 

Mr. Bertucci. Seville. 

(At this point. Senator Ervin withdrew from the hearing room.) 

Senator Curtis. You stayed at the same hotel the full time? 

Mr. Bertucci. Yes. 

Senator Curtis. Wlio paid the hotel bill ? 

Mr. Bertucci. I did. 

Mr, Kennedy. Now I will move on to Mr. Strauss. 

Mr. Strauss, you are business agent ? 

Mr. Sti^auss. Yes, sir. 

Mr. Kennedy. You have been a business agent and you are also 
trustee for the union ? 

Mr. Strauss. Yes, sir. 

]Mr. Kenntedy. How long have you been a business agent? 

Mr. SiTiAuss. Around September or October of 1954. 

Mr. Ivennedy. Who appointed you business agent ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11007 

Mr. StRx\uss. I wasn't appointed. I was elected. 

Mr. I^NNEDY. By whom ? 

Mr. Strauss. By who? The membership that was present at the 
time. 

Mr. Kennedy. In 1954? 

Mr. Strauss. I believe so, sir. 

Mr. IvENNEDT. Who suggested to you that you should run as busi- 
ness agent? 

Mr. Strauss. Nobody suggested anything to me. 

Mr. Kennedy. What were you doing prior to that time ? 

Mr. Strauss. I will explain how it come about. 

Mr. Kennedy. All right. 

Mr. Strauss. I was a member of 169 of the Teamsters, and I was 
working in a munitions plant. In the meantime, I was on vacation. 
The office was only about a half block away. I used to pass by their 
office quite often and see all these fellows out there. I happened 
to know not "Toots" or anybody else, but some members they had. 

I said "What is going on here." 

(The witness conferred with his counsel.) 

Mr. Kennedy. Summarize it. 

Mr. Strauss. So while I am on vacation, I went in there, I just 
stopped in, it was another Teamsters local and I said, "What is going 
on fellows, are you busy organizing?" and somebody said "Yes." 
Somebody asked me, "Do you want to organize?" And I said "Cer- 
tainly, I think I can organize," and they said "O. K., we will put 
you on as organizer." 

So I went out. In about 4 months, I believe, when they had an 
election, that is when I was elected business agent. 

Mr. Kennedy. Have you always been interested in the working- 
man? 

Mr. Strauss. Positively. 

Mr. Kennedy. You are always trying to do some good for him, 
trying to help him ? 

Mr. Strauss. Positively. 

Mr. Kennedy. How many times have you been arrested ? 

Mr. Oliensis. Sir, with respect to that, I have the defendant's rec- 
ords which I secured from our police department. May I present 
it to him, so there is no confusion in his answers, with your permis- 
sion? 

Mr. Strauss. I am not ashamed of nothing. 

(Witness conferred with his counsel.) 

Mr. Strauss. Approximately seven times, sir, since 1938, I believe 
it has here. 

Mr. Kennedy. And how many times have you been convicted? 

Mr. Strauss. I think it is twice, sir. There is some kind of mistake 
here. 

Mr. I^nnedy. Philadelphia, 1938, larceny of an automobile; is 
that right, with 13 days to 2 years ? 

Mr. Strauss. Yes, sir. That was probation. That is right. You 
are right, sir. I didn't see that little notation. Three times. 

Mr. Kennedy. Philadelphia, 1938, is that entering to steal and 
larceny, sentenced to Huntington Eef ormatory ? 

Mr. Strauss. If it says it, that is it. 



11008 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. Then 1941, hold up and robbery at point of gun, 
conspiracy, T^/^ to 15 years at Eastern State Penitentiary, paroled in 
1949. 

Mr. Strauss. Yes, sir. 

Mr. IvENNEDY. And then Upper Darby, Pa., robbery, is that the 
same one, 5 to 10 years, concurrent with the rest ? 

Mr. Strauss. A concurrent sentence, sir. 

Mr. Kennedy. They are separate convictions, are they not? 

Mr. Strauss. I believe so, sir. 

Mr. Kennedy. So that is 

Mr. Strauss. It had to be that. 

Mr. Kennedy. Four convictions. Then in 1951 you were arrested 
but discharged on disorderly conduct, and in 1955 aggravated as- 
sault, nolle prossed, is that right ? 

Mr. Strauss. That is riglit, sir. 

Mr. Kennedy, Those are the only convictions, the four convictions? 

Mr. Strauss. So far as I know, sir, if the record so shows. 

Mr. Kennedy. You can't remember any others ? 

Mr, Strauss. No, I don't. 

Mr. Kennedy. How much money were you paid when you became 
interested in trying to organize the employees ? 

(Witness conferred with his counsel.) 

Mr. Strauss. I respectfully decline to answer the question on the 
ground I am not required to give evidence against myself under the 
fifth amendment. 

Mr. Kennedy. Have you been given any money in addition to the 
money tliat came out of local 596 ? Were you given money out of 107 ? 

Mr. Strauss. No, sir. 

Mr. Kennedy. Did you ever receive money from Raymond Cohen ? 

Mr. Strauss. Never. 

Mr. Kennedy. Did you have discussions with Raymond Cohen as 
to how much money you were to receive from 596 ? 

Mr. Strauss. I didn't even know the man then, 

Mr, Kennedy. When did you loiow him? Wlien did you meet 
him? 

(Witness conferred with his counsel.) 

Mr. Strauss. About 2-3 years, when he became administrative 
trustee. I had heard about him, but I didn't know him. 

Mr. Kennedy. When was the union put in trusteeship ? 

Mr. Strauss. About 2 years ago, I believe, sir. 

Mr. Kennedy. For what reason ? 

Mr. Strauss. I do not know. 

Mr. Kennedy. Do you know, Mr. Bertucci ? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. You are president of the union and you don't know 
wliy it was put in trusteeship ? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. Do you know why it is in trusteeship at the present 
time? 

Mr. Bertucci. No, sir, but we are supposed to have a hearing to 
come out of trusteeship. 

Mr. Kennedy. Do you know how long it has been in trusteeship ? 

Mr. Bertucci. Approximately 2 years. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11009 

Mr. Kennedy. And you don't know why it was put in trusteeship ? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. Did you protest about it being put in trusteeship ? 

Mr. Bertucci. Yes, sir. 

Mr. Kennedy. What did they tell you ? 

Mr. Bertucci. We were to have a hearing. We had a hearing, and 
Raymond Cohen became the administrative trustee for us. 

Mr. Kennedy. What argument did they give as to why you should 
remain in trusteeship and Mr. Cohen should be administrative trustee ? 

Mr. Bertucci. The meeting never was held. 

Mr. Kennedy. Tlie meeting never was held. So you were never able 
to find out wliy you were in trusteeship ? 

Mr. Bertucci. No, sir. 

Mr. Kennedy. Mr. Strauss, did you pai-ticipate in any vandalism 
after you became business agent for 596 ? 

Mr, Strauss. No, sir. 

Mr. Kennedy. Did you know about the purchase of the paint re- 
mover during the Pontiac automobile strike ? 

Mr. Strauss. No, sir, 

Mr. Kennedy. You did not ? 

Mr. Strauss. No, sir. 

Mr. IvENNEDY. Did you have anything to do with throwing the 
paint remover on the Pontiac automobiles ? 

Mr. Strauss. No, sir. 

Mr. Kennedy. You didn't have anything to do with the vandalism 
during that strike ? 

Mr. Strauss. No, sir. 

Mr. Kennedy. Did you participate in the beating of any individual ? 

Is he under indictment now ? 

(Witness conferred with his counsel.) 

Mr. ICennedy. You don't remember that ? 

Mr. Strauss. No, sir. 

Mr. IvENNEDY. You didn't participate in any of the beatings of any 
of the individuals ? 

Mr. Strauss. Just a minute. I don't understand what you mean by 
that question? 

Mr. Kennedy, Did you take part ? 

Mr, Strauss, Are you referring what ? 

Mr. Oliensis. Maybe I can clarify it for him, sir. 

(Witness conferred with his counsel.) 

Mr. Strauss. No, sir. 

Mr. Kennedy. You never did ? What was the confusion about the 
question ? 

Mr. Strauss. I was walking down the street and somebody hit me 
in tlie head with something. That is why I was wondering. 

Mr. Kennedy. Does that happen often ? 

Mr. Strauss. It don't happen often, I guess. 

Mr. Kennedy. But you never took part in beating anyone up your- 
self ? 

Mr. Strauss. As far as unionism or anything is concerned, no, sir. 

Mr. Kennedy. You won't tell us about how mucli money you receive 
as business ag:ent? 



11010 laiPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Strauss. I respectfully decline to answer that question on the 
ground I am not required to give evidence against myself under the 
fifth amendment. 

Mr. Kennedy. Did you go to Miami ? 

Mr. Strauss. No, sir. 

The Chairman. Are there any further questions ? 

If not, the committee will stand in recess until 10 : 30 in the morning. 

(Whereupon, at 4: 30 p. m., the committee recessed to reconvene at 
10 : 30 a. m., Thursday, May 8, 1958.) 

(Members of the committee present at the taking of the recess were 
Senators McClellan and Curtis.) 



INVESTIGATION OF IMPROPER ACTIVITIES IN THE 
LABOR OR MANAGEMENT FIELD 



THURSDAY, MAY 8, 1958 

United States Senate, 
Select Committee on Improper Activities 

IN THE Labor or Management Field, 

Washington, D. O. 
The select committee met at 10 : 30 a. m., pursuant to Senate Reso- 
lution 221, agreed to January 29, 1958, in the caucus room, Senate 
Office Building, Senator John L. McClellan (chairman of the select 
committee) presiding. 

Present : Senators John L. McClellan, Democrat, Arkansas ; Irving 
Ives, Republican, New York; Sam J. Ervin, Jr., Democrat, North 
Carolina; Karl Mundt, Republican, South Dakota; and Carl T. Cur- 
tis, Republican, Nebraska. 

Also present : Robert F. Kennedy, chief counsel ; Jerome S. Adler- 
man, assistant chief counsel; John B. Flanagan, investigator; Leo C. 
Nulty, investigator; Herbert J. Rose, Jr., investigator; Ralph De- 
Carlo, investigator ; Ruth Young Watt, chief clerk. 
The Chairman. The committee will come to order. 
(At the convening of the session, the following members were 
present : Senators McClellan and Ives.) 



The Chairman. You do solemnly swear the evidence you shall give 
before this Senate select committee shall be the truth, the whole 
truth, and nothing but the truth, so help you God ? 

Mr. Machold. I do. 

TESTIMONY OF EARLE J. MACHOLD, ACCOMPANIED BY HIS 
COUNSEL, HARRY G. SLATER 

The Chairman. State your name, your place of residence, and your 
business or occupation, please, sir. 

Mr. Machold. My name is Earl J. Machold. I am president of the 
Niagara Mohawk Power Corp., with offices at 300 Erie Boulevard 
West, Syracuse N. Y. I reside at 306 Linden Terrace, Syracuse, N. Y. 

The Chairman. You have counsel ? 

Mr. Slater. My name is Harry G. Slater, counsel for Niagara 
Mohawk Power Corp. My address is 300 Erie Boulevard West, Syra- 
cuse, N. Y. 

Mr. Kennedy. Mr. Machold, how many employees do you have? 

Mr. Machold. About 9,400. 

11011 

21243— 58— pt, 28 13 



11012 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. How many of those are members of organized labor ? 
Mr. Machold. All of the production workers and office workers are 
members of IBEW. 

Mr, Kennedy. That is what, about 9,000 or so ? 
Mr. Machold. I would think about 9,000. 

Mr. Kennedy. How long have you been president of the company ? 

Mr. Machold. I have been president of Niagara Mohawk Powder 

Corp. since its organization in 1950. Prior to that I was the president 

of the holding company, out of which that evolved, since September 

1942. 

Mr. Kennedy. Mr, Machold, are you familiar with the magazine 
called the New York Federationist ? 
Mr. Machold. I am, 

Mr. Kennedy, Did your company make any contributions or take 
any ads in that magazine ? 
Mr, Machold. They did, 

Mr, Kennedy. With whom was your contact with the New York 
Federationist? 

Ml". Machold. My contact was with a gentleman by the name of 
George Mason. 
Mr. Kennedy. He stated to you that his name was George Mason ? 
Mr, Machold, Yes, sir, 

Mr. Kennedy. When did you start taking ads with the New York 
Federationist after your discussions with him ? 
Mr. Machold. I think the first ad that we took was in 1949. 
Mr. Kennedy. How much money did you pay at that time? 
Mr. Machold. My recollection is $1,500. 
Mr. Kennedy. That was for an ad, a back page ad, was it ? 
Mr. Machold. I think that is correct. 

Mr. Kennedy, That is one of their best ads, as I undei-stand it. 
Then in 1951 did you take another ad ? 

Mr. Machold. I think we took one in 1950. 

Mr. Kennedy. 1949 was for $1,500; 1950 was for how much?— 1950 
for how much ? 
Mr. Machold. $1,500. 
Mr. Kennedy. And 1951 ? 
Mr, Machold, $5,000, 
Mr. Kennedy. And 1952? 
Mr. Machold. $7,500. 
Mr. Kennedy. And 1953? 
Mr. Machold. $7,500, 
Mr. Kennedy. And 1954? 
Mr. Machold. $10,000; $20,000; I am sorry. 
Mr. Kennedy. $20,000, in 1954? 
Mr. Machold. That is right. 
Mr. Kennedy. 1955 ? 
Mr. INiACHOLD, $20,000. 
Mr. Kennedy. 1956? 
Mr. Machold. $20,000. 
Mr. Kennedy. 1957? 
Mr. Machold. $10,000. 

Mr, Kennedy, Tliat makes a total of 

Mr, Machold. $93,000. 



IMPROPER ACTIVITIES EST THE LABOR FIELD 11013 

Mr. Kennedy. Mr. Machold, from the figures that you gave us, you 
made a contribution or you took an ad in 1951 for $5,000, and one of 
the best ads that you could possibly get, would be $1,500. Wliy did 
you make a contribution of so much in that year? 

Mr. M.\CHOLD. Well, as this thing progressed, it was represented to 
me that the cost of this publication was going up, that it was increas- 
ing, and that a larger distribution was being made. I suppose I was 
influenced all the time by the fact that we do have 9,000 employees 
who are members of a union which is affiliated with the A. F. of L. and 
the New York State Federation of Labor. It was also represented 
to us that this publication was put into the hands of every union 
officer in the locals, not only in our own organization but in the whole 
State of New York. Then I think I would have to be fair to say that 
as the question of the development of Niagara Falls evolved during 
this period, this magazine did publicize the traditional position of 
the New York State Federation of Labor and the IBEW in con- 
nection with public and private power, which was, of course, in favor 
of private power. 

Mr. ICennedy. Did you know what the circulation of the magazine 
was? 

Mr. Machold. I never knew exactly what the circulation of the 
magazine was, sir. I had no way of knowing. I don't know that I 
ever inquired. But I had assumed that the circulation was between 
25,000 and 30,000 copies. 

Mr, Kennedy. Actually, the circulation was only about 2,500 to 
3,000. 

Mr. Machold. I didn't know that, sir. 
Mr. Kennedy. Did you ever ask? 

Mr. MACiiOLi). I can't say that I did, but I was under the impres- 
sion that the circulation was around 25,000 or 30,000 copies. 

Mr. Kennedy. Did you know that this private company, this com- 
pany that was run by Mr. Lapensohn, was to receive 75 percent of 
this money ? 
Mr. Machold. No, sir. 

Mr. Kennedy. Did you think it was all going to the New York 
Federation of Labor ? 

Mr. Machold. That it was going to the New York State Federation 
of Labor. 

Mr. Kennedy. What could possibly induce you, Mr. Machold, to 
pay as much as $20,000 in the years 1954, 1955, and 1956? 

Mr. Machold. There was both the question of increase in costs in 
representations made to me about the program for the increased cir- 
culation of the publication. Also, that all advertisers were being 
asked to pay more during that period, and that they had been suc- 
cessful in getting them to pay more. 
Senator Ives. I would like to interrupt there, Mr. Counsel. 
Mr. Machold, did you ever receive from the late Mr. Thomas A. 
Murray any letter in connection with this at all ? 

Mr. Machold. I received letters with Mr. Murray's signature on 
them. I have been led to believe since this investigation started 

maybe there was some (question 

Senator Ives. That is what I meant. You assumed the letter was 
a correct letter? 
Mr. Machold. I assumed the authenticity of the signatures. 



11014 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Senator Ives. Thank you. 

Mr. Kennedy. Did you charge this to your advertising account? 

Mr. Maghold. Yes. 

Mr. I\JENNEDY. It was out of your regular advertising account? 

Mr. Machold. Well, I think it is a subaccount under our advertis- 
ing account. I believe it is general administrative expenses. 

Mr. Kennedy. But actually it wasn't taken out of your advertising 
account, was it, the $93,000 ? 

Mr. J^Iachold. I don't think so. I think it was charged to general 
administrative expenses. 

I will see if we have the details of that. 

Mr. Kennedy. Why wouldn't you charge it to the advertising ac- 
count? Why would you take it out of the special account? 

Mr. Machold. Our accounts are kept under the classification of 
accounts described by the public utilities commission of the State of 
New York, and advertising charged to the account "Advertising" 
involves only expenses incurred in comiection with advertising for the 
sole purpose of promoting the sale of electricity, the only other place 
proper to charge it under the classification of accounts prescribed by 
the public service commission is miscellaneous general expenses. 

Mr. Ivennedy. Was this an expense that you could deduct, this 
$93,000, as far as income taxes ? 

Mr. Machold. It is an operating expense, yes, sir. 

Mr. Kennedy. The thing that puzzles me is that if you were go- 
ing to get an ad at that period of time, even the best ad would be 
$1,500, and here you spent this $20,000. That is what disturbs me. 

Mr. Machold. Well, I did it upon the basis of the representations 
made to me as to the cost of this publication and the efforts that were 
going to be made to increase its circulation and distribution. 

Mr. Kennedy. But you never even asked what the circulation was. 

Mr. Machold. I don't recall that I did specifically. I assumed 
that it was 25,000 or 30,000 copies. 

Mr. Kennedy. Was it because you felt that this would be tied up, 
this money could be used for the fight against public power in New 
York? 

Mr. Machold. It wasn't only that. 

Mr. Kennedy. Was that one of the factors ? 

Mr. Machold. Only that to publicize the traditional policy of this 
organization in connection with the public power issue. 

Mr. Kennedy. Was that one of the factors — in answer to my ques- 
tion, was that one of the factors that induced you to pay as much as 
$20,000? 

Mr. Machold. Yes, I think it is fair to say it was. 
Senator I\^s. On that, I would like to interpose a question. You 
did not pay that $20,000 with the idea that you would get the Fed- 
eration of Labor to support private power, did you ? 
Mr. Machold. Absolutely not. 

Senator Ives. I think that is a point that ought to be brought out 
here. 

Mr. Machold. That was the traditional policy. 
Senator I\^s. I was a member of the legislature from February 24, 
1930, through 1946, and my recollection is that a good share of that 
time, if not all of it, the Federation of Labor was opposed to public 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11015 

power. They did not want to work for the Government. They 
wanted to be in a position where they could have collective bargain- 
ing, and they can't have collective bargaining working for the Gov- 
ernment. 

Mr. Machold. As I understand, that has been their policy for as 
long as I know. 

Senator Ives. It is my recollection, too. 

Mr. Machold. I think I should add, I don't think anybody ever 
had any reason to question the integi'ity of the New York State Fed- 
eration of Labor in New York State. 

Senator Ives. I never questioned the integrity of the New York 
Federation of Labor. 

As far as I know, they have always been on the level. They may 
have a few scamps among them, but I have never found them. 

Mr. Kennedy. You received a letter from this man Lion, on 
February 28, 1952. He acknowledged the receipt of $7,500 at that 
time, and he stated to you, "You can be sure this money will be put 
to good use." What did you think he meant by that ? 

Mr. Machold. I haven't any idea what they meant by that. As 
a matter of fact, I don't recall the letter at the moment. He certainly 
never made any representations to me, and I had no reason to be- 
lieve, and didn't believe, that he could influence the policy of the 
New York State Federation of Labor in any way. 

The Chairman. The Chair hands you what purports to be a copy 
of the letter of February 28, 1952, addressed to you as president of 
the Power Corp., and which bears the typewritten signature of D. M. 
Lion, director of publicity. I will ask you to examine that copy and 
state if you identify it as a copy of the original you received, or if 
you received the original. 

(Tlie document was handed to the witness.) 

(The witness conferred with counsel.) 

Mr. Machold. I don't recall that, but I have no reason to doubt 
that I received it. 

The Chah^man. You have no reason to doubt that you received 
that? 

Mr. Machold. No. 

The Chairman. That copy may be made exhibit No. 52. 

(The document referred to was marked "Exhibit No. 52" for ref- 
erence and will be found in the appendix on p. 11179.) 

Mr. Kennedy. This is another letter, Mr. Chairman, dated Febru- 
ary 5, 1953, to Mr. Machold. It states : 

Dear Mr. Machold : I wish to extend sincere thanlis for the contract for the 
outside back cover and advertisement to appear in the 1953 edition of the New 
York Federatiouist. We will do all in our power toward fighting the proposed 
legislation as discussed with you. 

The Chahiman. I hand you a copy of a letter, to which counsel has 
just referred. I ask you to examine it and state if you received the 
original of that letter. 

(The document was handed to the witness.) 

Mr. Machold. Yes, I have no doubt that I received that letter. 

The Chairman. That may be made exhibit No. 52-A. 

(The document referred to was marked "Exhibit No. 52-A" for 
reference and will be found in the appendix on p. 11180.) 



11016 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. Mr. Chairman, for the benfit of the witness and the 
committee, Mr. Lapensohn and his colleague stole most of this money. 
Actually, $60,000 of the $93,000 went into their special bank account. 
In summary, tracing these funds, we find that of the $93,000, Lapen- 
sohn received $84,750 and the State Federation of Labor received 
$8,250. 

Mr. Machold. That is as much of a surprise to me as it must have 
been to the officials of the State Federation of Labor. 

Mr. Kennedy. Mr. Machold, was this to assist the New York Fed- 
eration of Labor in their fight against public power that you paid 
this money ? 

Mr. Machold. Well, I think I was influenced by the traditional 
position that they also had taken, which was publicized during this 
whole period, sir. In our relationships with our employees, they were 
very much interested in this public-private power argument in 
Niagara Falls, and, maj^ I add, not at our instigation. 

Mr. Kennedy. Was it to help the New York Federation of Labor 
to finance their fight against public power than you paid this sum? 

Mr. Machold. I assume through the dissemination of information 
as to their position, of their position, in the publication of this 
magazine 

Mr. I^NNEDY. It went beyond the publication, did it not, because 
you never even inquired what the circulation of the publication was. 
It must have been that you felt that the money was going to be used 
in other ways. Isn't that correct? You didn't pay the money just 
for this magazine. 

Mr. Machold, I was influenced by their position and their activity 
in the Niagara situation ; yes, sir. 

Mr. I^nnedy. Was this to help the New York Federation of Labor 
to finance the fight against public power in New York? 

That is correct, is it not ? 

Mr. Machold. I would say so, yes. In this magazine, any sums 
paid to this magazine, I assume went to the New York Federation 
of Labor. 

Senator Ives. Mr. Machold, was this contribution made with the 
idea on that, that you Avould get the Federation of Labor to change 
their position in any waj, shape, or manner ? 

Mr. Machold. No, sir; their position was well known for many 
years. 

Senator Ives. In other words, was this contribution made because 
the New York Federation of Labor was threatening to change its 
position, and you didn't want them to; you were persuading them 
not to? 

Mr. Machold. No, sir. 

Senator I\^s. The reason I raised that point is because I never 
knew that the Federation of Labor contemplated any such change. 

Mr. Machold. Not to my knowledge. 

Senator Ives. Certainly before you ever advertised in that maga- 
zine, their position on public power was well established for years 
before that. 

Mr. Machold. Yes, sir. 

Senator Ives. All right. 

The Chairman. Do I understand that the regular price of the best 
ad that they had for sale was $1,500 ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11017 

Mr. Machold. I don't know, sir, that there was any established 
schedule of prices for advertising in this publication. 

The Chairman. You had purchased the back cover for $1,500 the 
first year ; is that correct ? 

Mr. Machold. Yes, sir. 

The Chairman. And for the second year, the same ? 

Mr. Machold. Yes, sir. 

The Chairman. Then the third year you went up to $5,000. 

Mr. Machold. That is correct. 

The Chairman. That is quite an increase, is it not, in cost of ad- 
vertising in that period of time ? 

Mr. Machold. Yes, sir. 

The Chairman. And then the increase went up again the next year 
to $7,500. 

Mr. Machold. Yes, sir. 

The Chairman. The second year after that up to $20,000. 

Mr. Machold. Yes, sir. 

The Chairman. You are a businessman. You did not regard all 
of that as paying for an ad ; did you ? 

Mr. Machold. I regarded half of it as being represented to me as 
their efforts or their program for the increased distribution of this 
publication, as it was represented to me. I certainly had no reason 
to believe that 

The Chairman. Business people just don't throw away money that 
way. You thought you were getting something for the additional 
amount you were paying ; didn't you ? 

Mr. Machold. I thought we were getting goodwill; yes, sir. 

The Chairman. You were buying goodwill. That is a part of it. 
You were buying goodwill. Would that include keeping the union 
from making demands upon you with resj)ect to working conditions ? 

Mr. Machold. No, sir. 

The Chairman. And wages and so forth ? 

Mr. Machold. No, sir. 

The Chairman. What kind of goodwill were you buying ? 

Mr. Machold. Among our employees who were already 

The Chairman. Wouldn't you get just as much good will out of 
them, out of the $1,500, if that was the regular price of the ad, as you 
would if you paid $15,000, $20,000, or more? You would get the ad 
and they would see the same ad. 

Mr. Machold. In retrospect, perhaps we would ; yes, sir. 

The Chairman. In retrospect, you think that is correct ? 

Mr. Machold. Yes, sir. 

The Chairman. Here is what I am concerned about. It looks to 
me like this is a racket. Wliether you businessmen who are business- 
inen, who know how to run a big corporation, whether you are the 
victims, or whether you feel out of fear or some other reason you have 
to contribute to these things, and make tbese tremendous donations, 
or whether you do it for some other reason, I just cannot understand. 
Business people don't throw away money. Have you given the only 
reason that you can think of why you were so extravagant in the use 
of that money ? 

Mr. Machold. I think I have, sir, and I must say that I think every- 
body that advertises in this publication are deeply indebted to this 
committee and its staff for having revealed the situation. 



11018 IMPROPER ACTIVITIES IN THE LABOR FIELD 

The Chairman. Thank you very much. We are trying to find 
these things that are going on, that should not be going on in this 
country, to determine wliether we need legislation to stop them. I 
appreciate your cooperation in coming here frankly and saying "Yes, 
this is what we did." 

I thinlv you have cooperated with the committee in its ejffort to dis- 
close these facts, to bring out this situation. But to me it is some 
kind of a bad racket that ought to be corrected. I hope after we get 
these facts before us we can find some procedure, some remedy, that 
will stop those acts. Thank you very much. 

Mr. I^NNEDY. I think possibly we saved your company $10,000, 
did we not, indirectly, Mr. Machold, another $10,000 ? 

Mr. Machold. Well, I doubt that, Mr. Kennedy. 

Mr. Kennedy. Wasn't Mr. Lapensohn supposed to come back? 
Didn't he have an appointment to come back in July of 1957 to pick 
up another $10,000? 

Mr. Machold. He said he was coming back at some point ; yes, sir. 

Mr. Kennedy. And we started our investigation and he left the 
country prior to making the second trip back there. 

The Chapman. I suggest you donate that to the Eed Cross. 

Mr. Machold. I can assure you that business people will not make 
this same mistake again, or at least I will not. 

The Chairman. Thank you. 

Mr. Kennedy. The figures break down that 9 cents of that money 
went to the union and 91 cents went to Mr. Lapensohn. 

The Chairman. Nine cents out of each dollar went to the union 
and 91 cents went to Mr. Lapensohn? 

Mr. IvENNEDY. Yes. 

The Chairman. I think he can afford to 1 ake a long, extended trip. 

Mr. Machold. I want to thank the committee and their staff for 
letting me testify this morning rather than yesterday as originally 
plamied. I appreciate. 

The Chairman. All right. 

Call the next witness. 

Mr. Kennedy. Mr. Chairman, we are now going into a different 
matter. There was some discussion in the hearings the first week of 
the situation involving the Food Fair Co. and the Trailer drops that 
occurred in Philadelphia, Pa. I would like to call now some wit- 
nesses who will testify on that matter. The first witnesses will be 
Mr. Blayney Barton and Mr, Paul Cupp. They will have their 
assistants. 

The Chairman. Gentlemen, be sworn. Do you and each of you 
solemnly swear the evidence you shall give before this Senate com- 
mittee shall be the truth, the whole truth, and nothing but the truth, 
so help you God ? 

Mr. Barton. I do. 

Mr. Cupp. I do. 

TESTIMONY OF BLAYNEY BARTON AND PAUL CUPP 

The Chairman. Beginning on my left, will you state your name, 
your place of residence, and your occupation ? 

Mr. Cupp. I am Paul J. Cupp. I live in Bryn Mawr, Pa. I am 
president of the American Stores Co., headquarters at 124 North 15th 
Street, Philadelphia. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11019 

The Chairmax. Thank you. On my right ? 

Mr. Barton. My name is Blayney J. Barton. I live in Drexel Hill, 
Pa. I am vice president of the American Stores Co. at the same ad- 
dress, 124 North 15th Street, Philadelphia, Pa. 

The Chairman. And the gentleman in behind there ? 

Mr. McInttre. I am Kobert J. Mclntyre. I live in Overbrook 
Hills, Pa. I am an assistant to Mr. Barton at the American Stores, 
the same address, 124 North 15th Street. 

The Chairman. If you care, you may move a chair around to the 
table. 

Gentlemen, do you waive counsel ? 

Mr. Barton. Yes. 

Mr. Cupp. Yes, sir. 

Mr. McIntyre. Yes, sir. 

Mr. Kennedy. Mr. Cupp, could you tell us a little about the Amer- 
ican Stores as to their size, the areas in which they operate ? 

Mr. Cupp. American Stores operates in the Middle Atlantic States. 
They are presently operating 844 retail units, with 7 distribution 
centers, some processing plants. It has more than 25,000 employees. 

The Chairman. How many ? 

Mr. Cupp. More than 25,000. 

Mr. Kennedy. How does American Stores compare to some of the 
other big chain grocery stores in the country ? 

Mr. Cupp. It is fourth in size among the large chains. 

The Chairman. Is that a grocery chain ? 

Mr. Cupp. A food chain, yes, sir. 

Mr. Kennedy. You have a contract and most of your employees or 
a high percentage of your employees are members of unions ? 

Mr. Cupp. They are. 

Mr. Kennedy. Specifically in the Philadelphia area you have some 
employees who are members of the Teamsters Union, is that right? 

Mr. Cupp. We have. 

Mr. Kennedy. Local 107 ? 

Mr. Cupp. That is right. 

Mr. IU3NNEDY. Would you tell us the situation tliat led up to the 
negotiations in the fall of 1954, first as to who you had representing 
you in those negotiations, what some of the issues were, and perhaps 
Mr. Barton can assist you, as I understand he actually participated 
in the negotiations. 

Mr. Cupp. At that time, we were members of the Pennsylvania 
Motor Truck Association, which was bargaining 

Mr. Kennedy. That is MTLR ? 

Mr. Cupp. Yes. 

Mr. Kennedy. We will refer to it as the MTLR. 

Mr. Cupp. They looked after our interests in neogtiations, as it 
did for other companies. MLTR representing us in negotiations. 

Mr. I^nnedy. They represented just you, or did they represent 
others ? 

Mr. Cupp. They represented the industry. 

Mr. Kennedy. And did they also represent other industry groups 
in Philadelphia ? 

Mr. Cupp. Yes. They represented the trucking industry gen- 
erally. Usually the master contract was negotiated first, subsequent 
to which the food industry was represented for its specific needs. 



11020 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. That would be the whole of the food industi*y, and 
the big cliamstores, is that correct ? 

Mr. Cupp. Yes, that is right. 

Mr. Kennedy. How many of you were there, approximately? 

Mr. Cupp. I think Mr. Barton had better answer that question. 

Mr. Kennedy. Was it 10 or 12 ? 

Mr. Barton. It is my recollection there were about six. 

Mr. Kennedy. About six of you. You had a contract with the 
MTLR, did you? Did the chainstores? 

Mr. Barton. We had a specific power of attorney by which we au- 
thorized the Motor Transport Labor Kelations to negotiate for us. 

Mr. Kennedy. Were they to do all of the negotiating or were you 
able or allowed under the contract to do some of the personal con- 
tacting with the union yourselves ? 

Mr. Barton. No. As is characteristic of some large association 
contractor relationships, the work with the union is performed by the 
association officers. If a company such as our type would have a 
problem to discuss with the miion, we would not go directly to the 
union for procedural reasons. We would go to our representative, 
Motor Transport Labor Kelations, and after explaining our problem, 
expect them to discuss it with union officials. 

Mr. Kennedy. In other words, not only with grievances, but in the 
negotiating of the contract, you would not feel free to go to the union 
officials yourselves and attempt to negotiate a point in the contract? 

Mr. Barton. That is correct. 

Mr. Kennedy. You were not permitted to make a personal approach 
yourselves; is that right? 

Mr. Barton. That is correct. It is my understanding that either 
the articles of association or the bylaws, or some written provision of 
the Motor Transport Labor Relations organization provided specifi- 
cally that all approaches to the union should be through this organ- 
ization. That is characteristic of this problem in other areas of the 
country. 

Mr. Kennedy. Specifically in 1954, after Mr. Raymond Cohen 
took over as secretary -treasurer of local 107, there were some negotia- 
tions conducted, were there not, with that union in connection with 
the contract ? That is, the contract with the chainstores ? 

Mr. Barton. That is correct ; yes. 

Mr. Kennedy. Was there anything that you wanted to clarify ? 

Mr. Barton. No ; I was just going to say that I think it was a wage 
reopener, that the contract had not expired. It is my recollection that 
as these new officers came to position, they negotiated with Motor 
Transport Labor Relations people under this wage reopening pro- 
vision. 

Mr. Kennedy. We were and have been specifically interested in the 
situation regarding trailer drops. We have had some discussions be- 
fore the committee on that matter. Was that a question that arose 
during the negotiations in 1954, in the fall of 1954 ? 

Mr. Barton. Yes ; that is correct. 

Mr. Kennedy. Could you explain to the committee, either Mr. Cupp 
or Mr. Barton, what a trailer drop is, what it means to a company, a 
chainstore? Either one of you may answer it. 

Mr. Cupp. A trailer drop involves the use of semitrailers, the loaded 
trailer being left at the destination point, at the market, the tractor 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11021 

being moved on to pick up an empty or return to base, with the trailer 
being unloaded at the conveneience of the store management. 

The Chairman. That is something like a freight car being switched 
off and onto a side track the purpose being to miload and the engine 
moves on and goes on about other business ? 

Mr. Cupp. That is an exact parallel ; yes, sir. 

The Chairman. And you just drop the car or the trailer that is 
on the truck, and then the merchandise is unloaded at the convenience 
of the business. 

Mr. Cupp. It is a much more economical way of handling merchan- 
dise ; that is correct. 

The Chairman. It is a much more economical way. So if you get 
a trailer dropped, you get some advantage; is that correct? 

Mr. Cupp. It is a lesser cost ; that is correct. 

The Chairman. Proceed, Mr. Counsel. 

I wanted to get it clear. 

Mr. Kennedy. What would be the results if you did not get a 
trailer drop ? What would have to happen ? 

Mr. Cupp. The result is that costs increase by virtue of — well, there 
are 2 or 3 things that happen. In the first place, the driver is not 
moving equipment. Your investment is at a standstill. 

Mr. Kennedy. When you don't get a trailer dropped, the driver 
stays with the trailer ? 

Mr. CtTPP. The driver stays there to unload, and it does involve the 
development of a great deal more overtime. It also increases the 
problem at the store for the fact that the manager does not have the 
same flexibility in scheduling his work for his staff. So costs rise on 
both counts. It is a reason that all operators are very desirous of 
having trailer drops in large stores where they can be economically 
used. 

Mr. Kennedy. Wliat do you feel to be the economic advantage in 
having a trailer drop 'i 

Mr. Cupp. We feel that the savings in dollars per trailer drop, all 
the factors included, are in the range of $18 to $25 per drop. In a large 
operation, that runs into very considerable money over a period of 
time. 

The Chairman. Do you mean that is the saving to whom? 

Mr. Cupp. A saving to the operator, to the company. 

The Chairman. Which company ? 

Mr. Cupp. Well, it would be to our company. 

The Chairman. Do you own the trailers ? 

Mr. Cupp. Yes ; we own and operate all of our own equipment. 

The Chairman. You are talking about trailer drops of your own 
trailers ? 

Mr, Cupp. That is correct. 

The Chairman. And if you can arrange with the union to drop the 
trailers, that gives you that much advantage or that much savings? 

Mr. Cupp. That is right; conversely, if we are not permitted to 
drop them, it puts that much penalty on us. 

The Chairman. It puts that much penalty on you? 

Mr. Cupp. That is right. 
^ Mr. Kennedy. Would you tell us what the conditions were, the 
situation in 1954, regarding the negotiations on the trailer drops? 



11022 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Were you anxious to obtain trailer drops during those negotiations 
that took place in 1954 ? 

Mr. Baktox. Yes ; I was a new man with the company at that time, 
and working with operating people had learned that it was character- 
istic in the industry for some employers to have trailer drops. We 
checked through ]\Iotor Transport Labor Relations and found out 
through these officials that a number of representative firms in the 
Philadelphia area had trailer drops. 

For instance, a competitor of ours — there were 3 or 4 competitors 
of ours which had trailer drops. We petitioned or requested our 
counsel at Motor Transport Labor Relations, and our representatives 
there, to attempt to set trailer drops on the negotiating agenda, at 
which time, when negotiations would permit, it would be discussed 
with the union. 

Mr. Kexxedy. Let's get the names of those individuals from 
MTLR, who were representing you, the counsel and the names of the 
other officers. 

Mr. Bartox. The gentleman, our counsel there, was Mr. Bernard 
Siegel. Mr. Bernard Siegel represented the Motor Transport Labor 
Relations as counsel, and also was an able representative, so far as 
rej^resenting a competitor of ours, one which had trailer drops. 

Mr. Clark was the president of Motor Transport Labor Relations. 
Mr. Ganon, Hugh Ganon, was another officer, and Mr. Jack Mathews 
was secretarj' -treasurer, or secretary. 

In meetings with these gentlemen, either individually or jointly, 
we brought to their attention to request that it was a very important 
item for our company to receive the trailer drop advantage if it could 
be negotiated, and we pressed them at some length to put this on their 
negotiating agenda. 

Mr. Kexxedy. What was the situation as far as your company at 
that time was concerned in connection with trailer drops ? Had you 
always been a great user of trailer drops, or had that been a relatively 
new matter for your company after the war? 

Mr. Cupp. In 1951 we moved in with a modern distribution center 
in West Philadelphia, and began to convert from small trucks to 
tractor-trailers, and we were also increasing the number of large 
stores to which it is feasible to make trailer drops. So at the time 
of these negotiations, we had very few trailer drops, but could have 
used a great many. So it was an important thing to us in negotia- 
tions to develop some equality within the industry. That is what we 
put up to the men of MTLR. 

Mr. Kexxedy. You had a potential for a great many: is that 
correct? 

IMr. Cupp. That is correct. 

Mr. Kexxedy. You could have used them if they had been made 
available to you at that time ? 

Mr. Cupp. That is right. 

Mr. Kexxedy. You felt that this was a very important economic 
matter to your company ? 

Mr. Cupp. It was, indeed. 

Mr. Kexxedy. So you asked that this question be raised and put on 
the agenda for the negotiations in 1954 ? 

Mr. Cupp. That is risfht. 



niPROPER ACTIVITIES IN THE LABOR FIELD 11023 

Mr. I\iNNEDY. The negotiations occurred, and those negotiations 
were carried on by Mr. Ganon, Mr. Clark, and the counsel, Mr. Siegel, 
witli the representatives of the union ; is that right, with the repre- 
sentatives of local 107 ? 

Mr. Bartox. That is correct. 

Mr. Kennedy. You people representing the food companies did not 
actually participate in the negotiations? 

Mr. Barton. That is correct. Motor Transport Labor Relations 
had this i-man negotiating group, and then there was a secondary 
body, I think composed of members of the board of directors, and as 
members of the board of directors we would keep close liaison with 
this 4-man negotiating group who met and conversed and talked and 
presented the effect of the various problems on the agenda. So none 
of us on this secondary group were a part of actual negotiations. 

Mr. Kennedy. You would be in a different room, actually; is that 
right ? 

Mr. Barton. That is correct, generally. Occasionally they would 
caucus with us. 

Mr. Kennedy. You Avere tliere for consultation ? 

Mr. Barton. That is right. They would come to us and caucus 
with us, and so on. 

Mr. Kennedy. As the union had failed to give in on this question — 
and I am moving along now to later in the negotiations — as the union 
liad failed to give in on this matter of trailer drops and other matters, 
was it discussed among j^our group that you would risk a strike rather 
than to give in to the union on these matters ? 

Mr. Barton. Yes ; there was a conversation of that nature. 

Mr. Kennedy. Had you pretty well agreed at that time that if you 
could get all of the foodstores to hold fast, that you would take a 
strike ? 

Mr. Barton. That was the point of discussion ; yes. If there could 
be a permanent link or permanent chain established among the repre- 
sentative food groups, then a strike would be taken. 

Mr. Kennedy. Did you find during this time, and I am talking 
about probably the beginning of December 1954, that there was any 
weakness in any particular company as far as standing up to the union ? 

Mr. Barton. Well, I Avill answer that in a general way. There was 
a weakness among 2 or 3 companies. For instance, a meeting was held 
at the food distributors' association to find out the respective posi- 
tions that companies would take. The Best Markets people indicated 
that they could not take a work stoppage. 

Mr. Kennedy. Is that a relatively small company, the Best Markets ? 

Mr. Barton. Yes. The Food Fair people indicated that they felt 
it would be unwise to take a work stoppage, and the Penn Fruit people 
said that if Food Fair would not take a stoppage, then neither would 
they. That ties in also WTth another conversation when it was ascer- 
tained that A. & P. apparently could not make up their mind one way 
or another, and Food Fair indicated that if A. & P. could not take 
a strong stand, neither could they. 

Mr. Kennedy. So you evidently found weaknesses in several com- 
panies : is that right ? 

Mr. Barton. That is rifflit. 



11024 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr, Kennedy. Following these discussions, was there then an agree- 
ment reached regarding trailer drops ? 

Mr. Barton. As negotiations continued, we were hopeful of getting 
a substantial concession so far as trailer drops were concerned. Natu- 
rally, as you would expect in negotiations, one figure would be dis- 
cussed and then another figure. 

Finally, as the negotiations drew to a close, the 4-man negotiat- 
ing group reported back to us that they had not been as successful as 
they had hoped for in providing drops for us, but that a concession 
had been made by the union in the amount that we would start off 
with 50 trailer drops. 

Mr. Kennedy, Mr. Barton, can you fill in on this ? 

Mr. Cupp. I would like to make clear that we never had any objec- 
tive except to get the same operating conditions that our competitors 
had. We have never endeavored to work out a competitive advantage. 
We simply wanted the same patteiTi or freedom in dropping trailers 
as did our competitors. That was our only objective. 

Mr. Kennedy. Did you receive that in this negotiation? 

Mr. Cupp. We did not receive it, as it turned out. 

Mr. Kennedy. As a matter of fact, were you put at a distinct com- 
petitive advantage ? 

Mr. Cupp. We were. 

Mr. Kennedy. Could you tell the committee what the company, the 
Food Fair Co. received, and what you received ? I will go into the 
other companies. 

Mr. Cupp. Our understanding is that all of our competitors who 
had trailer drops continued on a basis not less than they were enjoying, 
and we were severely restricted to the number that we were permitted. 

Mr. Kennedy. The statement on that says Food Fair, Penn Fruit, 
Best Markets, William Montgomery may continue the system of drop- 
ping bodies, which are the trailer drops, without men to cover, but 
Food Fair is to add 20 helpers, and Penn Fruit, Best Markets, and 
William Montgomerj^^, to add helpers in proportion to Food Fair's 20, 
based on a reasonable formula — for example, volume in 107's jurisdic- 
tion — to be agreed upon by Mr. McBride, attorney for the union, and 
Mr. Sieijel for the association. 

American Stores and A. & P. may drop up to 50 bodies per week 
without men to cover, with no requirement to add helpers. 

How many drops would that give a store such as Food Fair at that 
time? 

Mr. Cupp. We understood through MTLR that it was two hundred 
and eighty some. 

(At this point. Senator Curtis entered the hearing room.) 

Mr. Kennedy. As I understand it, the next company, Penn Fruit, 
which was also to have unlimited trailer drops, did not have a contract 
with 107, but with a different union ; is that right. 

Mr. Cupp. That is right. 

Mr. Kennedy. So that was no disadvantage for Raymond Cohen? 

Mr. Cupp. That is right. 

Mr. Kennedy. And Best Markets and William Montgomery were 
relatively small companies and not in the same category as Food Fair, 
American Stores, A. & P., and Penn Fruit ; is that correct? 

Mr. Cupp. Yes. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11025 

Mr. Kennedy. They were not in a comparative field as to size ? 

Mr. Cupp. That is right. 

Mr. Kennedy. Your company and A. & P. only received up to 50 
trailer drops, while Food Fair and these other companies received 
unlimited trailer drops ; is that right? 

Mr. Cupp. That is our understanding. We know we were limited 
to 50. 

Mr. Kennedy. Was that a great competitive disadvantage for you ? 

Mr. Cupp. We could have used, according to the operating people, 
within the life of this contract negotiated at the end of 1954, in the 
range of 275 to 300 a week. By simple arithmetic, on the basis of 
the savings per drop over the life of that contract, it would involve 
some $300,000 to $400,000 to our company. 

Mr. Kennedy. You didn't have at that particular time this many 
trailer drops ; did you ? 

Mr, Cupp. No ; not at this time. 

Mr. I^NNEDY. You mean this was the potential, that if you were 
allowed unlimited trailer drops this is what you could have gone 
into within a reasonable period of time? 

Mr. Cupp. That is correct. 

(At this point, Senator Ives left the hearing room.) 

Mr. Kennedy. You feel that the competitive disadvantage was 
$300,000 to $400,000 'i Is that the figure you used for over this period 
of time ? 

Mr. Cupp. That is correct. 

Mr. Kennedy. That is the advantage that these other companies 
had over your company in this ? 

Mr. Cupp. That is correct. 

The Chairman. Counsel has been interrogating you, apparently, 
from a copy of the contract. I do not know whether this has been 
made an exhibit yet or not. 

I hand you this document from which counsel has been reading, 
and I ask you to examine it and state if you identify it as a copy of 
the contract negotiated in 1954, about which you have been testifying? 

(A document was handed to the witness.) 

Mr. Barton. This is a memorandum of agreement drawn up be- 
tween the Motor Transport Labor Relations Association group and 
union local 107. 

The Chairman. Is that what constituted the contract that was 
negotiated ? 

Mr. Barton. It would be the basis for the contract to be written 
therefrom. 

Mr. Kennedy. No contracts were ever written; were they? 

Mr. Barton. Not so far as we know. 

The Chairman. In other words, that is the only agreement that was 
actually made ? 

Mr. Barton. So far as we know. 

The Chairman. That is what you have been testifying about? 

Mr. Barton. This is what we are familiar with, yes. 

The Chairman. That may be made exhibit No. 53. 

(Document referred to was marked "Exhibit No. 53," for reference 
and may be found in the files of the select committee.) 

The Chairman. Exhibit 53 is for reference. 



11026 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. "Was it agreed during these negotiatioi)S that the 
union would sympathetically consider giving you an extra 25 trailer 
drops after a period of 6 months ? 

Mr. Barton, We were told by Motor Transport Labor Kelations 
people that they would sympathetically meet with us and review the 
possibilities of receiving 50 trailer drops. What vv^as negotiated, I 
emphasize, I do not know. This is what was told to us by Motor 
Transport Labor Kelations. 

Mr. Kennedy. After the 6-month period, did you in fact receive 
the extra trailer drops ? 

Mr. Barton. No. 

Mr. Kennedy. So, actually, it was not until 1956, was it, that you 
received another 25 trailer drops? 

Mr. Barton. That is correct. 

Mr. Kennedy. So during this period of time. Food Fair was able 
to have these unlimited trailer drops, or continue their procedure, 
while 3'ou were still limited to that number? 

Mr. Barton. Food Fair, Penn Fruit, and the other groups that had 
unlimited opportunities. 

Mr. Kennedy. And you and A. & P. were kept down to a limited 
numbei', were you, to 50 ? 

Mr. Barton. Well, we were. 

The Chairman. Did you know that at the time that the contract 
was finally negotiated, that you were giving up being discriminated 
against in this arrangement ? 

Mr. Barton. Yes, sir. That was explained to us by Motor Trans- 
port Labor Relations people, that they had attempted to negotiate a 
more liberal number, but for reasons, wliicli Avere apparently good to 
themselves, it was felt that that was the maximum that could be 
secured. It was suggested to us that we had now broken the ice, and 
iiow that we had broken this roadblock we could look forward to 
future negotiations wlien an additional occasion could be negotiated 
for us. 

The Chairman. Did you realize at the time of this discussion that 
you are referring to, that some of your competitors had been given 
a decided advantage in the economic benefits of this contract t 

Mr. Cupp. Yes fwe knew it, of course. 

The Chairman. You knew it ? 

Mr. Cupp. Sure. 

The Chairman. But you were helpless to do anvtliing about it? 

Mr. Cupp. That is right. 

The Chairman. What I am trying to understand is why would there 
be justification in negotiating with a labor union — you are all negoti- 
ating with the same union ; is that correct ? 

Mr. Cupp. Through MTLR, that is correct. 

The Chairman. What I can't understand is why the union could 
not deal with all of you alike '. 

Mr. Cupp. We can't understand it either. 

The Chairman. That is your problem i 

Mr. Cupp. That is our problem. 

The Chairman. Some are favored, given more favored terms, some 
of your competitors, that you and some others were not granted, the 
same economic advantages ? 

Mr. Cupp. That is the problem. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11027 

The Chairman. I am trying to understand this. 

Mr. Kennedy. In our informal discussions with representatives of 
the Food Fair Co., they have felt that there really isn't an economic 
advantage in having a trailer drop. What is your comment on that ? 

Mr. Cupp. Well, I never saw anybody in this business who had that 
arrangement who gave it up voluntarily. 

Mr. Kennedy. Your figures of between $18 and $25 you believe 
are accurate figures, that that is how much a trailer drop is worth ? 

Mr. Cupp. That is what a trailer drop is worth to our company. 
That we know. 

Ml'. Kennedy. Were you ever able to get some equality with these 
other companies, Mr. Cupp ? 

Mr. Cupp. No. 

Mr. Kennedy. Subsequently, did you — — 

Mr. Cupp. I should qualify that. 

Mr. Kennedy. Following the negotiations of 1954 and through 
1955 and 1956, were you able to work out an airangement whereby 
you got some equality '{ 

Mr. Cupp. As it applied to the existing contract covering the years 
1955 and 1956, the answer is ''No.'' The 1956 negotiation for the 
years 1957 and 1958, there was developed an unrestricted trailer drop 
privilege outside of the 30-mile radius, with restrictions within 30 
miles and that applies to everybody, as I understand it. 

Mr. Kennedy. Did you have a difficult time in dealing with Ray- 
mond Cohen and 107 during the period 1955 and 1956? 

Mr. Cupp. Well, we didn't deal Avitli them directly. MTLE was 
our agent. 

Mr. Kennedy. Did you have a difficult time getting what you wished 
through MTLR from local 107 'I 

j\Ir. Cupp. Very definintely. 

Mr. Kennedy. Did you finally feel that you should switch from 
MTLR, to get somebody else to see if j'ou could get some of these 
things clarified and get some of the things that the other companies 
Avere getting \ 

Mr. Cupp. Yes ; we did. 

Mr. Kennedy. What steps did you take ? 

Mr. Cupp. That was sentiment within the industry to negotiate sep- 
arately, as the food industry, and food employers labor relations was 
formed for that purpose. Prior to that we retained counsel to deal 
specifically with local 107, and never to enjoy the same operating con- 
ditions as had some of our competitors. 

Mr. Kennedy. What counsel did you retain at that time ? 

Mr. Cupp. AVe retained Mr. Samuel Blank. 

Mr. Kennedy. What did you know tbout Mr. Blank when you re- 
tained him? 

Mr. Cupp. We knew that he had been of service to other people, 
and it was represented to us that he could be etfective in our prob- 
lems with local 107. I went to see him to discuss it and explained 
that our sole objective was to have the same operating conditions as 
liad our competitors. 

After a few days he indicated that he might be of some service to 
us. On that basis, we retained him. 



21243— 5S—i)t. 



11028 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. Had he represented the Food Fair Co. prior to that 
time ? 

Mr. Cupp. Some time in the past he had ; yes. 

Mr. Kennedy. Had he been representing them starting in 1954, 
that you knew of ? 

Mr. Cupp. I wasn't sure as to the details of when or how. 

Mr. Kennedy. Had you learned that he had some success with 
local 107 ? Is that why you retained him ? 

Mr. Cupp. That is why we retained him ; yes. 

Mr. Kennedy. Was he able to be successful in the negotiations with 
local 107 where MTLR had not been successful ? 

Mr. Cupp. He was. 

Mr. Kennedy. Would you tell us what happened ? 

Mr. Cupp. We wanted the same hourly schedule in our perishables 
warehousing delivery operations as had our competitors. That was 
the first and largest item that we had on our list. Within a very few 
weeks he was successful in working out for us, which involved a very 
substantial saving to our company. 

Mr. Kennedy. He was able to work it out where the MTLR had 
not been successful ; is that correct ? 

Mr. Cupp. That is correct. 

Mr. I^^nnedy. Subsequently, was the matter of trailer drops equal- 
ized between youi-selves and the other companies ? 

Mr. Cupp. No ; he was not successful in that until in the negotiations 
of late 1956. 

Mr. Kennedy. But that did happen finally, ultimately ? 

Mr. Cupp. That did happen finally. Ultimately, it did. 

Mr. Kennedy. Did you ever feel that there had been some kind of 
an arrangement or deal that had been made by some of your com- 
petitors with local 107 ? 

Mr. Cupp. Well, there were some things we just couldn't understand. 
We had no factual information. That is the best answer I can give 
you to that. 

Mr. Kennedy. Could you ever get an explanation as to why some of 
your competitor were allowed the unlimited trailer drops while you 
were not allowed them ? 

Mr. Cupp. No explanation ; no. 

The Chairman. You mentioned something about perishable goods. 

Mr. Cupp. Fruits and vegetables and meats. 

The Chairman. What disadvantage had been imposed on you with 
respect to that which you had gotten corrected ? 

Mr. Cupp. We were serving our stores 6 days a week. They were 
serving theirs 5 days a week. We wanted later starting times in an 
effort to work out a greater efficiency on utilization of manpower. We 
were denied the right to alter our schedules, but Mr. Blank was ef- 
fective in bringing about that alteration. 

The Chairman. You said there was some difficulty in your opera- 
tions. You said your competitors were operating 5 days a week, and 
you were operating 6 days a week. What effect did that have ? I do 
not understand that. 

I understand the trailer drop. That is pretty clear, whatever ad- 
vantages or disadvantages there are in that. But I do not under- 
stand where you were discriminated against with respect to perishable 
merchandise. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11029 

Mr. Cupp. It costs more to go to a destination point 6 times than it 
does 5 times. 

The Chairman. What you wanted to do was to get on the five-time 
basis ? 

Mr. Cupp. That is correct. 

The Chairman. In other words, operate your trucks for 5 days in- 
stead of 6? 

Mr. Cupp. Correct. 

The Chairman. They would not let you change that ? 

Mr. Cupp. That is right. But Mr. Blank worked it out for us. 

The Chairman. And that concession later made to you was made 
after you hired Mr, Blank? 

Mr. Cupp. That is correct. 

The Chairman. Had you sought to change your schedule, to oper- 
ate on a 5-day basis, at the time the contract was negotiated, in 1954? 

Mr. Cupp. I am not sure of that. But during the life of the con- 
tract, in the yeare 1955 and 1956, we asked MTLR to work it out for 
us and they were totally unsuccessful. 

The Chairman. They may have failed. That is one thing. I am 
trying to relate this as to whether this was a discrimination made 
against you over your protest at the time the original contract was 
made, or whether you just found your operation as previously estab- 
lished was costing more, and that you could effect savings by making 
the change. 

Mr. Cupp. Senator, the work schedule is really not a subject of the 
negotiations. The rates per hour, the work week in terms of 40 
hours, and other conditions, are matters for the contract. But the 
scheduling of the w^ork is usually regarded as the employers' right. 

The Chairman. Was there anything in the contract to prevent you 
from changing from 6 days to-5 ? 

Mr. Cupp. No ; this agreement did not prevent it. 

The Chairman. In other words, what I am trying to get is the 
disadvantage, whatever was imposed upon you, or that you had 
brought upon yourself by reason of having a 6-day operation, was 
not an issue at the time the original memorandum was made. 

Mr. Cupp. That is correct; it was not an issue at that time. 

The Chairman. It was not an issue. Therefore, that would not be 
a discrimination against you in the course of the negotiation? 

Mr. Cupp. That is correct. 

The Chairman. But the other, with respect to the trailer drops, 
that was an issue at the time of the negotiations ? 

Mr. Cupp. That is correct. 

The Chairman. And you came out at a disadvantage by reason 
of what you may term favoritism towards your competitor ? 

Mr. Cupp. That is right. 

The Chairman. I did not understand this perishable goods. 

Mr. Cupp. They are two different things. 

The Chairman. This perishable-goods problem developed after- 
ward. In making a survey of your business operations, you found 
you could save money by making 5 trips instead of 6 ? 

Mr. Cupp. Ordinarily, in the operation of any contract, with the 
relationship of the union, as long as the basic provisions of a con- 
tract are respected by the employer, he has a right to run his business. 



11030 IMPROPER ACTIVITIES IX THE LABOR FIELD 

The Chairman. That was not by reason of contract? 

Mr. Cupp. No. 

The Chairmax. That was by reason of pressure that was applied 
against you ? 

Mr. Cupp. That is right. 

The Chairman. I am just trying to get this record as accurate as 
it is possible to get it. I do not see how that could be charged against 
your competitor. It may put you to a disadvantage. That is an 
action chargeable against the union : isn't that correct? 

Mr. Cupp. I don't know as we have charged anything against our 
competitors. 

The Chairman. I miderstand that. But the other, the trailer drop^ 
you may say you didn't charge it against your competitors, because 
your competitors were trying to get, at the time of the negotiations^ 
just as much advantage as he could, but you were working through 
the same medium of negotiation, representing all of them. 

Mr. Cupp. That is right. 

The Chairman. But it finally wound up that you came out with 
a disadvantage, whereas your competitors had considerable advantage 
from your standpoint? 

Mr. Cupp. That is right. 

The Chairman. That did not involve the problem that later arose 
wath respect to the perishable goods ? 

Mr. Cupp. That is correct. 

The Chairman. At the time of negotiating the contract, in 1951,^ 
was there any other disadvantage you suifered by reason of advantages 
that your competitors gained in that contract, other than the trailer 
drops ? 

Mr. Cupp. Xone that I know of ; no. 

The Chairman. Now, we have it completely clear that that is the 
only thing where you were discriminated against at the time the 
contract was made. 

Mr. Cupp. That is right. 

The Chairman. Proceed. 

Mr. Kennedy. I think the reason the other point was raised is 
that you had been trying to straighten out this other difficulty after 
the contract was signed, and that you had not been able to do it 
through MTLR but finally you went and retained Mr. Blank and he 
was able to straighten it out with local 107. 

Mr. Cupp. That is correct. 

Mr. Kennedy. Subsequently, in negotiations that followed, you: 
were able to achieve the equality as far as the trailer drops with your 
competitors ; is that right ? 

Mr. Cupp. That is right. 

Mr. Kennedy. Did you know, hear or learn of anything that Mr. 
Lapensohn had to do with any of these mattei-s ? 

Mr. Cupp. Well, I didn't. 

Mr. Kennedy. Did you ? 

Mr. Barton. I had only seen Mr. Lapensohn 2 or 3 times. As far 
as knowing him, I knew nothing about him. 

Mr. Kennedy. Did he play any part in your achieving the success 
that you achieved with your new attorney, Mr. Blank ? 

Mr. Barton. Not so far as I know. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11031 

Mr, Kennedy. Did he take part in any of the discussions ? 

Mr. Cupp. No. 

Mr. Kennedy. You never met or talked with him about this matter ? 

Mr. Barton. I can remember Mr. Lapensohn being at one meeting 
when Motor Transport Labor Relations were our representatives in 
the Adelphia Hotel. I can remember his being in one meeting when 
Mr. Sam Blank was working for us. Aside from that 

Mr, Kennedy. He was present at that meeting ? 

Mr. Barton. That is right. 

Mr. Kennedy. Was success achieved after that meeting that you 
had with Mr. Lapensohn, when he was representing local 107 ? 

Mr. Barton. I don't remember that point. I just had an operation 
and on returning from the hospital was not quite tied in with the work 
that was going on. At that time Mr. Lapensohn was at the union 
office and I met him. But I can't remember whether we were success- 
ful or Avhether we were not in our visit. 

The Chairman. What did he have to do with it ? What role did he 
play ? 

Mr. Barton. I don't know. 

Mr. Cupp. Nothing, as far as we were concerned. 

The Chairman. You had no dealings with him ? 

Mr. Cupp. No, sir ; I have never seen him. 

The Chairman. You never discussed any of these problems with 
him a tall? 

Mr. Cupp. No, sir. 

The CiixViRMAN. Did you discuss any other problems with him ? 

Mr. Barton. With Mr. Lapenshon ? 

The Chairman. Yes. 

Mr. Barton. No ; I have never talked about any problems with him. 

The Chairman. Then he had no connection so far as you know? 

Mr. Barton. No connection so far as I know ; no. 

The Chairman. You say so far as you know ? 

Mr. Barton. That is correct. 

The Chairman. Did you have any information otherwise? 

Mr. Barton. Well, you read a lot of information in the newspapers. 

Mr, Kennedy, You had more information, it seems to me, when I 
talked to you a week ago. 

The Chairman, I don't know. I am trying to get the facts, 

Mr. Barton. I said that Mr, Lapensohn was at the meeting in the 
107 office. 

The Chairman. Who were you meeting with? 

Mr. Barton. We were meeting with union 107 officials. 

The Chairman. Who else was there ? 

Mr. Barton. I don't know whether Mr. Blank was there or Mr. 
Rudenko was there. 

The Chairman. Who is he ? 

Mr. Barton. A law partner of Mr. Blank. I think Mr. Blank or 
other officials from his law office were there. They were 107 officials. 

The Chairman. Union officials? 

Mr. Barton. Yes, sir. 

The Chairman. What was the purpose of the meeting? 

Mr. Barton. To discuss some point of business that our operating 
people had asked Mr. Blank to process with union 107. 



11032 IMPROPER ACTIVITIES IN THE LABOR FIELD 

The Chairman. What was that point ? 

Mr. Barton. I don't remember the specific point. 

The Chairman. Did that have to do with the perishable goods? 

Mr. Barton. It could have been. I don't remember. 

The Chairman. Did Mr. Blank represent you in any other matter 
besides the perishable goods problem? 

Mr. Barton. There may have been 2, 3, or 4 points discussed at 
that meeting. 

The Chairman. Do you recall what the other points were ? 

Mr. Barton. No, sir, I don't remember specifically what they were. 

The Chairman. You don't say specifically that you discussed the 
perishable goods problem at that meting; is that right? 

Mr. Barton. There was a letter in which we embodied 4, 5, or 6 
points. 

The Chairman. Here you hire a lawyer, and you get an appoint- 
ment, I assume to go down to the union hall to talk to union officials 
about your problem. 

Mr. Barton. That is correct. 

The Chairman. What was the problem ? ^ 

Mr. Barton. Well, I don't remember the points discussed in that 
letter, Senator. 

The Chairman. When was this meeting held, or about when ? 

Mr. Barton. It was probably 2 years ago last August or Septem- 
ber, around in that time. 

The Chairman. Where is the letter? Do you have a copy of the 
letter that you made a memorandum on? 

Mr. Barton. There would be a copy in our files; yes, sir. 

The Chairman. Do we have a copy of it ? 

Mr. Kennedy. I don't believe so. Was it 1955 or 1956 ? 

Mr. Cupp. It would have had to have been 1956 for the fact that we 
retained Mr. Blank around June of 1956. He has served us since that 
time. It couldn't have been before that. 

Mr. Barton. It would have been in August or September 

The Chairman. That would have been less than 2 years ago. 

Mr. Cupp. That is right. 

The CHAraMAN. I can't quite understand why you don't remember 
what the meeting was about. 

Mr. Cupp. Maybe I can shed a little light on this. 

The Chairman. I would be glad for you to. 

Mr. Cupp. There were about five things that we hoped to accom- 
plish, or have Mr. Blank accomplish for us. One was on trailer 
drops. The most immediate thing was altering our schedule for the 
handling of perishables. There was a question of helpers that we 
were required to carry on some trucks that management did not think 
were necessary. There were a couple of lesser things that I don't 
bring to mind right now. Those were the things that I went to see 
Mr. Blank about to see if he could help us. On the basis of him 
being able to help us on part of them — he didn't give us any assurance 
that he could help on any, but he thought he could on the first one — 
that was important and that is why we retained him. There was a 
succession of meetings. I can understand why Mr. Barton seems to 
be a little foggy to you. There were not only these points, but the 
general climate and the relationship between our company and 107 
was very adverse, for reasons that we could not fathom. If there is 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11033 

any one thing he did for us, it was to clear up such misunderstandings 
that may have been in the minds of the 107 leaders, so that our labor 
relations people would have a direct approach, whereas they would 
not even answer the phone or talk to us before. There was a suc- 
cession of meetings, with Blank's office representing us. 

I would say his greatest accomplishment was to give us an entry so 
we could at least talk to these people about our problems and lay them 
before them. In the operation of a large business, you have a great 
number of employees with unions, and there are all kinds of matters 
that arise that are properly the subject for discussion. 

I can understand Mr. Barton not being able to rattle off 
specifically 

The Chairman. There were several meetings, of course you might 
not remember the specific details for this one. 

Mr. Barton. There is another reason for that. Senator, as I ex- 
plained previously, I had been ill and in the hospital, and during my 
absence there had been 1, 2, or 3 meetings, the subject matter of which 
I was not familiar with. 

As soon as I came back from the hospital, I was not at my strongest 
thinking in business channels as one would normally think, I was 
asked to go down to this meeting. 

The letter had already been prepared, so it was a question of my 
going down and visiting with these people, at which time I met Mr. 
Lapensohn. 

The Chairman. Was that your first meeting with Lapensohn ? 

Mr. Barton. No, sir. I had explained that in 1954 I had met him 
in the Alelphia Hotel, when Motor Transport Labor Relations were 
negotiating for us. I met him on a more informal basis that time 
than I did at this time for the reason that at the Adelphia Hotel there 
were large groups of people in attendance. At this meeting with 107 
there was a small group. Our own company were the only people 
represented because Mr. Blank, by reason of his professional abUity, 
had been able to arrange for us to meet personally with the 107 folks. 

The Chairman. Had you gotten your relief on the perishable goods 
problem prior to the time you had this meeting in 107 ? 

Mr. Barton. I don't think so. 

The Chairman. You think it was still pending ? 

Mr. Barton. Yes, sir. 

The Chairman. Maybe all 4 or 5 of the points were pending at 
that time? 

Mr. Barton. Yes. 

The Chairman. And on some of them, and this is one of them, the 
perishable goods problem, you got relief ? 

Mr. Barton. At a subsequent date, probably. That is correct. 

Mr. Cupp. I think I should say that in all relationships of any kind 
between our company and Mr. Lapensohn — these are chance meetings 
that he is describing — they had no significance. 

The Chairman. Did he appear to be taking any part in the dis- 
cussion or did he take any part in the discussion of the meeting at 
107? 

Mr, Barton. When I met Mr. Lapensohn originally in the Adel- 
phia Hotel, I understood that he was a business agent of 107, and in 
his capacity as an official of the union, yes, as a business agent of the 
union that he acted that day. 



11034 IMPROPER ACTIVITIES IN THE LABOR FIELD 

The Chairman. Did he take part at the meeting in 107 ? 

Mr. Barton. Yes, sir. 

The Chairman. He took part in the discussion there? 

Mr. Barton. Yes, sir. 

The Chairman. As a representative of the union ? 

Mr. Barton. Yes, sir. It was my understanding; yes. I thought 
he was acting as one of their key business agents. 

Mr. Kennedy. Finally you broke away from MTLR; did you? 

Mr. Barton. That is correct. 

Mr. Kennedy. Because you had this success with Mr. Blank? 

Mr. Curp. I think it was a natural outgrowth of that, thei-e was 
sentiment in the food industry generally for separate representation 
or negotiations with 107. The food industry was kind of on the tail 
of the dog on the general industry negotiations and the food industry 
was not happy about that. 

Mr. Kennedy. You had achieved success with Mr. Blank where 
you had not achieved success with the MTLR; is that correct? 

Mr. Cupp. That is correct. 

Mr. Kennedy. So you prevailed or urged the rest of the food in- 
dustry to take on Mr. Blank ; is that correct ? 

Mr. Cupp. I should say that we were infiuentiaL We did not urge, 
we did not have to urge, the sentiment was for breaking away from 
MTLE. 

Mr. Kennedy. Here are the minutes of November 13, 1956, of the 
MTLR, and local 107. In attendance: Mr. Cohen, Battisfore, Pen- 
rose, and Attorney McBride. 

For the MTLR Mr. Clark, Gannon, Matthews, and Attorney Siegel, 
I want to read this for your comments on it. 

Mr. Siegel states here, "Jim and Hugh," who are the heads of the 
MTLR— 

have taken the attitude that they are very much distressed over the whole 
incident. However, they felt they could not hold Penn Fruit Co. in our group, 
nor could we negotiate for one food chain only. 

This is the part. I want to stress. 

The way the food group left this association was the most suspicious thing 
I have ever heard of, and I have told Messrs. Blank and Rudenko. 

Then Mr. Gannon goes on : 

I would like to say something. I am upset because 2 years ago we were in 
agreement on all matters except 3, and you know and I know that everything 
was settled, except 3 points, seniority, picket lines, and hot cargo. Since that 
time many things have been added by you and your business agents. 

He is talking to Mr. Cohen. 

In addition I would like to get off my chest the fact that we have a contract 
with you under which you are not supposed to give anyone else any better deal 
than you gave our members. But you did this for Coastal Tank Lines. On 
American Stores, we could not get things accomplished in 18 months, but they 
got them ironed out directly by going to the union through their attorney in 
1 hour. 

Do you have any comment about those two statements, about the 
fact that the surrounding about this whole matter was highly sus- 
picious, and the fact that after you retained Mr. Blank, you were 
able to get all of these matters straightened out rather quickly ? 

Mr. Cupp. I have not any comment. They admit they were un- 
successful and Mr. Blank was successful. What the basis of their 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11035 

suspicions would be, I think they ought to explain. I don't know. 

Mr, Kennedy. Why was it that you retained Mr. Blank? Will 
you tell us that ? 

Mr. Cupp. Because he felt that he could accomplish for us in 
achieving some equality for our company 

Mr. Kennedy. Why did you happen to go to Mr. Blank originally ? 

Mr. Cupp. We didn't want to have to go to anybody. 

Mr. IvENNEDY. Who urged you to go to Mr. Blank ? 

Mr. Cupp. The circumstances urged more than anything else. I 
would be glad to disclose it, the identity of the specific person. 

Mr. Kennedy. Was it a union official who suggested that you go 
to Mr. Blank? 

Mr. Cupp. Yes ; it was a union official. 

Mr. Kennedy. Did you understand at that time that Mr. Blank 
had a close relationship with any union official ? 

Mr. Cupp. We understood that he had a favorable relationship in 
that he could get a hearing on the incident. We could not get one 
nohow. 

Mr. Kennedy. You knew that he had represented the Food Fair 
Co. Did you understand that he had any other relationships with any 
of the union officials or business agents of the union ? 

Mr. Cupp. No ; we were just looking for a result. 

Mr. Kennedy. Did you make a financial arrangement with him 
when you first went to talk to him ? 

Mr. Cupp. Not the first time. He suggested that if he were success- 
ful, a certain figure. He also made very plain that if we were not 
satisfied with the results or he could not produce, we had no obligation. 

Actually, we paid him nothing until about 10 or 11 months after he 
started to look after our interests. 

Mr. Kennedy. Was that after he had been successful i 

Mr. Cupp. That was after he had been successful. 

Mr. Kennedy. How much did you pay him then ? 

Mr. Cupp. We paid him $20,000, and we considered as against the 
results he had secured for us, it was a very fair payment. 

Mr. Kennedy. How much was the result worth that he secured for 
you? 

Mr. Cupp. The results on an annual basis on the first thing he ac- 
complished, in savings to us, not only from 107 but from the other 
unions involved, was about $100,000 a year, we considered for that 
result in so short a time, that his ideas of value were very fair. 

Mr. Kennedy. I am not questioning the fee at all. 

Mr. Cupp. I should add that that represented a lot of things besides 
that one accomplishment. The clearing of the atmosphere, whatever 
caused it to be the way it was, was an accomplishment in itself. From 
a business standpoint or any other standpoint, we felt and feel it was 
a sound arrangement. 

Mr. Kennedy. I might say, Mr. Chairman, for Mr. Blank, that he 
does not have a very reputable reputation in Philadelphia. I do not 
want these facts to go out prior to the time that he testifies. 

Mr. Cupp. I might add along that line that we made inquiries in 
banking circles and other circles before we engaged him, and he was 
highly recommended, 

Mr. Kennedy. All right. 

The Chairman. Is there anything further ? 



11036 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. Not at this time. 

The Chairman. Do you have anything, Senator Curtis ? 

Senator Curtis. No ; I think no. 

The Chairman. All right. Thank you, gentlemen. You may 
stand aside. 

Mr. Kennedy. Mr. Kramer. 

The Chairman. You do solemnly swear the evidence you shall give 
before this Senate select committee shall be the truth, the whole truth, 
and nothing but the truth, so help you God ? 

Mr. Kramer. I do. 

TESTIMONY OF J. ALBERT KRAMER 

The Chairman. State your name, your place of residence, and your 
business or occupation ? 

Mr. Kramer. My name is J. Albert Kramer. I live in Merchant- 
ville, N. J. I am secretary-treasurer, of Rabiger-Kramer, Inc., Phil- 
adelphia. 

The Chairman. You waive counsel ? 

Mr. Kramer. I do. 

Mr. I{j:nnedy. R-a-b-i-g-e-r-Kramer ? 

Mr. Kramer. Yes. 

Mr. Kennedy. You do the trucking for the A. & P.; is that right? 

Mr. Kramer. That is right ; some of it. 

Mr. Kennedy. In the Philadelphia area ? 

Mr. Kramer. Yes. 

Mr. ICennedy. I want to take you specifically up to the negotiations 
in 1954. At that time, were you anxious to receive unlimited trailer 
drops ? 

Mr. Kramer. We were. 

Mr. Kennedy. Did you feel, at that time, and do you still feel, that 
it amoimts to an immense saving for a company if they have trailer 
drops ? 

Mr. Kramer. Tliat is right. 

Mr. Kennedy. What would you feel a trailer drop is worth, one 
trailer drop ? 

Mr. Kramer. I feel that it is worth about $22.50 a drop. 

Mr. Kennedy. That is about the same as the previous witness 
stated. So it would be an advantage worth $22.50, approximately, 
for each drop that you were able to get ? 

Mr. Kramer. Yes ; it would be. 

Mr. Kennedy. And you had negotiations in 1954 on your behalf 
by the MTLR ; is that right ? 

Mr. Kramer. That is correct. 

Mr. Kennedy. The negotiations ended up with your being re- 
stricted, as a representative of the A. & P. Co, being restricted to 50 
trailer drops, while some of your competitor received unlimited trail- 
er drops ; is that right ? 

Mr. Kramer. That is right. 

Mr. Kennedy. Did you ever receive or obtain any explanation for 
that? 

Mr. Kramer. No ; I did not. 

Mr. Kennedy. Do you feel that that puts you at a competitive dis- 
advantage ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11037 

Mr. Kramer. The company advised me that they were at a competi- 
tive disadvantage. 

Mr. ICennedy. Does that cost you a considerable amomit of money 
or cost the company a considerable amount of money in comparison 
to our competitors, tlie fact that you were restricted in the trailer 
drops ? 

Mr, I^AMER. My own company lost considerable money in 1955 by 
not having the drops. 

Mr. Kennedy. This is a very important matter to a company; is 
that correct ? 

Mr. IvRAMER. That is right. 

The Chairman. You said you lost. Do you mean that the overall 
operation was a loss, or that you would have made more money by 
reason of the drops ? 

Mr. Kjiamer. Our overall operation was a loss in 1955. 

The Chairman. And you think that was caused in part at least by 
not having the trailer drops ? 

Mr. Kramer. It was. 

The Chairman. How many trailer drops could you use if you had 
them unlimited? 

Mr. lOtAMER. I think at that time we could have used about 100 
a week, with a steady increase as the stores were prepared to receive 
dropped trailers. 

The Chairman. How many did you actually have? 

Mr. K!ramer. We had 50 during 1955. 

The Chairman. How much would that amount to a year? 50 drops 
a week you were denied. You could have used 100 a week and you 
only had 50, so that is a deficiency of 50 a week. 

Mr. Kramer. That is right. 

The Chairman. 50 times $22.50, what does that amount to each 
week? 

Mr. Kramer. I hadn't figured it that way, Senator, but I know in 
1955 we lost $72,000. 

The Chairman. It is a matter of mathematics. But you lost some 
$70,000? 

Mr. Kramer. That is right. 

The Chairman. And this trailer drop savings would have made 
that up? 

Mr. Kramer. I think it would. 

The Chairman. Is there anything further? 

Senator Curtis. Mr. Chairman. 

The Chairman. Senator Curtis. 

Senator Curtis. Wlio gains by a restriction in the contract as to 
the number of trailer drops? 

Mr. Kramer. Well, I think the company with the freedom of opera- 
tion certainly would profit greatly by having a drop. 

Senator Curtis. Is there any advantage to the union ? 

Mr. Kramer. Sir ? 

Senator Curtis. Is there any advantage to the union ? 

Mr. Kramer. I don't know that it would make much difference one 
way or the other. 

Senator Curtis. Does it call for the employment of more men? 

Mr. Kramer. By not having trailer drops, it does call for the em- 
ployment of more people, or at least with longer hours. It may not 



11038 IMPROPER ACTIVITIES IN THE LABOR FIELD 

change the number of people, but it would have quite an effect on 
overtime. 

Senator Curtis. What would have happened to your company if 
you had held out in the negotiations for unlimited trailer drops? 

JSIi*. IvRAMER. IVliat would have happened to my company? 

Senator Curtis. Yes. 

Mr. Kramer. Well, at that time I wasn't in a position to do so. 
After all, I am a contract carrier for A. & P. 

Senator Curtis. What I mean is would the miion have been in a 
position and would they have closed down the operation? 

Mr. Kramer. There is that possibility. 

Senator Curtis. Do you regard whether or not to use trailer drops 
a management decision or is that properly a labor decision ? 

Mr. Kramer. I think it is a management decision. 

Senator Curtis. I agree with you. 

That is all, Mr. Chairman. 

Mr. Kennedy. The Food Fair Co. has maintained to us that there 
is no saving in trailer drops. What would your comment be on that? 

Mr. Kramer. I couldn't miderstand that. 

Mr. Kennedy. There is no question in your mind that there is? 

Mr. Kramer. Not at all. 

Mr. Kennedy. What about the cost of equipment ? 

Mr. Kramer. Sir? 

Mr. IvENNEDY. Wliat about the cost of equipment? Would there 
be a saving in that field ? 

Mr. Kramer. I don't think there would be any marked saving in 
the cost of equipment, because over the amortized period of the equip- 
ment, it would make very little difference. 

Mr. Kennedy. It is well understood in the industry that there is a 
savings in trailer drops ; is it not ? 

Mr. Kramer. Tliat is right. 

Mr. Kennedy. That is, in having trailer drops ? 

Mr. Kramer. That is true. 

Mr. Kennedy. That is all. 

The Chairman. The committee will stand in recess mitil 2 o'clock. 

(Whereupon, at 12 : 13 p. m., the committee recessed to reconvene 
at 2 p. m., the same day.) 

(Members of the committee present at the taking of the recess 
were: Senators McClellan and Curtis.) 

AFTERNOON SESSION 

(The committee reconvened at 2 p. m., at the expiration of the 
recess.) 

(Members of the committee present at the convening of the session 
were : Senators McClellan and Curtis.) 

The Chairman. The committee will come to order. 

Call the next witness, Mr. Kennedy. 

Mr. Kennedy. Mr. Chairman, the next witness will be Mr. Julius 
Schwartz. 

I would like to also explain, Mr. Chairman, that there is a Food 
Fair chainstore, or group of stores, here in Washington, D. C, and 
they have nothing to do with the Food Fair Co. that we have been 
discussing. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11039 

We have had some mquiiy about that, and I wanted to straighten 
out the record. 

The Chairman. Be sworn, please. 

You do solemnly swear that the evidence you shall give before this 
Senate select committee shall be the truth, the whole tinith, and noth- 
ing but the truth, so help you God ? 

Mr. Schwartz. I do. 

TESTIMONY OF JULIUS S. SCHWARTZ, ACCOMPANIED BY HIS 
COUNSEL, SCOTT W. LUCAS AND HARRY SHAPIRO 

The Chairman. State your name, your place of residence, and your 
business or occupation. 

Mr. Schwartz. My name is Julius S. Schwartz. My residence is 
in Philadelphia. I am industrial relations director for Food Fair 
Stores, 2223 East Allegheny Avenue, Philadelphia. 

The Chairman. You have counsel present. 

Counsel, will you identify yourself for the record ? 

Mr. Lucas. I am Scott W. Lucas, attorney at law, 1025 Connecticut 
Avenue, representing all of the Food Fair executives who are going 
to testify before this committee, along with Mr. Harry Shapiro, 
attorney at law, Philadelphia, Pa. 

The Chairman. Thank you very much. We are glad to have you. 
We have missed you here quite a lot. 

Mr. Lucas. It is very kind to have you say that, sir. 

Mr. Kennedy. Were you a Senator also, Mr. Shapiro? 

Mr. Shapiro. That is right, sir, but not to the degree as the chair- 
man has the honor to be. 

Mr. Kennedy. Mr. Chairman, Mr. Schwartz is being asked to ap- 
pear at this time on a limited inquiry. He will be recalled at a later 
time. 

You are director of industrial relations ; are you ? 

Mr. Schwartz. That is right, sir. 

Mr. Ivennedy. You have held that position for how long ? 

Mr. Schwartz. I would say 13 to 14 years. 

Mr. liJENNEDY. That is for the Food Fair Co. ? 

Mr. Schwartz. That is the Food Fair Stores. 

Mr. Kennedy. What are your responsibilities ? 

Mr. Schwartz. My responsibilities include employment, training, 
labor relations, publications, public relations, and I also administer 
about 200 scholarships for the Food Fair Stores Foundation. 

Mr. Kennedy. Is that only in Philadelphia, or is that nationally ! 

Mr. Schwartz. That is the entire chain. 

Mr. Kennedy. Your headquarters in Philadelphia ; is that right ? 

Mr. Schwartz. Philadelphia, that is right. 

Mr. Kennedy. You have been a representative in the bargaining 
agency for some of your employees in the Teamsters Union; is that 
right ? 

Mr, Schwartz. That is right. 

Mr. Kennedy. Specifically you have local 107 ? 

Mr. Schwartz. 107 in Philadelphia. 

Mr. Kennedy. Did you know Mr. Benjamin Lai)ensohn from local 
107? 



11040 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Schwartz. I know Mr. Lapensohn ; yes, sir. 

Mr. Kennedy. How long have you known Mr. Lapensohn? 

Mr. Schwartz. I would say I met him about 10 or 11 years ago. 

Mr. Kjinnedy. Under what circumstances did you first meet him? 

Mr. Schwartz. I was out on an evening with a labor man who in- 
troduced me to him. 

Mr. Kennedy. Did you see him occasionally after that? 

Mr. Schwartz. Very casually. 

Mr. Kennedy. You didn't know him very well ? 

Mr. Schwartz. Not very well at all. 

Mr. Kennedy. Did he ever come to your home ? 

Mr. Schwartz. Never, sir. 

Mr. Kennedy. Did you ever go to his home ? 

Mr. Schwartz. No, sir. 

Mr. Kennedy. Did the other officials of the Food Fair Co. know 
Mr. Lapensohn? 

Mr. Schwartz. I think some do know him. 

Mr. Kennedy. Do you know if he had ever visited them at their 
home? 

Mr. Schwartz. That I do not know. 

Mr. Kennedy. You think some of the others know him, but you 
don't know how well ? 

Mr. Schwartz. I don't know. 

Mr. Kennedy. Mr. Friedland, did he know him ? 

Mr. Schwartz. That I don't know, sir. 

Mr. Kennedy. Mr. Arnold Cohen ? 

Mr. Schwartz. I think he stated once he did know him. 

Mr. Kennedy. Did you know him as a representative of local 107^ 

Mr. Schwartz. No; I did not. 

Mr. Kennedy. Did you know he worked for 107 ? 

Mr. Schwartz. I found out he did work for 107. 

Mr. Kennedy. Did you know at the time ? 

Mr. Schwartz. What time is that ? 

Mr. Kennedy. During the period of negotiations for the contract 
of 1^4 — during the period 1955 and 1956. Did you know he was 
associated with local 107 ? 

Mr. Schwartz. I knew he was associated. 

Mr. Kennedy. Wliat do you mean associated ? 

Mr. Schwartz. That he had some administrative position down 
there. 

Mr. Kennedy. Do you Imow in what capacity ? 

Mr. Schwartz. No ; I do not. 

Mr. Kennedy. You did not ? 

Mr. Schwartz. I do not know. 

Mr. Kennedy. How did you know he was associated with 107? 

Mr. Schwartz. Because I happened to see him there on one occasion 
and I inquired about him, and they said he was working with 107. 

Mr. Kennedy. When was that that you saw him ? 

Mr. Schwartz. It might have been maybe in the latter part of 1954. 
That may not be exactly right. 

Mr. Kennedy. Was that during the period of time that the negotia- 
tions for the contract were going on ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11041 

Mr. Schwartz. I don't think so. The negotiations were in Decem- 
ber, I think, of 1954. I don't know whether I recall seeing him down 
there or not. 

Mr. Kjsnnedy. Did you see him before that ? 

Mr. Schwartz. I may have, on 1 or 2 occasions. 

Mr. Kennedy. At the union headquarters ? 

Mr. Schwartz. At the union headquarters ; yes. 

Mr. Kennedy. That was prior to the negotiations? 

Mr. Schwartz. I am not sure whether it was prior or not that I had 
seen him. 

Mr. IvENNEDY. If the negotiations took place in December 1954, and 
you saw him in 1954, if it was that year, it must have been before 
December. 

Mr. Schwartz. It would have been some time in the fall. 

Mr. Kennedy. Did you have discussions with him at that time ? 

Mr. Schwartz. No ; I didn't. It was just a greeting, and I was sur- 
prised to see him. 

Mr. Kj:nnedy. Did you see him any other time down there ? 

Mr. Schwartz. Maybe on 1 or 2 occasions. 

Mr. Kennedy. Did you ever discuss the Food Fair problems with 
Mr. Lapensohn ? 

Mr. Schwartz. Not directly ; no. 

Mr. Kennedy. Did you indirectly ? 

Mr. Schwartz. There was one occasion there where we had a griev- 
ance and I tried to reach our regular business agent and he wasn't there. 
I mean, our business agents weren't there, and I was referred to who 
was there, and it happened to be Mr. Lapensohn. I told the story and 
that was it. 

Mr. Kennedy. When was that ? 

Mr. Schwartz. I think it might have been in 1954 or 1955. 

Mr. Kennedy. 1954 or 1955 ? 

Mr. Schwartz. I am not sure. 

Mr. Kennedy. Did you discuss the grievance with him? Did you 
discuss that with Mr. Lapensohn ? 

Mr. Schwartz. I told him the grievance. That was it. 

Mr. Kennedy. You what ? 

Mr. Schwartz. I told him the grievance ; yes. 

Mr. Kennedy. Was he able to do something about it ? 

Mr. Schwartz. I don't recall. It was just to get on record. I think 
it was a discharge case. 

Mr. Kennedy. Did you discuss any other grievances with him ? 

Mr. Schwartz. Never. 

Mr. Kennedy. Did you discuss any other matters dealing with Food 
Fair, the contract between Food Fair and local 107 ? 

Mr. Schwartz. No; I didn't, because I didn't see him that often. 

Mr. I^nnedy. You did not discuss that with him. Do you know 
if any of the other officials of your company ever discussed this con- 
tract with him ? 

Mr. Schwartz. No ; I don't, sir. 

Mr. Kennedy. You were in charge of these negotiations, or you 
were in charge of the labor relations ? 

Mr. Schwartz. For tlie company, and re]>resented the company. 



11042 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. As I understand it, the MTLR is the one that con- 
ducted the negotiations for yon in that contract of 1954. 

Mr. Schwartz. Yes, sir ; that is correct. 

Mr. Kennedy. Did you participate in the negotiations or discus- 
sions at all yourself ? 

Mr. Schwartz. I was i)resent at two meetings, as part of the food 
group who sat as an advisory committee to the MTLR. 

Mr. IvENNEDY. When were those two meetings ? 

Mr. Schwartz. They were around the middle of December, and 
I think one was around the 14th of December and the other about 
the 17th of December. 

Mr. Kennedy. Where were those meetings held ? 

Mr. Schwartz. Down at the 107 hall. 

Mr. Kennedy. At that time the negotiations were being conducted 
bytheMTLR? 

Mr. Schwartz. That is correct. 

Mr. Ivennedy. During that time around the 14th or I7th of Decem- 
ber, or during that period of time, did you have any personal con- 
ferences with the representatives of local 107 ? 

Mr. Schwartz. No; I did not. 

Mr. Ivennedy. You did not ? 

Mr. Schwartz. No. 

Mr. Kennedy. Did any of your company, any representatives of 
your company ? 

Mr. Schwartz. I don't think so. 

]\Ir. Kennedy. They never told you about it if they did ? 

]Mr. Schwartz. No; they didn't. 

Mr. Kennedy. Was this question of the trailer drops an important 
question ? 

Mr. Schwartz. That was a very important question, among other 
questions. 

Mr. Isjennedy. Did you or any representative of your company, 
have any discussions with the representatives of local 107 as to 
how many trailer drops should be allowed to Food Fair? 

Mr. Schwartz. Discussions on that? 

Mr. Kennedy. Yes. 

Mr. Schwartz. I had none directly with them. 

Mr. Ivennedy. My question was : Did you or any representative of 
your company have any discussions with them about how many 
trailer drops should be allowed to Food Fair ? 

Mr. Schwartz. I think there is a question there of a principle, I 
think, the principle being to retain what we had had for about 5 years. 

Mr. Kennedy. Now the question is: Did you or representatives 
of your company have any discussions with any representatives of 
local 107 as to the question of how many trailer drops should be 
allowed ? 

Mr. ScHw^ARTZ. Might I ask what you mean by representatives of 
the company ? 

Mr. Kennedy. Other than the MTLR. 

Mr. ScHAVARTZ. Only that I had to keep my company informed, 

and I also kept 

(Witness conferred with his counsel.) 

Mr. Kennedy. You haven't answered. I have asked you the ques- 
tion three times and you haven't answered yet. Did you or any 



IMPROPER ACTIVITIES IN THE LABOR FIELD 



1104^ 



representative of your company, Avith the exception of the MTLR, 
have am' clisciissions with the representatives of local 107 as to liow 
many trailer drops should be allowed during this period of time? 

Mr. Schwartz. I would not know. 

Mv. Kexxedy. What do you mean you would not know? 

Mr. ScmvAKTZ. Only that in trying- to answer your question, you 
are asking me whether any representative of the company had a dis- 
cussion with them. I didiVt have a discussion with them. 

Mr. Kennedy. Do you know if any representative of your company 
had any discussions with them ? 

Mr. Schwartz. No; I don't, except I kept our counsel informed. 

Mr. Kennedy. You kept your counsel informed of what ? 

Mr. Schwartz. When the situation got veiy critical there, in the 
progress of the negotiations. 

Mr. Kennedy. Who was j^our counsel ? 

Mr. Schwartz. Mr. Blank. 

Mr. Kennedy. Did he have discussions with the representatives of 
local 107? 

Mr. Schwartz. That I don't know. 

Mr. Kennedy. lie never told you that he was having discussions? 

]Mr. Schwartz. I was keeping him informed on it. 

Mr. Kennedy. You are not answering the question at all. 

(Witness conferred with his counsel.) 

Mr. Kennedy. Listen to the question and then answer it. Did 
he ever inform you that he was having any discussions with the repre- 
sentatives of local 107? 

Mr. Schwartz. I don't remember. 

Mr. Kennedy. You don't remember. Well, now, it would be rather 
unusual, as you had the MTLR conducting the negotiations for you, 
that would be a rather unusual situation, w<»u1d it not, to have an 
outside attorney going down and negotiating the contract. That 
would be something that you would remember. Did it happen? 

Mr. Schwartz. No; because MTLR was representing us there. 

Mr. Kennp:dy. Did a representative of your company, Mr. Blank 
or anyone else, go down and have any discussions with the representa- 
tives of local 107? 

Mr. Schwartz. I don't know. 

Mr. Kennedy. You do not know ? 

Mr. Schwartz. No. 

Mr. Kennedy. As the labor relations official for Food Fair, you 
would know if it happened ; would you not? 

Mr. Schwartz. It could be. 

Mr. Kennedy. Well, did anybody ever indicate to you that they 
were having some discussions with Mr. Cohen or Mr. Lapensolin? 

Mr. Schwartz. I don't recall that there were any indications. 

Mr. Kennedy. That would be something that you would remem- 
ber, Mr. Scliwartz. That would be something that you would te- 
member. Did anybody from the company ever inform you that they 
were having such a discussion ? . 

'Mr. Schwartz. Not thatl can recall in the company. 

Mr. Kennedy. "Not that I can recall in the company." J)ld any-' 
l)iody outside the company inform you they were ^ havi'iig sitch 
discussions? 



-I>t. 28- 



3iiji mil 'i^liamp-i. h-i. 



11044 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Schwartz. No, sir. 

Mr. Kennedy. Did anybody inside the (•oin[)iiny inform yon they 
were having such discussions^ 

Mr. Schwartz. No, sir. 

Mr. Kennedy. Did anybody inform you that they were having- 
sucli discussions? 

Mr. Schwartz. No, sir. 

Mr. Kennedy. You are sure of that? 

Mr. Schwartz. Positive. 

Mr. Kennedy. Did you ever learn such discussions as to the con- 
tract were taking place ? 

Mr. Schwartz. May I have that again ? 

Mr. Kennedy. Did you ever learn that discussions as to the terms 
of the contract were taking place between representatives of Food 
Fair and the representatives of local 107? 

Mr. Schwartz. I don't rememlier. 

Mr. Kennedy. "1 don't remember.'* You just said no lo the other 
question. 

(Witness conferred with liis counsel.) 

The Chairman. The Chair would like to ask the witness a ques- 
tion. We Avant to get this record straight. I think possibly you mis- 
understood the question. '\^^iat we are undertaking to determine is 
aside from MTLR, those who were there in the regular course of repre- 
senting all the stores that were involved, all of the companies, the 
chains, that were involved. 

As I understand it you had this MTLR, Motor Transport Labor 
Relations, representing all of the chainstores that were involved in 
these negotiations ; is that correct? 

Mr. Schwartz. That is correct. 

Tlie Chairman. The question here is where you or anyone else 
associated with food stores, or anyone else representing them, either 
attorneys or otlier officers or agents of the food stores, had sei)arate 
conferences and negotiations with representatives of the union regard- 
ing the subject matter tliat was under discussion in the negotiations. 

I think that is as direct as I can put it. 

Mr. Schwartz. Well, I wasn't there for any of those discussions, 
but I did keep our attorney informed of the progress of the nego- 
tiations. 

The Chairman. You said you kept your attorney informed. That 
does not answer the question. Did you have any conversations? 
Did an}^ of those other than the MTLR group, any of your company, 
agents, officers, or attorneys, carry on or have conversations with rep- 
resentatives of the union with regard to this contract, or anything 
involved in thevSe negotiations? 

The question is: First, do you know whetlier they did or not? 

Mr. Schwartz. I don't know, sir, whether they did or not. 

The Chairman. Did you ? 

Mr. Schwartz. No. 

The Chairman. And you know of no one else who did ? 

Mr. Schwartz. I can't say that I don't knoAv that. I can possibly 
infer. 

The Chairman. You know of no one else who did^ You can 
answer that. Or do you know ? 

Mr. Schwartz. Do you mind repeating the question again. Senator? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11045 

The Chairman. Yes, sir; I will rejpeat it. Do you kiiow of any 
officer, agent, attorney, or representative of Food Fair Stores, Inc. 
other than those of the jMTLR having conversations with or negotia- 
tions with or conferences with representatives of the union, 107, 
regarding the subject matter that was in consideration in the negotia- 
tion conferences ? 

Mr. Schwartz. I Avould think our lawyers' office had convei-sations 
with them. 

The Chairman. You think who? 

Mr. Schwartz. Our attorney's office. 

The Chairman. That is your impression ? 

Mr. Schwartz. At my what? 

The Chairman. That is your impression ? 

Mr. ScHw^ARTZ. That is right. 

The Chairman. That is your recollection ? 

Mr. Schwartz. That is right. 

The Chairman. Who was your attorney ? 

Mr. Schwartz. Mr. Blank. 

The Chairman. He was carrying on, you think, conferences with 
the representatives of the imion during the period of these negotia- 
tions ? 

Mr. Schwartz. Only to the extent that I was keeping him informed, 
and there was a question there of a strike being imminent. 

The Chairman. How would you be keeping him informed of his 
own conferences with tlie union officials ? 

Mr. Schwartz. P]xce[)t this, that he knew the seriousness of it, in 
representing us. 

The Chairman. I am sure he knew the seriousness of it, but the 
point is was he having these convei-sations or conferences with repre- 
sentatives of the union ? 

Mr. Schwartz. I understood he was having some conferences. 

The Chairman. You understood that he was. All right. 

Mr. Kennedy. What form were those conferences taking? 

Mr. Schwartz. I really don't know. 

Mr. Kj^nnedy. What did he tell you about the conferences? 

Mr. Schwartz. I don't know what happened at the conferences. I 
told him our position. 

Mr. Ivennedy. What did he tell you about what A^as happening at 
the conferences ? 

Mr. Schwartz. He was counseling me on what they attempt to do, 
and at the same time I gave him some of the ideas that came out of 
some of our caucuses, company caucuses. 

Mr. Kennedy. He reported back to you as to what should be done, 
what position you should take regarding the negotiations? 

Mr. Schwartz. We exchanged views on those. 

Mr. I^nnedy. That was after his conferences with the officials of 
local 107? 

Mr. Schwartz. I don't know when the conferences took place. 

Mr. KENNEDY. That is what you undei-stood, what he was reporting 
back to you was based on the conferences that he had with local 107 
officials? 

Mr. Schwartz. I think that would be right. 

Mr; Kennedy. And you in turn would take a particular position 
Avith your MTLR people ; is that right ? 



1104G IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Schwartz. No. I would take the position with our own ^oup, 
and then we would pass on what ever w6 could do to our MTLR 
people. 

Mr. I^NNEDY. Did your group know that you were having these 
secret meetings with local 107 officials ? 

Mr. Schwartz. I don't know whether I would call them secret 
meetings. 

Mr. Kennedy. Were they secret from tliom ? 

Mr. Schwartz. They probably don't know about those ; no. 

Mr. Kennedy. Is that where you got the idea, was it from Mr. Blank 
that you received the idea, of requesting the unlimited trailer drops 
with the 20 helpers ^ 

Mr. Schwartz. No; I didn't get it there. AVe had the unlimited 
drops up until that time. 

Mr. lUiNNEDY. Was it from the negotiations that were conducted by 
Mr. Blank with the officials of local 107 that was the basis of your 
requesting that that system continue, of unlimited trailer drops, plus 
putting on the 20 helpers ? 

Mr. Schwartz. I would say not, because we had several ideas on the 
subject. 

Mr. Kennedy, ^^liat ideas came from Mr. Blank ? 

Mr. Schwartz. Well, the ideas there I reviewed with him, and we 
had the ideas, for example, of the possibility of creating a fund and 
having it divided among the various drivers. Then we had another 
idea that maybe we ought to have a bonus of a half hour or an hour go 
to the drivers who were dropping. Then the idea came up that pos- 
sibly helpers, adding helpers, might be a solution, because from a union 
point of view the continuation of drops meant that they were losing or 
could lose membership. 

Mr. Kennedy. TV-liy didn't you just allow the jNITLR to conduct 
these negotiations for you ? 

Mr. Schwartz. They did. They got the same ideas. 

Mr. Kennedy. ^Vliy did you have your own private attorney go 
around conducting negotiations ? 

Mr. Schw.vrtz. I don't know whether you would call it conducting. 
It was just sounseling with him. 

Mr. Kennedy. "\Mien had you retained Mr. Blank? 

Mr. Schwartz. I can't say exactly, because I was not the one that 
retained him. 

Mr. Kennedy. Wiw retained Mr. Blank ? 

Mr. Schwartz. I think that came through our president's office. 

Mr. Kennedy. ^^Hiat were the financial arrangements with him? 

Mr. ScHWATiTZ. I don't know the financial arrangements that were 
that were made. 

Mr. KJENNEDY. But he was there, he started working for you during 
the period of these negotiations in 1954 ? 

]\Ir. Schwartz, It was prior to 1954. 

Mr. Kennedy. Prior to 1954? 

Mr. Schwartz, Pardon me. I mean prior to the negotiations. 

'Mr. Kennedy. Do you know when he received his first fees? 

Mr. Schwartz. No ; I do not. , .. , , , , 

Mr, Kennedy. In your coii^erehceswitli him as to the proposition 
that you would -make iivyour- meetings, did you finally cbnVe up with 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11047 

the solution that you should make the propostion that you would 
continue with your trailer drops and put on 20 helpers? 

Mr, Schwartz. No ; I did not. 

Mr. Kennedy. What did you finally decide in your meetings after 
his meetings with the union officials ? 

Mr. Schwartz. What we did there was in our own caucuses among 
the other food people, discussing various means. 

Mr. Kennedy. Your ideas were based on the meetings that Mr. 
Blank had with these union officials. Did you finally come up with 
the idea that you would suggest the unlimited trailer drops and the 
20 extra helpers ? Is that correct? 

Mr. Schwartz. No ; I didn't suggest that. 

Mr. Kennedy. That was the culmination of your meetings with 
Mr. Blank ; was it not ? 

Mr. Schwartz. No. 

Mr. Kennedy. Where did you get the idea ? 

Mr. Schwartz. Our idea was an idea not only of our company but 
other companies present in discussions in our own caucuses, and we 
relayed it to our own committee. 

Mr. Kennedy. This was not your own idea? 

Mr. Schwartz. Not my idea. 

Mr. Kennedy. Mr. Friedland — was he aware of the fact — was the 
president of Food Fair aware of the fact that Mr. Blank was having 
these personal meetings with the officials of local 107? 

Mr. Schwartz. If I may right here. Senator — Mr. Kennedy — Mr. 
Friedland was not president of the company at the time, and I was 
not in touch with him about it at all. 

Mr. Kennedy. Was he an official of the company at the time? 

Mr. Schwartz. Yes, he was, sir. 

Mr. Kennedy. Was he aware of the fact that Mr. Blank was having 
these meetings? 

Mr. Schwartz. I don't think he was. 

Mr. Kennedy. Who else in the company knew that these meetings 
were taking place? 

Mr. Schwartz. Well, if anyone knew-^I would report my negotia- 
tions and the progress of them to the vice president in charge of ware- 
housing and transportation. That is Mr. Cohen. 

Mr. Kennedy. But you did not inform the group that was con- 
ducting the negotiations for you, the MTLR? 

Mr. Schwartz. No; I did not. 

Mr. Kennedy. They were miaware of the fact that you were having 
these personal negotiations ? 

Mr. Schwartz. Well, they might have been unaware of it, yes, sir. 

Mr. Kennedy. Well, you didn't tell them ? 

Mr. Schwartz. No ; I did not. 

Mr. Kennedy. There was no other way they could find out. That 
is correct, is it not ? 

Mr. Schwartz. That is correct. 

Mr. Kennedy. And you were able, in these negotiations, and in the 
contract that was signed, you were able to get unlimited trailer drops, 
were you not ? 

Mr. Schwartz. Well, the final settlement was a continuation of 
unlimited trailer drops, which was true of another major competitor 



11048 IIMPROPER ACTIVITIES IN THE LABOR FIELD 

who, no doubt, is larger than we are in the particular town. But 
there were limitations on it. 

Mr. Kennedy. Did you know that they were refusing- to grant that 
same allowance to the A. & P. Co., the national stores? 

Mr. Schwartz. A. & P. was sitting there with us. 

Mr. Kennedy. You were aware, were you not, that they refused to 
grant that to the A. & P. stores and to the National 

Mr. Schwartz. On the contrary; I don't know whether A. & P. 
acted individually or any other company acted individually. 

But Ave were negotiating to contract to continue our present method 
in 1954 insofar as drops were concerned, and that was true of three 
other companies. At the same time, two of the leading companies 
received the privilege of dropping trailers. 

Mr. Kennedy. The facts are that you received unlimited trailer 
drops and A. & P. and American Stores did not receive unlimited 
trailer drops. 

Mr. Schwartz. But we had the drops. 

Mr. Kennedy. But they also wanted and needed unlimited trailer 
drops at that period of time. 

You were aware of the fact, were you not, that you received un- 
limited trailer di-ops, and these other stores were limited to 50? 

Just answer the question, and then you can go on to explain it, if 
you wish. 

Mr. Schwartz. I was very much aware of that. 

Mr. Kennedy. You were aware of it ? 

Mr. Schwartz. Yes. 

INIi'. Kennedy. Did you Avant to offer some explanation ? 

Mr. Schwartz. Yes ; I do. "Wliat we were after, along with another 
major competitor, was a continuance of the same method of operation. 
When it came to our competitors, when we first got into this drop 
picture, the competitors, namely two of the companies that were repre- 
sented here this morning, I don't think they weer in any position to 
use all the drops or could use drops because of the fact that their 
stores were not the same caliber of stores that ours were. I only cit« 
this particular fact to you. In 1950, we went in to trucking in 1949, 
in 1950, in analyzing the size of stores and the volume of the other 
companies, our volume per store, and we had llo in 1950, was around 
a million and a half dollars per store. 

American Stores also was doing, at 1,637 stores, about $253,000. In 
other words, the Food Fair volmne was six times the volume per 
store of this particular competitor. In the case of the A. & P., it 
was 21/^ times, and in the case of Penn Fruit, they were larger. These 
large volume stores were an outcome of an evolution in supermarket 
merchandising, where we try to display merchandise in a self-service 
fashion, and at the same time to go for the larger markets, and, 
therefore, as much as possible, create an efficient operation which the 
other competitors have not done. 

They were just starting gradually to get up to this point, until in 
1954, at this negotiation, and I am just checking some figures here on 
sales that were reported in their annual reports, in 1954, the negotia- 
tion time, our particular volume was around $1.7 million. American 
Stores was about $0.5 million. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11049 

Therefore, our volume was three times theirs, but they were con- 
verting their stores, closing up the small traditional service store and 
getting into the self-service market. 

Therefore, their demand for this type of operation was more to 
their liking. That brought about their particular fight for the situa- 
tion. We, on the other hand, w^anted to retain what we previously 
had had. 

Mr. Kennedy. They wanted trailer drops, 

Mr. ScHw^'^RTZ. That is right. 

Mr. Kennedy. And they w^anted trailer drops in the same rate that 
you were getting trailer drops. 

Mr. Schwartz. Well, here is one thing I can say to you 

Mr. Kennedy. Isn't that correct, they wanted trailer drops just as 
you were getting trailer drops ? 

Mr. ScHw^ARTz. That is right.t 

Mr. Kennedy. And they were not allowed to have trailer drops at 
the same rate you were having them. 

Mr. Schwartz. Prior to that time, I don't know whether there was 
a necessity for them. 

Mr. Kennedy. I am not asking that. I say at that time they were 
not allowed to get the same number of trailer drops as you were 
getting. 

Mr. Schwartz. I have no objection to them getting all the trailer 
drops in the world. 

Mr. Kennedy. I am sure of that. But the facts are that they were 
not able to get the trailer drops at the same number you were able 
to get them. 

Mr. ScHW^ARTz. I don't know whether they couldn't get them. 

Mr. Kennedy. Well, they did not get them, did they? 

Mr. Schwartz. They did not have them. 

Mr. Kennedy. Well, they did not get them, did they ? 

Mr, Schwartz. No. 

Mr, Kennedy. And they wanted them, did they not? 

Mr. Schwartz. That is right. 

The Chairman. Let me ask you about the trailer drops. Are they 
quite an advantage from the standpoint of economic operation? 

Mr. ScHw^vRTz. Well, I don't know whether I would call it an 
advantage. Senator. To us it is a convenience and a modern, efficient 
way to transport merchandise from a major warehouse to a store. 

In some cases, too, there are a lot of stores that could not take 
a complete load of merchandise at any one time. 

Therefore, it was the convenient factor of having this trailer 
parked outside of the back of your store to be unloaded at the con- 
venience of the store personnel. And also, at the convenience and 
the demand of the needs of the consuming public. 

The Chairman. You said it is very convenient to have them. I 
am asking you about the economic factor. Is there also quite a saving 
by reason of having them, in operation cost? 

Mr. Schwartz. I doi^'t know wliether it is an economic factor. I 
heard some figures this morning, Senator. I think one was $22.50 a 
drop. That is what one man quoted. Another one said anywhere 
from $18 to $25. 

The Chairiman. That is right. 



11050 IMPROPER ACTIVITIES IX THE LABOR FIELD 

Mr. Schwartz. I don't know where they get their figures. Quickly 
trying to analyze it myself, if you didn't have a ti'ailer drop and a 
man unloaded, tlie driver unloaded, the merchandise at the store level 
when the trailer came in, it would take him maybe 2, 21/^, or 3 hours 
to unload it. Therefore, at the rate at the time, in 1954, winch was 
the 1955 contract and which could be somewhere around $2.47, it might 
cost anywhere from $7.50 to $10 to unload. 

At the same time, you had a professional who could unload it. But 
wlien he went away, then you had to have some store help who were 
not professionals in unloading to unload. 

They cost you maybe $1.50 an hour. So in figuring it out, it is a 
question in my mind of whether it costs you $8 to $10 with a driver, or 
$6 with the store help. 

So that is why I fail to see the figures that were mentioned this 
morning, how they reconcile them. 

The Chairman. You do not agree with the figures mentioned this 
morning, but you do agree there is some economic advantage in them? 

Mr. ScHAVARTz. You may call them economic advantages. I call it 
convenience and efficiency in the method of operating our markets, 
which is part of the evolution of the supermarket industry. 

The Chairman. Don't convenience and efficiency contribute to 
economy ? 

Mr. Schwartz. I would say it does. 

Mr. Lucas. Mr. Chairman, may I interject for just one statement 
on this point ? 

The CiL\iRMA]sr. Yes. 

Mr. Ltjcas. We have a witness, Mr. Arnold Cohen, who will go into 
this very question at some length when he is on the stand. 

The Chairman. All right. 

Well, I was just getting this witness' view. 

I did not know who in the company would be able to give the best 
testimony regarding it. All right, I will just defer until we get 
Mr. Cohen on the stand. 

Senator Curtis. Mr. Chairman. 

The Chairman. Senator Curtis. 

Senator Curtis. Mr. Schwartz, I want some things straightened up 
in my mind. Wliat is the MTLR ? 

Mr. Schwartz. The MTLR is the Motor Transport Labor Relations 
division of the Pennsylvania Motor Truckers Association. 

That group negotiates for many truckers in the particular area. 
In our case, it is in Philadelphia. Wliat we do is give the Motor 
Transport Labor Relations, the MTLR, a power of attorney to negoti- 
ate for you. 

Senator Curtis. Is it a voluntary association ? 

Mr. Schwartz. Yes, it is. 

Senator Curtis. Of management? 

Mr. Schwartz. Of management. 

Senator Curtis. AVlio were the members ? 

Mr. Schwartz. The members? I would say anyone in the truck- 
ing field in the Philadelphia area, and they could be in any number of 
lines of trucking. 

Senator Curtis. Is it the truckowners or the stores ? 

Mr. Schwartz. They could be truckowners, public carriers, they 
could be contract carriers, and they could be individual stores. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11051 

Senator Curtis. It is an association ? 

Mr. Schwartz. That is right. 

Senator Citrtis. Were the members bound by contract to act in 
unison and not deal directly with the union ? 

Mr. Schwartz. I would say that they are bound by contract. 

Senator Curtis. With each other ? 

Mr. Schwartz. That is right. 

Senator Curtis. When did you withdraw from the MTLR ? 

Mr. Schwartz. We withdraw in the latter part of 1956, when we 
started — not we, I mean the food people all withdrew and started 
their own association. 

Senator Curtis. The latter part of 1956 ? 

Mr. Schwartz. That is right. 

Senator Curtis. These negotiations that Mr. Kennedy was inquir- 
ing about, what year were they for ? 

Mr. Schwartz. The negotiations took place in the latter part of 
1954 for the years 1955 and 1956. Then the 1956 negotiations took 
care of 1957 and 1958. 

Senator Curtis. The contract period with the teamsters is the cal- 
endar year ? 

Mr. Schwartz. The calendar year, that is right. 

Senator Curtis. What arrangements were followed after you with- 
drew from MTLR ? 

Mr. Schwartz. Then a new group was formed called the Food Em- 
ployers Labor Relations, Inc., and that was comprised of, I think there 
are 28 companies, all in the food field, all with common problems in 
the food field. 

Senator Curtis. Thej' were food stores ? 

Mr. Schwartz. Food stores, cooperatives, wholesalers, chainstores, 
but all in the food field. 

Senator Curtis. What did that group call themselves ? 

Mr. Schwartz. Food Employers Labor Relations. 

Senator Curtis. Did they then bargain for all the members ? 

Mr. Schwartz. They bargained for all the members. 

Senator Curtis. Are the members of this latter association bound 
to each other to act in unison in their bargaining and not deal indi- 
vidually ? 

Mr. Scpiv/ARTZ. Yes, they are. 

Senator Curtis. For how long a time had Food Fair had unlimited 
trailer drops ? 

Mr. Schwartz. We had had it since we went into our own trucking 
operation, I would say in the middle of 1949. 

Senator Curtis. And your company resisted a change in that ? 

Mr. Schwartz. Resisted a change ? 

Senator Curtis. Yes. 

Mr. Schwartz. In what respect, Senator ? 
ing about, what year were thev for ? 

Senator Curtis. What is that? 

Mr. Schwartz. In what respect? 

Senator Curtis. In your negotiations, your position was you wanted 
that continued ? 

Mr. Schwartz. Absolutely. 

Senator Cuirns. What other food concerns belonging to the asso- 
ciation had similar unlimited trailer drops? 

Mr. Schwartz. That is in the 



11052 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Senator Curtis. Prior to these negotiations in the latter part of 
1954. 

Mr. Schwartz. There were four companies, Penn Fruit Co. 

Senator Curtis. Wliat fruit company? 

Mr. Schwartz. Penn Fruit, Food Fair, Bast Market, and Mont- 
gomery Co. 

Senator Curtis. Did they all get to keep them ? 

Mr. Schwartz. Pardon me. 

Senator Curtis. Did they all get to keep it ? 

Mr. Schwartz. In the contract; yes. In the 1954 contract, they 
continued their method of operation. 

Senator Curtis. In other words, the concerns that had the unlimited 
drops got a contract to keep them. Did any concerns who had had a 
limited number of trailer drops at the time of negotiations gain the 
right to unlimited drops ? 

Mr. Schwartz. Well, those who had the operation of the drops, un- 
limited, as you stated, continued that operation. However, several 
other companies picked up drops, who had never had them before. 

Senator Curtis. By that you mean unlimited drops ? 

Mr. Schwartz. No. They picked up a fixed figure of 50 drops for 
the American Stores and 50 drops for the A. & P. Tea Co., with a right 
to review and get a sympathetic hearing after 6 months after the 
new contract went into effect. 

Senator Curtis. They did not have any drops ? 

Mr. Schwartz. They did not have any drops ; that is right. Those 
who had the continuation of their old method of operation then had 
to put on some helpers, and the helper picture was worked out on a 
proportionate basis. 

Senator Curtis. Were the ultimate tenns arrived at in the 1954 
negotiations handled through MTLR ? 

Mr. Schwartz. Which negotiations ? 

Senator Curtis. 1954? 

Mr. Schwartz. Was the ultimate ? Yes. 

Senator Curtis. It was. 

Mr. Schwartz. Yes. 

Senator Curtis. What was the nature of the contract among the 
members of MTLR, whereby they were bound to each other not to 
deal directly with the union ? 

Mr. Schwartz. Do you mind repeating that again. Senator. 

Senator Curtis. Mr. Keporter, will you read the question ? 

(The pending question, as requested, was read by the reporter.) 

Mr. Schwartz. I think in a labor negotiation all of us try to help 
as mucli as we possibly can to come to a consummation and an agree- 
ment, and we try to use everything we can to come to an agi-eement, 
eveiybody 'S ideas and everybody's thouglits and everybody's exchange 
of views. 

It was pretty imminent that there may be a work stoppage. 

Senator Curtis. What I am trying to get at is what sort of a con- 
tract you had with each other. 

Mr. Schwartz. The only contract we had with each other — we had 
no contract except the power of attorney to the labor relations division 
of the Pennsylvania Motor Truckers' Association. It was power of 
attorney. 



IMPROPER ACTIVITIES EN THE LABOR FIELD 11053 

Senator Curtis. Was that power of attorney to sign a bargaining 
contract ? 

Mr. ScHWAETz. To negotiate the contract, that is right. 

Senator Curtis. Was it an exclusive power of attorney ? 

Mr. Schwartz. I would think it was, yes. 

Senator Curtis. You think it was ? 

Mr. Schwartz. Yes, sir. 

Mr. Shapiro, Could I help you. I found out that there is a bylaw 
plus the power of attorney, which I am told by counsel for the organi- 
zation 

Senator Curtis. There is what ? 

Mr. Shapiro. Bylaws and the power of attorney both, which provide 
for the company acting solely for all of the members, and their mem- 
bers being bound by it. 

Senator Curtis. The association ? 

Mr. Shapiro. Yes, the bylaws of the association plus the power of 
attorney which each member gives to the association to negotiate for 
it. 

Senator Curtis. Does it prohibit conversation ? 

Mr. Shapiro. I have asked that a copy be procured if possible so we 
can submit it to you. 

Senator Curtis. Do you know whether it prohibits conversation be- 
tween a member and the union ? 

Mr. Shapiro. I will find that out. It does not prohibit conversa- 
tions between a member and the union during negotiations. That is 
what I am told by counsel for the association. 

Senator Curtis. Thank you. That is all, Mr. Chairman. 

The Chairman. Does it prohibit separate negotiations ? 

Mr. Shapiro. Yes, it does. 

The Chairman. It does prohibit separate negotiations ? 

Mr. Shapiro. Yes. 

The Chairman. The purpose of working through the MTLR is so 
that you can engage in, in a sense, collective bargaining on the part of 
management as you engage in collective bargaining on (lie part of the 
unio, or the laborers. That is the purpose of the association, is it not? 

Mr. Schwartz. Yes, sir. 

The Chairman. That is the purpose of that kind of an arrange- 
ment, so you will all have an equal chance ? 

Mr. Schwartz. That is essentially correct. 

The Chairman. Is there anything further ? 

The Chair thinks that we should call, or I would like to call Mr. 
Cohen. 

Mr. Lucas. Can I submit to you two questions to ask this witness ? 

The Chairman. I would like to get this matter of the economic 
advantage cleared up. 

Mr. Shapiro. He is available. 

The Chairman. We will call him in a few moments. 

Counsel for Food Fair has submitted two questions. I see no 
objection to them. 

Do you wish to see them, Senator Curtis ? 

(A document was handed to Senator Curtis.) 

Mr. Lucas. I hope you can read my writing. Senator. 

Senator Curtis. I liave no objection. 



11054 IMPROPER ACTIVITIES IX THE LABOR FIELD 

The Chairman. Tlie Chairman propounds to the witness questions 
submitted by his counsel. Question No. 1: Did Food Fair Stores 
have any objection to other competitors having as many drops as 
they wanted insofar as their contracts were concerned 'I 

Mr. Schwartz. We have no objection whatsoever to any number of 
drops that any competitiors would have, because we think it is a 
progressive step, and whatever is good for a competitor is good for us, 
and I think it makes for progress, and eventually any efficiencies out 
of it would be passed on to the consumer. 

The Chairman. You were not trying to keep others from getting 
drops, and you were simply trying to keep unlimited that privilege 
that you had enjoyed theretofore ? 

Mr. Schwartz. You are absolutely right. 

The Chairman. Now, question No. 2 : Did you or any of Food Fair 
executives make any objection of any kind whatsoever as to any of 
your competitors having more drops than was called for under its 
respective contract? 

Mr. Schwartz. We never made any objections, and we would never 
make any. 

The Chairman. Did you know what they got ? 

Mr. Schwartz. Did I know what they got, surely. 

The Chairman. Did they know what you got ? 

Mr. Schwartz. Absolutely. 

The Chairman. At the time or did they find it out later ? 

Mr. Schwartz. x\bsolutely at the negotiations. 

The Chairman. At the time of the negotiations ? 

Mr. Schwartz. Yes, sir. 

The Chairman. Was any explanation given ? We have asked this 
of these others who didn't get the drops, what explanation was given 
why they shouldn't have the drops. 

Mr. Schwartz. Well, I don't think any explanation was there, ex- 
cept from the other side of the bargaining table, which was the union, 
no doubt, might frown a bit, because if you have drops you may 
eventually eliminate men from working, where you may have had two 
on a truck, and you may come down to one. 

The Chairman. They would have more objection in that respect 
to you, wouldn't they, having any drops at all ? 

Mr. ScHAVARTZ. That is right. 

The Chairman. Than they would those who had a smaller opera- 
tion? 

Mr. Schwartz. That is correct, and they did. 

The Chairman. So they surrendered, in effect, their major objection 
in order to retain the minor benefits ? 

Mr. Schwartz. Well, I don't know. 

The Chairman. If they object to drops, and if it is liable to effect 
the employment of men or union membership, the number of union 
members, then they would necessarily have greater objection to the 
larger operation than they would to the smaller ? 

Mr. Schwartz. Not entirely. 

The Chairman. Well, if you are doing 2 or 3 times as much busi- 
ness as your competitors, then you are employing possibly 2 or 3 
times as many people, and getting 2 or 3 tunes as many shipments in, 
isn't that correct ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11055 

Mr. Schwartz. That is correct. 

The Chairman. Well, if they are going to give free drops at all, 
it would hurt them worse to give free drops to the one that is doing 
the biggest business than it would to give it to the one doing the 
smaller business and having the smaller number of employees, isn't 
that correct ? 
. Mr. Schwartz. That is logical. 

The Chairman. That is logical ? 

Mr. Schwartz. Yes, sir. 

Mr. Kennedy. Mr. Chairman, as there has been a question raised 
as to the right of the member of the association to go ahead and cany 
on his negotiations or carry on conferences with representatives of 
tlie union, I would like to call the attorney for the MLTR around 
to just ask him that question. He is Mr. Segal. 

Senator Curtis. Could I ask the witness who is here one question?; 

The Chairman. Yes, sir. 
. Senator Curtis. Well, isn't the question of whether you use drops 
at all or how many, a management decision? It doesn't relate to 
wages or hours. 

Mr. Schwartz. It should be. '■■•> 

Senator Curtis. Or working conditions or pension or welfare 
funds? 

Mr. Schwartz. It is a negotiable item. 

Senator Curtis. A negotiable item ? 

Mr. Schwartz. Yes. 

Senator Curtis. I can't understand that. 

That is all, Mr. Chairman. - 

The CiiAiR3iAN. Mr. Segal, will you come around, please ? 

STATEMENT OF BERNARD G. SEGAL 

Will you be sworn ? . - 

. .Mr. Sjegal. It is only a matter of law. 
'The Chairman. You may express an opinion. 

Mr. Kennedy. I wanted to find out from you what the situation was 
as regards to a member of the association going ahead and conducting 
discussions or negotiations while the MLTR was in the midst of 
negotiations with the union. 

Mr. Segal. First to reply to that category, there was an absolute 
rule that while contract terms were being negotiated, no member 
was to have any contact with any union representative pertaining to 
any matter involved in the negotiations. 

When negoiations began, the members were assembled and reminded 
of this rule. Every meeting during the course of negotiations, the 
^ame admonition was again made. We considered it as essential that 
individual employers not speak with union representatives as I am 
sure the union negotiators considered it essential that their individual 
members not talk with management representatives about matters 
which went on at either meeting, 

Mr. Kennedy. Could you explain to the committee what the reason 
for that would be? Would it be that it would undermine all of the 
woT'k of the association, if the individual members went behind their 
backs and conducted these negotiations ? 



11056 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Segal. Yes; I think it is an established principle on both 
sides of a negotiating table that out of a united front comes strength. 
Out of a sin<i^]e negotiation, or a single group of people, who speak 
for the people they represent, being sure that when they speak they 
are the only spokesmen, comes the confidence that the negotiations 
will be for the benefit of all. 

Now, each side, of course, and T will speak now only for manage- 
ment, has regular resource, fii'st to its general membership and second 
to a negotiating committee which in our case consisted of 42 members 
in which every segment of the industry was represented. 

For example, the food group had a representative selected by the 
members of the food industry who spoke for the food group on the 
negotiating team. So the carriers were divided into segments of the 
country. Tliere were the Western carriers, who had selected their 
representatives, and there were the New England carriers, and so 
also the coal and fuel oil dealers had their representative. 

The course of negotiation then was as follows: Fii'st there was a 
general meml)ership meeting at which the entire membership was ad- 
vised of what was transpiring. At regular and at frequent intervals, 
there were contacts between the negotiating team and this large nego- 
tiating group of 42 representatives of the entire industry. 

Wlien we got down to the end of the negotiations, then there were 
periods during Avhich the negotiating team would stand by at the 
association offices a few blocks from the union offices. As problems 
of particular groups arose — as, for example, the food group — they 
were actually drawn into the negotiations as an entirety and per- 
mitted to participate while their own prdblem was under considera- 
tion. 

But the fundamental of it all was that there were to be no dis- 
cussions not actually in the negotiating group between individual 
members and the union. 

Mr. Kennedy. So this testimony that we have heard from the rep- 
resentatives of Food Fair that these negotiations were conducted by 
an attorney of theirs was a violation, a strict violation, of the agree- 
ment between the association and its members. 

Mr. Segal. If there were actual negotiations. 

Mr. Kennedy. I said according to his testimony. 

Mr. Segal. That would have j^en a violation of what we regard as 
the obligation of members. 

Senator Curtis. Now, Mr. Chairman, you are talking about obliga- 
tions of members. 

The Chairman. Let the Chair make this observation: I do not 
think that we have dealt with matters of law at all here. I think 
that we are dealing with facts. I do not care if you do not want the 
sworn testimony, but I am sure you would say the same thing under 
oath. 

Mr. Segal. I am quite sure of that. 

The Chairman. I do not think that we are talking about legal 
matters. 

Mr. Segal. That is because Mr. Kennedy asked me the procedure. 
The interpretation of the bylaws, and the power of attorney is the 
matter of law to which I had reference. 

The Chairman. Of course, it would be a legal opinion, and accord- 
ing to your judgment as a lawyer, and as a lawyer for that association 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11057 

or ffroup, you say an individual business involved in the negotiation 
had no right under the bylaws and under the power of attorney to 
negotiate on the side while those negotiations were in progress^ 

Mr Segal. That is correct, and I may say that I have never heard 
the company to which reference is made question that in any of our 
meetings, and I would doubt whether the company would question 
that. 

The Chairman. All right. • i . u . +1.;. 

Senator Curtis. I am not clear in my own mmd yet about this. 
I can understand the arguments that would be advanced tor such a 
policy and for such a rule, that one agency speak for all, but what 
I want to know is the elements in the contract that they were com- 
pelled to follow that policy. . . -, ^. 4.- r. .r.A 

Mr Segal. Senator, as each member joined the corporation, and 
there'has been some reference to this being Motor Transport Labor 
Relations of the Pennsylvania Motor Truck Association. That is not 
correct. This is a separate corporation, Motor Transport Labor Rela- 
tions, Inc. It is bound by articles of incorporation and bylaws. 
Those bylaws make provision for the association being the exclusive 
bargaining agent for collective-bargaining agreements tor its 

"^Further, each company, as it joins the corporation, and becomes a 
member— this is a nonprofit corporation— signs a POwer of attorney 
which expressly provides that the corporation shall be the exclusive 
bargaining agent for the company in the negotiation of collective- 
bargaining agreements. i •. i. 

Senator Curtis. Now, suppose a company, and we make it a hypo- 
thetical company, belongs to your nonprofit corporation. Can they 
withdraw and withdraw their power of attorney at any time. 

Mr. Segal. Yes. There are. Senator, limitations, but I don t think 
that they are here applicable. 

Senator Curtis. And suppose a company does proceed to negotiate 
in its own right, what remedy do the other members of your nonprofit 
corporation have against them? 

Mr Segal. I believe none. I believe that the corporation retains 
that right, remaining subject to the current collective-bargaining 
agreement until its expiration. Otherwise, there is no penalty either 
on the company or any right in the other members. Any company 
would have had the right during the negotiations to have withdrawn 
had it so desired. . ^ ^ . .„ . , , 

Senator Curtis. Without formally withdrawing, if they proceeded 
to negotiate, would the MTLR or the individual members have a 
cause of action against the member that did that? 

Mr. Segal. General common law rules would apply. Senator. 

Senator Curtis. What is that ? 

Mr. Segal. Well, I presume if people have an agreement and a 
member violates the agreement, and the other members can prove 
damao-e, they would have a cause of action, but I knoAv of no such 
suit in the collective-bargaining field in the American jurisprudence. 

Senator Curtis. They would have to prove they were damaged? 

Mr. Segal. They would have to prove actual damage, and that 
would be tiie sole amount of recovery. It is because of the diinculty, 
I )H-esume, of proving damage, that there has never been such a suit 
that I l:now of. 



11058 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Senator Curtis. Now, what does the contract arrangement provide 
concerning conversations with the union by a member? 

Mr. Segal. Now, I take it. Senator, that you mean 

Senator Curtis. I am referring to the contract. 

Mr. Segal. You mean the power of attorney ? 

Senator Curtis. Yes, and I am referring to discussions which re- 
Late to tlie subject matter of collective-bargaining proposals, but I am 
calling them conversations because tliey do not formally finalize them 
in collective bargaining. 

Mr. Segal. There is no express provision in either the bylaws or the 
power of attorney to that specific effect. 

Senator Curtis. In other words, a member company might join 
MTLR, and given their power of attorney, and if they saw the union 
officials and put up an argument for something they thought ought 
to be included, but if they didn't actually formalize negotiating on 
it, that is not expressly prohibited ? 

Mr. Segal. I am sorry. There was some speaking behind me, and 
I didn't hear your question. 

. Senator Curtis. I will do my best to restate it. Suppose that a 
comjjany that does belong to MTLR and has been given their power 
of attorney, in the period while negotiations are going on contact the 
union and put up an argument for some of the things that they think 
ought to be put into the contract, but they do not separately nego- 
tiate a contract, is such a procedure prohibited either by the power 
of attorney or by the bylaws ? 

Mr. Segal. I would say by implication it is. What gives me pause 
is when you designate it as not being negotiation. Realistically, any- 
thing that an employer says to a miion during the negotiations affects 
the negotiations, in our view. 

We would prefer and have really applied a strict rule that any 
member desiring to have that kind of access, come to the negotiating 
committee and we have never denied such access to any group or any 
particular interest which or who thought it might be desirable to have 
direct access to the union. It has not been at all unusual for us to 
say to the union, we think such and such an interest ought to present 
itself on view directly, but that is done under the ages of the asso- 
ciation, and it is done in a way that it cannot adversely affect any other 
member because association representatives are present. 

We would no more think of having private discussions with union 
members not negotiators than we would like to have our members have 
private negotiations with them. 

Senator Curtis. That is all. 

The Chairman. Thank you very much. 

]Mr. Kennedy. That is all. 

The Chairman. Call the next witness. 

Mr. Kennedy. I would like to call Mr. Gannon and Mr. Clark. 

The Chair]man. Do you and each of you solemnly swear that the 
evidence you shall give before this Senate select committee shall be 
the truth, the whole truth, and nothing but the truth, so help you 
God? 

Mr. Ck:\rk. I do. 

Mr. Gannon. I do. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11059 

TESTIMONY OF JAMES P. CLARK AND U. F. GANNON, SR., ACCOM- 
PANIED BY THEIR COUNSEL, BERNARD G. SEGAL AND JAMES J. 
LEYDEN 

The Chairman. Beginning on iny left, state your name and your 
place of residence and your business or occupation. 

Mr, Gannon. My name is U. F. Gamion, Sr., and I live at 4 Meridith 
Road, Overbrook, Philadelphia, Pa. 

The Chairman. What is your business or occupation, please ? 

Mr. Gannon. I am a freight forwarder and in the warehouse busi- 
ness and local trucking business. 

The Chairman, Thank j^ou verv much; and the gentleman on my 
right? 

Mr, Clark, My name is James P, Clark, and I live in Chancelor- 
ville, Philadelphia, and I am president and owner of the Highway Ex- 
press Lines Trucking Co, in Philadelphia. 

The Chairman. Thank you very much. Gentlemen, do you have 
counsel? 

Mr. Segal. I am Bernard G. Segal, 1719 Packard Building, Phila- 
delphia, and I have asked my associate, James J. Leyden, to be with 
me since he has the files and he is familiar with tltem should any ques- 
tions necessitate recourse to the files. 

The Chairman. Thank you very much. Proceed. 

Mr. Kennedy. Mr. Gannon, you held a position in the MTLR ? 

Mr. Gannon, Yes, sir. 

Mr. Kennedy. What was that position ? 

Mr. Gannon. I am vice president and treasurer. 

Mr. Kennedy. And part of that group included the food chains; is 
that right? 

Mr. Gannon, That is right, 

Mr, Kennedy. And now Mr, Clark, you also held a position ? 

Mr. Clark. I am president of the MTLR, 

Mr, Kennedy. How long have you held that position ? 

Mr, Clark. 20 years. 

Mr, IvENNEDY. You are familiar with the negotiations that took 
place in 1954 ? 

Mr. Clark, Up to the last day, at which point I took a spell the night 
before, and I didn't attend the last day's negotiations. 

(At this point, the following members were present : Senators Mc- 
Clellan and Curtis,) 

Mr, Kennedy, But you were conducting the negotiations together 
wdth Mr. Gannon and with the help of Mr. Segal on behalf of the food 
chain group ; is that right ? 

Mr, Clark. That is correct. 

Mr. Ivennedy: And those negotiations had taken place during part 
of November and December 1964 ? 

Is that correct ? 

Mr, Clark. That is right, about the middle of December. 

Mr. I^NNEDY, Was one of the issues with which you were arguing 
with the representatives of the union the question of the trailer drops ? 

Mr, Clark, That is correct, 

Mr. Kennedy. Was that an important issue ? 

21243— 58— pt. 28 16 



11060 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Clark. That was important both to the Food Fairs and to the 
general freight carriers. 

Mr. Kennedy. Did all of the food companies look upon this ques- 
tion of a trailer drop as an important financial matter? 

Mr. Clark. Of course they did. 

Mr. Kennedy. And that included Food Fair, did it not ? 

Mr. Ci^vRK. Yes. 

Mr. Kennedy. Everyone considered that to get a trailer drop was 
a financial advantage, is that right ? 

Mr. Clark. Of course. 

Mr. Kennedy. Were you attempting to obtain, during the negotia- 
tions that led up to the signing of this agreement, were you attempting 
to obtain equality for all the food chains in regard to this question 
of trailer drops ? 

Mr. Clark. We were trying to gain equality for not only the food 
people but also for all the general truckers that needed it. That was 
one of the important issues of the negotiations that year. 

Mr. Kennedy. You were attempting to obtain the same terms also 
on this matter of trailer drops for all of the companies involved, is 
that right? 

Mr. Clark. That is correct. 

Mr. Kennedy. You were not attempting to try to get a contract 
for so many trailer drops for one company and fewer trailer drops for 
another company ? 

Mr. Clark. Of course not. 

Mr. Kennedy. Did you feel that that would have been unfair ? 

Mr. Clark. Sure it would have been unfair. 

Mr. Kennedy. What was the position of the union in connection 
with the trailer drops ? 

Mr. Clark. The union wanted to eliminate the trailer drops. 

Mr. Kennedy. For everyone ? 

Mr. Clark. For everyone that year. 

Mr. Kennedy. So this was a matter of negotiation where you, rep- 
resenting these companies, and the union officials, were at variance, 
is that right ? 

Mr. Clark. That is correct, 

Mr. Kennedy. Was this such a serious matter, this and possibly 
some other issues that were under consideration, were these such 
serious matters that you were considering suggesting to the food com- 
panies that they take a strike on the matter ? 

Mr. Clark. Not only the food companies. 

Mr. Kennedy. I am restricting it to the food companies. 

Mr. Clark. Yes ; we were leaning toward a strike because we didn't 
think we could get what we were striving for. We called the food 
companies together 2 or 3 times during the last week and told them 
them it looked like we were not going to get it, and that we were 
willing to go the distance with them and go on strike, if necessary. 

Mr. Kennedy. This would be the week of early December 1954, is 
that right ? 

Mr. Clark. The first week in December starting about 10th of 
December, I believe. 

Mr. Kennedy. I see. 

The Chairman. You said go on strike. You meant take a strike if 
one came, is that what you meant ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11061 

Mr. Clark. If we were forced to it ; yes. 

The Chairman. You were not going on strike. 

Mr. Clark. Well, what I mean by that is what usually happens. 

The Chairman. Risk a strike. 

Mr. Clark. Risk a strike. 

Mr. Kennedy. This was not an issue which you were getting ready 
to back down on, is that right ? 

Mr. Clark. No. We told them that. 

Mr. ICennedy. In order to have a successful strike you would have 
to have agi*eement amongst all the food chains ? 

Mr. Clark. We would have to have agreement among all our mem- 
bers, of which we have about 300. 

Mr. Kennedy. They had to be in agreement that they would take a 
strike. Otherwise, it would be a great financial loss to those who 
went out on strike and there still remained those in business. 

Mr. Clark. It would not work unless we had solid agreement. 

Mr. Kennedy. You had to have all of them in on it ? 

Mr. Clark. Of course. 

Mr. Kennedy. So were you feeling these various companies out 
at that time to see if they were amenable to taking a strike ? 

Mr. Clark. Yes ; we were. 

Mr. Kennedy. Was there a rumor around at that time, or was 
there a feeling, not a rumor, that one of the companies was conducting 
some negotiations behind your backs ? 

Mr. Clark. I did not know at that time. 

Mr. Kennedy. Did you learn of it subsequently ? 

Mr. Clark. I heard of it ; yes. 

Mr. Kennedy. Did you know of it, Mr. Gannon ? 

Mr. Gannon. On Friday, December 17. 

Mr. Kennedy. You learned the fact that some secret negotiations 
liad taken place ? 

Mr. Gannon. That is right. 

Mr. Kennedy. Let me find out. When you were feeling the vari- 
ous companies out as to whether they would take a strike or not, 
what was the feeling that you found from the representatives of the 
company ? 

Mr. Clark. As I recall, we called three meetings during the last 
week, one on a Friday, about the 10th of December. One on the fol- 
lowing Tuesday, about the 14th, and the I7th, the one which I did not 
attend. It was the last meeting prior to the close of negotiations that 
week, because the following week was Christmas. We talked to the 
food groups. There was some doubt in their mind that they would 
stick together. 

Mr. Kennedy. Did that come from any particular area or from any 
particular company that you remember ? 

(The witness conferred with his counsel.) 

Mr, Clark. Yes. I believe it shows in the minutes exactly what 
happened. 

Mr. Kennedy. Can you summarize that? Do you remember what 
it was ? 

Wasn't there a question raised about Food Fair at that very time? 

Mr. Clark. Mr. Hein was the chairman of the food group at that 
time. 

I will read the minutes. 



11062 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kkntnedt. All rijiflit. 

Mr. Clark. "I represent the food group," he said. 

Every important segment of the industry attended today's meeting. There 
were eight people present, A. & P. was not present because the proi)er people 
had to be represented in New York. Food Fair was present, but the man i-ep- 
resenting had to go back to the main office for further instructions. Everyone 
there gave his word of honor that his company had not told 107 they wonld 
not accept its — that they would accept its present demands. 

Mr. Kennedy. I will read that over again. 

A. & P. was not present because the proi>er people had to be represented in 
New York. Food Fair was present but the man representing had to go back 
to his main office for further instructions. 

Mr. Clark. That is correct. 
Mr. Kennedy (reading) : 

Everyone there gave his word of honor that their company had not told local 
107 they would accept the present demands. All committed themselves except 
Food Fair that those present would stand firm if all would agree. The group 
would not stand on wages alone and suggested that we explore a method of 
paying the union whenever a box is dropped as long as it did not transgress the 
principle. Food Fair said that if A. & P. was in line, Food Fair and Best 
Markets would be in line also. .;; 

Mr. Clark. That is correct. 

Mr. ICennedt. Then Mr. Barden said — 

1 represent American Stoi'es. If we can get unionism in the food industry, we 
will feel that principles force us to take a strong position. If our competitors" 
fold, they will force us to fold. However, American Stores will stand firm until 
our competitors fold. We believe we can get strong support from Penn Fruits, 
but I have a question about Food Fair and Best Markets. Penn Fruits said 
if Food Fair folded then Penn Fruit must fold. 

So there was some question at that time as to what was going on 
with Food Fair? 

Mr. Clark. That is correct. 

Mr. Kennedy^. You got sick, did you, about this period of time? 

Mr. Clark. After we had these meetings with the food people, and 
it looked like our lines were weakening, we called another meeting 
before I got sick, for Friday, the I7th, I believe it was. 

(The witness conferred with his counsel.) 

Mr. Kennedy'. You wei'e not f»resent at that meeting ? 

Mr. Cl.\rk. No. 

(The witness conferred with his counsel.) 

Mr. Clark. We had two meetings, Friday, Tuesday, and the fol- 
lowing Friday. 

Mr. Kennedy'. You were not present ? 

Mr. Clark. The following Friday, I took sick on Thursday night, 
and I had to go to bed, and although I called the meeting for that 
Friday for a deadline showing. 

Mr. Kennp:dy. For a deadline to see whether they would stand up 
for a strike. You went, Mr. Gannon, representing the MTLR? 

Mr. Gannon. When Mr. Clark was taken sick, I was the only one 
there, and I got ahold of our directors and asked them what to do, 
because we had missed one of our main men. 

He was the main negotiator. They said for me and Mr. Mathews 
to go over and do the best thing we could do. My office is not far 
from 107. I walked over there and the food group was all assembled 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11063 

ill thei-e. We got in there and they had been talking I don't know 
how long. After some time Ray Cohen 

Mr. Kexnedy. At that time were you urging on them that they 
should stand fast. 

Mr. Gannon. Certainly. I am not for strikes, but that was 1 year 
that I wanted to take a strike, because I felt that the money we had 
to pay was considerable, and that this was the time, if we are going to 
fight, we ought to fight it. 

Mr. Kennedy. Did they indicate during this meeting that they 
would stand fast? 

Mr. Gannon. They indicated they would stand fast. 

Mr. Kennedy. At the beginning of the meeting ? 

Mr. Gannon. Yes. 

Mr. KJENNEDY. Did you say Raymond Cohen spoke to you ? 

Mr. Gannon. Mr. Raymond Cohen spoke to me and said "Hughie, 
let's you and me go into my office. I want to talk to you." 

That has happened time and time again on different matters over 
the years. After all, I have been 23 years in this labor relations. 
So I went into the office with Ray. He sat down and he said "Hughie, 
I don't want to let it get you and Jim Clark embarrassed, but the food 
group are not going to stick with you." 

Mr. Kennedy. What did you say to that ? 

Mr. Gannon. I said "Ray, you are crazy. We just walked out of 
there and everybody was solid." 

So he says "O. K., I will prove it to you," he says. "I am now 
going to call up Food Fair," and he mentioned to me Mr. George 
Friedland, who I did not know from Adam. 

He dialed the telephone. 

Mr. Kennedy. Did he suggest to you that you get on another phone 
at that time ? 

. Mr. Gannon. No, I was sitting there in the office with him. He 
never lied to me. I just took his word that he dialed. He dialed and 
I could hear somebody talking and he said "I have now Mr. Hugh 
Gannon, one of tlie negotiators in here. Are you going to go through 
with what you said the other day or whenever it was that you don't 
want any strike, you want to keep your drops the way you have them, 
and for that I am going to get 20 extra men ? " 

By that time, I was boiling when I got through that telephone 
conversation, because there we were sitting in with a group that were 
supposed to stick, and out I walked, and Mr. Cohen had asked me 

Mr. Kennedy. Wait a minute. He said on the telephone or de- 
scribed the fact to this voice on the other end of the phone ? 

Mr. Gannon. Yes. I missed something there I forgot to tell you. 
Before he got off the telephone, he put his hand over the telephone, 
and I said to Ray, "What are you going to do with the representative 
of Food Fair that is in there now because evidently he doesn't know 
anything about this ? " 

Then whoever he was talking to, he said, "In about 10 or 15 minutes 
he will be called out of that room and told what to do." 

Mr. Kennedy. So Cohen explained to this person he described as 
Friedland, he explained the w^hole deal of giving unlimited drops to 
Food Fair with the 20 extra helpers ? 

Mr. Gannon. That is what he was going to gain, the 20 extra 
helpers. 



11064 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy — 

This is the deal we have made, and aren't you going to go through with it? 

Mr. Gannon. That is right. 

Mr. Kennedy. He said that one the phone in your presence? 

Mr. Gannon. That is right. 

Mr. Kennedy. And he turned to you and said, "Now are you going 
to believe me?" And you raised the question about the man in the 
next room ? 

Mr. Gannon. Yes. 

Mr. Kennedy. Who was the man in the next room ? 

Mr. Gannon. Mr. Schwartz. 

Mr. Kennedy. He was there conducting the negotiations ? 

Mr. Gannon. Certainly. 

Mr. Kennedy. And you thought or imderstood from the way he 
was discussing it, that they were going to stand for a strike ; is that 
right? 

Mr. Gannon. That's right. 

Mr. Kennedy. So what did Cohen then say to the man on the tele- 
phone ? 

Mr. Gannon. That in 10 minutes Mr. Schwartz would get orders 
what to do. 

Mr. Kennedy. That he would receive a telephone call ? 

Mr. Gannon. That lie would receive a telephone call. By that 
time, I was pretty mad, after thinking of all the work and effort we 
had put in, especially for the food companies. 

Myself personally, I spent hours and hours for them settling their 
grievances. When I came out, Mr. Cohen had asked me, and this 
was something confidential. The only reason I am telling it now is 
because I am on oath here. The first one I run into is Mr Leyden, 
and I told him, and he wanted me to go in and tell the group. 

I said "Jim, I can't tell that group in there because I am bound 
under secrecy." 

Mr. Kennedy. But you knew then that a secret agreement had 
been made between the Food Fair Co. and the union ? 

Mr. Gannon. That is right. So I said "We will get Mr. Schwartz 
out here." So we got Mr. Schwartz out. I don't know whether I 
told him or Mr. Leyden told him that he would receive a call and 
in about 5 or 10 minutes he received the call. Whatever was said, 
I don't know. At that time, you must realize I had 35 or 40 men over 
in the office about a square away. We were doing another deal with 
what they call the Peninsula deal, which was below Wilmington, that 
group down there. I was pretty well burned up anyhow. 

So I went over to our office and I came back again. Meantime, the 
food group had stayed together and started to work out their prob- 
lems. I came back later on. 

Mr. Kennedy. Did Mr. Schwartz make a suggestion after that,, 
then, that the Food Fair Co. 

Mr. Gannon. That they were going to go along with it because 
they were going to get all their drops, the same drops they had 
before. 

You see, this was the first year 

Mr. Kennedy. Wait a minute. Tliat they would put on the 20 
helpers ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11065 

Mr. Gannon. Twenty helpers. 

Mr. Kennedy. He made that suggestion at that time ? 

Mr. Gannon. That is ri^ht. 

Mr. Kennedy. After this telephone conversation ? 

Mr. Gannon. That is right. 

Mr. Kennedy. That was the agreement ultimately accepted by 
Raymond Cohen ? 

Mr. Gannon. That is right. 

Mr. Kenni:dy. But you were not able to get that agreement for the 
A. & P. Co., or National Stores ? 

Mr. Gannon. You will have to realize, Mr, Kennedy, that Food 
Fair had been a very progressive people. They had a lot of these super- 
markets. American Stores didn't have them. They used to have the 
small stores. They were going to go into it. I said to them, to the 
union, that I wanted everybody to be treated equal, and what one got, 
everybody should get. 

(At this point, Senator Mundt entered the hearing room.) 

Mr. Kennedy. That is not the way it ended up, is it ? 

Mr. Gannon. No, it did not end up that way. 

It ended up that the American Stores, they felt — well, they could get 
75 trailers if they w^anted to take that as the first package. Then it was 
suggested because they would not be able to use the 75, that they use 
50 from January 1, and after 6 months they would get sympathetic 
understanding if they needed more trailers. That is the way the deal 
Avas made. 

Mr. Kennedy. Then the three companies 

Mr. Gannon. American Stores made their own choice. 

Mr. Kennedy. Food Fair, Best Markets, and Penn Fruit received 
unlimited ? 

Mr. Gannon. In other words, Mr. Kennedy 

Mr. Kennedy. Is that correct, that they received unlimited? 

Mr. Gannon. Whatever they had. I had wanted all the companies 
to get the same, because they are all paying the same rate. 

Mr. Kennedy. And the other two companies, American Stores and 
A. & P. only received 50, is that right? 

Mr. Gannon. Fifty. 

Mr. Kennedy. You felt during the negotiations 

Mr. Gannon. I felt that they should get all they wanted because 
they were all paying the same rate. 

Mr. Kennedy. And everybody should be treated alike ? 

Mr. Gannon. Treated alike ; certainly. 

Mr. Kennedy. Did you ever get an explanation as to how Food 
Fair was able to make this deal with 107 ? 

Mr. Gannon. Do I know^ how it was made ? 

Mr. Ivennedy. Yes. 

Mr. Gannon. Only from what Mr. Cohen told me, from whoever 
he was talking to. 

Mr. Kennedy. And Penn Fruit also received the same arrange- 
ment. Do you know how that was done? They also received un- 
limited trailer drops. 

Mr. Gannon. What I was trying to explain to you, Mr. Kennedy, 
was that Penn Fruit and Food Fair were the big chainstores that 
had all these supermarkets. All these other stores did not have it. 



11066 IMPROPER ACTIVITIES IN THE LABOR FIELD 

In fact, Mr. Cohen was not going to give anybody any drops start- 
ing in 1955. No food store was going to get them, 

Mr. Kennedy. Penn Fruit liad a contract with a different union, 
did they not? 

Mr. Gannon. What did you say, Mr. Kennedy ? 

Mr. KJENNEDY. Penn Fruit had a contract with a different union? 

Mr. Gannon. Yes, 929. 

Mr. IvENNEDY. So Mr. Cohen as 107 was not affected by making 
this kind of a contract with Penn Fruit, is that right ? 

Mr. Gannon. Yes. 

Mr. Kennedy. And Best Markets was a relatively minor company ? 

Mr. Gannon. That is a small company. I want to say at this time, 
Mr. Kennedy, please, that the food chains themselves made the deal. 
They tried to tlirow it on the Motor Transport. We iiad nothing to 
do with the 20 men, I want that emphasized, that we had nothing 
to do with giving those 20 men. In the first place, I would not be a 
party to it. 

Senator Curtis, Mr. Chairman ? 

The Chairman. Senator Curtis. 

Senator Curits. Would you explain that 20-man proposition a lit- 
tle bit ? What does that mean ? 

Mr. Clark, They were going to get 20 extra helpers if they would 
retain the same number of drops, as I understood it later. They 
would put on 20 extra helpers. 

Senator Curtis. And how many different companies ? 

Mr. Clark. One. 

Senator Curtis. In other words, the Teamsters Union would be 
called upon to furnish 20 additional employees ? 

Mr. Clark. They negotiated with them and received 20 additional 
employees, with a right, as I understood it, to keep the trailer drops 
they had. 

Senator Curtis. That is all, Mr. Chairman. 

The Chairman, Is that what caused the contract to be made under 
those terms, the fact that Food Fair liad made this side deal? 

Mr. Clark. I don't know how to answer that. Senator, except to 
say the food people, of course, weakened our front that we had lined 
up, and when they wouldn't believe in themselves that they would stick 
together, then it opened the floodgates as far as we were concerned. 

Of course, if you have a break in your lines when you are in the 
transportation business, you are a dead duck. 

The Chairman, "\^,1iat I am trying to get at is this : Was it Food 
Fair that broke that line ? 

Mr. Clark. As the testimony shows here, reading in the minutes, 
they are the ones that brought it up. 

The Chairman. This Cohen that you spoke of that did this calling, 
that called you out of the meetina:, who wanted to talk to you, is 
Ray Cohen ? 

Mr. Clark. Eay Cohen, He is the secretary, I guess you call him. 

The Chairman, The secretary-treasurer of local 107, with whom 
you were negotiating ? 

Mr, Clark, That is right. 

The Chairman, He called you off to keep you from getting em- 
barrassed ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11067 

Mr. Gannon. He said Mr. Clark and I always treated him fairly, 
and he wanted to tell me that we had a break in our ranks. 

The Chairman. And he proved it to jou. 

Mr. Gannon. He proved it to me. 

The Chairman. By calling up Mr. Friedland; is that right? 

Mr. Gannon. I don't know. He told me that is who it was. 

The Chairman. You don't actually know who it was ? 

Mr. Gannon. I don't actually know ; no, sir. 

The Chairman. That is, who answered the telephone. He told you 
it was Friedland ? 

Mr. Gannon. That is right. 

The Chairman. You heard him say to him, "Are you going to keep 
that agreement you made with me about the 20 men and unlimited 
drops?" 

Mr. Gannon. That is right. 

The Chairman. You heard that part of the conversation ? 

Mr. Gannon. That is what he was saying. 

The Chairman. That is what Cohen said, that is what you heard 
him say ? 

Mr. Gannon. Yes. 

The Chairman. And that is what they got out of it ? 

Mr. Gannon. Yes. In other words, they pulled the rug out from 
underneath us. 

The Chair]man. In a few minutes, they called their representative 
their assisting in the negotiations, Mr. Schwartz, and he changed 
his position after getting that message, did he? 

Mr. Gannon. Yes, sir. 

Senator ^Iundt. What did Mv. Schwartz say at the time he 
changed his position ? 

You were all sitting there, I take it, in a meeting. After he got 
the phone call, and he came back, what did he say ? 

Mr. Gannon. They all were still in the room, in the conference 
room, and I had to leave there. After all, they had a chairman of 
that group. Mr. Clark was my right-hand man, and he was gone. 
I was trying to get all the loose ends up because we had worked night 
and day, and we liad worked that particular night until 2 o'clock 
in the morning. 

Senator Mundt. You were not there when Mr. Schwartz was called 
out of the room ? 

Mr. Gannon. Mr. Schwartz was the one that told his own group. 

Senator ]Mundt. I am trying to put this together in its proper cate- 
gory, in its proper chronology. You said that about 10 minutes after 
Mr. Cohen called you into his office, Mr. Schwartz was called out 
of the conference room. 

Mr. Gannon. That is right. 

Senator Mundt. Were you there at the time he was called out of 
the conference room ? 

Mr. Gannon. I saw him go to the telephone. 

Senator Mundt. Who called him out ? 

Mr. Gannon. Somebody. 

Senator Mundt. You saw him go to the telephone ? 

Mr. Gannon. That is right. 
- Senator Mundt. Were you there when he talked on the phone ? 



11068 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Gannon. I was in the building. I did not actually see him. 

Senator Mundt. Were you there at the time he concluded his 
conversation ? 

Mr. Gannon. Yes, sir. 

Senator JSIundt. Were you there at the time he walked back into 
the room? 

Mr. Gannon. Yes, sir. 

Senator Mundt. Did you hear what he said then ? 

Mr. Gannon. No, I did not hear. 

Senator Mundt. You said at that time he changed his position. 

Mr. Gannon. He changed his position, because it was up to them. 

You see, I would not go in and tell anj^body anything. 

Senator Mundt. I'm just trying to hnd out what manifestation was 
made by Mr. Schwartz that they had changed their position after he 
talked on the phone. He must have said something to somebody. 

Mr. Gannon. He said it to his own group in there. 

Senator Mundt. Then his own group must have said something to 
somebody else. How did you find out that they changed their position ? 

Mr. Gannon. They worked it out. He promised they were going 
to meet there that whole afternoon, because they had their own chair- 
man and everything else, and I had to leave. I came back later on. 

Senator Mundt. I still can't understand how you found out they 
had changed their position after he made the phone call. That is what 
I am trying to determine. How did you find out that the phone call 
changed their position ? He must have said something. 

IVIr. Gannon. It must have been in the room there when they agreed 
that Food Fair was going to go along without taking a strike. They 
were going to take and give them the 20 men plus getting the drops 
again. 

Senator Mundt. Did Mr. Schwartz after the phone call when he 
returned to the room, did he thereupon stand up and say "We are walk- 
in out on you. We are going to settle with 20 men. We have changed 
our mind. We are going home." 

Wliatdidhesay? 

Mr. Gannon. No, he went and told them. 

Senator Mundt. Told who? 

Mr. Gannon. Told the group there. 

Senator Mundt. His own group, the Food Fair group ? 

Mr. Gannon. Yes, that is all that was in there. The food group. 

Senator Mundt. Well, the whole food industry was represented ? 

Mr. Gannon. That is right. 

Senator Mundt. He went back and said to the food industry what ? 
Did you hear him say that ? 

Mr. Gannon. Yes, that they were going 

Senator Mundt. A^liat did you liear Mr. Schwartz say to the food 
group ? That is what I want to find out. 

Mr. Gannon. That they were going to change their position, that 
he had his orders, and they were not going to take a strike, and they 
were going to give 20 men to the union for that. 

Senator Mundt. You lieard Mr. Schwartz say that when he got back 
from his phone call. He said "I am sorry, fellows, but I have my 
orders, I am going to change our position." 

Mr. Gannon. I couldnx say it. Senator, because, I had been under 
confidence, and I could not go in and open my mouth about it. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11069 

Senator Mundt. I am not talking about you. I am talking about 
Mr. Schwartz. Of course, that would have been bad news for the 
•other fellows. 

Mr. Gannon. That is right. 

Senator Mundt. They must have said something. What did they 
say? 

Mr. Gannon. Well, I left there. 

Senator Mundt. What point did you leave, immediately after Mr. 
Schwartz made the statement, during the statement, or when ? 

Mr. Gannon. After he made the statement. 

Senator Mundt. After he made the statement ? 

Mr. Gannon. Yes; because they had to work out their own details. 
They had to work out their own details. 

Senator Mundt. Was your partner in the room ? 

Mr. Gannon. No, sir. He was sick. 

Mr. Clakk. I was off that day. 

Mr. Gannon. He was off that day, and I was trying to do all 
these jobs myself. 

Senator Mundt. So you don't know what happened after that. I 
think I have the picture. 

Mr. Gannon. I came back later on, Senator, maybe in a couple of 
hours, and they were still in the room. 

Senator Mundt. Was Mr. Schwartz still there ? 

Mr. Gannon. Schwartz was still there. They were all still there. 
They then started to find out what American Stores could get, and 
by the time I got back, they had decided to make the best job they 
could. I went on into the night. As I say, we were there until 2 
o'clock in the morning on that and other matters. 

Senator Mundt. What, specifically, did Food Fair get from the 
union which was not available to the other food companies? 

Mr. Gannon. Nothing, only their preference of dropping all their 
boxes that they were not going to get for 1955, only that they gave in 
and gave the 20 men. They gave 20 extra men in order to be able to 

Senator Mundt. Was that an advantage to Food Fair to get 20 extra 
employees ? 

Mr. Gannon. Twenty men. They were going to give them 20 extra 
men. 

Senator Mundt. Did they get the right to lire 20 men or to employ 
them ? 

Mr. Gannon. Well 

Senator Mundt. I can see that firing 20 men would be an advantage, 
but to hire 20 extra employees wouldn't look like an advantage to me. 
Maybe you are trying to tell me they got the right to fire 20 people ; 
is that right ? 

Mr. Gannon. No ; they were going to get the right to hire 20 extra 
men for 1955 and 1956. 

Senator JNIundt. Is it hard to get extra men to work if you are 
willing to pay them ? 

Mr. Gannon. No; but before they didn't have it. Senator. They 
didn't have these men. They had no extra men. This was a deal 
that was made for the 20 extra men. 

Senator Mundt. All right. This is the deal they made. They 
liad a right to hire 20 extra men. 



11070 IMPROPER ACTIVITIES IX THE L.\BOR FIELD 

Mr. Gaxxox. They liad to pay a penalty. 

Senator ^Ifxdt. Xone of these other food people could hire extra 
teamsters ? That was their advantaije ^ 

Mr. Gaxxox, They had to pay a penalty of 20 extra men. 

Mr. Clauk. Senator, if I may 

Senator Mrxirr. I am a little confused. If you can shake me out, 
it will help. 

The Chairman. Just one moment. Let me help the Senator. lie 
was not here. One of the big issues in negotiation was that Food 
Fair had been getting all of the drops that it wanted and all that it 
could use. That ran to around 27.5, I believe is the testimony. The 
union did not want to give them these drops. They were all trying to 
stick together so they would all be treated alike. They have given 
their power of attorney and were all in the same group. In other 
words, it was collective bargaining on the side of management as well 
as on the other side. So Food Fair, according to the testimony, or 
as it is indicated, when they got to the point where it looked like 
tbere would be a strike, they were trying to determine who would 
stick and who would not. 

They all said they would stick. But the unionman calls Mr. Gan- 
non out, who was head of negotiating for all members, and said, "Your 
lines are broken. They are not going to hold. I am doing this to 
keep 3'ou and ^Ir. Clark from being embarrassed." He did not be- 
lieve it. But he calls up ^Ir. Friedland of Food Fair, or said that 
was who he was calling, and said to him, "Are you going to keep that 
agreement you made with me, that you will put on 20 men if we give 
you all of the drops, the agreement you made with me a day or two 
agoT' 

Then !Mr. Gannon asked him, "What about Mr. Schwartz in here 
who is negotiating, who has been saying they were going to go along?" 
and Cohen said, 'Tie Avill get a telephone call in 10 minutes." 

After he got the telephone call, according to the testimony, the whole 
picture clianged. So while they were giving 20 men, they were getting, 
from what the testimony sb.ows. they were getting the advantage of 
these drops and an economic benefit of from $18 to $25. 

Senator ^Iuxdt. TMiat the company got or was supposed to have 
gotten were extra drops and what the union got was the hiring of 
extra employees. 

The Chairmax. Yes, they got the extra men. But this was an 
agreement, if this testimony is true, which was made outside of the 
regular negotiation. I think I have stated it correctly. 

Mr. Clark. I think that is right. They retained, all the food group, 
as we later found out, retained what they had in the way of drops. 

Some of them not needing the drops at that time didn't have as much 
as tlie others. Then it was worked out with A. & P. and American 
Stores later, where they would work out on a negotiation basis they 
would get 50 and in the next 6 months they would get sympathetic 
consideration on any they may need as the big stores progressed. 

Senator Curtis. Xow, by a trailer drop, you mean the practice of 
goiuff to the place for unloading? 

Mr. Clark. That is right. 

Senator Curtis, Unhooking the tractor part, and leaving the trailer 
there ? 

Mr, Clark. To be unloaded at their convenience. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11071 

Senator Curtis. At the convenience of the receiver of the shipment ? 

Mr. Clakk. That is ri<^lit. 

Senator Curtis. Well, do yoa people regard that as a management 
decision? 

Mr. Clark. We always did, and it was always considered as such, 
and that is the reason why they had the trailer drops prior to 1954. 
Some of the freight operators liad them, but on these new negotiations 
the union wanted to eliminate (liem, and they had a demand. We did 
f5r the freight when the thing broke, but the food people worked out 
their own problem and agreed to. this, rather than go the limit. They 
agreed to hold what the}'' had. ■ 

Senator Curtis. Well, Avith the rest of the members of MTLR, you 
did maintain your contention for unlimited trailer drops? 

Mr. Clark. We were fighting for that, Senator, during the 1954 
negotiations. 

Senator Curtis. Did you get it? 

Mr. Clark. No. 

Senator Curtis. For the group otlier tluin the food group ? 

Mr. Clark. No. 

Senator Curtis. You did not ? 

Mr. Clark. No. 

Senator Curtis. Well, I can't see how 

Mr. Clark. In some cases we got it where a need was shown as 
between rail and truck lines, where it was competitive, and some need 
was shown for it. We did work that problem out in some few cases, 
and it is still open to negotiation. 

Senator Cur'HS. It seems to me that if the management of the 
transportation companies and the shipper want to do business that 
way, it is clearly a management decision, and not a matter that the 
union Avould have any right to make any demands on, or would be a 
proper subject of negotiation. 

Mr. Clark. We gave it everything we had and we didn't get it. 

The Chairman. You felt tha;t way about it, too, didn't you ? 

Mr. Clark. Indeed we did. 

Senator Curtis. That is what we want to know. 

Mr. Clark. We will continue to battle over it. 

Mr. Kennedy. I have just a few more matters that I want to ask 
about this. Under this agreement, the various stores such as Food 
Fair were to continue with the number of drops that they had at that 
time ; is that right ? 

Mr. Clark. That is correct. 

Mr. Kennedy. How many drops did they tell you that they had at 
that time? 

Mr. Clark. Who? 

Mr. Kennedy. Food Fair. 

Mr. Clark. It was around 280 or 283. 

Mr. Kennedy. Each week, and they would continue to have that 
liumbiBr? . : ^ 

Mr. Clark. That is my understanding. '^ 

Mr. Kennedy. Did the union alio w.them to take on new drops ? 
Mr. Clark. I don't think so. ' 

Mr. Ki.nnkdy. Did you have some information ta that eiffect, that 
they Avere allowed to, or that the luiion didn't even enforce that/^and 
allowed them to take on new drops? 



11072 IMPROPER ACTIVITIES IX THE LABOR FIELD 

Mr. Gannon. One time I was over at the union 

Mr. Kennedy. Before we get there, did you get information to that 
effect? 

Mr. Gannon. Yes. 

Mr. Kennedy. And you were able to verify the information that 
Food Fair was in fact getting even more drops ? 

Mr. Gannon. When I went over to the union I complained very 
bitterly about them giving Food Fair more drops and I said, "You 
gave them at least 20 or 25," and I didn't know the number at the- 
exact time, and one of the business agents was called in, and he said 
that they had stopped that about a week or so ago, and they were 
adhering to what their contract was made out for, in 1955, 280 or 283. 
I complained very bitterly about American Stores not getting their 
just dues. 

Mr. Kennedy. During that period of time, under the agreement 
American Stores was to get another 25, or an extra 25, or at least the 
union was to give them sympathetic consideration every 6 months^ 
and Mr. Cohen refused in effect to give them the extra 25 ? 

Mr. Clark. We fought against it and we finally worked it out 
after the first 6 months. 

Mr. Kennedy. It was another year, wasn't it ? 

Mr. Clark. Seven or eight months. 

Mr. Kennedy. It was a year after the original agreement ? 

Mr. Clark. They would reopen in June for reconsideration, and 
we did, and we argued about it, and they finally got it the following 
Fe}>ruary. 

Mr. Kennedy. That would be 7 months after they were supposed 
to get it, a year after the original agreement ? 

Mr. Clark. That is right. 

Mr. Kennedy. Then they got an extra 25 ? 

Mr. Clark. That is right. 

Mr. Kennedy. During this whole i period of time, Food Fair and 
these other 2 companies were receiving 280 plus? 

Mr. Clark. That is right. 

Mr. Kennedy. Now, did you ultimately have some information that 
some of the other companies were breaking away from the MTLR ? 

Mr. Clark. As I reviewed the minutes, I noticed — ^you mean break- 
ing away from MTLK ? 

Mr. IvENNEDY. Also getting a private attorney to conduct discus- 
sions ? 

Mr. Clark. No. 

Mr. Kennedy. When was that first brought to your attention? 

Mr. Clark. In 1956. We heard rumors of it in the late summer of 
1956, and Ray Cohen told us at one of our meetings, I think in Sep- 
tember or October, that he officially received a letter from the food 
groups they were resigning. 

We did have a letter at that time. 

Mr. Kennedy. Wlio did you understand that they were having 
represent them at that time ? 

Mr. Clark. Same Blank. 

Mr. Kennedy. He is the individual that had represented the Food 
Fair Co. ; is that right ? 

Mr. Clark. That is correct. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11073 

Mr. IvENNEDY. Did you have any conversations, Mr, Gannon, re- 
t^arding: Mr. Blank's representation of the American Stores'^ 

Mr. Gannon. Mr. Bhmney Barton, wlio was on tlie stand this 
morning, told me another thing in confidence. 

Mr. Kennedy. When was this ? 

Mr. Gannon. I cannot place the date, Mr. Kennedy, but I imagine 
it w^ould be in September or October sometime. 

Mr. Kennedy. Of 1956^ 

Mr. Gannon. Of 1956. And he told me very distinctly that for 18 
months there was something Motor Transport couldn't do, and he 
finished that up in an hour down there with Mr. Lapensohii sitting 
in there. 

I said, ''How do they do it?" and he said they sat there and talked, 
and in about half an hour or three-quarters, I think it Avas, Mr. 
Lapensohn took him out into the hallway and came back. 

Mr. Kennedy. Who did he take out in the hallwa}' ? 

Mr. Gannon. The stewards. 

Mr. Kennedy. The business agents ? 

Mr. Gannon. The stewards. 

Mr. Kennedy. And then he came back and Lapensohn canie back 
in and said everything had been straightened out ? 

Mr. Gannon. That is right. 

Mr. Kennedy. They were able to get something that you couldn't? 

Mr. Gannon. It was pretty painful for us to take after all of the 
work that we certainly tried to do, to think that something could be 
finished up in an hour. They certainly made us look very bad. 

Mr. Kennedy. That was done with Mr. IMank participating? 

Mr. Gannon. I don't know who was in there. He didn't tell me. 

Mr. Kennedy. That is the only thing he told you ? 

Mr. Gannon. It is another confidence and, of course, I am under 
oath and I am telling the truth. 

Mr. Kennedy. This is another thing that was related to you; is 
that right? 

Mr. Gannon. That is right. 

Mr. Kennedy. Ultimately, the whole food-chain group left your 
organization and went over with Mi-. Blank? 

Mr. Gannon. Some of them didn't want to go because the cost was 
too high. 

Mr. Kennedy. But they did ultimately go ? 

Mr. Gannon. They were forced to, and some of the operators that 
work for A. & P., they had no alternative. 

Mr. Kennedy. Because they had to stay united in these matters; is 
that right? 

Mr. Gannon. Yes, sir. 

Mr. Kennedy. That is the same point, that once Food Fair had 
made this agreement that they would sign a contract with local 107, 
there was no possibility of the other food companies going out on 
strike or taking a strike. 

Mr. Clark. That is right. 

Mr, Kennedy, Because it would not have been possible economically ; 
is that right? 

Mr. Clark. Yes, sir. 



11074 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. IvENNEDY, Once one company caved in, all of the other com- 
panies caved in, of necessity ? 

Mr. Clark. That is right. 

Mr. Kennedy. I think that that is all. 

The Chairman. Are there any f nrther questions ? 

All right ; thank you very much. 

Mr. Clark. Thank you very much. 

Mr. Kennedy. i\lr. Sam Blank. 

The Chairman. You do solemnly swear that the evidence you shall 
give before this Senate select committee shall be the truth, the whole 
truth, and nothing but the truth, so help you God ? 

Mr. Blank. I do. 

TESTIMONY OF SAMUEL A. BLANK 

The Chairman. State your name, and your place of residence, and 
your business or occupation. 

Mr. Blank. My name is Samuel A. Blank, B-1-a-n-k. I am a 
lawyer practicing in Philadelphia, Pa. 

The Chairman. I suppose you waive counsel, do you, Mr. Blank? 

Mr. Blank. I do. 

Mr. Kennedy. You have been practicing how long ? 

Mr. Blank. Since 1932. 

Mr. Kennedy. You are a member of the bar in Pemisylvania ? 

Mr. Blank. I am, sir, yes. 

Mr. Kennedy. Mr. Blank, you are an attorney that has participated 
in labor matters, and covered those ? 

Mr. Blank. Yes, sir. 

Mr. Kennedy. When did you first meet Mr. Ben Lapensohn ? 

Mr. Blank. I have known Mr. Lapensohn I would think somewhere 
around 13 or 14 or 15 years, somewhere around that time, in a general 
way like I would know anyone else, and I never knew him particularly 
well until he came into our office in 1952 and asked us to handle some 
work for him. 

Mr. Kennedy. He wanted you to do what at that time? 

ISIr. Blank. He came in to see us about some representation in the 
real-estate field, in about 1952. 

jVIr. Kennedy. Did you represent him at that time' 

Mr. Blank. Our firm did, Mr. Kennedy, and the work that he 
wanted us to handle for him was of a real estate nature, and one of 
the men in the office who handles that work handled the work itself, 

Mr. Kennedy. Did you ever see him in connection with Mr. Cohen, 
or in connection with local 107 ? 

JMr. Blank. I did see him in connection with Mr. Cohen, and is 
there any specific time? 

'Mr. Kennedy. Tell me first when you met him in connection with 
Hr. Cohen, or knew he was associated with Mr. Cohen ? 

Mr. Blank. The first recollection I have of it was when I walked . 
into our office one day and saw him in the waiting room with Mr. 
Cohen and some other gentleman. This was, I would say,. some time 
around November of 1953, shortly after Mr. Cohen had been elected- 
secretary-treasurer of local 107. .. :r- " r • 

I walked over to them and congratulated Mr. Cohen upon his elec- 
tion and asked them what they were doing there, and they said they 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11075 

were there for the purpose of retaining Thomas McBride as their 
counsel. 

I might add, parenthetically, that at that time Mr. McBride was 
a tenant of the suite that we were in at 1529 Walnut Street, and we 
w^ere not associated other than the fact we were both cotenants of 
the same suite. They were there to see Mr. McBride which they 
did, and I saw him there at that time with Mr. Cohen. 

Mr. Kennedy. That was at the time that they retained Mr. McBride 
as their counsel ? 

Mr. Blank. Yes, sir. 

Mr. Kennedy. Had they contemplated retaining you first, and did 
they have any discussions with you ? 

Mr. Blank. They couldn't, sir. We have never represented labor 
unions, and I think people generally knew our firm. 

Mr. Kennedy. Did they approach you first ? 

Mr. Blank. Not at all, sir. 

Mr. Kennedy. Did you have any discussions with him after that 
regarding his association with Mr. Cohen of local 107 ? 

Mr. Blank. I don't recall anything specifically, no, sir. 

Mr. Kennedy. I showed you these checks and discussed them with 
you before, but there is a check dated December 9, 1953, $1,500 from 
your law firm, I believe, and another check on March 15, 1954, for 
$3,000, both made payable to Mr. Benjamin Lapensohn. Wliat was 
the purpose of those two checks ? 

Mr. Blank. As you will recall, sir, when w© were visited by mem- 
bers of your staff, we told them about these transactions. 

I am prepared to identify them because we gave the photostats to 
the committee, sir. 

Senator Mundt. Would you identify those checks for the record ? 

Mr. Blank. I do, sir. 

Senator Mundt. We will make them exhibits 54A and 54B. 

(Documents referred to were marked "Exhibits No. 54A and 54B" 
for reference and will be found in the appendix on pp. 11181-11182.) 

Mr. Blank. May I proceed ? All of the details with regard to that 
have been fully explained to your committee. 

Mr. Kennedy. Would you explain them to this committee ? This is 
why I asked you. 

Mr. Blank. Mr. Lapensohn came in to see us in 1952 in connection 
with some real estate mvestments that he was prepared to make, and 
asked us if we would handle some work for him. He then was, and I 
presume still is 

Senator Mundt. Pardon me. AVlien you say "us" do you mean your 
law firm as a group, or "us" meaning you and some clients of yours ? 

Mr. Blank. I mean my law firm. Senator. 

Senator Mundt. Thank you. 

Mr. Blank. He asked us if we would handle some of this work, and 
we said that we would. He had at that time and subsequently thereto 
for some time a number of submissions of desirable investment prop- 
erties, and these he came in and discussed with members of our firm. 

Subsequently thereto he asked us whether or not we did not receive 
submissions of this type which we would like to have reviewed for 
clients of ours. It was rather well known in Philadelphia at the time 
that there were a number of substantial people who were desirous of 

21243— 58— pt. 28 17 



11076 IMPROPER ACTIVITIES IN THE LABOR FIELD 

investing in real estate and if we analyzed them and approved them 
and recommended them we could form syndicates which would pur- 
chase these properties and it Avas a rather important segment of our 
business. 

We told him that we would like to have him do some of that work 
for us, which he did. Some of these trips entailed going out of towui, 
and some of them involved expenses and so forth, and lie did this 
work. We gave our file on this matter, at least to the extent that we 
had it, to the committee, and they went over it. 

In December of 1953 he came in to see us and told us that he had 
expected, or one of the things we had discussed at the time was that 
if any of these properties materialized successfully and a syndicate 
was formed that would purchase them he might become a part owner 
of the syndicate on a more favorable basis than other investors. 

In other words, by putting up less of a share of the investment he 
would acquire a proportionately larger share than otliers who had 
had none of the time that was spent in analyzing and checking, and 
so forth, and so on. 

(At tins point the following members are present : Senators Mc- 
Clellan, Mundt, and Curtis.) 

None of these things had materialized for him, although things that 
he had reviewed had been successfully materialized for other clients 
of ours, and he asked if we would pay him for his work, which, after 
he told us what he wanted on account, we paid. He continued to do 
this work, and in March of 1953 came in and asked for this further 
payment. At that time we felt that since this w^as a matter which 
was not fully reimbursable by us to clients, that we would like to call 
a halt to it. 

We then told him that so far as we were concerned we would pay 
it, but Ave would prefer to call a halt to it and have no further transac- 
tions of that nature, although we would want him to continue to work, 
if he felt like he desired to do so, but only on the basis that if we could 
get him into one of these syndicates, fine ; and if we could not, there 
would be no obligation upon us. That, sir, is the full record of the 
transaction. 

Senator Mundt. Did he continue to work? Did he get into any 
syndicates ? 

Mr. Blank. I beg your pardon ? 

Senator Mundt. Did he continue to work and did he get into any 
of the syndicates ? 

Mr. Blank. He did some work after that, but none of the ventures 
materialized for him, and he subsequently discontinued them and 
went into his own. He had a half dozen or so transactions in real- 
estate matters which one of my partners handled for him over the 
next 3 or 4 years. 

Senator Mundt. When he came to you initially, did he come to you 
cold, or did you know him before, had he been referred to you by 
someone, or did he have a reference ? 

Mr. Blank. I had known him in a casual fashion, sir, for some 
years prior thereto, and, although I am sure he retained other counsel 
for other purposes, we had a rather well-known place in tlie real-estate 
field, and I think he consulted us for that purpose. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11077 

Senator Mundt. "Was he known to you preceding the arranoements 
he made with yon as a real-estate man or a man that had been in the 
real-estate business, or was lie known to you to have some other occu- 
pation or profession '( 

Mr. Blank. No, sir; I kmnv him as a real-estate man. He was 
quite well known in that field, and had quite substantial properties 
in that field. We knew him as a real-estate broker. As a matter of 
fact, in October 1953 he came in to see me and asked if 1 would buy 
a property with him, a gasoline station, which I did, and, of course, 
the committee has full information on that subject, and at that time 
he filed a statement with the bank in connection with that loan, and 
it indicated a substantial net worth. 

Senator Mundt. I presume Pennsylvania has a system of licensing 
its realtors, does it not ? 

Mr. Blank. I understood he was licensed as a broker, although in 
these transactions I don't think he was interested in commissions. 
He wanted to become a principal and did become a principal in 
various transactions. 

Senator Curtis. Mr, Chainnan ? 

The Chairman. Senator Curtis. 

Senator Curtis. What was the nature of the duties Mr. Lapensohn 
performed for you? 

Mr. Blank. He would get ahold of the property or a group of 
properties that we were interested in, and he would go out and see 
them. Many of them w^ere not located right around the corner from 
us. They might have been in various places. He would look them 
over, check the neighborhood, check the property, check the leases, 
and various other things that were necessarily done in connection 
with deteraiining whether or not a property was a good one. From 
our point of view, Senator, it was more important that we do not 
recommend to a client that they go into a venture, rather than to 
have them go into one which miglit be unsuccessfully concluded, 
because that was something that we were most eager to avoid. 

Senator Curtis. Did he work on a per diem basis ? 

Mr. Blank. No; that was not a set arrangement. The origirial 
anticipation was that some transactions would materialize in wiiicli 
he would be compensated on the basis that I outlined before. But 
these did not work out and he was rather disappointed. We were 
disappointed, too. We would rather have hoped that something 
would have w-orked out for him. 

Senator Curtis. But that was a payment from your own funds for 
his services rendered, is that your statement? 

Mr. Blank. Yes, sir. 

Senator CuTtTis. That is all. 

Mr. Kennedy. Do you liave records for tlie particular transac- 
tions that you paid him this $1,500 for and later tlie $3,000? 

Mr. Blank. Senator, the full record of tliat file is photostated and 
with you. 

Mr. Kennedy. But there is no way of determining. That is a 
group of documents. There is no way in there to determine by re- 
viewing that that he actually performed any services for you and 
was paid tliis amount of money ? 



11078 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Blank. You are perfectly correct, sir, except there was just 
nothing else we could have paid him for. That is what we did pay 
him for. 

Mr. liJENNEDY. According to the testimony before this committee, 
and this is why I bring it up, he was greatly involved at that particu- 
lar time in the campaign for Mr. Cohen, and these two checks are 
during that period of time when he needed money and Mr. Cohen 
needed money for his campaign. 

I am wondering if any mention of that was ever made when he 
received this money from you. 

Mr. Blank. He did not mention it to us. What he did with the 
money, of course, we do not know. Of course, we were in an ad- 
versary position with regard to whether we should or should not 
pay it, and we certainly would not have paid money that we did not 
have to pay, and we certainly would not have paid any more than we 
were required to pay. 

Mr. Kennedy. After Mr. Cohen was in fact elected in 1954 — as 
you know, the 1953 election was contested and there was another 
election in 1954 — following his election, were you then retained by 
the Food Fair Co.? 

Mr. Blank. Yes, sir; we were retained by Food Fair in June of 
1954, but as has already been explained to you, sir, the fact that Mr. 
Cohen was subsequently elected as the head of this union had no bear- 
ing in our view on the question as to whether or not we were retained 
by Food Fair. I think I have mentioned to you that one of my part- 
ners had some years before handled a rather important matter for 
one of the major stockholders of Food Fair. Another one of my 
partners had been in the tax department of the accounting firm that 
then did and still does represent and do the accounting work for Food 
Fair. 

The president of Food Fair, who is still the president, had been, 
prior thereto, vice president and general counsel. When he became 
president of the company, he found himself no longer as available 
to his executives as he had been theretofore. It was decided then 
that they wanted to retain a law firm in Philadelphia that had 
various integrated services. That is primarily the reason we were re- 
tained, at least so far as we know. 

Mr. Kennedy. Did you conduct and handle some of their labor 
difficulties and problems ? 

Mr. Blank. Yes, sir; we did, as well as handle a number of their 
other problems. We handled their corporate problems, we handled 
some real estate problems, we handled a number of problems, which 
we have given you. 

Mr. Kennedy. In these negotiations for the contract in 1954, about 
which we have had some testimony, did you have some conferences 
with the representatives of local 107 ? 
Mr. Blank. Yes, sir; we did. 

Mr. Kennedy. With whom did you have conferences ? 
Mr. Blank. With the various business agents. I did not par- 
ticipate in too many of them. I did participate in several at the 
beginning, but then one of the other members of the office who han- 
dles more of that work participated in the continuing work. But I 
did participate and did handle some of them, sir. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11079 

Mr. Kennedy. How many conferences did you have, approxi- 
mately ? 

Mr. Blank. I would prefer it not to be specific, sir, because, I 
really do not remember. But certainly more than 1 or 2. Let me put 
it that way. 

Mr. Kennedy. Who did you meet with ? 

Mr. Blank. Usually it was the business agents who handled their 
work, 

(At this point. Senator Curtis withdrew from the hearing room.) 

Mr. Kennedy. Did you discuss the terms of the contract, for in- 
stance, on the trailer drops and some of these other matters ? 

Mr. Blank. Well, in that period, Mr. Kennedy, the contract was 
not being negotiated. They w-ere then operating mider a contract 
that was in full force and effect until the end of the year. 

Mr. Kennedy. When the contract was being negotiated 

Mr. Blank. So there was nothing we could have done. In the 
negotiations, sir, as you have heard, I did not handle those negotia- 
tions. They were handled by the Motor Transport Labor Relations. 

Mr. Kennedy. Did you have some conferences with local 107? 

Mr. Blank. I had one that I told you about, Mr. Kennedy. 

Mr. Kennedy. Just answer the question. 

Mr. Blank. I had one ; yes, sir. 

Mr. Kennedy. With whom did you have that ? 

Mr. Blank. Raymond Cohen. 

Mr. Kennedy. Wliere did that take place ? 

Mr. Blank. At his office at local 107. 

(At this point. Senator Ervin entered the hearing room.) 

Mr. Kennedy. What did you discuss at that conference ? 

Mr. Blank. I told him then I was there on a mission to acquaint 
him with this question of whether or not Food Fair would or would 
not take a strike. There had been a great number of rumors at that 
time as to whether or not Food Fair would take a strike because the 
union had the understandino; they would not take a strike. 

Incidentally there were several of the other companies that were 
very lukewarm as to whether or not they would take a strike. 

I told him that insofar as Food Fair was concerned, I was there 
specifically to give him a message, that Food Fair was going to take 
a strike if they had their drops taken away from them; that they 
had been operating for years under this method of operation, and they 
were not going to surrender it. I was there to so advise him. 

He did not accept my assurance, he knew that I meant what I said, 
but he was not as positive that my client felt that way. 

But I got across the message that I was there to convey, and we 
discussed the situation. When I left there, I had the feeling that he 
did not want any strike any more than our people wanted a strike. 

Mr. Kennedy. Why was it necessary for you to go down there, 
Mr. Blank, to see Mr. Cohen ? 

Mr. Blank. I think my relationship with him was such that if I 
told him something he would believe that I firmly meant it, and it 
was necessary at that time in the view of our client that he know. 

Mr. Kennedy. Who specifically asked you or requested you to go 
down there? 

Mr. Blank. I don't recall specifically, but it was either Arnold 
Cohen or Julius Schwartz. We discussed the matter together 



11080 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. What was Mr. Arnold Cohen's position at that 
time ? 

Mr. Blank. He was vice president in charge of this operation, 
warehousing and trucking. 

Mr. Kennedy. And they all felt it was necessary for you to take 
a trip down there and tell' them that the company was going to take 
a strike in this matter^ 

Mr. Blank. Yes, sir. 

Mr. Kennedy. Did you ever discuss the matter with Mr. Lapen- 
sohn ? 

Mr. Blank. I don't have any specific recollection that I did, but 
I certainly would have had he been there and available, and because 
there would have been no reason that I should not discuss it with 
him. 

Mr. Kennedy. During this period of time did you discuss it with 
Mr. Lapensohn? 

Mr. Blank. If he w^as there, and I saw him, I certainly would have. 
But I don't know. 

Mr. Kennedy. That does not answer the question. Did you? 

Mr. Blank. There is some doubt in my mind as in the minds of 
others, whether he w^as in Philadelphia at that time. So I don't 
know. But had he been there, I would have, positively. 

Mr. Kennedy. What is the answer to the question as to whether you 
did or did not ? 

Mr. Blank. I do not know, sir. 

Mr. Kennedy. You what ? 

Mr. Blank. I do not know, sir. 

Mr. Kennedy. During this period of time, were you performing 
services for Mr. I^apensohn through your law firm ( 

Mr. Blank. I don't know whether or not we were doing any at that 
particular time. The dates and the times that we handled these real- 
estate transactions for him are not before me. But if there was a real- 
estate transaction then being handled, it was. But my best recollec- 
tion is, there was none at tJiat time. 

Mr. Kennedy. Looking at the record here, it would appear that 
your real-estate transactions that you were handling for Mr. Lapen- 
sohn began in November of 1953. Would that be right ^ 

Mr. Blank. Certainly I know that he came in to see us first in 1952, 
so I am certain we were doing work for him at that time. 

Mr. Kennedy. The first check is 1630, and it indicates then that the 
transaction started in November 1953, and continued through 1954, 
4 transactions in 1954 ; 4 transactions in 1955 ; 5 or 6 transactions in 
1956. So this was all during the period of time that Mr. Lapensohn 
was representing local 107 ; was it not ? 

Mr. Blank. I am sure, sir, with that record before you, you are 
correct on your dates. I don't have them, of course, clearly fixed in 
my mind. It would be impossible for me to have that information in 
my mind. 

Mr. Kennedy. And during this period of time, you knew that he 
was also representing local 107? There was no question in your mind 
about that ? 

Mr. Blank. When you say representing local 107, there is a ques- 
tion in my mind, because I don't think he had any authority in connec- 
tion with the matters tliat we were handling with 107. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11081 

Mr. Kennedy. You knew he was associated with local 107 ? 

Mr. Blank. I knew he had a position there ; yes, sir. 

Mr. Kennedy. Did you also become close personal friends your- 
selves ? 

Mr. Blank. 1 would say Ave were not intimate, but we were 
friendly; yes, sir. 

Mr. Kennedy. He used to come to your home occasionally ^ 

Mr. Blank. He did ; yes, sir. 

Mr. Kennedy. And you would go to his home? 

Mr. Blank. Yes, sir. 

Mr. Kennedy. And you recommended him for one or more of the 
clubs in Philadelphia ; did you ? 

Mr. Blank. I do not know, sir. I do not believe I did. 

Mr. Kennedy. Did you recommend him for any of the clubs in 
Philadelphia? 

Mr. Blank. I do not believe that I did. 

Mr. Kennedy. Are you sure of that ? 

Mr, Blank. If you would mention it 

Mr. Kennedy. The Locust Club, did you recommend him for the 
Locust Club ? 

Mr. Blank. I did not; no, sir. I know he was elected to the Lo- 
cust Club, but it was not I that did it, 

Mr. Kennedy. You say you were retained in June of 1954 by the 
Footl Fair Co. When Avere you paid by the Food Fair Co, ? 

Mr. Blank. When ? 

Over a year after we started to do our work, Mr. Kennedy. 

Mr. Kennedy. Was it a contingent arrangement that you had with 
them? 

Mr. Blank. No, it was not a contingent arrangement, but we did 
not discuss it, tlie amount of our fee until after the year was finished 
so that we would be in a position to more accurately ascertain the 
nature and extent of the services. 

Mr. Kennedy. I understood from the discussions that I had with 
the people from Food Fair that you discussed $15,000 the firet year; 
is that correct ? 

Mr. Blank. That is not my recollection, 

Mr, Kennedy, And that you performed so well that they finally 
agreed to pay you $20,000 ? 

Mr, Blank. That's not my recollection, sir. My recollection is that 
the fee was discussed at the end of the period rather than the begin- 
ning. 

Mr. Kennedy. How much did you finally receive from Food Fair? 

Mr. Blank, I suggest to the Chair that the question of what a 
lawyer charges a client has always been held by the courts to be a 
matter not subject to public inquiry. 

The committee has all of the information on that, Mr. Kennedy. 
If there is any further that you require, I Avill be glad to supply it, 
but I request that the matter not be made a matter of public inquiry. 

Mr. Kennedy. Mr. Chairman, the only question I raise is because 
of the close relationship that existed between Mr, Blank and Mr. 
Lapensohn, and because he has played such a ]irominent role in the 
hearings, and because these business dealings did go on between Mr. 
Lapensohn and Mr. Blank, and because of the testimony that we have 
had here today. 



11082 IMPROPER ACTIVITIES IN THE LABOR FIELD 

It does become of some interest to the committee. 

I would not press the point, but the manner in which the fee was 
handled, waiting for a period of a year, and finally your being retained 
by these other companies, are matters that we need to inquire into. 

Mr. Blank. Mr. Kennedy, you know I have indicated to you that in 
most cases it is our practice, miless required by the client, not to 
request a retainer fee in advance before we do any work. Most of 
our work is done with business firms of good reputation. Normally, 
in the normal and usual course of our business, we wait until the 
end of a period when we can appraise the nature of our work and send 
a bill. 

Mr. KENiiTEDY. That is the question I have asked and that is the 
answer you have given. But these other matters have been of some 
interest. Whatever the Chair would like will be all right. I will not 
press it. 

The Chairman. In some instances we have definitely required them 
to disclose the amount of fee and the purpose for which they were 
employed. That started back with the precedent when we were inves- 
tigating in another committee, the 5 percenters, in another adminis- 
tration. It has been required subsequently. The Chair takes this posi- 
tion. I would not require it, except that I definitely knew that it had 
some importance, that it was a factor in the weight of the chain of 
evidence that established something very pertinent to the inquiry. 

If you will give it to us confidentially first, we will determine later 
the whole subject. 

Mr. Blank. I wanted to say to the chairman, if I may, that com- 
plete information with regard to this voluntarily given to the com- 
mittee, as all of our records from the beginning to end. All of the 
information is now in the possession of Mr. Kennedy. If there is any- 
thing further required, we will be happy to supply it, sir. 

The Chairman. Very well. 

Mr. Kennedy. You were retained by Food Fair. Were you then 
approached by another one of the food companies ? 

Mr. Blank. I would just like to comment about the coincidence that 
you are attempting to make, sir 

]\Ir. Kennedy. I am not attempting to make anything. 

Mr. Blank. You say were we then approached ? 

Mr. Kennedy. I was going to ask you when after you told me the 
answer first. 

Mr. Blank. May I give the facts as they existed, because I think 
the committee should have them. We were retained by Food Fair in 
June of 1954. For a period of 2 years thereafter, we were retained 
in many labor matters in Philadelphia, as we were in many other 
matters not having anything to do with labor. 

But in all that time, I don't know of one single piece of business 
that came into our office that related to business with local 107. So 
when Mr. Cupp called me in June of 1956 and said that he would 
like us to do their work for them, naturally we were grateful and 
pleased to have a firm of American Stores reputation ask us to do 
their work for them. But it was a full period of 2 years after we had 
first started to represent Food Fair that we had come to the attention 
of the American Stores. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11083 

Mr. Kennedy. So you were approached then by the representa- 
tives of American Stores, and you had some conversations with Mr. 
Cupp? 

Mr. Blank. Mr. Cupp ; yes, sir. 

Mr. I^NNEDY. Did he suggest to you at that time the problems that 
they were having with local 107 ? 

Mr. Blank. Yes, he did. I might add, incidentally to that, that it 
took me several days to make up my mind whether or not we would 
accept the work, and it did, and I would like to indicate the reason 
for that, if I may, Mr. Chairman. 

Mr. Cupp asked us to do this work for him and indicated the nature 
of their problems. It seemed to me, from what he had to say, that 
everything he asked for and that he wanted this union to do for him, 
he was fully entitled and justified in having. I saw nothing that he 
wanted that was not reasonable and was not proper. I said that we 
would consider whether or not we would like to do it, the considera- 
tion being that we then represented Food Fair, which was and is a 
competitor of the American Stores. 

It would have been, I would think, improper for us to have accepted 
a retainer from American Stores without first clearing it with the 
officials of Food Fair; I therefore sought out the president of Food 
Fair, Mr. Stein, and discussed the matter with him, and he was de- 
lighted; he said, "I think this is a very good thing, because instead 
of our having to lose some of the things we have gained as a result of 
our having these trailer drops being a necessary adjunct to our dis- 
tribution, I think it would be a good thing now that the American 
Stores are going into that branch of work for you to get them some 
additional benefits, if you can, because they are entitled to them." 

When he told me he felt that way, I then communicated with Mr. 
Cupp and told him we would be happy to take the work. 

Mr. Kennedy. Did you work on some of their difficulties? Did 
you work on some of those problems with representatives of local 
107? 

Mr. Blank. Actually, Mr. Kennedy, I did not. Shortly after Mr. 
Cupp retained us, I think within a matter of several days, I left on an 
extended vacation. I went over to Europe and I didn't get back until 
late in August, as I recall it, or some time in August and that work was 
done by other people in our firm. I personally did not handle it. 

Mr. Kennedy. Did you have any conferences or conversations with 
Mr. Lapensohn in connection with the problems that were facing 
American Stores? 

Mr. Blank. No, sir ; I did not. 

Mr. Kennedy. You never discussed it ? 

Mr. Blank. I don't say never, but at that time I certainly did not, 
because I 

Mr. Kennedy. Subsequently, did you ? 

Mr. Blank. If I saw him, and if there were a problem on my mind, 
there would have been no reason in the world for me not to mention it 
to him, but I don't have any specific recollection of discussing a par- 
ticular problem. I would not deny that I did. 

Mr. Kennedy. I am not questioning whether there was any reason 
that you should not discuss it. I am just trying to get the answer 



11084 IMPROPER ACTIVITIES IN THE LABOR FIELD 

to the questions. Every time I ask that question, you give me the 
same answer, 

Mr. Blank. I realize, Mr. Kennedy, that you are, and I am trying 
to give you a trutliful answer. But it is a very difficult thing to do at 
this time — to place yourself years back and try to remember specifi- 
cally whether you had 1 conversation or 2 conversations, when you had, 
literally, hundreds of thousands of them. 

Mr. Kennedy. You just can't remember that ? 

Mr. Blank. I would sa}^ that the probability is that I did, but I do 
not have a recollection of it. 

Mr. Kennedy. Your firm, evidently, was remarkably successful, 
according to the testimony before this committee, that you were able 
to achieve in just short conferences what the other organization was 
not able to achieve in 18 months, and which the company itself was un- 
able to achieve in trying to get to the union. 

Is there anything particular that you can tell us as to what was 
the source of your success ? 

Mr. Blank. I would like to suggest, Mr. Kennedy, and I don't 
know the facts about how long it took, but I would very much doubt 
whether a problem as serious as the one we handled for the American 
Stores was settled in 1 hour, 10 hours, or 30 hours, because it was a very 
complicated type of problem. 

I doubt very much whether the man in our office or the man who 
handled it would have understood the problem Avithont having spent 
several weeks or more in preparation and analysis of it. 

Many of you gentlemen are lawyers and you know that each time 
you come to handle a case you don't always hit a liome run. There 
are many times when our firm has not done well with certain cases, 
and people go to other lawyers and the other lawyers do well with 
those cases. In this case, Motor Transport Labor Kelations, which 
is a very wonderful outfit in my opinion, and who have done a splen- 
did job for the trucking industry in Philadelphia were unable to effect 
a good result for these people. 

What they wanted was fair and proper. All tliey asked for, as I 
recall the situation — and as I said before you will pardon me if I am 
not too specific because I did not handle it — all they wanted was to get 
the same starting time for their produce operation that their other 
competitors, including A. & P. already had had for years. 

There was just no reason why, if that matter was properly ex- 
plained that they should not ^et it. 

I would be very delighted if we performed some miracle, in getting 
it for them, because that Avould certainly redound to the credit of our 
firm. 

But I must state that in that I don't think we performed any 
miracle at all. I think MTLR wore the union down in the 18 months 
or so they were in it, and possibly we came along at the proper time 
and the union realized they should have it. Whatever it was, I know 
they were delighted with the result and we were delighted that they 
got it. 

^ Mr. Kennedy. You were talking about a home run. The situa- 
tion would appear that in 1954 your client, the Food Fair Co., was able 
to come up to bat and hit a home run, and then your second client, as 
American Stores, was also able to hit a home run, immediately after 
retaining you. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 110S5 

Mr. Blank. I woukl not like to niininiize the extent of a success 
that we have in any of our work. 1 would be happy to say that we 
do do the best work we can, and if we are satisfying any of these 
people, we are glad that we do. 

It certainly was the result of good, hard work. 

Mr. Kennedy. In 1954, for instance, did you discuss with Mr. 
Lapensohn specifically the fact that the Food Fair Co. would have 
unlimited drops or continue tlieir former procedures with tlie under- 
standing they would take on '20 additional men ? 

Mr. Blank. No, I did not do anything about that, sir, but I cer- 
tainly did discuss the question of tlie droping of trailers, because that 
was a subject which anyone that had anything to do with that situa- 
tion in Philadelphia was discussing with everybody else. The situa- 
tion in Philadelphia then was extremely chaotic. 

Mr. Kennedy. Do you know anybody else that was discussing that 
w^ith the representatives of local 107 other than yourself? 

Mr. Blank. I do not, but I would doubt very much if everylx)dT 
wasn't scurrying arovmd doing everything they could to avoid a 
drastic strike Avhicli then looked imminent. 

Mr. Kennedy. Did any of the officials of Food Fair indicate to you 
that they had been discussing the matter with any representatives 
from 107? 

Mr. Blank. No, sir; they did not. 

Mr. Kennedy. Mr. Friedland never discussed that? 

Mr. Blank. Mr. Friedland had nothing to do with that particular 
situation. 

Mr. Kennedy. Did he ever discuss it? 

Mr, Blank. No, sir. 

Mr. Kennedy. Mr. Arnold Cohen ? 

Mr. Blank. No, sir. 

Mr. Kennedy. He never mentioned that to you ? 

Mr. Blank. No, sir, to my knowledge, he never discussed it with 
the union. 

Mr. Kennedy. So you were the only one that you know of who was 
conducting these negotiations ? 

Mr. Blank. As I indicated before, Mr. Kennedy, I did not negoti- 
ate with the union at all. All I did was to pass on to them a message 
which I thought they should have. You have heard the testimony. 
The negotiations were carried on by MTLR and not by me. 

Mr. Kennedy. You were the oidy one other than MTLR who was 
having discussions with the union for Food Fair, that you know of; 
is that right ? 

Mr. Blank. Yes, sir. 

Mr. Kennedy. There is just one other matter. 

You had 150 shares of Food Fair property stock. 

Mr. Blank. Five hundred. 

Mr. Kennedy. You received 500. Did you transfer 125 shares 

Mr. Blank. One hundred and fifty shares. I never did actually 
transfer them. 

Mr. Kennedy. Let me ask you the question. To Mr. Lapensolm? 

Mr. Blank. Yes, sir; I did not actually transfer them. 

The original share certificate is still in our name, but we gave him a 
letter that he had 150 shares. Incidentally, he paid the same price 
for them that we paid for them. 



11086 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr.E^ENNEDY. Which was $150 ? 

Mr. Blank. Yes. 

Mr. Kennedy. Actually, at that particular time the shares were 
worth four times that? 

Mr. Blank. I would doubt it, sir, because the conversation I had 
with him was shortly after I was told that I could have these shares. 
Unless they were worth $4 when I got them, which I doubt very much. 
I am sure they were worth $1 when I got them and that is the price I 
asked him to pay. 

Mr. Kennedy. At the time he paid you, they were actually worth 
$600. 

Mr. Blank. There was a time when we had the discussion, and I 
think I discussed this with your staff, and we told him he could have 
these checks, and at a subsequent period he made out and mailed a 
check for them. 

It was an insignificant amount of shares and an insignificant amount 
of money. 

Mr. Kennedy. Have you had any other transactions other than 
these business deals that went on through 1954, 1955, and 1956 ? 

Mr. Blank. All I can say, Mr. Kennedy, is that you have a full 
record of every transaction we have had, completely. We gave you 
a full record of it. 

Mr. Kennedy. Maybe we were not able to identify them. Could 
you answer the question as to whether you have had any other finan- 
cial transactions with Mr. Lapensohn other than the land transactions 
that occurred during 1954, 1955, and 1956 ? 

Mr. Blank. Of course, as you know, we made him an advance of 
$9,000 in the end of 1955 or early 1956. But that was subsequently 
repaid. 

Mr. Kennedy. I didn't know about that. You loaned him $9,000 ? 

Mr. Blank. Well, I didn't personally. But one of the members 
of our firm was asked by him to advance $9,000 for him in some real 
estate transaction, which he did. Wlien it came time for him to repay 
it at the settlement, he was not able to do so because the financing 
had not materialized as he had expected. He had asked to have the 
loan retained over a period of time. 

Mr. Kennedy. "\Yhat interest did he pay on that ? 

Mr. Blank. He did not pay the interest yet. 

The note provided for 4-percent interest, but he has not paid it yet 
The principal of it was repaid. 

Senator Mtjndt. How long had the loan run when he paid it? 

Mr. Blank. A period of approximately 2 years. 

Senator Mundt. Two years ? 

Mr. Blank. Yes, sir. 

Senator Mundt. Why didn't he pay that comparatively insig- 
nificant amount of interest? 

Mr. Blank. Well, it was not an insignificant amoimt, sir. 

Senator Mundt. Compared to $9,000 it is pretty small. 

Mr. Blank. Do you mean the interest ? 

Senator Mundt. Yes. 

Mr. Blank. We had this property, I had this property with him, 
and he had been out of the jurisdiction, and I had not seen him, and 
we thought we ought to get this note paid. 

We sold the property and it realized enough to pay back the $9,000. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11087 

Senator Mundt. He is not going to pay the interest ? 

Mr. Blank. No, sir. It is still due. I hope to collect it. I am 
sure he will pay it some day. 

Senator Mundt. I don't know the gentleman in question. I have 
been attending another hearing. This would amount to about $720. 

Mr. Blank. I would think so, sir. 

Senator Mundt. Is the gentleman in question in such straits and 
circumstances that he has difficulty in raising $720 ? 

Mr. Blank. I have difficulty in communicating with him, sir. 

Senator Mundt. You have not been in touch with him since he paid 
the loan ? 

Mr. Blank. I have not been in touch with him since before he left 
the United States. 

Mr. Kennedy. You handled a business transaction for him, didn't 
you, in this year, 1958 ? 

Mr. Blank. No, sir. 

Mr. Kennedy. Have you sold any property for him ? 

Mr. Blank. No, sir. 

Mr. Kennedy. Well, as of the end of 1957 ? 

You have not sold any property or had any business transactions 
with him in 1958 ? 

Mr. Blank. No, sir. 

Mr. Kennedy. All of your business transactions ended ? 

Mr. Blank. I know of no business 'transactions that we handled 
for him after he went to Europe in the middle of 1956 — 1957. 

The Chairman. When did he leave ? 

Mr. Blank. I think it was sometime in 1957. 

The Chairman. May 1957? 

Mr. Blank. I think so. 

(At this point, Senator Ervin withdrew from the hearing room.) 

Mr. Kennedy. Didn't you and Mr. Lapensohn own a gas station 
together ? 

Mr. Blank. Yes. I just told the Senator that I sold that and the 
proceeds were used to repay this obligation. But he did not partici- 
pate in that transaction. 

Mr. Kennedy. When did you sell it ? 

Mr. Blank. It was sold early in February of this year. 

Mr. Kennedy. That, I think, was the transaction that I had in mind. 

Mr. Blank. Yes, sir, that we did. 

Mr. Kennedy. You sold this property that you owned jointly ? 

Mr, Blank. Yes, sir. 

Senator Mundt. That was the $9,000 used to repay the loan? 

Mr. Blank. That is correct, Senator. 

Senator Mundt. And that was all he had coming from the sale, 
was it? 

Mr. Blank. Yes, sir. 

Senator Mundt. $9,000? 

Mr. Blank. Yes, sir. 

Senator Mundt. If there had been $9,720 due him, you would liave 
taken it all ? 

Mr, Blank. If there had been that much due there, sir, I certainly 
would have. 

Senator Mundt. I see. 



11088 IMPROPER ACTIVITIES IN THE LABOR FIELD 

The Chaikman. ^lien did you agree to make this sale ? Was he 
consulted about it or did you have power of attorney to sell it at 
any time ? 

Mr. Blank. Yes, we did, sir. At the time the loan was made, it was 
made on the basis of this collateral. 

At that time we owned this property and it was registered in the 
name of a young lady in my office, as collateral for that loan, we had 
this property and it was clearly understood that if the loan was not 
paid, we would have the right to sell it, which we did. 

The Chairman. That arrangement was all made prior to the time 
he left? 

Mr. Blank. Yes, sir. 

The Chairman. You have had no contact with him since ? 

Mr. Blank. None at all. 

The Chairman. We would be a little interested in having him visit 
us, if we could arrange it. 

Mr. Kennedy. Is that the only loan that you made to him ? 

Mr. Blank. Wasn't there a $5,000 transaction some time in 

Mr. Kennedy. March 10, 1955 ? 

Mr. Blank. I think so, sir, yes. I did not personally make it. 
One of my partners did. It was subsequently repaid. 

Mr. Kennedy. Are you in the lending business also ? 

Mr. Blank. No, but I must say that we have done some good for 
a number of people in Philadelphia whom we have helped, and who 
are still grateful for the help which we gave them in the early days. 

Mr. Kennedy. Would you put Mr. Lapensohn in that class? 

Mr. Blank. All I can say, sir, is that these were rather usual 
transactions in our office. There was nothing unusual. 

Mr. Kennedy. Well, somebody for whom you have done a lot of 
good would be very grateful to you, is that what you meant to imply ? 

Mr. Blank. What I meant was that it is not an unusual thing for 
lawyers in offices such as ours to help people when they ask for it, 
if we are in a position to do so. 

Mr. Kennedy. If he wanted a loan of $5,000, and a loan of $9,000, 
why wouldn't he just go to a bank and obtain a loan from there, rather 
than from your law firm? 

Mr. Blank. As you know, there are times when people get extended 
and I guess they can't get bank accommodations. If tliey could, I am 
sure they would go to the bank. 

Mr. Kennedy. Did the propriety of loaning this money to an offi- 
cial, a representative of local 107, whatever you call him, while you 
were at the same time representing the food company, did the propriety 
of that ever rise in your mind ? 

Mr. Blank. I don't think it represents a problem, sir. It seems to 
me and I have discussed this with several members of our firm, if we 
represent a man who is an executive of a company, and he leaves that 
company and goes to work for another company, it seems to me that 
we should not be reluctant to do business with that new company on 
behalf of a client of ours just because we know the man well. 

I think generally the fact that you know people well or have had 
relations with them in a business way should not in any way disbar 
or prevent people from doing business. 

Mr. Kennedy. Of course, the business dealings that you had with 
Mr. Lapensohn, Mr. Blank, did not really begin until after he became 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11089 

associated with local 107, at least according to our records. The only 
one in 1953 was a $75 item. 

Mr. Blank. That is not the fact, sir, if I may correct the record. 
We signed an agreement of sale for the purchase of that gasoline 
station in October of 1953, and the record shows that we handled 
and discussed business real estate transactions with him from 1952 on. 

That was made part of the record which we turned over to you. 

Mr. Kennedy. 1 don't think you had any actual financial trans- 
actions in 1952. 

Mr. Blank. Xo, but the agreement of sale for that gasoline sta- 
tion was dated October 1953, and your committee has seen that. 

Mr. Kennedy. B^^ and large the transactions all took place in 1954, 
1955, and 1956. Of course, that was the time that he was a representa- 
tive of local 107. Then loaning this money on two different occasions, 
the $14,000 ; does tliat sound at all questionable ? 

Mr. Bl.\nk. I nmst give you this assurance, Mr. Kennedy, that our 
relationships with local 107 were in no way affected directly, indirectly, 
or sidewise by any influence or purported influence with Mr. Lapen- 
sohn. Anybody who would have any business matters with that union 
knew that Raymond Cohen was the only one who could make any 
changes in any situation of any importance at all. 

Mr. Kennedy. According to the testiminy before the committee, 
and you have explained it accordingly, you had remarkable success 
with local 107, and at the same period of time it is true that you had 
many business dealings with Mr. Lapensohn, and it is true that on two 
different occasions you loaned him considerable amounts of money. 

As I say, you have given your explanation, but those are the facts. 

Mr. Blank. Well I remember when Ave went to college they used 
to talk about posthope reasoning, and I am sure you wdl remember 
that just because something happens after the fact, that it does not 
necessarily happen because of the fact or the event, and any such 
attempt to place guess upon conjecture would only, in my judgment, 
be a distortion of the facts, sir. 

I give you this testimony, and I mean it sincerely, sir, that his rela- 
tionship with that union had no effect whatsoever on the work which 
Ave did with that union which Avas based purely on a professional 
basis, trying to handle it as competently as we could. 

Mr. Kennedy. You can see how these facts might raise a question, 
and that is why it might be Avell if you came to testify and explained 
the situation. 

Mr. Blank. I thank you, sir, for the opportunity to be here today, 
so that I may explain it, because the reputation of our firm and my 
personal reputation in Philadelphia are very important to us. 

It is a privilege to be here and to be able to straighten out the 
record, sir. 

Mr. Kennedy. The ethical practices committee, I might add, out- 
laws or prohibits this kind of an arrangement Avith a union official. 

Mr. Blank. I did not know it, sir. 

Is that one in this article which was just written ? 

Mr. Kennedy. No, the ethical practices committee of the AFLr- 
CIO. 

The Chairman. That was for the future. That was not in effect 
at the time of these transactions. That is for the future. 

Are there any other questions ? 



11090 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. That is all. 

The Chairman. Thank you very much. 

I would like to call Mr. Cohen for just a moment. I want to give 
him the opportunity to explain today, at this time, particularly about 
any advantages in these drops or lack of advantage. 

You will be sworn, sir. 

Do you solemnly swear that the evidence you shall give before 
this Senate select committee shall be the truth, the whole truth, and 
nothing but the truth, so help you God ? 

Mr. Cohen. I do, sir. 

STATEMENT OF ARNOLD D. COHEN, ACCOMPANIED BY HIS COUNSEL, 
SCOTT W. LUCAS, WASHINGTON, D. C, AND HARRY SHAPIRO 

The Chairman. State your name, your place of residence, and 
your business or occupation. 

Mr. Cohen. My name is Arnold D. Cohen. I live in Wynnewood, 
Pa. My business is vice president of Food Fair Stores in charge of 
warehousing and transportation. 

The Chairman. Let the record show the same counsel appears as 
appeared for Mr. Schwartz. 

Mr. Cohen, in my interrogation of Mr. Schwartz I undertook to 
interrogate him regarding the advantages of having these trailer 
drops. It was suggested that possibly you had more information 
about that and could give better testimony on that point than he 
could. 

For that reason, I am calling you now, since the committee cannot 
remain in session much longer, but since that issue was raised today> 
I thought you should have an opportunity to testify briefly on that 
point this afternoon. 

I may ask you two or three questions. You have heard evidence 
today that these trailer drops are regarded as having an economic 
value. The lowest, I believe, which has been testified to was $18 per 
drop, and up to as high as $25 a drop. 

Someone suggested the average would be about $22.50 per drop. 
In your work with the company, in your position with the company^ 
is it part of your duties to take into account the economics of 
operation ? 

Mr. Cohen. Yes, it is, sir. 

The Chairman. How long have you been with the company ? 

Mr. Cohen. I came with Food Fair Stores in 1946, just following 
my tenure with the Army. 

The Chairman. Have you made any calculations with respect to 
the advantages of these trailer drops, the economic advantage in it? 

Mr. Cohen. Well, Senator, I don't see where there is an economic 
advantage to this particular phase of our operation. I see where 
there is an advantage to our store operations with the convenience of 
a method of making deliveries, but a dollar-and-cents savings we 
cannot show. 

The Chairman. That gives a pretty sharp conflict in testimony, as 
you can appreciate. I frankly do not know. Tlie thing that gives 
support to the contention that these trailer drops have a decided eco- 
nomic advantage is that everyone was fighting so hard to get them in 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11091 

the course of negotiations with the union. If they have no particular 
economic advantage, then why was that possible the principal issue, 
or point at issue, in the negotiations with the union ? 

Mr. Cohen. Well, it was a principal point of negotiation with Food 
Fair Stores because we needed the convenience of our method of oper- 
ation. Maybe I can qualify my statement somewhat, Senator, by 
saying this : 

Wliere you operate a drop trailer operation, you are forced, with 
that type of an operation, to have more trailers than you normally 
would if you had the tractor attached to the trailer constantly. 
Figuring the value of the trailers, you in turn, or we in turn, with our 
method of operation and the number of drops we have, and had, the 
number of trailers we were forced to put on, we did not show a definite 
or any economic advantage. 

(At this point, Senator Ervin entered the hearing room.) 

Mr. Cohen. Our advantage was primarily one of giving the store 
the convenience of unloading the trailer when they could. No. 1, ac- 
commodate the merchandise into the back room of the store, and. No. 2, 
when they had the time to unload the trailer. 

The Chahiman. How would that differ from the same advantage 
that would go to others ? Wouldn't it be the same advantage to any 
other of your competitors ? Wouldn't it give them the same benefits, 
the same convenience that you are speaking of. 

(At this point. Senator Mundt left the hearing room.) 

Mr. Cohen. It would, if they were in a position to operate with the 
same system. 

The Chairman. That is the system that is regarded as more efficient ? 

Mr. Cohen. Maybe I can qualify it this way, or explain it. 

The Chairman. All I know from the testimony here is that every- 
body wanted it. The union didn't want to give it to anyone. That 
much I think is undisputed. 

What is the consideration that made it such a controversial issue? 

Mr. Cohen. Primarily, I think it was this : Where you had an oper- 
ation where you had a straight truck or a tractor and trailer with a 
driver and a helper, if you were then permitted to go into a drop 
operation, you certainly did not have the need for the helper. 

Now, the advantage of having a drop operation — we started off 
with no helpers. We continued that operation from 1949, when we 
first started with the first truck, all the way up until 1954, when it 
was put into jeopardy. 

The Chairman. Are there any further comments about it? 

Mr. Cohen. The only thing that I would like to make as a point, 
Senator, if I may, is the fact that in order to keep our method of op- 
eration, and in order to let our competitors have the type of operation 
that we operated under, the union could foresee the fact that there 
would be a so-called vanishing American. 

The vanishing American came into being with reference to Amer- 
ican Stores. If they were permitted their drops, they would not need 
the helpers. The union in turn felt that they were not going to lose 
their membership for those men who were acting in the capacity of 
helpers. 

Therefore, in 1954, they came along and said because they didn't 
want the vanishing Americans, we would pick them up. 

212-43— 58— pt. 28 18 



11092 IMPROPER ACTIVITIES IN THE LABOR FIELD 

The Chairman. They could argue the same way, that you ought to 
deliver with an oxcart, too. 

Mr. CoiiEN. Well, there are a lot of things they say sometimes. 

The Chairman. Are there any other questions? 

Mr. IvENNEDY. Mr. Cohen, while you are here, do you know Mr. 
Lapensohn ? 

Mr. Cohen. Yes, I know ]\Ir. Lapensohn. 

Mr. Kennedy. How long have you known Mr. Lapensohn?. 

Mr. Cohen. Approximately 10 years. 

Mr. Kennedy. How did you first meet him ? 

Mr. Cohen. You asked me that question before, counsel, and I told 
you that to the best of my recollection 

Mr. Ivennedy. Just answer the question. 

Mr. Cohen. To the best of my recollection, I think I was intro- 
duced to him or him to me at the country club dance. 

Mr. Kennedy. Did you see him after that ? 

Mr. Cohen. Yes, I did, sir. 

Mr. Kjinnedy. Under what circumstances ? 

Mr. Cohen. Well, there were a few, primarily that of having break- 
fast together in the Horn & Hardart restaurant at 54th and City 
Line Avenue on an average of maybe 2 or 3 times a year. 

Mr. I^nnedy. Did you arrange to meet there? 

Mr. Cohen. No, sir. 

Mr. Kennedy. You just happened to meet at the Horn & Hardart 
restaurant ? 

Mr. Cohen. Yes, sir. Thursday mornings I don't eat at home for 
breakfast. So I would eat at the most convenient restaurant, which 
happened to be Horn & Hardart's. 

Mr. Kennedy. There was one occasion at Horn & Hardart's ? 

Mr. Cohen. There was one occasion when I met Mr. Lapensolin 
at the Technion banquet. Technion is an organization interested in 
forwarding teclinical advice to the State of Israel, and I met him at a 
banquet one time where we exchanged greetings. 

Mr. Kennedy. Did you ever discuss local 107 business with him? 

Mr. Cohen. No ; I did not. 

Mr. Kennedy. Did you know what he was doing at the time ? 

Mr. Cohen. No ; I did not. 

Mr. Kennedy. You never inquired of him ? 

Mr. Cohen. No ; I did not. 

Mr. Kennedy. You had breakfast with him 2 or 3 times a year and 
you never inquired what work he was doing ? 

Mr. Cohen. No ; I didn't. 

Mr. Kennedy. You didn't know what business he was in ? 

Mr. Cohen. No ; I did not. 

Mr. Kennedy. And you never inquired ? 

Mr. Cohen. No. In fact, up until very recently I thought he was a 
lawyer. 

Mr. Kennedy. You never inquired of him ? 

Mr. Cohen. I did not ; no, sir. 

Mr. Kennedy. And you used to meet him this often ? 

Mr. Cohen. Well, I did see him one time at 107. 

Mr. Kennedy. What did you think then ? 

Mr. Cohen. I had nothing to think. I saw him in the hall. I said, 
"Hello" and he said "Hello" and that was all. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11093 

Mr. Kennedy. Did you think he was associated with 107 at that 
time ? 

Mr. Cohen. I had no reason to believe anything. I never even gave 
it a thought at that time. 

Mr. Kennedy. You never knew he was in with 107 ? 

Mr. Cohen, I did not ; no, sir. 

Mr. Kennedy. Did you ever call him or telephone him down there ? 

Mr. Cohen. No, sir. 

Mr. Kennedy. Did you participate in any of the negotiations for 
any of these contracts ? 

Mr. Cohen. No ; I did not. 

Mr. Kennedy. You never had anything to do with labor ? 

Mr. Cohen. No. I directly didn't go to any of the negotiations. 

Mr. Kennedy. Did you participate in any of the discussions on the 
negotiations ? 

Mr. Cohen. Just that Mr. Schwartz would keep me advised as to 
what the progress of the negotiation was. 

Mr. Kennedy. Are you the one that sent Mr. Blank down to see the 
officials of local 107 ? 

Mr. Cohen. T had discussion with Mr. Blank. The discussion was 
of the nature where I had been advised that we were going to lose our 
ability to drop our trailers, and I made mention to Mr. Blank that we 
would take a strike for this, and I didn't care who knew it, that he 
could tell it to anybody at all, including Kay Cohen. 

Mr. Kennedy. That you would take a strike rather than submit to 
that? 

Mr. Cohen. That is right, sir. 

Mr. Kennedy. So it was a very important matter to you, was it not ? 

Mr. Cohen. Yes ; it was. 

Mr. Kennedy. And also it was very important to all of the other 
companies, according to their testimony. 

Mr. Cohen. According to their testimony ; yes, sir. 

Mr. Lucas. May Ave have one conference, Mr. Chairman, on a 
matter ? 

The Chairman. Yes. 

(Witness conferred with his counsel.) 

Mr. Shapiro. Mr. Chairman, I think we should say to the committee 
that the gentleman has the figures on which he bases his conclusion, and 
I thought the committee would be interested in them, especially from 
the chairman's interest. 

The Chairman. If you have a compilation of fibres on which you 
base your testimony, if you desire you may submit it as an exhibit and 
the committee will receive it. 

Mr. Cohen. Thank you. 

Mr. Shapiro. Can we give the conclusion as to what it shows ? 
The Chairman. Certainly. 

Mr. Cohen. Let me clarify a couple of points, Senator. No. 1 is 
that we never had 283 or 287 drops in our operation, either a day or 
a week. 

The Chairman. How many did you have ? 

Mr. Cohen. We have our operating figures here as of December 
1954, which takes us into the new contract, January 1, 1955, at which 
time we had the ability just to drop in two products, which were 



11094 IMPROPER ACTIVITIES IN THE LABOR FIELD 

groceries and produce. There was no store of ours or anybody's that 
we knew who was doing vokime where they could take a full drop of 
a product like dairy, frozen foods, fish, meat. So these drops were 
only embracing the two fields. 

No. 1, we enjoyed 105 drops a week on groceries and we had 43 drops 
a week on produce, or a total of 148 drops a week. 

The Chairman. At what time was that? 

Mr. Cohen. As of January 1, 1955. There were some weeks when 
your normal 148 drops could, in turn, get to 200. There were times in 
our operation where they could reach a maximum of 200, and that 
would be under the circumstances where we were making a distribution 
of some product like Christmas trees prior to Christmas. 

Mr. Kennedy. Didn't you inform the MTLR that you had some 
280 trailer drops? 

Mr. Cohen. We never did, sir. 

Mr. Kennedy. When you had the discussions and they were going 
to have the negotiations with the union, didn't you tell them at that 
time that you liad some 280 trailer drops ? 

Mr. Cohen. No, sir. I only heard that one time by rumor and that 
was given to me by American Stores. 

Mr. Kennedy. So during the period 1954, 1955, 1956, you never 
had as many as 200 

Mr. Cohen. We don't have 287 today, and today we enjoy more 
stores than we had in 1954. 

Mr. Kennedy. Did you ever say you wanted to get 280 ? 

Mr. Cohen. We couldn't have them because we couldn't use them. 

Mr. Kennedy. Did you ever discuss it and say that you wanted 
them? 

Mr. Cohen. No, sir. 

Mr. Kennedy. You never did ? 

Mr. Cohen. No, sir. 

Mr. Kennedy. Here is Mr. Berman from the union, and perhaps 
he is wrong, too, Mr. Al Berman, on December 27, 1955. He is a 
representative of the union. 

He states "I don't know about Penn Fruits, but Food Fair is drop- 
ping 283 bodies a week." 

Mr. Cohen. May I ask you where he got that figure, sir. 

Mr. Kennedy. You will have to ask Mr. Berman. 

Mr. Cohen. I can only tell you as the operator how many we had, 
sir. 

The Chairman. That is the minutes of what? 

Mr. Kennedy. That is in the minutes of the MTLR-local 107, joint 
meeting. 

Mr. Cohen. I can only say that Mr. Berman is misinformed. 

Mr. Kennedy. Do you remember if they ever raised the point that 
you were dropping 280 trailer drops ? 

Mr. Cohen. I have heard the story kicked around and exaggerated 
to the point where we were unconcerned whether they thought we had 
287 or 2,087. 

We knew what were doing. We knew how many we had. We were 
only concerned with our particular operation. If they, in turn, could 
operate with trailer drops, we personally didn't care. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11095 

Mr. Kennedy. You say that Mr. Gannon's testimony, then, before 
the committee is incorrect when he says that he was informed that 
you needed 280 trailer drops, or 283 ? 

Mr. Cohen. We did not have 287 or 283 trailer drops, sir. 

Mr. Kennedy. You never informed him of that fact ? 

Mr. Cohen. He never asked me. I certainly never informed him. 

Mr. Lucas. May we have those marked as exhibits, Mr. Chairman? 

The Chairivian. The document presented here, a compilation 

Mr. Shapiro. They show everjr store. 

The Chairmian. Wliich the witness referred to will be made ex- 
hibit 55 for reference. 

(Document referred to was marked "Exhibit No. 55?" for reference 
and may be found in the files of the select committee.) 

Mr. Shapiro. It is a list of the stores which are operated with 
drops. 

Mr. Cohen. May I continue with one other explanation? 

The Chairman. Are you going to something else ? 

Mr. Cohen. No. It is in reference to the economics of our method 
of operating. Within our operation as of January 1, 1955, which is 
the point in question, we operated with a total of 56 tractors and 113 
trailers. 

We were leasing these trailers and tractors. If we did not have the 
ability to drop, we would end up with a surplus of 44 trailers. The 
44 trailers cost us $91,520 a year. We would in turn have to procure 
8 tractors, which would cost $41,600 a year. We would have to hire 
10 drivers, which would cost us $46,800 a year, figuring overtime in 
that rate. Subtracting one from the other, our method of dropping 
trailers for the convenience of our stores cost us $4,000 a year as 
against a method of operating where we would have stayed with 
every load. 

In 1955, starting January 1, when the negotiation was passed on 
that we must take on 20 helpers, our method of operation did not 
cost us the additional $4,000, but cost us the additional $96,000 plus 
the $4,000 or the $100,000 that we were forced to pay to continue our 
method of operating. 

This is in addition to the labor increase or the hourly rate that was 
negotiated for the contract in which everybody participated. 

The Chairman. I present to you a document, which seems to be a 
carbon copy or a photostatic, of some notes made. I will ask you 
first to examine it and see if you recognize the handwriting. 

(A document was handed to the witness.) 

(Witness conferred with his counsel.) 

Mr. Cohen. Not being an expert, sir, this looks somewhat like 
Julius Schwartz' handwriting. 

The Chairman. I think it is. I thought possibly you would rec- 
ognize it. What are the notations he makes about 283 drops ? 

Mr. Cohen (reading) : 

Unions — 283 drops presently. 
The Chairman. Sir ? 

Mr. Cohen. He says, "Unions — 283 drops presently." 
The Chairiviian. That indicated at that time that Mr. Schwartz was 
making a note about 283 drops, does it not? 



11096 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. CoHEX. He might h<ave been commenting on what tlie union 
said. If Berman, for instance, in what you mentioned before, sir, 
quoted 283 drops, Mr. Schwartz might have made that note. 

The Chairman. I liave another one here. I am not sure about the 
handwriting of this one. Possibly it is in the handwriting of your 
attorney, Mr. Blank. 

I notice here the notation — 

drops, no new drops. We want right to drop total of 283, not restricted to 
stores. Al will advise further. 

Do you know anything about that ? 

Mr. Cohen. The only thing I can make comments on that, Senator, 
is the fact that once everything was so-called signed, sealed, and 
delivered, as our 1955-56 contract, and I was advised of the nature of 
the contract as far as the hourly increase was concerned, and as to our 
continuing our present method of operating, and the fact that we 
were going to put on 20 helpers or were forced to put on 20 helpers. 

The next thing that came along was with the opening of the very 
next store, when we sent the driver out to drop the trailer, as was our 
previous method of operating, the union said ''Xo." 

The Chahiman. According to your testimony, you had 148 ? 

Mr. Cohen. That is right, sir. 

The Chairman. According to other evidence, the number that was 
discussed, at least, during the period of any negotiations the number 
that was discussed was 283. 

Mr. Kennedy. And the number discussed by their attorney. 

In addition to that, obviously there was a great financial interest in 
having the trailer drops or you wouldn't have notified the union that 
you would go out on strike, that you sent a special messenger down 
there that you would go out and strike rather than go into this, 

Mr. Cohen. I don't know, counsel. I have to take exception to one 
thing. You keep saying that there was financial advantage. I keep 
saying there was not. 

Mr. Kennedy. I say the fact that you would send a special messenger 
down to see and talk to the union, to tell them you would go out on 
strike rather than give in on the trailer drops indicates that there 
was a great, tremendous financial gain for having the trailer drops. 

The Chairman. It indicates there was a great advantage, and the 
other witnesses have testified that there was a financial advantage. 
This witness says there was no financial advantage in it. 

Mr. Cohen. I say, sir, there was no financial advantage in it, but 
there was a convenience advantage. 

The Chairman. A convenience advantage ? 

Mr. Cohen. Yes, sir. 

The Chairman. Are there any further questions ? 

If not, the committee will stand in recess until 10 : 30 in the morning. 

(Wliereupon, at 5 : 15 p. m., the committee recessed to reconvene at 
10 : 30 a. m., Friday, May 9, 1958.) 

(Members of the committee present at the taking of the recess were : 
Senators McClellan and Ervin. ) 



INVESTIGATION OF IMPROPER ACTIVITIES IN THE 
LABOR OR MANAGEMENT FIELD 



FRIDAY, MAY 9, 1958 

United States Senate, 
Select Committee on Improper Activities 

IN THE Labor or Management Field, 

Washington, D. C. 

The select committee met at 11 a. m., pursuant to Senate Resolution 
221, agreed to January 29, 1958, in the caucus room. Senate OflS.ce 
Building, Senator John L. McClellan (chairman of the select commit- 
tee) presiding. 

Present : Senator John L. McClellan, Democrat, Arkansas ; Senator 
Carl T. Curtis, Republican, Nebraska. 

Also present : Robert F. Kennedy, chief counsel ; Jerome S. Adler- 
man, assistant chief counsel; John B. Flanagan, investigator; Leo C. 
Nulty, investigator ; Herbert J. Rose, Jr., investigator ; Ralph DeCarlo, 
investigator ; Ruth Young Watt, chief clerk. 

The Chairman. The committee will come to order. 

Call the next witness. 

Mr. Kennedy. Mr. Chairman, the first witness is a staff investigator, 
Mr. George Kopecky. 

The Chairman. Senator Lucas, you gentlemen left with the Chair 
a day or two ago a certificate from a doctor regarding a witness. I 
understood you misplaced it last night. You had left it with the 
chairman, however, and I have it. 

I told you that I would place it in the record. I now direct that 
this letter addressed to me on May 7, from Dr. William Likoff, 
regarding the witness Myer Gordon, be placed in the record at this 
point. 

(The letter is as follows :) 

Bailey Thoracic Clinic, 
Philadelphia, Pa., May 7, 1958. 
Senator John L. McClellan, 

The Capitol, Washington, D. C. 

Dear Senator McClellan : Mr. Myer Gordon, of 325 Winding Way, Merion, 
Pa., has been under my care since February of 1957. 

Mr. Gordon suffered an acute antero-septal myocardial infraction due to a 
coronary artery occlusion on February 14, 1957. Mr. Gordon continues to suffer 
from active coronary artery insufficiency manifested by chest pain. His activities 
are consequently sharply restricted. 

It is my sincere opinion that testimony before a committee of Government 
with its associated emotional strain would be a distinct hazard to Mr. Gordon's 
precarious state of health. I respectfully request that Mr. Gordon be excused 
from the ardors of testimony. 

A request such as this would not be issued unless I believe that the patient's 
health would be seriously jeopardized. 
Sincerely yours, 

William Likoff, M. D. 

11097 



11098 IMPROPER ACTIVITIES IN THE LABOR FIELD 

The Chairman. Mr, Kopecky, have you been previously sworn in 
this series of hearings ? 

Mr. Kopecky. No, sir. 

The Chairman. You do solemnly swear that the evidence you shall 
give before this Senate select committee shall be the truth, the whole 
truth, and nothing but the truth, so help you God ? 

Mr. Kopecky. I do. 

TESTIMONY OF GEORGE KOPECKY 

The Chairman. State your name, your place of residence, and your 
business or occupation ? 

Mr. Kopecky. My name is George Kopecky. My residence is 2907 
Gainsville Street, Washington. My occupation is staff investigator 
with this committee. 

The Chairman. Mr. Counsel, you may proceed. 

Mr. Kennedy. Mr. Kopecky, you have made a study and investiga- 
tion of some of the stock transactions of the Food Fair Co. ? 

Mr. Kopecky. Yes, I have. 

Mr. Kennedy. You have also made a study of the stock transac- 
tions of the Food Fair Properties ? 

Mr. Kopecky. Yes. 

Mr. Kennedy. Would you tell the committee the relationship be- 
tween the Food Fair Stores and Food Fair Properties ? 

Mr. Kopecky. Food Fair Properties is an affiliate and subsidiary 
of Food Fair Stores. 

Mr. Kennedy. Food Fair Stores is one of the largest chainstores 
in the United States ? 

Mr. Kopecky. It is recognized to be the sixth largest. 

Mr. Kennedy. And the Food Fair Properties — what was the pur- 
pose of the Food Fair Properties, and when did that come into exist- 
ence? Your testimony is all taken from the documents, and you 
have documents there which will back up whatever statements you 
make ; is that correct ? 

Mr. Kopecky. I do have documents. 

In 1955, negotiations were entered into by an underwriting firm and 
Food Fair Stores, the purpose of which was to create an affiliate 
known as Food Fair Properties. 

Food Fair Properties represents a real-estate development for 
the purpose of acquiring real estate, constructing shopping centers, 
and in these shopping centers Food Fair Stores would place a super- 
market to locate m a prominent location within the center. 

Mr. Kennedy. "Wliat was the relationship between the manage- 
ment of Food Fair Stores and Food Fair Properties ? 

Mr. Kopecky. Management for all intents and purposes is one and 
the same. 

Mr. I^nnedy. This plan came into existence in 1955; is that 
right? 

Mr. Kopecky. Yes, sir. 

Mr. Kennedy. There had been some discussions prior to that time, 
but it actually came to fruition in 1955 ? 

Mr. Kopecky. That is correct. 

Mr. Kennedy. Were there some stocks and bonds issued at that 
time? 



UMPROPER ACTIVITIES IN THE LABOR FIELD 11099 

Mr. KoPECKY. Bonds and stock of Food Fair Properties were issued 
in September and October 1955. 

Mr. Kennedy. Mr. Chairman, we have here a mimeographed paper, 
memorandum, which gives the backgroimd, a little bit, on these stocks 
and bonds. As Mr. Kopecky describes them, it might be helpful to 
follow them from here. 

The Chairman. Did you compile this memorandum ? 

Mr. Kopecky. Yes, Mr. Chairman, I did. 

The Chairman. Sir ? 

Mr. Kopecky. Yes ; I did. 

The Chairman. Does it reflect your findings from an examination 
of the records ? 

Mr. Kopecky. It does. 

Mr. Kennedy. I would like to have this made an exhibit, if we could, 
Mr. Chairman. 

The Chairman. This memorandum — you compiled it, as I under- 
stand, from your records ? 

Mr. Kopecky. Yes ; that is correct. 

The Chairman. It may be made exhibit 56. 

(Document referred to was marked "Exhibit No. 56," for reference, 
and will be found in the appendix on p. 11183.) 

The Chairman. You can make any explanation of it that you 
care to. 

Mr. Kennedy. There were both debenture bonds and common stock 
that were issued ; is that correct ? 

Mr. Kopecky. That is correct. 

Mr, Kennedy. Could you tell us what the value of the debenture 
bonds was ? 

Mr. Kopecky. There were $7,691,250 of debenture bonds issued at 
this time, in 1955. 

Mr. Kennedy. What did the bonds consist of ? 

Mr. Kopecky. The bonds were offered in the form of what is known 
as a unit, and each unit consisted of a $50 debenture bond plus 11 
shares of the common stock. 

Mr. Kennedy. What was this unit to be sold for ? 

Mr. Kopecky. The unit was to be sold for $50. 

Mr. Kennedy. The unit consisted of the bond plus the 11 shares of 
stock? 

Mr. Kopecky. Bond plus stock. 

Mr. Kennedy. And that was to be sold for $50 ; that unit ? 

Mr. Kopecky. At $50. 

Mr. Kennedy. That is apart from the other stock that was to be 
sold separately ; is that right ? There was a separate sale of common 
stock? 

Mr. Kopecky. You are correct, there was a separate offer. 

Mr. Kennedy. So there are two deals. One was this unit which 
consisted of the bonds plus the 11 shares of stock which was to be sold 
at $50, and then the common stock, apart from that ? 

Mr. Kopecky. That is correct. 

Mr. Kennedy. Let us discuss the debenture bonds, first, the unit 
that you mentioned. 

The Chairman. Let me see if I understand. There were 2 issues, 
1 being debenture bonds and the other common stock. 

Mr. Kopecky. That is correct. 



11100 IMPROPER ACTIVITIES IN THE LABOR FIELD 

The CiiAiKMAX. A part of the common stock was placed in a pack- 
ao'e with the debenture bonds? 

Mr. KoPECKY. That is correct. 

The Chairman. And a part of the common stock was to be sold 
separately ? 

Mr. KopECKY. That is correct. 

The Chairmax. So you have the debenture bonds and the common 
stock packao-ed and then you have the same common stock as a sep- 
arate sale or otfer for sale ? 

Mr. KopEGKY. Correct. 

Mr. Kennedy. What we describe as a unit, the bond plus the 11 
shares of stock, that was to be sold for $50. Was that first to go to 
those who owned Food Fair stock? 

Mr. KoPECKY. That is right. The owners and holders of the Food 
Fair Stores were given the first opportunity to purchase these units. 

Mr. Kennedy. How Avas that handled? 

Mr. KopECKY. That was eftected through what is known as a right. 
Each stockholder and owner of the parent company, Food Fair Stores, 
was given one right for each share of stock of Food Fair Stores that 
he held. 

The Chairman. In other words, it was a right reserved to the 
stockholders to purchase this issue? 

Mr. KoPECKY. To purchase the units ; that is correct. 

The Chairman. And that right was based on the amount of stock 
they already owned ; is that correct ? 

Mr. KoPECKY. That is right. 

Mr. Kennedy. How many of these rights were necessary to pur- 
chase one of these units ? 

Mr. KoPECKY. Twenty rights were needed to buy one $50 unit. 

Mr, Kennedy. Was Mr. Friedland president of the Food Fair Co. 
at that time? 

Mr. KoPECKY. Mr. Friedland was chairman of the board of Food 
Fair Stores at that time. 

Mr. Kennedy. And he had a large amount of this stock, this Food 
Fair stock, did he not? 

Mr. Kopecky. Yes, he owned Food Fail- Stores. 

Mr. Kennedy. Therefore, he had a large number of rights? 

Mr. Kopecky. A large number of rights accrued to Mr. Friedland. 

Mr. Kennedy. Did he make a certain number of those rights avail- 
able to friends and associates ? 

Mr. Kopecky. Yes. Mr. Friedland, his family, and his other 
asociations did make available certain of these rights. 

Mr. Kennedy. How many rights did the make available? 

Mr. Kopecky. He made available a total of 136,000 rights to a 
group of individuals. 

Mr. Kennedy. How many people received these rights from Mr. 
Friedland? 

Mr. Kopecky. A total of 20. 

Mr. Kennedy. Were any of those individuals labor officials? 

Mr. Kopecky. There were four who were either labor officials or 
a relative of a labor official. 

The Chairman. Four? 

Mr. Kopecky. Four. 

The Chairman. Four of the 20, do you mean? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11101 

Mr. KoPECKY. Yes, sir. 

Mr. Kennedy. Under the SEC Act, it is not possible to make these 
rights available prior to the time that the stock is sold on the market; 
is that right? 

Mr. KoPECKY. There is no legal obligation. 

Mr. Kennedy. At the time that these rights were actually trans- 
ferred, did they have any value? 

Mr. KopECKY. When these rights were signed over, on or about 
September 20, 1955, they did have an actual value in the stock market. 

Mr. Kennedy. Would you name the four union officials who re- 
ceived the units or the rights ? 

Mr. Kopecky. Yes. Max Block. 

The Chairman. Who? 

Mr. Kopecky. Max Block, who was an international union vice 
president in the Butchers Union and president of 2 butcher local 
unions in New York. 

The Chairman. Do you have a list of those to whom stock was 
made available ? 

Mr. Kopecky. Yes, Senator, I do. 

The Chairman. I am speaking of the list of 20 ? 

Mr. Kopecky. Yes, sir. 

Mr. Kennedy. Mr. Chairman, he has the list of the 20, but we also 
have the list of 4. Some of the stock, in contrast to the unit, the 
debenture bond, was also made available. We have not gotten into 
that yet. 

The Chairman. The Chair presents to you here a mimeographed 
sheet showing certain stocks of persons listed. Will you identify it 
and state if you compiled this list from the records that you are now 
testifying from. 

(Documents were handed to the witness.) 

Mr. Kopecky. Mr. Chairman, I identify this list, and I compiled 
this list. 

The Chairman. You compiled this list or prepared this memoran- 
dum from the records that you have examined ? 

Mr. Kopecky. That is right. 

The Chairman. That may be made exhibit 57, for reference. 

(Document referred to was marked "Exhibit No. 57," for reference 
and may be found in the files of the select committee.) 

The Chairman. Proceed with the explanation of it. 

Mr. Kennedy. We were discussing the rights which were made 
available, Mr. Kopecky. You have stated that the rights were worth 
money at the time they were made available to these various union 
officials ? 

Mr. Kopecky. Yes; that is right. 

Mr. Kennedy. How many rights Avent to Max and Louis Block ? 

Mr. Kopecky. A total of 3,800 rights. 

Mr. Kennedy. How much were" they worth at the time of the 
transfer ? 

Mr. Kopecky. At the time they were signed over to these individ- 
uals, they were worthy approximately $2,600 in the stock market. 

Senator Curtis. How do you establish that? 

Mr. Kopecky. From affidavits and quotations taken from the Na- 
tional Quotation Bureau, which is recognized as the authority and 
source of information. 



11102 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Senator Curtis. In other words, that is what they were selling 
for then? 

Mr. KopECKY. Yes. If any individual had to go out and desired to 
purchase one of these rights, he would have to pay a certain amount 
of money to acquire them. 

Mr. Kennedy. Would you describe again who Max and Louis 
Block were? 

Mr. KoPECKY. Max Block is a vice president of the International 
Butchers Union; is also the president of local 342 and 640, both of 
which are butchers' unions in New York City. Louis Block is his 
brother, and is an administrator of the welfare and pension funds of 
these unions. He was formerly the president of local union 640 prior 
to his brother assuming that position. 

Mr. Kennedy. Do the Butchers Union have a contract with Food 
Fair Stores? 

Mr. KoPECKY. Yes, sir ; they do. 

Mr. Kennedy. They transferred 3,800 rights to Max and Louis 
Block, and at the time of the transfer, the rights themselves were 
worth $2,600? 

Mr. KoPECKY. The rights themselves were worth approximately 
$2,600. 

Mr. Kennedy. And that gave them the right to purchase bonds? 

Mr. Kopecky. With those rights they could then turn those rights 
in and purchase $12,000 worth of bonds for $50 a unit, which we have 
described previously. 

Mr. Kennedy. Were the bonds at that time actually worth more 
money ? 

Mr. Kopecky. The bonds at that time were selling at a premium 
in the stock market. 

Mr. Kennedy. Approximately how much ? 

Mr. Kopecky. Those $12,000 of bonds were selling for approxi- 
mately $16,800. 

Mr. Kennedy. Or about $70 a bond ; is that right ? 

Mr. Kopecky. $70 or $75 a unit. 

Mr. Kennedy. A bond ? 

Mr. Kopecky. A bond. 

Mr. Kennedy. So they could purchase the unit for $50 when, in 
fact, it was worth $70 or $75 ? 

Mr. Kopecky. That is right. 

Mr. Kennedy. That is what 20 of these rights allowed them to do ? 

Mr. Kopecky. That was the purpose. 

Mr. Kennedy. So they ultimately purchased for $12,000 bonds or 
units that were worth $16,800 ? 

Mr. Kopecky. Yes, sir. 

Mr. Kennedy. To whom else did they give these rights ? 

Mr. Kopecky. One Paul Lafayette. 

Mr. Kennedy. Wlio is Paul Lafayette? 

Mr. Kopecky. Paul Lafayette at that time was president of Local 
1245 of the Retail Clerks' Union in New Jersey and he was also a 
vice president in the International Union of the Retail Clerks. 

Mr. Kennedy. Has he ended his association with the Retail Clerks? 

Mr. Kopecky. Yes, he has. 

Mr. I^nnedy. Was he expelled from the Retail Clerks ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11103 

Mr. KoPECKY. There were charges pending against him and at the 
time the charges were pending against him he submitted his resig- 
nation which was accepted. 

Mr. IvENNEDY. Did the Eetail Clerks at that time have a bargain- 
ing contract with the Food Fair Co. ? 

Mr. KoPECKY. Yes, ihej did. 

Mr. Kennedy. He received 3,200 rights which were valued at that 
time at $2,400, is that right ? 

Mr. KoPECKY. That is right. 

Mr. Kennedy. And he would pay nothing for those rights ? 

Mr. KoPECKY. No. He received those rights gratis. 

Mr. KJENNEDY. He was allowed, with those 2,400 rights, to pur- 
chase bonds worth $8,000, is that right ? 

Mr. KoPECKY. That is right. 

Mr. Kennedy. Actually, the value of the bonds at that time was 
$11,200? 

Mr. KoPECKY. Approximately $11,200. 

Mr. Kennedy. You have named three individuals. Who was the 
fourth one ? 

Mr. KoPECKY. The fourth one was a Jack Shore, who was a brother- 
in-law of Ben Lapensolm. 

Mr. Kennedy. How was that arranged ? 

Mr. KoPECKY. Well, what happened in that regard was that 
through Mr. Louis Stein, the president of Food Fair Stores, Jack 
Shore was given 4,000 rights which at that time were worth about 
$3,000. This pennitted Mr. Shore to buy $10,000 in bonds. At the 
time the purchase was made for $10,000, these bonds were selling for 
approximately $14,000 in the open stock market. 

The Chairman. Let me get something clear. These rights you 
say were worth so much at the time, or were selling for so much, for 
instance $3,000. You have 4,000 rights which you say were worth 
$3,000. 

Mr. KoPECKY. They were worth approximately 75 cents a right. 

The Chairman. Just to get the right to purchase was worth that? 

Mr. KoPECKY. Yes, sir. 

The Chairman. Then you paid in addition for the stock ? 

Mr. KoPECKY. For the bonds. 

The Chairman. For the package ? 

Mr. KopECKY. Yes, sir. 

The Chairman. Did you have to have these rights in order to pur- 
chase ? I mean to purchase at the original selling price. 

Mr. KopECKY. At $50, yes, sir. 

The Chairman. If you didn't have the rights and wanted to pur- 
chase the stock, then it would cost you $70 instead of $50. I am 
talking about the package. 

Mr. KoPECKY. Yes, sir. You would have to pay the premium price. 

The Chairman. In other words, the right gave you the privilege 
of buying the stock at its original sale price or par value price? 

Mr. KopECKY. That is correct. 

The Chairman. But if you didn't have the rights and wanted to 
purchase the stock at the time of this transaction, if you went into 
the market to purchase a package, it would cost you $70 to $75, is 
that your testimony? 



11104 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. KopECKY. That is true. 

The Chaikman. 1 want to get it clear. J do not always under- 
stand accountants" figures. 
Proceed. 

Mr. Kennedy. The reason that the rights were worth any money at 
that time was because the bonds were selling at a premium, really. 

Mr. KoPECKY. That is true. 

Mr. Kennedy. The right that you had was to purchase the unit or 
bond for $50, when, in fact, it was worth $70 ? 

Mr. KoPECKY. Yes. 

Mr. Kennedys So the fact that you had that right would be worth 
money, obviously. That is why the rights cost money. 

Mr. Kopecky. That is right. 

The Chairman. In other words, where you show $4,000 as the value 
of the right, it would permit you to exercise those rights in the pur- 
chase of stock for the full amount of the right, and you would save 
$3,000, is that right ? 

Mr. Kopecky. A gift was given out of $3,000. 

The Chairman. It was the equivalent of $3,000 in a gift insofar 
as the value of the stock was concerned ? 

Mr. KoPECKY^ Insofar as the value of the rights are concerned. 

The Chairman. As I understand it, the right, if you applied it to 
the purchase of stock, was worth $70 ? 

Mr. Kennedy. No, Mr. Chairman, 

The Chairman. I think I know, but I am trying to understand. 

In other words, the right to purchase one of these packages entitled 
you to purchase for the original price of $50 ? 

Mr. Kopecky. Correct. 

The Chairman. If you wanted to purchase the package and had no 
right, which were granted to the original incorporators, if you had no 
right then the package cost $70 or $75 ? 

Mr. Kopecky. Yes. 

The Chairman. So the right was actually worth the difference be- 
tween $50 and $70 ? 

Mr, Kopecky. Yes, 

The Chairman. One right is worth $20 ? 

Mr. Kopecky-. No, Mr. Chairman. It required 20 rights to pur- 
chase 1 unit. 

The Chairman. Twenty rights, then, were worth approximately 
$20? 

Mr. Kopecky. Yes. 

The Chairman. They were worth approximately $1 a right ? 

Mr. Kopecky. Between 75 cents ancl $1 a right. It varied during 
the trading period. 

The Chairman. In this instance, you varied the 4,000 at $3,000 or 
75 cents a right? 

Mr. Kopecky. On the day they were signed over, they were worth 
approximately 75 cents a right. They were in existence for approxi- 
mately 3 weeks, and tlieir value during that 3-week period they were 
in existence, each right varied between 75 cents and in excess of $2. 

Senator Curtis. Mr. Chairman ? 

The Chairman. Senator Curtis. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11105 

Senator Curtis. Referrino^ to this chart which was made up, taking 
the case of Jack Shore, I understand that these 4,000 rights were worth 
$3,000, and therefore by paying $10,000 he got $14,000 vahie in bonds. 

Mr. KoPECKY. Yes, sir. 

Senator Curtis. In the columns under the "Stock" that is separate ? 

Mr. KoPECKY. Separate and apart from the unit bond, yes. 

Senator Curtis. Witli the bond he also got some stock, is that right ? 

Mr. KoPECKY. Yes, he did. 

Senator Curtis. But in this column under "Stock'" that is a separate 
purchase of stock ? 

Mr. KoPECKY. A separate purchase of stock, having nothing to do 
with the unit. 

Senator Curtis. You go ahead and develop it. I wanted to make 
sure that those two headings were separate. 

Mr. Kennedy. Yes. 

As I understand, the reason that they put common stock out at all 
at that time was to try to find out actually what the stock was worth in 
the unit? 

Mr. Kopecky. Yes. 

Mr. Kennedy. They knew if there were 11 shares of Stock plus the 
bond and they would sell that for $50, and if they could find out what 
the stock was worth separately they would laiow how much the bond 
itself was worth apart from the 11 shares of stock. 

Just on Jack Shore, he is the brother-in-law of Ben Lapensohn ? 

Mr. Kopecky. That is right. 

Mr. Kennedy. Did Mr. Lap>ensohn's name ever appear ? 

Mr. Kopecky. On the same day that Mr. Shore paid his check for 
$10,000 for these $14,000 worth of bonds, Ben Lapensohn reimbursed 
Jack Shore in the identical amount by his personal check. 

Mr. Kennedy, Did Mr. Lapensohn's name ever appear on a list ? 

Mr. Kopecky. In connection with the stock. 

Mr. Kennedy. But not in connection with the units ? 

Mr. Kopecky. Not in connection with the units. 

Mr. Kennedy. The number of rights, then, that were given to these 
4 individuals was 12,000 ; is that correct? 

Mr. Kopecky. A total of 12,000 rights were given to the 4 labor 
officials. 

Mr. Kennedy. That is, to these 4 labor officials, and the value of the 
rights at that time was $9,000 ? 

Mr. Kopecky. Approximately $9,000. 

Mr. Kennedy. And those rights had to be exercised, and with $20,- 
000 and those rights you could get these bonds, is that right ? 

Mr. Kopecky. That is correct. 

Mr. Kennedy. And the bonds at that time were worth $42,000 ? 

Mr. Kopecky. That is correct. 

Mr. Kennedy. So these individuals who exercised the rights got 
$42,000 worth of bonds for $30,000; that is how it ended up; is that 
correct ? 

Mr. Kopecky. Tliat is correct. That is how the bond situation 
ended up. 

Mr. Kennedy. Let's go over to the common stock now. There were 
650,000 shares of stock issued ? 



11106 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. KoPECKY. A total of 650,000 shares of common stock were 
issued separate and apart from the bonds. 

Mr. Kennedy. How much was that stock to be sold for ? 

Mr. KoPECKY. According to the agreement that was entered into 
between the underwriting firm and Food Fair Stores management, 
it was to be offered to the general public at $1 a share. 

Mr. Kjinnedy. Was there a preferred list of the individuals who 
could purchase this stock for a dollar ? 

Mr. KoPECKY. Yes. 

Mr. KJENNEDY. Did the stock, before it was sold, have the appear- 
ance that it was going to sell for a premium ? 

Mr. KoPECKY. Yes. 

Mr. Kennedy. Do you have some affidavits there from the invest- 
ment house which handles these bonds and these units ? 

Mr. KoPECKY, Yes, I do. I have an affidavit from the managing 
partner of the Philadelphia office of the managing firm of Eastman- 
Dillon, who was responsible for the negotiations at that time with 
the Food Fair people, and also an affidavit from the present managing 
partner in New York of the Eastman-Dillon firm, Mr. Frederick 
Barton. 

The Chairman. Did you procure the affidavits ? 

Mr. KoPECKY. Yes, I did. 

The Chairman. You may read them. Are they very long ? 

Mr. KoPECKY. One is 2 pages, double spaced, and the other is 2i/^ 
pages, double spaced. 

Tlie Chairman. They may be entered into the record at this point. 
Read the pertinent parts of them. 

They may all be printed in full in the record at this point. 

(The affidavits referred to are as follows :) 

April 16, 1958. 
Commonwealth of Pennsylvanla., 

County of Philadelphia, ss: 

I, James P. Magill, being duly aflBrmed, do depose and state that I voluntarily 
furnish this statement to George M. Kopecky, known to me to be a member of 
the stafE of the United States Senate Select Committee on Improper Activities 
in the Labor Management Field, and that this information may be used as 
required by this committee during the course of its business. 

At the present time, I am a limited partner in the firm of Eastman Dillon, 
Union Securities & Co., and in the year 1955 I was the managing partner of that 
firm's offices in Philadelphia, Pa. 

During the latter part of the year 1955, negotiations were arranged between 
my firm and the Food Fair Stores organization, represented by Louis Stein and 
Samuel Friedland, whereby an issue of debenture bonds and common stock in 
units, and common stock of Food Fair Properties, Inc., a corporation which 
became afliliated with Food Fair Stores, was to be offered to the stockholders 
of Food Fair Stores, Inc., and to the general public. 

Eastman Dillon & Co. participated as the managing underwriter of this 
offering. 

On August 17, 1955, a registration statement relating to this offering of the 
debenture bonds and common stock of Food Fair Properties, Inc., was filed with 
the Securities and Exchange Commission and through newspaper announcements 
after the release of the issue by the SEC. As a result, a demand began to develop 
for the common stock by various customers desirous of purchasing this security. 

During the intervening period between the filing date of August 17, 1955, and 
September 14, 1955, the date when trading commenced, the requests by customers 
for the 650,000 shares of common stock of Food Fair Properties, Inc., were such 
that it developed this offering was oversubscribed. 

After the offering was filed with the SEC on August 17, 1955, Mr. Louis Stein 
discussed with me the possibility of submitting the names of certain friends, 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11107 

employees, and associates of the Food Fair organization who might be permitted 
to purchase some of the issue of the 650,000 shares of common stock of Food 
Fair Properties, Inc. 

This was an acceptable arrangement to Eastman Dillon & Co., and thereafter 
a list of names was submitted by Mr. Louis Stein to me. These persons were 
given consideration toward the purchase of this common stock. 

It is to be noted there was not any obligation or agreement of any nature where- 
by the Eastman Dillon firm was required or bound to fulfill the re<iuests as set 
forth in this list submitted by Mr. Stein. Eastman Dillon & Co. bad the right 
to reject all or any portion of this recommended list. 

The list of names, as submitted by Mr. Stein, was furnished during the period 
between August 17, 1955, and September 14, 1955, and probably nearer the latter 
date. 

During this period, Mr. Stein and I were in periodic contact relative to the 
proi>osed offering, and at the times of these contacts, I informed Mr. Stein of 
the demand developing for the common stock and the fact there were indications 
the issue of common stock might be oversubscribed. 

In summary, the following developed with regard to the aforementioned offer- 
ing of securities of Food Fair Properties, Inc. : 

1. Between the filing date of August 17, 1955, and September 14, 1955, the date 
when trading commenced, an active demand developed for the common stock. 
During this period, the portion of the offering, consisting of 650,000 shares of 
common stock, became oversubscribed. This indicated the offering would prob- 
ably be successful and that the common stock and the units of debenture bonds 
with common stock would probably sell on the open market at a premium above 
the offering price. 

2. At the time of my contacts with Louis Stein, I kept him informed of the 
above developments and circumstances. 

Affirmed to before me this 16th day of April 1958. 

.Tames P. Magill, 

Afliatit. 
Catharine G. Magee, 
'Notary Public, Philadelphia, Philadelphia Co. 

My commission expires March 5, 1961. 

I, D. Frederick Barton, being duly sworn, do depose and state that I volun- 
tarily furnished this statement to George M. Kopecky, known to me to be a 
member of the staff of the United States Senate Select Committee on Improper 
Activities in the Labor or Management Field, and that this information may 
be used as required by this committee during the course of its business. 

At the present time I serve as the general manager of Eastman Dillon, Union 
Securities & Co., and have served in this capacity since March 1, 1953. 

During the year 1955, negotiations were arranged between my firm and Food 
Fair Stores, Inc., represented by Louis Stein and others, whereby an issue of 
debenture bonds and common stock in units, and common stock of Food Fair 
Properties, Inc., a corporation which became affiliated with Food Fair Stores, 
Inc. was to be offered to the stockholders of Food Fair Stores, Inc. and to the 
general public. 

Eastman Dillon & Co. participated as the managing underwriter of tliis 
offering. 

On August 17, 1955, a registration statement relating to this offering of the 
debenture bonds and common stock of Food Fair Properties, Inc. was filed with 
the Securities and Exchange Commission in accordance with the required 
regulations. 

At about this time the offering was brought to the attention of the public as 
a result of the filing with the Secudities and Exchange Commission and through 
newspaper announcements after the release of the issue by the Securities and 
Exchange Commission. 

As a result a demand began to develop for the common stock by various in- 
dividuals desirous of purchasing this security. During the intervening period 
between the filing date of August 17, 1955, and September 1.3, 19.1.". the date 
when trading commenced, the request made by customers of the firm and others 
for the 650,000 shares of common stock of Food Fair Properties Inc. was such 
that it eventually developed this offering of the common stock was oversub- 
i;cribed. 

21243— 56— pt. 28 19 



11108 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Prior to the effective date of this offering — which was at the close of business 
on September 13, 1955 — a list of recommended names of prospective purchasers 
for the common stock was delivered by Food Fair Stores, Inc. to my firm's offices 
in Philadelphia. 

Of the 650,000 shares ultimately sold to buyers selected by the underwriter, 
ajjproximately 359,000 shares were sold to persons appearing on the recom- 
mended list. In view of the fact that the common stock offering became over- 
subscribed, certain of the requests from customers of Eastman Dillon to piir- 
chase the stock could not be and were not honored. 

It was my opinion that in order for this financing and also the future growth 
of this company to be successful, the market for the common stock after the 
effective date should be in excess of the offering price. 

Such a result would ultimately depend on numerous factors, including favor- 
able market conditions. Assuming all of these favorable factors, it was my 
opinion that this common stock would trade above the offering price, probably 
as high as $1.50 per share. 

D. Frederick Barton. 

Sworn to before me this 7th day of May, 1958. 

Edw. J. Kick, Notary piiMic, State of Neto York. 
No. 30-2106900. Certified in Nassau County. Certificate tiled in New York 

County. 

Term expires March 30. 1959. 

Mr. KopECKY. One is signed by Mr. James Magill, dated April 16. 
Mr. Magill was the partner in the Philadelphia office. He indicated 
in this affidavit as follows : 

During the latter part of the year 1955, negotiations were arranged between 
my firm and the Food Fair Stores organization, represented by Louis Stein and 
Samuel Friedland, whereby an issue of debenture bonds and common stock in 
units, and common stock of Food Fair Properties, Inc., a corporation which 
became affiliated with Pood Fair Stores, was to be offered to the stockholders 
of Food Fair Stores, Inc., and to the general public. Eastman Dillon & Co. 
participated as the managing underwriter of this offering. 

On August 17, 1955, a registration statement relating to this offering of the 
debenture bonds and common stock of Food Fair Properties, Inc., was filed with 
the Securities and Exchange Commission in accordance with the required regu- 
lations. At about this time, the offering was brought to the public's notice as a 
result of the filing with the Securities and Exchange Commission and through 
newspaper announcements after the release of the issue by the SEC. As a 
result, a demand began to develop for the common stock by various customers 
desirous of purchasing this security. During the intervening period between the 
filing date of August 17, 1955, and September 14, 1955, the date when trading 
commenced, the requests by customers for the 650,000 shares of common stock 
of Food Fair Properties, Inc., were such that it developed this offering was 
oversubscribed. 

After the offering was filed vdth the SEC on August 17, 1955, Mr. Louis Stein 
discussed with me the possibility of submitting the names of certain friends, 
employees, and associates of the Food Fair organization who might be per- 
mitted to purchase some of the issue of the 650,000 shares of common stock. 

The Chairman. Kead that again. He submitted what ? 
Mr. KoPECKY (reading). 

After the offerng was filed with the SEC on August 17, 1955, Mr. Louis Stein 
discussed with me the possibility of submitting the names of certain friends, 
employees, and associates of the Food Fair organization who might be per- 
mitted to purchase some of the issue of the 650,000 shares of common stock of 
Food Fair Properties, Inc. This was an acceptable arrangement to Eastman 
Dillon & Co., and, thereafter, a list of names was submitted by Mr. Louis Stein 
to me. These persons were given consideration toward the purchase of this 
common stock. It is to be noted there was not any obligation or agreement of 
any nature. whereby the Eastman Dillon firm was required or bound to fulfill 
the requests as set forth in this list submitted by Mr. Stein. Eastman Dillon 
& Co. had the right to reject all or any portion of this recommended list. 

The list of names, as submitted by Mr. Stein, was furnished during the period 
between August 17, 1955, and September 14, 1955, and probably nearer the latter 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11109 

date. During this period, Mr. Stein and I were in periodic contact relative to 
the proposed offering, and at the times of these contacts I informed Mr. Stein 
of the demand developing for the common stock and the fact there were indi- 
cations the issue of common stock might be oversubscribed. 

In summary, the following developed with regard to the aforementioned 
offering of securities of Food Fair Properties, Inc. : 

(1) Between the filing date of August 17, 195.5, and September 14, 1955, the 
date when trading commenced, an active demand developed for the common 
stock. During this period, the portion of the offering, consisting of 650,000 
shares of common stock, became oversubscribed. This indicated the offering 
would probably be successful and that the common stock and the units of deben- 
ture bonds with common stock would probably sell on the open market at a 
premium above the offering price. 

(2) At the time of my contacts with Louis Stein, I kept him informed of 
the above developments and circumstances. 

This is signed James Magill and affirmed. 

There is a second affidavit prepared by Mr. D. Frederick Barton, 
who is the managing partner of the underwriting firm in New York. 
He advises as follows: 

On August 17, 1955 a registration statement relating to this offering of 
the debenture bonds and common stock of Food Fair Properties, Inc., was 
filed with the Securities and Exchange Commission in accordance with the 
required regulations. At about this time the offering was brought to the 
attention of the public as a result of the filing with the Securities and Ex- 
change Commission and through newspaper announcements after the release 
of the issue by the Securities and Exchange Commission. As a result a demand 
began to develop for the common stock by various individuals desirous of 
purchasing this security. 

During the intervening period between the filing date of August 17, 1955, 
and September 13, 1955, the date when trading commenced, the request made 
by customers of the firm and others for the 650,000 shares of common stock 
of Food Fair Properties, Inc., was such that it eventually developed this offering 
of the common stock was oversubscribed. 

Prior to the effective date of this offering (which was at the close of busi- 
ness on September 1.3, 1955), a list of recommended names of prospective 
purchasers for the common stock was delivered by Food Fair Stores, Inc., to 
my firm's offices in Philadelphia. Of the 650,000 shares ultimately sold to 
buyers selected by the underwriter, approximately 359,000 shares were sold 
to persons appearing on the recommended list. In view of the fact that the 
common stock offering became oversubscribed, certain of the requests from 
customers of Eastman Dillon to purchase the stock could not be and were 
not honored. 

It was my opinion that in order for this financing and also the future growth 
of this company to be successful, the market for the common stock after the 
effective date sliould be in excess of the offering price. Such a result would 
ultimately depend on numerous factors, including favorable market conditions. 
Assuming all of these favorable factors, it was my opinion that this common 
stock would trade above the offering price, probably as high as $1.50 per 
share. 

That is signed by D. Frederick Barton, and notarized. 

Mr. Kennedy. We were talking about the shares themselves; that 
there was a preferred list that was sent over, or a list of those indi- 
viduals who had the right to purchase stock for $1 a share. 

Mr. KoPECKY. That is right. 

Mr. Kennedy. And the stock came on the market and was available 
on the market on what day ? 

Mr. Kopecky. On September 14, 1955, was the first day of trading. 

Mr. Kennedy. And this list was sent over just prior to that time, 
is that right? 

Mr. Kopecky. Just prior to that. 



11110 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennp:dy. You liave the names here of the 20 individuals, 
the 20 labor officials, who had the right to purchase this stock for 
$1 a share, is that right? 

Mr. KoPECKY. Yes. 

Mr. Kennedy. At that time, when they had the right to purchase 
the stock for $1 a share, what was it actually selling for ? 

Mr. KopECKY. When these people were allocated the stock and 
were able to buy it for $1 a share, it was selling for approximately 
$4 a share. 

Mr. Kennedy. Let's go down this list. 

Max Block, who also received some of these units, was given the 
right, he and his brother were given the right to purchase 2,000 
shares ? 

Mr. KoPECKY. Just Max Block alone. 

Mr. Kennedy. At a cost of $2,000 ? 

]Mr. Kopecky. That is right. 

Mr. Kennedy. And actually at that time they were worth $8,000 ? 

Mr. Kopecky. That is right. 

Mr. Kennedy. Paul Lafayette, 1,000 shares, and the value of the 
shares at that time was $4,000 ? 

Mr. Kopecky. $4,000. 

Mr. Kennedy. He ultimately sold those shares ? 

Mr. Kopecky. Mr. Lafayette ultimately sold the common stock. 

Mr. Kennedy. He kept it for 6 months ? 

Mr. Kopecky. Yes, he kept it for approximately 6 months and sold 
1,000 shares for alwut $4,800. 

Mr. Kennedy. So he made, on that deal, some $3,800 ? 

IVIr. Kopecky. On a $1,000 investment he made about $3,800 in 6 
months. 

Mr. Kennedy. And he also separated the stock and the bonds and 
he sold that also, did he not ? 

Mr. Kopecky. Yes. After the stock and bonds could be separated, 
he sold the stock which he received. 

Mr. Kennedy. So in summary, Lafayette invested a total of $8,000, 
and sold part of his interest, and received $8,300 from the sale, and 
still retains $8,000 worth of bonds? 

Mr. Kopecky. That is true. 

Mr. Kennedy. Jack Shore bought 2,000 shares ? 

Mr. Kopecky. Yes. Ultimately, Jack Shore paid $2,000. 

Mr. Kennedy. And they were worth $8,000 ? 

Mr. Kopecky. Yes. 

Mr. Kennedy, Was his name always on the list or were there any 
other names on the list ? 

Mr. Kopecky. His name was not originally on this list. There was 
a typewritten list prepared which reflected the names of Kaymond 
Coiien for 1,000 shares and Ben Lapensohn for 1,000 shares. These 
names were stricken out, and Jack Shore's name substituted. 

Mr. Kennedy. Do you have that list ? 

Mr. Kopecky. Yes, I do. 

I have the list in front of me. 

The CiLViRMAN. Is that the original list or a photostatic copy ? 

Mr. Kopecky. This is a photostat of the original list obtained from 
the underwriting firm. It was not available at the Food Fair organi- 
zation. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11111 

The Chairman. May I see it a moment ? 

(The document was handed to the committee.) 

The Chairman. This list may be made Exhibit 58. 
(The document referred to Avas marked "Exhibit No. 58" for 
reference, and may be found in the files of the select committee.) 

The Chairman. You obtained this list from the files of the under- 
■writing company ? 

Mr. KopECKY. Yes, Mr, Chairman. 

The Chairman. Do the records show who submitted this list? 

Mr, KopECKY. No ; the record does not show. That was furnished 
to me by various officers of the Eastman Dillon Co. 

The Chairman. I believe that is covered in the affidavit, is it not? 

Mr. KopECKY. Yes. 

The Chairman. That the list came from Mr. Stein ? 

Mr. KoPECKY. From Mr. Louis Stein. 

The Chairman, The title on that reads "D," and I don't know what 
that means, and then it reads "suggested names of labor men for con- 
sideration in connection witli Food Fair Properties, Inc., stock." 

This was obtained from the files of the underwriter? 

Mr. KopECKY. Yes, sir. 

The Chairman, This list does not show who submitted it, but the 
affidavits say that Mr. Stein submitted the list? 

Mr, KopECKY, That is correct. 

Mr. Kennedy, That list that j^ou have there shows that Mr, Eay- 
mond Cohen's and Mr, Ben Lapensohn's names were crossed out? 

ISIr, Kopecky, Yes. Originally their names were on the list and 
then crossed out and Mr. Jack Shore's name replaced theirs. 

Mr. Kennedy, For 2,000 ? 

Mv. Kopecky. For 2,000 shares. 

Mr, Kennedy. He is the brother-in-law, is he not ? 

Mr. KorECKY, He is the brother-in-law of Ben Lapensohn. 

The Chairman. I l^elieve you said on the same day Jack Shore pur- 
chased it Lapensohn reimbursed him for $10,000. 

Mr, Kopecky, Lapensohn reimbursed Shore for the $10,000 of 
bonds on the same day and 4 daj^s later — separate checks were issued 
for the bonds and for the stock. On the same day, a reimbursement 
was made for the bonds and 4 days afterward a payment in an identical 
amount of $2,000 was made by Lapensohn to Shore. 

The Chairman. So Shore was reimbursed a total of $12,000 ? 

Mr. Kopecky. Shore was reimbursed a total of $12,000. 

The Chairman. $10,000 in 1 check on the day the packages were 
purchased, and $2,000 some 4 days after the common stock was pur- 
chased ? 

Mr. Kopecky. That is correct, Mr. Chairman. 

Mr. Kennedy. The next name on this list is Mrs. Nicholas Novel- 
lino, 500 shares. 

Mr. Kopecky. That is right. 

Mr. Kennedy. Who was she ? 

^Ir. Kopecky. ]SIrs. Novellino is the sister, the married sister, of 
Eugene Kennedy. Eugene Kennedy is the general manager — he is the 
business manager of Local 1500 of the Retail Clerks. 

Mr. Kennedy, In New Y ork ? 

Mr. Kopecky. In New York, yes. 

Mr. Kennedy. And Joseph Belsky ? 



11112 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. KorKUKY. Joseph Belsky is vice president of tlie International 
Butcliei^ Union in New York. 

Mr. Kennedy. Both of those unions have contracts with Food Fair? 

Mr. KorECKY'. Mr. Kennedy's union does have. Mr. Belsky's union 
does not. He is a vice president of the international union and re- 
sponsible for the supervision of a number local unions in the Greater 
New York area. 

Mr. Kennedy. His local unions have ? 

Mr. Kopecky'. His local unions which he supervises do have, yes. 

Mr. KenxXedy. And he paid $1,000 and the stock Avas worth $4,000? 

Mr. Kopeck Y. That is correct. 

Mr. Kennedy. And John Tennyson? 

Mr. Kopecky. Yes, Mr. Tennyson also did purchase some common 
stock. 

Mr. Kennedy. Do 3^ou have his identification? Do you liave the 
rest of these? 

Mr. Kopecky. I have to look each one of them up. I have them 
in a schedule here, and as soon as I locate the schedule, I will be able 
to read them all off at the same time. 

Mr. Teimyson is a representative of local 162, in Baltimore, of the 
Amalgamated Meat Cutters and Butchers Union. 

Mr. Kennedy. Elizabeth Abramoff? 

Mr. Kopecky. Elizabeth Abramoff is the wife of William Abramoff, 
who is the president of Local 1358 of the Retail Clerks Union in New 
Jersey, and is also president of the Eetail Clerks District Council 11. 

Mr. Kennedy. They also have contracts? 

Mr. Kopecky'. Yes, they do. 

Mr. Kennedy. John Haletsky. 

Mr. Kopecky. John Haletsky is the official in charge of Local 1393 
of the Retail Clerks Union in Reading, Pa. Contracts are main- 
tained between his union and Food Fair. 

Mr. Kennedy. Tliey cost $400 and were worth approximately 
$1,600? 

Mr. Kopecky. Yes. 

Mr. Kennedy. Jack Birl. 

Mr. Kopecky. Jack Birl is the business representative of Tvocal 
199 of the Butchers Union in Millsboro, Del. 

Mr. Kennedy. And Vincent LoCasale ? 

Mr. Kopecky. LoCasale is the financial secretary and treasurer of 
Local 195 of the Butchers Union in Philadelphia, and there is a 
contract in existence between his union and Food Fair. 

Mr. Kennedy. Rocco Rossano ? 

INIr. Kopecky. Rossano is the vice president of local 195, the same 
as LoCasale. 

Mr. Kennedy. Joseph Snyder ? 

Mr. Kopecky. Snyder, who is presently deceased, was an official 
along with Rossano and LoCasale of Local 195 of the Butchers. 

Mr. Kennedy. Allan Love? 

Mr. Kopecky. Allan Love is a representative, a union official in 
Common Laborers' Local Union No. 57 in Philadelphia. 

Mr. Kennedy. Do they have a bargaining arrangement? 

Mr. Kopecky. Yes. 

Mr. Kennedy. They do. Anthony Matz ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11113 

Mr. KoPEGKY. Anthony Matz is the president of the Firemen and 
Oilers Union. 

Mr. Kennedy. What union is it? 

Mr. KoPECKY. That is the Firemen and Oilers Union. 

Mr. Kennedy. Do they have a contract ? 

Mr. KoPECKY. Yes, they do. 

Mr. Kennedy. Irving Kaplan ? 

Mr. KoPECKY. Irving Kaplan is the business manager and presi- 
dent of Local 464 of the Butchers Union in Newark. 

Mr. Kennedy. And Max Becker ? 

Mr. KoPECKY. Max Becker is the union official connected with 
Local 1262 of the Retail Clerks in Newark. 

Mr. Kennedy. And Bernadette Casale? 

Mr. KoPECKY. Bernadette Casale is the wife of William Casale, 
who is the secretary-treasurer of local 342, which is Max Block's 
union, and Max Block is the president of that union. 

Mr. Kjennedy. That is the Butchers ? 

Mr. KoPECKY. Yes, of the Butchers Union. 

Mr. Kennedy. Joseph D'Urso received 100 shares. 

Mr. KopECKY. Joseph D'Urso was a business agent for Local 1390 
of the Retail Clerks Union in Philadelphia. 

Mr. Kennedy. Do they have a contract ? 

Mr. KopECKY. No, this union does not have a contract with Food 
Fair. 

Mr. Kennedy. Could we get an explanation on that ? 

Mr. Kopecky. Mr. D'Urso, and also the next name which appears 
on this list, William Cherry, both of these people indicated that they 
consider themselves personal friends and acquaintances of Louis 
Stein. 

Mr. Kennedy. What about Mr. Leon Shacter? 

Mr. Kopecky. Leon Shacter is the vice president in the Interna- 
national Butchers Union. He is also cochairman of the joint or- 
ganizing committee of Butchers and Teamsters, and he is also presi- 
dent of Butchers Local 56 in Camden, N. J. 

Mr. Kennedy. Do they have a contract ? 

Mr. Kopecky. Yes. 

Senator Curtis. Mr. Chairman ? 

The Chairman. Senator Curtis. 

Senator Curtis. Did you find any evidence that stock or bonds or 
unit packages were offered to employees generally ? 

The Chairman. Yes, I did. 

Senator Curtis. Briefly, what was the situation ? 

Mr. Kopecky. As indicated in the affidavit furnished by Mr. Magill 
and Mr. Barton, Mr. Stein indicated that there were certain friends, 
relatives, and associates 

Senator Curtis. No. I mean anybody that worked there ; were their 
rights given ? 

Mr. Kopecky. Yes ; certain officials were furnished rights. 

Senator Curtis. I am talking about the rank and file employees. 

Mr. Kopecky. The rank and file of the employees were not given 
rights. 

Senator Curtis. I do not need the names, but about how many were 
employees ? Were they all officers ? 



11114 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. KoPECKY. They were all officers or relatives of officers, ranking 
officials. 

Senator Curtis. In the company ? 

Mr. KopECKY. Yes, sir. 

Senator Curtis. And they would be regarded as management 
employees ? 

Mr. KoPECKY. Yes ; that is right. 

Senator Curtis. I see here that Anthony Matz sold his stock in 1958 
for $600, and the value when he got it was $1,200. Did the stock go 
down ? 

Mr. KoPECKY. Yes ; it did. 

Senator Curtis. What is it worth now ? 

Mr. KoPECKY. Approximately $2 a share. 

Senator Curtis. What is the value of the bonds ? 

Mr. KopECKY. Approximately $35 to $40. 

Senator Curtis. Does the bond have to stand alone now ? 

Mr. KoPECKY. The bond stands alone. 

Senator Curtis. So if someone purchased a bond and 11 shares of 
stock for $50, the bond was worth $37 or so ? 

Mr. KoPECKY. That is accurate. 

Senator Curtis. And 11 shares of stock would be worth $11. It 
would have a value of $59 ? 

Mr. KoPECKY. $59 or $60. 

Senator Curtis. Did all of these larger labor leaders — by larger, 
I mean the labor leaders who got the larger amounts — do they all still 
hold their stocks ? 

Mr. KoPECKY. Yes. 

Senator Curtis. The Blocks and Jack Shore ? 

Mr. KoPECKY. Yes. 

Senator Curtis. Lafayette sold part of his ? 

Mr. KoPECKY. That is right. 

Senator Curtis. On this chart, this list of names beginning with 
Mi-s. Nicholas Novellino, and going down, you have identified them as 
union officers. Do you know whether any of them were also actually 
employees of Food Fair ? 

Mr. KopECKY. To my knowledge, after interviewing these indi- 
viduals, they were not employees of Food Fair. 

Senator Curtis. At least the greater amount were not ? 

Mr. KoPECKY. That is right. 

Senator Curtis. That is all. 

Mr. Kennedy. In answer to Senator Curtis, if the bonds are now 
worth about $30, then Paul Lafayette's bonds down here would not be 
worth as much as $8,000, would they ? 

Mr. KoPECKY. No. That was the original face value of the $50 
bond. 

Mr. Kennedy. We have in summary that Lafayette invested a total 
of $9,000; has received a total of about $8,300 from the sales and still 
retains the $8,000 in bonds. $6,000 would be closer to it rather than 
the $8,000. 

Mr. KoPECKY. That is con-ect. 

Senator Curtis. How many bonds does he hold ? 

Mr. KoPECKY. He holds 160 units, each unit being $50. 

Mr. Kennedy. Initially. Now what are they worth ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11115 

Mr. KoPECKY. Now they are worth less than $50. 

Mr. Kennedy. Because the stock has been separated. 

Mr. KoPECKY. Because the stock has been witlidrawn from the pack- 
age. 

Senator Curtis. All he has left is the bonds ? 

Mr. KoPECKY. That is right. 

Senator Curtis. How many does he have ? 

Mr. KoPECKY. 160 units. 

Senator Curtis. 160 bonds? 

Mr. KoPECKY. 160 bonds, that is right. 

Senator Curtis. And yon say they are worth about $37.50 now ? 

Mr. KoPECKY. Yes. 

Senator Curtis. In other words, to reflect the current market, that 
$8,000 in bonds retained by Lafayette, in summary, would be less, as 
it reflects today's market. 

Mr. KoPECKY. That is right. The base value is 8, but the actual 
trading value in the stock market is about $6,000. 

Senator Curtis. Do you know what interest the bonds pay ? 

Mr. KoPECKY. 5.5 percent. 

Mr. Kennedy. Elizabeth Abramoff, do you have her identification? 

Mr. KoPECKY, Elizabeth Abramofl' is the wife of William Abramoff. 

Mr. Kennedy. What is he ? 

Mr. KoPECKY. President of local 1358 of the Retail Clerks Union, 
Atlantic City, and president of the Retail Clerks Union District 
Council No. 11. 

Mr. KJENNEDY. John Haletsky. 

Mr. KopECKY. John Haletsky is an official in local 1393 of the 
Retail Clerks Union in Reading, Pa. 

Mr. Kennedy. And Jack Birl ? 

Mr. KoPECKY. An official in local 199 of the Butchers Union in 
Millsboro, Del. 

Mr. Kennedy. And Vincent LoCasale ? 

Mr. KoPECKY. Vincent LoCasale is the financial secretary-trea- 
surer of local 195 of the Butchers Union in Philadelphia. 

Mr. Kennedy. And Rocco Rossano ? 

Mr. KoPECKY. He is the vice president of the same local, local 195 
of the Butchers Union, in Philadelphia. 

Mr. Kennedy. Of these 20 individuals who received the stock, 17 
of them belong to local unions which have direct contracts with Food 
Fair, is that right? 

Mr. Kopecky. That is correct. 

Mr. Kennedy. One of them is a vice president of an international 
whose locals have contracts ? 

Mr. Kopecky. In the area for which he is responsible, the locals 
have contracts. 

Mr. Kennedy. And two of them, Joseph D'Urso and William 
Cherry have nothing whatsoever to do with the Food Fair ? 

Mr. Kopecky. That is correct. 

Mr. Kennedy. They have absolutely nothing to do with Food Fair. 
They happen to be in the category of labor men, but they do not 
have anything to do with them ? 

Mr. Kopecky. They do not have any working agreements with 
Food Fair, that is right. 



11116 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. And all of these individuals were able to purchase 
shares of stock worth $12,100 for $48,400. 

Mr. KoPECKY. Which were worth $48,400. 

Mr. Kennedy. Wliich were worth $48,400. So together with the 
value of the bonds and the shares of stock, tliese individuals were 
able to purchase, in summary, for $42,100, bonds and stock worth 
$90,400? 

Mr. KoPECKY. That is right. These people made an outlay of 
$42,100, and the value of the securities which they purchased at the 
time they made the outlay were worth $90,400. 

Mr. Kennedy. As of the date of issue ? 

Mr. KoPECKY. When their checks were issued, yes. 

Mr. Kennedy. So they received over 100 percent profit immedi- 
ately? 

Mr. KoPECKY. That is right. 

Mr. Kennedy. Or 100 percent came to them. They were well worth 
over twice the value they paid for them. 

Mr. KopECKY. That is right. 

The Chairman. Is there anything further ? 

If not, thank you. 

Call the next witness. 

Mr. Lucas. Mr. Chairman, may I make an inquiry during this lull ? 

The Chairman. Yes. 

Mr. Lucas. I should like to ask the distinguished Senator from 
Arkansas whether it is customary to read into the record in these 
proceedings affidavits without Senators who might want to cross- 
examine the individual who made the oath. 

The Chairman. Yes, we have permitted affidavits to be read into 
the record and also made exhibits, whenever he is testifying from 
them and the affidavits support the testimony, where he has gotten 
the corroboration. We usually put them into the record. At other 
times when affidavits are submitted, they are just made exhibits. But, 
of course, the exhibits are part of the records. 

Mr. Lucas. I appreciate that, but I wondered whether or not the 
committee has ever had occasion to call before the committee a witness 
who has made such an affidavit in order that Senators around might 
be able to cross-examine him. 

The Chairman. I am trying to recall. There may have been one 
or two instances where we have had affidavits and then later called 
the witness for examination. I believe we have in one or two in- 
stances, have we not? I think there have been one or two instances. 
Am I right ? 

Senator Curtis. I believe, Mr. Chairman, in the case of John Dies, 
in the Kohler hearing, that was the situation. He was an older man 
and there was some conflict as he went along with his own statements 
and he was called in. I think in fairness it should be said that he 
was not trained in legal documents, affidavits, and that sort of thing, 
and he was called in. 

The Chairman. I would say this : If there is any question about the 
veracity or the information contained in the statements, and the Sen- 
ator would like to have one of these witnesses called, the committee 
will consider it. 

Mr. Lucas. I appreciate that. Senator. I made inquiry for the 
purpose of ascertaining what the practice was, really. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11117 

The Chairman. You can appreciate why we do this. It is simply 
in the interest of economy. We can subpena all of these witnesses 
here, and if we are just going to get 1 or 2 facts tliat are corroborating, 
sometimes we will use the affidavits as corroborating what a witness 
will testify to. 

Mr. Lucas. Thank you very much. 

The Chairman. Call the next witness. 

Mr. Kennedy. Mr. Jack Shore. 

The Chairman. Mr. Shore, you do solemnly swear the evidence you 
shall give before this Senate select committee shall be the truth, the 
whole truth, and nothing but the truth, so help you God ? 

Mr. Shore. I do. 

TESTIMONY OF JACK SHORE, ACCOMPANIED BY COUNSEL, 
RAYMOND A. SPEISER 

The Chairman. Mr. Shore, state your name, your place of residence, 
and your business or occupation. 

Mr. Shore. I am Jack Shore. I live at Latches Lane Apartments, 
Merion, Pa. I am in tlie woolen waste business. 

The Chairman. Woolen waste business? 

Mr. Shore. That is right, sir. 

The Chairman. You have counsel ? 

Mr. Shore. Yes, I do. 

The Chairman. Counsel, identify yourself for the record. 

Mr. Speiser. My name is Raymond Speiser. I am a member of the 
Philadelphia Bar. I have offices at 1000 Girard Trust Building, 
Philadelphia. 

Mr. Kennedy. What did you say your occupation was ? 

Mr. Shore. Woolen waste. 

Mr. Ivennedy. In Philadelphia? 

Mr. Shore. That is right, sir. 

Mr. Kennedy. Do you have any other sources of income ? 

(The witness conferred with his coimsel.) 

Mr. Shore. I respectfully decline to answer on the grounds that 
I am not required to give evidence against myself under the fifth 
amendment. 

Mr. Kennedy. Mr. Shore, do you know Mr. Benjamin Lapensohn? 

Mr. Shore. Yes, I do. He is my brother-in-law. 

Mr. Kennedy. How long have you known him ? 

(The witness conferred with his counsel.) 

Mr. Shore. About 26 years. 

Mr. Kennedy. Have you had any business dealings with him ? 

Mr. Shore. I respectfully decline to answer upon the ground that 
I am not required to give evidence against myself under the fifth 
amendment. 

Mr. Kennedy. Did you have any business connections with him in 
relation to the New York Federationist ? 

Mr. Shore. I respectfully decline to answer for the same reason. 

Mr. Kennedy. Did you have any business dealings with him in con- 
nection with local 107 of the Teamsters Union in Philadelphia ? 

Mr. Shore. I respectfully decline to answer upon the ground that 
I am not required to give evidence against myself under the fifth 
amendment. 



11118 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. Could you tell the committee how it was that you 
came to purchase some of the stock of Food Fair Properties? 

Mr. Shore. I respectfully decline to answer for the same reason. 

Mr. Kennedy. Could you tell us how you came to purchase some of 
the units of the Food Fair Co. ? 

Mr. Shore. I respectfully decline to answer for the same reason. 

The Chairman. You better state the reason occasionally. "The 
same" kind of wears out. 

Mr. Shore. All right, sir. 

The Chairman. Proceed. 

Mr. Kennedy. Was there any arrangement made between you and 
Mr. Stein and Mr. Lapensohn regarding the pui chase of this stock? 

Mr. Shore. I respectfully decline to answer upon the ground that 
I am not required to give evidence against myself under the fifth 
amendment. 

Mr. Kennedy. Could you tell the committee why your name is sub- 
stituted for both Cohen and Lapensohn on the suggested list ? 

Mr. Shore. I respectfully decline to answer for the same reason. 

Mr. Kennedy. Could you explain what these two checks are, dated 
September 23, 1955, and October 3, 1955 ? 

The Chahiman. I hand you a photostatic copy of checks, two of 
them, one dated, apparently, October 3, 1955, in the amount of $10,000, 
payable to you, and issued by Ben Lapensohn. I will ask you to exam- 
ine that check, together with another one dated September 23, 1955, 
in the amount of $2,000, made payable to you, signed by Ben Lapen- 
sohn. I will ask you to examine these checks and state if you identify 
them as photostatic copies of the originals. The first is in the amount 
of $10,000, No. 2334, and the one in the amount of $2,000 is No. 2313. 

(The documents were lianded to the witness.) 

Mr. Shore. I respectfully decline 

The Chairman. Plave you examined the checks ? 

(The witness conferred with his counsel.) 

Mr. Shore. I have, sir. 

The Chairman. Do you identify them ? 

Mr. Shore. I respectfully decline to answer upon the ground that I 
not required to give evidence against m^'self under the fifth amend- 
ment. 

The Chairman. Those checks may be made exhibit 59A and B. 

(The documents referred to were marked "Exhibit Nos. 59A and B" 
for reference and will be found in the appendix on pp. 11184-11185.) 

The Chairman. I will ask you to examine the endorsement on the 
reverse side of those checks and state whose signature appears thereon. 

(The witness conferred with his counsel.) 

Mr. Shore. I respectfully decline to answer upon the ground that I 
not required to give evidence against myself under the fifth amend- 
ment. 

The Chairman. Do you recognize the signature of your brother- 
in-law, Mr. Ben Lapensohn ? 

Mr. Shore. I respectfully decline to answer upon the ground that I 
not required to give evidence against myself under the fifth amend- 
ment. 

The Chairman. Were these checks given to you in reimbursements 
for money you had paid out of the purchase of certain bonds and 
stocks of the Food Fair Properties, Inc. ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11119 

Mr. Shore. I respectfully decline to answer upon the ground that I 
not required to give evidence against myself under the fifth amend- 
ment. 

The Chairmax, Do you think the purchasing of stock and the sell- 
ing of it, or the purchasing of stock and transferring it to someone 
else, acting as agent for them, is something that might incriminate 
you ? 

Mr. Shore. It might be some evidence against me. 

The Chairman. If this Avas a transaction that was open, honest, 
and above board, and not one that was intended, for the truth about it, 
to be concealed, something to be hidden, something not to be uncov- 
ered, since the transaction was consummated long ago, what do you 
think there is about it now that might be incriminating? 

Mr. Shore. It might be some evidence against me. 

The Chairmax. We have a situation here now where evidence 
is indicating there were some arrangements between labor leaders 
and management for them to engage in certain transactions, whereby 
the labor leaders, at least, and people affiliated with labor unions having 
contracts and business transactions with Food Fair Properties, the 
Food Fair company, might profit. If this is in error, if there is 
anything that we are developing here that is not factual, that is not 
the truth, but if these are just ordinary transactions that happened 
without any peculiar reason for their being made, not difi'erent from 
the ordinarj^ transactions, I think you owe it to Food Fair Stores 
to make an explanation of it and state what the facts are. 

You tend to cast a reflection when you come in here and say you 
can't tell about these transactions because there is something there 
that might tend to incriminate you. 

You are not the only one involved. On the face of it, it is just 
an ordinary transaction Avhere you might have purchased stock for 
your brother-in-law and then transferred it to him and he reimbursed 
you. If you can do it without self-incrimination, I think you owe it 
to Food Fair Stores to explain it and state what the facts are. 
(The witness conferred Avith his counsel.) 

The Chairmax. Do you want to confer with your client a moment ? 
You may. 

(The witness conferred with his counsel.) 

Mr. Shore. I respectfully decline to answer upon the ground I 
am not required to give evidence against myself under the fifth 
amendment. 

The Chairmax. I cannot be the judge of that, but I can say this 
to you: By taking that position, you are casting implications here 
that are hurting other people. I am trying to get the truth. If the 
implications are facts and they are calculated to hurt, let them hurt. 
Bu if they are not, you are in a position to help clear it up. I think 
you owe it to them, unless there is something in here definitely that 
would tend to incriminate you if you told the truth. 
(The witness conferred with Ms counsel.) 

Mr. Shore. It might be some evidence against me. 

Senator Curtis. Mr. Chairman ? 

The Chairman. Senator Curtis. 

Senator Curtis. You realize, Mr. Shore, you cannot claim this 
privilege because it might incriminate somebody else, do you not, 
if it does not incriminate yourself ? 



11120 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Shore. Yes, I realize it. 
. Senator Curtis. Have you been advised that these ti-ansactions, 
as testified to by Mr. Kopecky, if true, were a violation of law ? 

(The witness conferred with his counsel.) 

Mr. Shore. I have never been so advised. 

Senator Curtis. Do you believe them to be ? 

(The witness conferred with his counsel.) 

Mr. Shore. No, I don't. 

Senator Curtis. Then why wouldn't you testify to them, if the 
transactions are not a violation of law, if you do not believe them to 
be? Why cannot you answer the counsel's questions, I will put it 
specifically, and tell about these checks that bear your name? 

(The witness conferred with his counsel.) 

Mr. Shore. I don't know whether they are violations of the law. 

Senator Curtis. Where is Mr. Ben Lapensohn now ? 

Mr. Shore. I respectfully decline to answer upon the ground that 
I am not required to give evidence against myself under the fifth 
amendment. 

Mr. Speiser. Mr. Chairman, would you permit me to confer with 
my client for a second, please ? 

The Chairman. Yes, you may. 

(The witness conferred with his counsel.) 

Mr. Shore. Senator, I wish to answer that question directly. I do 
not know where Mr. Lapensohn is now. 

The Chairman. Have you been in contact with him lately ? 

Mr. Shore. No, I have not. Senator. 

The Chairman. If you learn of his whereabouts, will you be kind 
enough to accommodate the committee by supplying the information ? 

(The witness conferred with his counsel.) 

The Chairman. We would like your cooperation. I don't think 
that would tend to incriminate you. 

(The witness conferred with his counsel. ) 

Mr. Shore. I will answer an^^^ questions I can under subpena, 
Senator. 

The Chairman. Thank you. I thought I would ask a few you 
could answer. 

Senator Curtis. 

Senator Curtis. Were you connected with the Rolee Advertising- 
Agency ? 

Mr. Shore. I respectfully decline to answer upon the ground that 
I am not required to give evidence against myself under the fifth 
amendment. 

Senator Curtis. Did you ever work for them ? 

Mr. Shore. I respectfully decline to answer on the same gromid. 

Senator Curtis. Are you acquainted with labor leaders in the area 
of Philadelphia? 

ISIr. Shore. I respectfully decline to answer upon the ground that 
I am not required to give evidence against myself under the fifth 
amendment. 

Senator Curtis. That is all, Mr. Chairman. 

The Chairman. Is there anything further ? 

Mr. Kennedy. I would like to learn something about the purchase 
of these bonds, where you received 4,000 rights and purchased bonds 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11121 

worth $10,000, worth $14,000 for $10,000. Would you explain that 
to us at all ? 

Mr. Shore. I respectfully declme to answer upon the ground that 
I am not required to give evidence against myself under the fifth 
amendment. 

Mr. Kennedy. Why were you selected to have this right to make 
this $4,U00 profit? 

Mr. Shore. I respectfully decline to answer upon the same ground. 

Mr. Kennedy. Do you Imow Mr. Louis Stein ? 

Mr. Shore. Yes, I do. 

Mr. ICennedy. Did he discuss this matter with you? 

(The witness conferred with his counsel.) 

Mr. Shore. I respectfully decline to answer upon the gi'ound that 
I am not required to give evidence against myself under the fifth 
amendment. 

Mr. Ivennedy. Why would you be selected to purchase stock worth 
$8,000 and be given the right to purchase it for $2,000 ? 

Mr. Shore. I respectfully decline to answer upon the same ground. 

Mr. Kennedy. Why did Food Fair put you on that list? 

Mr. Shore. I respectfully decline to answer upon the same ground. 

Mr. Kennedy. Was it so that the name of Mr. Lapensohn and Mr. 
Kaymond Cohen would not appear on the list ? 

Mr. Shore. I respectfully decline to answer upon the ground that 
I am not required to give evidence against myself under the fifth 
amendment. 

Mr. Ivennedy. Did you in fact transfer this stock to Lapensohn? 

Mr. Shore. I respectfully decline to answer upon the ground that 
I am not required to give evidence against myself under the fifth 
amendment. 

Mr. Ivennedy. Do you know if he in turn transferred 1,000 shares 
of the stock to Eaymond Cohen ? 

Mr. Shore. I respectfully decline to answer upon the same grounds. 

The Chairman. Are there any other questions ? 

Mr. Shore, you will remain under the same subpena that you have 
responded to here today, subject to caU by the committee. With 
that understanding, with notice being given to you or your attorney 
that you will return for further interrogation, you may be excused, 
if you accept that obligation. 

Do you ? 

Mr. Shore. Yes, I do. Senator. 

The Chairman. You do ? 

Mr. Shore. Yes, I do. 

The Chairman. Thank you very much. 

The committee will stand in recess until 2 o'clock. 

(Whereupon, at 12:25 p. m. a recess was taken until 2 p. m. of 
the same day, with the following members present: Senators 
McClellan and Curtis.) 

afternoon session 

(At the reconvening of the committee, the following membei^s are 
present: Senators McClellan and Curtis.) 

The Chairman. The committee will come to order. 



11122 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Call your next witness, Mr. Kennedy. 

Mr. Kennedy. Mr. Mandell. 

The Chairman. Do you solemnly swear that the evidence you shall 
give before this Senate select committee shall be the truth, the whole 
truth, and nothing but the truth, so help you God ? 

TESTIMONY OF SAMUEL P. MANDELL ACCOMPANIED BY COUNSEL, 
MORTON WITKIN 

The Chairman. State your name, your place of residence, and j^our 
business or occupation. 

Mr. Mandell. My name is Samuel P. Mandell. I live at 475 War- 
rick Road, Wynwood, Pa. I am in the produce business. 

The Chairman. The what? 

Mr. ]\L\NDELL. The produce business. 

The Chairman. You have counsel with you ? 

Mr. JNIandell. Yes, sir. 

The Chairjman. Identifj^ yourself. 

Mr. WiTKiN. My name is IMorton Witkin, I am an attorney prac- 
ticing law in the city of Philadelphia. I have my offices at 911 
Finance Building, Philadelphia. 

The Chairman. All right, Mr. Kennedy. 

Mr. Kennedy. Mr. Mandell, you are in the produce and fruit busi- 
ness, is that correct ? 

Mr. Mandell. Correct. 

Mr. Kennedy. You operate in the Philadelphia area ? 

Mr. Mandell. Correct. 

Mr. Kennedy. And the Food Fair account is one of your largest 
accounts ? 

Mr. Mandell. One of them, yes, sir. 

Mr. Kennedy. Approximately one-third of your business, is that 
right? 

Mr. Mandell. About that. 

Mr. Kennedy. You have known Mr. Louis Stein for a long period 
of time, is that correct? 

Mr. Mandell. Yes, sir. 

Mr. Kennedy. He is a close friend of yours ? 

Mr. Mandell. Yes, sir. 

Mr. Kennedy. I would like to ask you if he spoke to you in 1955, 
or if you had some convei-sation with him in 1955, about the purchase 
of some Dan River stock? 

Mr. Mandell. Yes, sir. 

Mr. Kennedy. That is Dan River Mills? 

!Mr. Mandell. Correct. 

Mr. Kennedy. What is the Dan River Mills ? 

Mr. Mandell. Dan River INIills is a textile organization. 

Mr. Kennedy. Where is that located ? 

Mr. Mandell. In Danville, Va. 

Mr. Kennedy. Did you ever have anything to do with that company ? 

Mr. JMandell. Yes, I did. 

Mr. Kennedy. Were you a director ? 

ISIr. jMandell. No. I am now, but I was a stockholder for quite 
a few years. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11123 

Mr. Kennedy. What about Mr. Stein? Did he have anything to 
do with the company ? 

Mr. Mandell. Pie is a director now, and probably was a stock- 
holder before. 

Mr. Kennedy. "Was he a director at that time, do you know ? 
Mr. Mandell. I don't think so. 

Mr. Kennedy. Did you 

Mr. WiTKiN. May i interrupt a moment? I think if you wait a 
second, we can verify that answer. 
Mr. Kennedy. Fine. 
(The witness conferred with his counsel.) 
Mr. Mandell. I camiot verify that at this moment. 
Mr. Kennedy. But you are both directors at the present time ? 
Mr. Mandell. Yes. 

Mr. Kennedy. Did you have some conversation with him in 1955 
about the purchase of some of this stock ? 
Mr, ]\Iandell. Yes, sir, 

Mr. Kennedy. Did he agree to make some arrangements for you to 
purchase some Dan River stock, 1,000 shares, for about $20,000? 
]Mr. ]Mandell. I didn't get that. 

Mr. Kennedy. "Was he going to make arrangements for you to pur- 
chase — and I will definitely open the details in a second — in brief, was 
he making arrangements for you to purchase 1,000 shares of the Dan 
River stock for $20,000? 

Mr. Mandell. Well, there was 1,000 shares promised to me during 
that year of some options that he was to get that was promised to him 
in the latter part of 1954. 

Mr, Kennedy, And did he have some conversation with you about 
making some of this stock available to any other individual? 
Mr, Mandell, Yes, sir, 

Mr, Kennedy, W^ho was the other individual ? 
Mr, Mandell, Ben Lapensohn. 
Mr. Kennedy. What did he tell you at that time ? 
Mr. Mandell. Well, it was about somewhere near the 28th of June 
when Mr. Stein had called me and asked me if I wouldn't give Mr. Ben 
Lapensohn 500 shares of Dan River stock at $20 a share, and he would 
return it to me as soon as he received his stock. 

Mr. Kennedy. Did you know Mr. Ben Lapensohn at that time? 
Mr, Mandell, I have known him just to say "hello." 
Mr, Kennedy, Did you get in touch with Mr, Ben Lapensohn? 
Mr. Mandell, Yes, I did, 

Mr, Kenned, Did you in fact deliver him 500 shares? 
Mr, Mandell, Pardon? 

Mr, Kennedy, Did you in fact deliver him 500 shares ? 
Mr. Mandell. Yes, I did. 

Mr, Kennedy, And you received from him a check for $10,000? 
Mr. Mandell. Yes, I did. 

Mr. Kennedy. That was aromid the 27th of June 1955 ? 
Mr. Mandell. Yes, sir. 

Mr. Kennedy. The value of the stock at that time was approxi- 
mately $15,000. You are aware of that, are you not ? 
Mr. Mandell. About that, yes. 



21243— 58— pt. 28 20 



11124 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. That was a saving to Mr. Ben Lapensohn, or a gift 
to Mr. Ben Lapensohn of about $5,000. 

Mr. Mandell. What it was, I don't know. 

Mr. Kennedy. Why did Mr. Stein say he wished to liandle it in 
that fashion ^ 

Mr. Mandell. Well, for one, I had the stock available, and the 
other is he just asked me to do him the favor, which I did. 

Mr. Kennedy. Did he indicate to you at that time that he did not 
want to make any direct transfer of the stock to Mr. Lapensolm ? 

Mr. Mandell. I don't recall. It could have been. 

Mr. Kennedy. Don't you undei'stand that that was the reason ? 

Mr. IVLvNDELL. It could have been. 

Mr. Kennedy. You understood that that was the reason, did you 
not? 

Mr. Mandel. Yes. 

Senator Curtis. I am not sure that I follow here. Was this stock 
available at a lesser price under some rights of existing stockholders ? 

Mr. Mandell. No. With the exception that Mr. Stein had some 
options due him at the basis of $20. 

Senator Curtis. And it invoh^d you only to this extent, that you 
immediately made your stock available and then Mr. Stein replaced 
your stock ? 

Mr. Mandell. Yes. 

The CiLYiRMAN. As I understood you, at the time of this trans- 
action when you transferred a part of your stock, 500 shares, when 
you transferred 500 shares of stock that you owned in this company 
to Mr. Lapensohn, the stock was actually worth $15,000, and you 
received only $10,000? 

Mr. Mandell. Correct. 

The Chairman. But you were to have your stock replaced by Mr. 

Mr. Mandell. Correct. 

The Chairman. Then you took no loss ? 

Mr. Mandell. Correct. 

The Chairman. You simply acted in accommodation to Mr. Stein 
in the matter ? 

Mr. Mandell. Correct. 

The Chairman. So if the stock was selling for $15,000 and you only 
received $10,000, your loss was made up by a transfer to you from 
Mr. Stein of the same amount of stock ? 

Mr. Mandell. Correct. 

The Chairman. Any losses sustained, on the basis of what the stock 
sold for to Mr. Lapensohn, and what it would sell for on the market, 
any loss that might have been incurred, Mr. Stein sustained that loss ? 

Mr. Mandell. Correct. 

Mr. WiTKiN. Mr. Chairman, may I confer with the witness for a 
moment? I think there is a very minor correction to be made. 

The Chairman. All right. 

(The witness conferred with his counsel.) 

Mr. Mandell. Senator, I sold the stock to Ben Lapensohn at $20 
a share. When the 500 shares were returned to me by Mr. Stein 
I had paid him $21. There was a loss of $500 on that particular sale. 

The Chairman. Do you mean you lost $500 in the transaction ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11125 

Mr. Mandell. Yes. 

The Chairman. That accommodation was pretty expensive for you, 
wasn't it ? 

Mr. Mandell. Well, with the exception that Mr. Stein had promised 
to give me 1,000 shares of his options that he was to receive, and 
I received them at the basis of $21, which was a fairly good deal to 
me, and I wasn't going to make any issue out of the $500. 

The Chairman. So you didn't make an issue of the $500? 

Mr. Mandell. No. 

The Chairman. I present to you here 4 photostatic copies of stock 
i?ertificates — 5 photostatic copies of stock certificates — in the amount 
of $100 each on the Dan River Mills in the name of Samuel P. Mandell. 
I ask you to examine those stock certificates and state if they are 
photostatic copies of the originals which you transferred, and if you 
transferred them to Mr. Lapensohn as appears on the back of the 
stock. 

( Documents referred to were handed to the witness.) 

Mr. Mandell. Yes, they are. Senator. 

The Chairman. They may be made exhibit 60A, B, C, D, and E. 

(Documents referred to were marked "Exhibit 60A, B, C, D, and 
E" for identification, and may be found in the files of the select 
committee. ) 

The Chairman. I hand you a check in the amount of $10,000, dated 
June 27, 1955, a treasurer's check on the Broad Street Trust Co. 
I ask you to examine that check and state if you received that in 
payment for the stock you transferred. 

(Document referred to was handed to the witness.) 

(The witness conferred with his counsel.) 

Mr. Mandell. Yes ; that is correct. Senator. 

Mr, WiTKTN. May I add something ? 

The Chairman. Yes. 

Mr. WiTKiN. I just want to show that he deposited that check. 

The Chairman. You deposited the check ? 

Mr. Mandell. To my personal account. 

The Chairman. This may be made exhibit 60 (F) . 

(Document referred to was marked "Exhibit No. 60 (F) '' for refer- 
ence, and will be found in the appendix on p. 11186.) 

The Chairman. I pass 3'OU something now which you may or may 
not know about. This is a photostatic cop)y of a charge to a bank 
account, charged to Ben Lapensohn, $10,000, order No. 21660. It says, 
"Pay to Sydney Mandell"— well, anyway, that is the way I make it 
out. I will present it to you and you can correct me if I am wrong — 
"on delivery 500 shares, Dan River Mills, $10,000." 

That is the bank record. You may not be able to identify it, but 
apparently it is dated June 23. Apparently he had it charged to his 
account so that a treasurer's check from the bank would go out to you. 

(Document referred to was handed to the witness.) 

Mr. Mandell. Senator, I wouldn't know anything about this docu- 
ment 

The Chairman. You probably would not. We will have some 
member of the staff who secured it identify it. 

Is there anything further ? 



11126 IMPROPER ACTIVITIES IX THE LABOR FIELD 

Mr. Kennedy. Mr. Chairman, I think we have the point in the rec- 
ord that this was an immediate profit to Mr, Lapensohn of $5,000. He 
kept the stock and he ultimately sold it and actually made a profit of 
$4,756.59 on this outlay of $10,000, a profit of almost 60 percent. 

The Chairman. Do we have a staff member Avho can testify to that? 

Mr. Ej:nnedy. Mr. Kopecky. 

TESTIMONY OF GEOEGE KOPECKY— Resumed 

The Chairman. Did you trace this stock through Mr. Lapenhorn, to 
where he disposed of it '( 

Mr. Kopecky. I did, Mr. Chairman. 

The Chairman. What did you find ^ 

Mr. Kopecky. The fact that in 1955 and 1956, Mr. Lapensohn dis- 
posed of this stock for a total of $14,758.59. 

The Chairman. How long had he kept it ? 

Mr. Kopecky. He sold 500 shares September 8, 1955, and he sold — 
well, what happened in this transaction was that after he received the 
500 shares the stock was split '2 for 1, so he consequently wound up 
with 1,000 shares. Then on September 8, 1955, he sold 500 shares, and 
then in the period beginning January 1956 through June 1956 he sold 
the balance of the 500 shares for a total of $14,756.59. 

The Chairman. Wliat was the date of the last transaction ? 

Mr. Kopecky. June 29, 1956. 

The Chairman. Within a vear's time, then, he had made a profit of 
$4,756.59 ? 

Mr. Kopecky. That is correct. 

The Chairman. What information do you have there as to the value 
of it? 

This witness says he thinks it had a value of about $15,000 at the 
time he transferred the stock to him. Have you traced that ? 

Mr. Kopecky. According to the financial records available at the 
time, this stock was worth approximately $15,000 on the open market 
to anyone who wanted to purchase it. 

Mr. Kennedy. You might ask if the profit has been declared on the 
income tax. 

The Chairman. Do you find where this profit was reported ? 

Mr, Kopecky. In that regard Mr. Lapensohn did report part of it, 
but he improperly reported the amount of the transaction in 1955, and 
he omitted from his income an amount of $2,445, from his income. 

The Chairman. I hand you another document, which says, 
"Charged to the account of Ben Lapensohn." 

Is that a document that you obtained in the course of your 
investigation ? 

(The document referred to was handed to the witness.) 

Mr. Kopecky. It is. 

The Chairman. From whom did you obtain it ? 

Mr. Kopecky. From the bank which maintains Lapensohn's 
account. 

The Chairman. What is the name of the bank ? 

Mr. Kopecky. Broad Street Trust Co., Philadelphia, Pa. 

The Chairman. It is the same bank that issued the $10,000 check to 
Mr. Mandell ? 

Mr. Kopecky. Yes, sir. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11127 

The Chairman. "Wliat is the date of that charge ? 

Mr. KoPECKY. June 23, 1955. 

The Chairman. That is a photostatic copy of the original docu- 
ment you found ? 

Mr. KoPECKY. It is. 

The Chairman. This document may be made exliibit 60 (G). 

(Document referred to was market "Exhibit No. 60 (G)" for refer- 
ence, and may be found in the files of the select committee.) 

TESTIMONY OF SAMUEL P. MANDELL— Eesumed 

Mr. Kennedy. Did you have any other transactions with Mr. Stein 
in connection with any union official ? 

Mr. Mandell. No, sir. 

Mr. Kennedy. Did you have any transactions with him for a simi- 
lar type of transfer of stock ? 

Mr. Mandell. Yes ; to Jack Shore. 

Mr. Kennedy, This was in connection with the Food Fair 
Properties. 

Mr. Mandell. Correct. 

The Chairman. Is that the same Jack Shore who testified here 
this morning ? 

Mr. Mandell. Yes, sir. 

Mr. Kennedy. And these bonds or units that were to go to Mr. 
Jack Shore ; those are the ones ; is that right ? 

Mr. Mandell. Yes, sir. 

Mr. Kennedy. Did Mr. Stein contact you in connection with that? 

Mr. Mandell. Yes, he did. 

Mr. Kennedy. Would you tell us where that conversation took place 
and what Mr. Stein wanted you to do in connection with the Food 
Fair Properties ? 

Mr. Mandell. Mr. Stein called me on the phone and told me that 
he had some rights that were due me, and for me to meet him in 
town, which I did. He gave me 6,000 rights for myself, and he also 
asked me if I wouldn't deliver to Jack Shore 4,000 rights because of 
him having to go somewhere and was in a hurry, so I said I would. 

Mr. Kennedy. This was on a Sunday, was it ? 

Mr. Mandell. I don't exactly recall whether it was a Sunday. It 
Avas a couple of days before the 3d of October, which could have been 
a Saturday or Sunday. 

Mr. Kennedy. You met him in a hotel in Philadelphia ? 

Mr. Mandell. I think I did. 

Mr. Kennedy. He called you and said he wanted to meet you in 
this hotel ; is that right ? 

Mr. Mandell. Yes. 

Mr. KJENNEDY. You met him down there and at that time he told 
you that he wanted you to transfer these rights to Jack Shore ? 

Mr. Mandell. Yes, sir. 

Mr. Kennedy. Did you know Jack Shore ? 

Mr. Mandell. No ;t did not. 

Mr. Kennedy. Did he explain why he couldn't have somebody in 
tlie Food Fair Co. transfer the rights to Jack Shore ? 

Mr. Mandell. No : he did not. 



11128 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Kennedy. Did he explain why he felt it was necessary to go 
through you rather than somebody in the Food Fair Co. ? 

Mr. Mandell. No ; he did not. 

Mr. Kennedy. He just said he wanted you to handle the transac- 
tions ? 

Mr. Mandell. Yes. 

Mr. Kennedy. Did you get in touch with Mr. Shore then ? 

Mr. Mandell. Yes ; I did. 

Mr. Kennedy. Did you know Mr. Shore ? 

Mr. Mandell. No ; I did not. 

Mr. Kennedy. You called Mr. Shore the f olloAving day ? 

Mr. Mandell. Yes ; I did. 

Mr. Kennedy. He came down to see you ? 

Mr. IVIandell. Yes, sir. 

Mr. Kennedy. At that time did you make the transfer to him ? 

Mr. Mandell. He gave me his check for $10,000, and I, in return, 
had mailed to the Pennsylvania company the rights covering the $10,- 
000, plus the rights of my own, and sent a letter to them telling them 
exactly how to make out the certificates, and the 4,000 rights which 
entitled him to 200 units. 

Mr. Kennedy. He gave you a check for $10,000 ? 

Mr. Mandell. Yes ; he did. 

Mr. Kennedy. You, in turn, paid your own check of $10,<^00 for 
the rights ? 

Mr. Mandell. Correct. 

Mr. Kennedy. This was for the bonds themselves ? 

Mr. JMandell. Yes. 

Mr. Kennedy. He was given the rights ; is that right ? 

Let's start over again. He came to your office ; right ? 

Mr. Mandell. Yes, sir. 

Mr. Kennedy. Correct. 

Mr. Mandell. Correct. 

Mr. Kennedy. He came to your office, and for the 4,000 rights that 
you gave him at that time, plus $10,000, he could purchase this $10,000 
worth of bonds ? 

Mr. Mandell. Correct. 

Mr. Kennedy. And he then got bonds worth some $14,000 ? 

Mr. Mandell. Well, I believe that is what it was. But he paid 
$10,000. 

Mr. Kennedy. So you gave him the rights and then he gave them 
back to you, and he also gave you a check for $10,000, you used your 
own check for $10,000 and sent it into the bank in order then to trans- 
fer the bonds to his name ? 

Mr. Mandell. Correct. 

Mr. Kennedy. Why was it handled in such a complicated fashion ? 

Mr. Mandell. For this reason, Mr. Kennedy, if I recall correctly : 
The warrants came in odd numbers, and I wanted to give him his 4,000 
and turn over the other 4,000 to my son. He also asked me if I 
wouldn't do him a favor, being I was sending the check, to mail it at 
the same time, which I did. 

Mr. Kennedy. "Wliy couldn't he just send in his own check for 
$10,000? 

Mr. Mandell. Well, I don't know. He probably could have. 

Mr. Kennedy. That would have been a far easier way to handle it. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11129 

Mr. Mandell. I agree with you. 

Mr. Kennedy. So you don't have the exphmation for that or why 
Mr. Stein saw fit to go through you ? 

Mr. MiVNDELL. Correct. 

Mr. Kennedy. Did Mr. Stein tell you at that time that the rights 
and the bonds were actually for Mr. Lapensohn ? 

Mr. Mandell. No, he did not. 

Mr. Kennedy. He did not mention that ? 

Mr. Mandell. No, sir. 

Mr. Kennedy. Are you familiar with the fact that Mr. Lapensohn^ 
on the same day, I believe, made out a check to Mr. Jack Shore for 
$10,000? 

Mr. Mandell. No, I am not. 

The Chairman. Wliat was the day 

Mr. WiTKiN. Mr. Chairman, may I interpose ? 

The Chairman. Yes. 

Mr. WiTKiN. Mr. Kennedy, you said at one stage the following day. 
I am not sure that the witness in saying "correct" was right. He said 
that it was a day or two before October 3. It is minor, but I would 
like the record corrected. 

Mr. Kennedy. I appreciate that. Within a few days. 

Mr. WiTKiN. Thank you. 

The Chairman. We have here exhibit No. 59-A, which has already 
been introduced in evidence. It is a $10,000 check from Ben Lapen- 
sohn to Jack Shore, dated October 3, 1955. Is this along about the 
time of the transaction ? 

Mr. Mandell. It is about the same da3^ 

The Chairman. Almost the same day ? 

Mr. Mandell. Yes. October 3. It is the same day. 

The Chairman. It is the same day that you handled the trans- 
action where you were getting this stock transferred to Shore, or the 
rights for him to buy the stock ? 

Mr. Mandell. Correct. 

The Chairman. It is the same day ? 

Mr. Mandell. Eight. 

The Chairman. Did you know at the time that the stock was des- 
tined for Mr. Lapensohn ? 

Mr. Mandell. I did not. 

The Chairman. No one mentioned that to you ? 

Mr. Mandell. No, sir. 

The Chairman. Had you known that, would it have aroused some 
suspicion in your mind ? 

Mr. Mandell. Well, I will say this, Senator, that if INIr. Stein told 
me to give the rights to Mr. Lapensohn, I woidd have probably done 
the same thing. 

The Chairman. You would have done it just as quickly for Mr. 
Lapensohn as you did for Mr. Shore ? 

Mr. Mandell. Yes, sir. 

The Chairman. You were just accommodating Mr. Stein? 

Mr. Mandell. Right. 

Mr. Kennedy. The way the transaction was handled was Stein to 
Mandell to Shore to Lapensohn ? 

Mr. Mandell. That I don't know. 

Mr. Kennedy. You don't know the last part of it ? 



11130 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Mandell. That is right. From Stein to me and from me to 
Shore. 

Mr. Kennedy. When we first interviewed you, you told a different 
story than this, did you not? 

Mr. Mandell. Yes, sir. 

Mr. Kennedy. But I understand it was an unselfish motive, that 
you felt you were protecting Mr. Stein, is that correct { 

Mr. Mandell. Well, I thought it was more or less of a white lie, 
and I didn't want to embarrass Mr. Stein. I thought I would em- 
barrass him if I did. But it was my error. 

Mr. Kennedy. It was quite different than the one vou have told 
today ? 

Mr. Mandell. Yes, sir. 

The Chairman. Are there any further questions ? 

Senator Curtis. 

Senator Curtis. No questions. 

The Chairman. Thank you very much. 

Call the next witness. 

Mr. WiTKiN. Are we excused ? 

Mr. Kennedy. Yes, sir. 

Mr. Stein. 

The Chairman. Mr. Stein, will you be sworn, please. 

You do solemnly swear that the evidence you shall give before this 
Senate select committee shall be the truth, the whole truth, and 
nothing but the truth, so help you God ? 

Mr. Stein. I do. 

TESTIMONY OF LOUIS STEIN, ACCOMPANIED BY HIS COUNSEL, 
SCOTT W. LUCAS AND HARRY SHAPIRO 

The Chairman. State your name, your place of residence, and busi- 
ness or occupation. 

Mr. Stein. I am Louis Stein. I reside in Philadelphia. I am 
president of Food Fair Stores, located at 2223 East Allegheny Ave- 
nue, Philadelphia. 

The Chairman. Let the record show the counsel that appears for 
Mr. Stein. 

All right, Mr. Kennedy, proceed. 

Mr. Kennedy. How long have you been president of Food Fairs? 

Mr. Stein. Approximately 5 years, Mr. Kennedy. 

Mr. Kennedy. What position did you hold before that? 

Mr. Stein. I was vice president and counsel. 

Mr. Kennedy. For how long ? 

Mr. Stein. For many years. 

Mr. Kennedy. How long have you been with Food Fair ? 

Mr. Stein. I would say almost from its inception. 

Mr. Kennedy. Mr. Stein, what position did you hold in 1955? 

Mr. Stein. President. 

Mr. Kennedy. You were president of the company at that time? 

Mr. Stein. I was, sir. 

Mr. Kennedy. How long have you known Mr. Benjamin Lapen- 
sohn ? 

Mr. Stein. I met jNIr. Lapensohn for the first time about 1940 or 
1941. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 111^1 

Mr. Kennedy. Did you see him frequently after that? 

Mr. Stein. I did not. I saw him very infrequently until the middle 
of 1953, when I began residing in Philadelphia. 

Mr. Kennedy. Did you see him frequently after that ? 

Mr. Stein. I wouldn't say frequently, but more frequently than I 
did previously. I would say I saw him possibly 6 or 8 times during 
a year. 

Mr. Kennedy. Did you become close friends after that ? 

Mr. Stein. Xo, I never become close friends with him, but I became 
friendly with him in a sense that I met him more often and we would 
sit down and talk every once in a while. 

Mr. Kennedy. Did he used to come to your home occasionally ? 

Mr. Stein. He never came to my home. 

Mr. Kennedy. Did you go to his home ? 

Mr. Stein. I don't know where he lives. I know the area, but I do 
not know where he lives. 

Mr. Kennedy. You were not aware of the fact that he was asso- 
ciated with 107 ? 

Mr. Stein. I never knew that he was associated with any union in 
any capacity. 

Mr. Kennedy. You never did. 

Mr. Stein. No, sir. 

Mr. Kennedy. Wlien you started seeing him more frequently in 
1953, 1954, and 1955, you had no idea that he had anything to do 
with local 107? 

Mr. Stein. I knew that he had to do with Ray Cohen and that he 
had helped hun — he told me that he had helped him sponsor his 
cause of getting elected as secretary-treasurer. 

I had known that he was very active in union affairs because of the 
magazines that he had, and that he was well connected with many 
unions. But I did not know him to be connected as a representative 
of 107. 

Mr. Kennedy. Did you know he worked for local 107 ? 

Mr. Stein. I did not. The first time I ever heard of any indication 
that he worked for them was when these committee hearings started. 

Mr. Kennedy. You never discussed, when you used to see him in 
1954 and 1955, what his connections were, and with whom he worked, 
is that right ? 

Mr. Stein. He did tell me, I know this, that he was in the labor 
magazine business. I had heard that, and that was rumored all 
around. AVlien you traveled around the city, you knew that. And 
also he was in the real estate business. 

Mr. Kennedy. You never picked up a rumor that he was with 
local 107? 

Mr. Stein. Not that he was with them ; that he was very close. He 
told me that he was an adviser of Mr. Cohen's. 

Mr. Kennedy. He did tell you that ? 

Mr. Stein. Yes. He told me he was an adviser of Mr. Cohen's. 
I think I told your committee investigators almost a year ago. 

Mr. Kennedy. The only thing he didn't indicate was that he was 
on the payroll of local 107 ? 

Mr. Stein. No, he did not, Senator 

Mr. Kennedy. I said that is the only thing he did not indicate to 
you, is that right? 



11132 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Stein. He didn't indicate that he was on the payroll. 

Mr. Kennedy. Right. He did not indicate that to you, isn't that 
correct ? 

Mr. Stein. I am sorry. You are right. 

Mr. Kennedy. And you never inquired of him as to whether he was 
receiving any money from 107 or Mr. Cohen ? 

Mr. Stein. He told me that he was not officially with 107. He told 
me that he was an adviser. 

Mr. Kennedy. He told you he was not officially connected with 
local 107? 

Mr. Stein. That is right. 

Mr. Kennedy. He told you that ? 

Mr. Stein. Yes, sir. 

Mr. IvENNEDY. And you never heard a rumor to the contrary 
around Philadelphia ? 

Mr. Stein. There was rumors that he was close to 107, sure. 

Mr. Kennedy. But you never heard that he was actually connected 
with 107 ? 

Mr. Stein. That is correct, sir. 

Mr. Kennedy. In 1955, you made some arrangements, according to 
the previous witness, to transfer some stock to him. Is that right? 

Mr. Stein. That is correct. 

Mr. KJENNEDY. That was for Dan River ? 

Mr. Stein. That is right. 

Mr. Kennedy. That was for some 500 shares of Dan River stock? 

Mr. Stein. That is right, sir. 

Mr. Kennedy. For what reason did you make those arrangements? 

Mr. Stein. Well, he had met me on a number of occasions prior to 
this transaction you are talking about, attempting to get me interested 
in going into a building construction business with him. It seems as 
if he had gone into the business of building the small office buildings. 
I had turned him down. He had spoken to me about another ven- 
ture, about a shopping center setup, and I didn't want to go in the 
deal with him. 

At that occasion, he had come up to the office to get my answer on 
these building projects. When I turned him down, he brought up 
the question of Dan River, and he said, "I understand that you are 
going to become a director of Dan River." I said, "That is correct." 

He also brought up the fact that he understood I had a block, a 
large block, on option. I told liim that was so. At that time he 
asked whether he couldn't participate in that option. I knew that I 
had turned him down with every request. He also seemed to want to 
get an edge on some of these things. 

I didn't want to get his ill will and I told him he could have 500 
shares. To place the date, this was about March 1955, because I be- 
came a director of Dan River Mills in April, the early part of 
April 1955. 

Mr. Kennedy. Is that all ? Is that the end of it ? 

Mr. Stein. You asked me how I came to discuss it. Thereafter, 
about a month or two later, he called me for the stock, and I told liim 
I hadn't received it yet. On the following call, I had gotten notice 
from the people who had promised me the option, that they were 
going to send me a part of these options. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11133 

I told him, at that time, to get in touch with Mr. Mandell and he 
would give him the 500 shares. Tlie reason I had tokl him to go to 
Mandell Avas because by that time the stock had gotten to $29 a share, 
and he was to get it at $20, because that was my option price. I had 
5,000 shares given to me at the $20 price. 

Because of his association with so many labor people, I just didn't 
feel right in having the transaction go through my books. I asked 
Mr. Mandell whether he would give it to him. Now in retrospect, 
I see that it was an error, and I should not have had it go through 
MandelFs books, but should have gotten it through my books, because 
there was nothing wrong, except that I have now colored the story 
that shouldn't have been colored. 

Mr. Kennedy. What happened, of course, was that you gave what 
amounted to $15,000 worth of stock for $10,000. 

Mr. Stein. At the time, sir, the stock was about $22 a share. It 
would have been about $1,000 difference, not 15. 

Mr. Kennedy. We have looked it up here, and I think the previous 
witness has testified to the fact that at that time the stock was worth 
$15,000. 

Mr. Stein. Mr. Kennedy, when I turned over the stock it was in 
June, the latter part of June, 1958. 

Mr. Ivennedy. 1958 ? 

Mr. Stein. 1955. But when I had first promised him the stock, 
when he asked me for it, and I told him he could participate to the 
extent of 500, was in March of 1955, and at that time it may have 
been around 22 or 23 dollars a share. 

Mr. Kennedy. The only thing I am pointing out to you is what 
the facts show, what the evidence shows, which was that at the time 
you transferred stock through an intermediary for $10,000, the stock 
was actually worth $15,000. You state at that time you did not know 
Mr. Lapensohn was an employee of local 107, or had anything to do 
with local 107, except in an informal basis. 

Actually, Mr. Schwartz from your company has testified that he 
knev/ that Lapensohn was connected with local 107 and had discussed 
some of Food Fair business with Mr. Lapensohn. 

Mr. Stein. I heard Mr. Schwartz's testimony, I don't ask him 
who he deals with in each individual contract. We have about 100 con- 
tracts in our organization, sir. What I was trying to say, sir, is that 
I am not doubting what Mr. Schwartz said. If you will remember, 
Mr. Schwartz said he never called Mi-. Lapensohn, but found out in 
an indirect way, and I don't remember, maybe you do, when he did 
speak to Mr. Lapensohn. But coming back to myself, Mr. Schwartz 
does not report to me about every labor leader he talks to, or any per- 
son he talks to in any labor hall. 

Mr, Kennedy. We interviewed, with Senator McClellan present, 
your secretary the other evening, and I believe both of .your attoi-neys 
were present, and she told us that she had telephoned Mr. Lapensohn 
on a half dozen occasions, and that she always found him in local 107. 

Mr. Stein. It may be true that she called him there. He was there 
a great deal, from what I understand. But I am telling you also that 
he was not supposed to have been officially connected with 107. 

Mr. Kennedy. It just is a very peculiar circumstance that you 
would make such an arrangement with an individual you say you did 



11134 IMPROPER ACTIVITIES IN THE LABOR FIELD 

not know veiy well, who had never been to your home, you had never 
been to his home, and to make an arrangement just because he was 
possibly slightly annoying that would permit him to make a $5,000 — 
well, you really gave him a $5,000 gift. That is what it amounted to. 

Mr. Stein. In the first thing, when I gave it, it was not $5,000. It 
was only about $1,000. 

Mr. Kennedy. At the time the transfer took place, Mr. Stein, it 
was actually worth $15,000. 

Mr. Stein. At the time the transfer took place, you are right. That 
was the reason why, because it was that price, that I felt somewhat con- 
cerned about turning it over directly, knowing of his connections 
with many union officials. 

Mr. Kennedy. Are you familiar with section 302 ? 

Mr. Stein. Yes, I think so. I don't know. You pointed it out to me 
the last time I was here. 

Mr. Kennedy (reading) : 

It shall be unlawful for any employer to pay or deliver or to agree to pay or 
deliver any money or other thing of value to any representative of any of his 
employers who are employed in an industry affecting commerce. Any person 
who willfully violates any of the provisions of this section shall, upon conviction 
therefore, be guilty of a misdemeanor and be subject to a fine of not more than 
$10,000 or imprisonment of not more than a year, or both. 

Mr. Stein. You will remember when I asked for a conference with 
you some weeks ago, you pointed that section out when you and I dis- 
agreed about the stock purchase plan. 

Mr. Kennedy. I hadn't known about this one. 

Mr. Stein. We talked about it in terms of the stock units and the 
stock purchase plan. 

The Chairman. That is, of Food Fair ? 

Mr. Stein. That is right, sir. 

The Chairman. You did not discuss this particular transaction? 

Mr. Stein. No. I said we discussed the section that Mr. Kennedy 
is referring to. 

Mr. Kennedy. Let's go on, then, to the one on the Food Fair Prop- 
erties. What were the circumstances which led you to take these four 
union officials and give them certain rights, that were worth, at the 
time the rights were transferred, some $9,000 ? 

Mr. Stein. The circumstances were as follows: The same problem 
that concerned the drop shipments that you heard yesterday, and 
which I hope I will get an opportunity to explain more^ at length dur- 
ing my testimony, affected real estate properties insofar as food dis- 
tribution is concerned. I think most of you people, most of you mem- 
bers of the committee, are familiar with the idea that there is some- 
what of an evolution going on in the retail industiy, and shopping- 
centers are a new type of venture. But I haA'e learned from experi- 
ence that I was not going to get into a problem that other companies 
got into in 1929, when they bought real estate and then attempted to 
make moneys on their investments and then lost their business, because 
the real estate ventures went bad. For about a year and a half prior 
to August of 1955, I was going to various houses on Wall Street at- 
tempting to get them interested in floating a stock issue, the principal 
business of which would be the development of shopping centers. I 
went to the firm that eventually did it, and they turned me down. I 
went to another very reputable firm, one of the largest on the street, 



IMPROPER ACTIVITIES IX THE LABOR FIELD 11135 

and they turned me down. I eventually went back to Eastman Dillon, 
and finally convinced them to issue the securities. 

This was about July of 1955. We finally agreed upon the format. 
I insisted, however, that there must be rights given to our stockholders, 
because if it did prove a successful venture, I was afraid my stock- 
holders would criticize me. I insisted, therefore, that there must be 
rights given to purchase these bonds and units. The senior partners 
of Eastman Dillon refused to go along with the plan and turned me 
down, because they said this was a new type of security, that the 
American public had not been indoctrinated to it. 

They said, "If we go and have to wait o weeks' time while the rights 
are outstanding," if any downturn came in the market they are liable 
to be stuck with the issue and there wasn't enough in it for them 
to take the risk. 

It was at that time that I offered to see whether the principal officers 
of Food Fair Stores who were going to sponsor this issue, whether 
they would agree to undertake in the prospectus to exercise all of 
their rights, either they or their assigns. It was at that time that 
the senior partner of Eastman Dillon said that "If you will agree 
to take down your portion, we will then take the risk of allowing you 
to give rights to your stockholders.'' 

It was with that understanding that I went back to my principal 
officers. The chairman of our board, who has the major' portion of 
this business, under this plan would have been required to j^ut up 
about $1,750,000, about, and he didn't feel that he wanted to put up 
all of that money. He made the other officers of the company promise 
that if he went along w^ith the plan, if anyone asked for any of the 
units, that he would have the first right to dispose of at least a half 
million dollars worth, because he did not have the available cash. 

To bear out this point, he borrowed, at the time — he and his family 
borrowed $1,200,000 from a Pennsylvania company to meet his obliga- 
tion on the securities when they were exercised in October 1955. 

After the registration statement was filed and it was publicly pub- 
lished that the issue was going to be floated, I received a number of 
calls, and was asked by our friends and by — I don't recall how many — 
3 or 4 labor leaders, and they asked whether they could get any of 
these units. 

This was all before it came out of the SEC, prior to September 13 
or 14, whatever date it was released. 

I told them the amounts I would give them and told them that it 
was subject to its being released by the SEC, and if they were buying 
it for investment and not speculation. This went for 340,000 worth 
of these units — 30,000 went to union officials. I am really happy to 
say when I looked over the list, and I never checked up, that one of 
them, I think, sold some of the stock, and the others kept their units, 
so they did keep their promise that they bought it for investment. 
That is how it came about. 

Mr. Kennedy. Do you say that Max and Louis Block telephoned 
you and made an anproach to you for the purchase of these units and 
the purchase of the bonds ? 

Mr. S^rEiN. Max Block did approach me and asked me for a much 
larger sum than he actually got. But I did not want to give him that 
amount. I used the excuse I couldn't get it, because I didn't want 



11136 IMPROPER ACTIVITIES IN THE LABOR FIELD 

anyone to be overburdened in case the deal was not a good one, where 
they would have some resentment. 1 was taking that chance, think- 
ing I would build goodwill, but 1 wanted to be sure I didn't bear any 
bad will. 

Mr. Kennedy. We have on here that he received 3,800 rights whicii 
were worth $3,600. Actually, he received 4,800 rights which were 
worth $3,600. 

You made available to him some 4,800 rights ? 

Mr. Stein. I made available — I haven't got the calculations — to 
purchase $12,000 of the units. 

Mr. Kennedy. And Paul Lafayette telephoned you also? 

Mr. Stein. Paul Lafayette spoke to me by phone and asked me 
for — in fact, Mr. Lafayette had asked me for more. He asked me 
for 8,000, and he wanted 2,000 shares, but I cut him down as well, if 
you will notice, and he only got 1,000. 

Mr. IvENNEDY. And Mr. Jack Shore called you ? 

Mr. Stein. No, sir. I told your mvestigators that story. 

Mr. I\JENNEDY. Just answcr the question. 

Mr. Stein. I am sorry. When your investigators came in to ask 
me about how Jack Shore got his stock, I told him I have only met 
Jack Shore on one occasion, several years back, that I did not know 
him, but that Ben Lapensohn had come to my office and asked whether 
he couldn't have some of these units. He said "My brother-in-law 
would like to have them. Would you please get it for him ?" 

I said I w-ould be glad to, and 1 told him the most I could get for 
him was $10,000. He then asked me also if he could have 1,000 
shares — whether I would suggest or get for him 1,000 shares of stock 
for Mr. Ray Cohen and 1,000 shares for himself. 

I said I would try to get that for him. 

Mr. I\JENNEDY. This is apart from the bonds ? 

Mr. Sit:in. That is right. Do you want to stick to the bonds ? Ii 
is one conversation. 

Mr. Kennedy. That is all right. That is fine. 

Mr. Stein. Several days later I received a phone call from Mr. 
Lapensohn, and he said that they didn't want, neither Cohen nor he,, 
wanted the stock, and would I mind trying to get it for his brother- 
in-law. I said I had no objection, that to me it made no difference. 
You will notice in the list that I sent to Eastman Dillon scratched 
out their names and substituted Jack Shore. There was nothing hid- 
den and nothing mysterious about it. 

Mr. I^jiNNEDY. Once again, in the handling of this transaction, 
which involved Mr. Benjamin Lapensohn, in the first place, if you 
did not know Benjamin Lapensohn was a union official, why was he 
put on the list of union officials ? 

Mr. Stein. I did not know why he was put on the list; I didn't 
notice it, except that he asked for Ray Cohen and his name was there, 
and I suppose when I gave it to my secretary, she insisted or thought 
she ought to put both on, on that list. 

Mr, Ivennedy. Then the circumstances of having Jack Shore's 
name on there at all, and when we trace it, we find that Jack Shore 
immediately transferred these bonds to jNIr. Benjamin Lapensohn. 

Mr. Stein. Your investigator told me tliat and asked me whetjier 
I knew whether it was bought for Mr. Lapensohn. I said he didn't 
have to go to those lengths. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11137 

Mr. Kennedy, Would you admit tliat the circumstances surround- 
ing this transaction are highly suspicious, to say the least? 

Mr. Stein. Not this one. The other one, yes. I admitted a few 
moments ago that it was indiscreet on my part of handling the 500 
Dan River Mills the way I did. But not this. This was clearly up 
and aboveboard without any intent of deceiving or hiding the situa- 
tion, 

Mr. Ivennedy. I will tell you what sounds possibly a little suspici- 
ous. That is the fact that Jack Shore, who you admit you had only 
met once, is put on this list, and Jack Shore then procures these 
units, that it is done througli an intermediary, Mr. Mandell, and then 
they are then transferred to Mr. Shore, who then transfers them to 
Mr. Lapensohn. Those circumstances are highly suspicious. 

Mr. Stein. Mr. Kennedy, I don't blame you questioning that prob- 
lem. May I please answer? What happened was that these units 
did not come from the registrar and transfer agent, these rights, 
until very late in the month of September. 

In other words, you have to get your stockholders listed as of a 
certain date. Then the registrar and transfer company had to prepare 
the list, type up the certificates, and mail them to the prospective 
stockholders. 

We got tliem in the latter part of September. Then I had to get 
in a hurry to make the distribution, because October 3d was the last 
clay that they could be exercised. 

Mr. Mandell had agreed to purchase $15,000 worth of these units, 
and $10,000 was to go to Mr. Shore. I took two 3,000 certificates, 
and I took two 2,000 certificates, and I intended to meet both gentle- 
men that weekend downtown, because that following Monday they 
had to be exercised. I got ahold of Mr. Mandell and gave him his, 
but I could not get ahold of Mr. Shore. I was going out of town 
that weekend. I asked Mr. Mandell "Would you please do me a 
favor and give these certificates to Mr. Shore?" 

Now, since then, and since all this commotion started on these cer- 
tificates, and I checked through and found what Mr. Mandell did. 
He gave his son 2,000, or somebody, of his six, gave them a 2,000 cer- 
tificate, and when he had to give Mr. Shore his 4,000, he didn't have 
an equal amount to give him. 

So he went in a 3,000 certificate and a two, as I understand the 
records, and transferred 4,000 into Mr. Shore and took 1,000 back into 
himself. But I had no control. It looks a little complicated, but 
it was not my doing, other than I initiated it by giving it to him. 

The Chairman. You say it looks a little complicated. It does. 
On the face of it, it arouses a natural curiosity. You can appreciate 
that. That is why you are given this chance to make your statement 
about it, to explain it. 

Mr. Stein. Thank you. 

The Chairman. I can appreciate that after you got in touch with 
Mandell and transferred the stock rights to Shore, beyond that you 
had no control over it, as to how they finished handling the transac- 
tion. But from the beginning, apparently, the stock was to go to 
Lapensohn, who had originally requested the stock, and it did go there 
immediately. Lapensohn even paid for it on the same day of the 
transaction. The question arises as to what did you know about that ? 



11138 IMPROPER ACTIVITIES IX THE LABOR FIELD 

AVas this wliole transaction to try to get this stock into Lapen- 
sohn's hands ? 

Mr. Steix. I didn't get tlie question. 

The Chairman. Was the purpose of the whole transaction, insofar 
as Shore was concerned, to get this stock to Lapensohn ? 

Mr. Steix. There Avas no need for it, sir. As you will notice in 
the common-stock list, if Mr. Lapensohn had asked it for himself, he 
would have gotten it. 

The Chairmax. He did ask for it for himself in the beginning. 

Mr. Stein. That is right. 

The Chairman. Then, for some reason, the transaction was changed 
so it went through a brother-in-law. 

Mr. Stein. Because he called me on the phone and asked. If you 
will look at that schedule there 

The Chairman. Let's see. He called you on the phone and asked 
you to make the change ? 

Mr. Stein. Right. 

The Chairman. Did you inquire why ? 

Mr. Stein. No. It was no 

The Chairman. Did you know who !Mr. Shore was at the time ? 

Mr. Stein. Yes ; I know. He told me. 

The Chairman. He told you he was his brother-in-law ? 

Mr. Stein. That is right. And I told that to your committee inves- 
tigators. 

The Chairman. You had no obligation to Shore at all ? 

]Mr. Stein. No. I did it as a favor to Lapensohn, not to Shore. 

The Chairman. Did you know Shore at the time? 

Mr. Stein. I had met him on one occasion. 

The Chairman. You only met him on one occasion? 

Mr. Stein. That is right. 

The Chairman. You felt under no obligation to favor Shore? 

Mr. Stein. Not a bit. I did it solely because I was asked by Mr. 
Lapensohn. 

The Chairman. But you did it under the desire of favoring Mr. 
Lapensohn ? 

Mr. Stein. That is true. 

The Chairman. And he was tlie one who was actually favored 
because he got the stock. 

Mr. Stein. That is true. 

The Chairman. I mean, it turns out that way, regardless of your 
intention. It turns out that he was the one that was favored, the 
one who made the original request. 

Mr. Stein. There is no question about that. Senator. 

Mr. Kennedy. Wliy did you want to favor ]Mr. Lapensohn? 

Mr. Stein. Because if anyone is in business, and you known that 
a person stands well in labor circles, you don't try to incur any 
ill will. If it did not mean anything to me, and he came and asked 
me for a favor, certainly I ought to try to do it for him, because that 
is human nature, and that is the way lousiness is done, not to get an\ 
benefits that you are not entitled to, as was intimated in a contract 
yesterday, but merely to be sure that you don't create ill Avill but 
try to get good will "of people insofar as your business is concerned . 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11139 

The Chairman. Let's go back to tlie other one, the Dan River 
Mills. Were you making that stock available simply to incur good 
will? 

Mr. Stein. To prevent ill will, more important than creating good 
will at that time, because I was turning him down constantly on a 
number of deals that he had come up to see me on. 

The Chairman. Unless you had some information, or unless you 
were under some more or less compelling impression that you needed 
to retain the good will of Mr, Lapensohn, I can't understand why, 
if you were not good friends, and you intimated you were not, why 
you would Avant to incur losses in a transaction of that kind simply to 
favor him. 

Mr. Stein. Your committee did a very fine job in bringing out Mr. 
Lapensohn's influence in labor circles. When you are sitting at the 
other side of a business table, and you know that the man is very well 
connected, you don't go out of your way, you don't look to go and do 
business with the man, but you do know him, and you may not be 
friends but you are friendly with the individual. You don't like to 
turn him down if you feel you could do him a turn. 

The Chairman. In other words, the effect of your testimony is you 
tliought he had sucli power or influence in the ranks of labor or with 
labor organizations that it was a good idea to keep his good will? 

Mr. Stein. I would rather put it this way 

The Chairman. Or to avoid incurring his ill will. 

Mr. Stein. That is right. That is very important. Senator. 

The Chairman. All right. We will put it your way. 

Mr. Stein. May I also state, sir, that I may have not been a very 
close friend of liis, but he traveled in very nice circles in Philadelphia, 
and on a number of occasions and affairs that were held in town, 
I would always find him there. 

He didn't have a bad reputation in Philadelphia, certainly not to 
my knowledge. Plad I known today v/hat this committee has brought 
out about this gentleman, I could assure you I would have stayed 
away from him with a 10- foot pole. 

But I did not know the things, and I don't think you knew them 
in 1955. 

The Chairman. Well, I didn't, of course. 

Mr. Stein. I meant to say the committee. 

The Chairman. I didn't know the man, of course. 

Mr. Stein. I apologize, sir. I didn't mean that. 

The Chairman. So far as you may have Imown him at the time, 
he may have had a good reputation. You did not know about his past. 
But the important thing here is that you were dealing with a man 
who was an official representative of the labor union, a man employed 
by them. You said you didn't know he was so employed, but he told 
you that he was the adviser to the secretary-treasurer of that local. 
So you knew he had labor connections, whether on a compensated 
basis or whether just in a position of influence. 

Mr. Stein. I knew before that he had many friends in the labor 
movement, due to his labor magazine. 

The Chairman. I understand. But the effect of your testimony is 
that because of his position with labor, whether official or otherwise, 

21243— 58— pt. 28 21 



11140 IMPROPER ACTIVITIES IN THE LABOR FIELD 

and you say you did not know it was official, because of liis position 
or influence with labor, you did not want to incur his ill will, and 
you handled the transactions this way or made him the beneficiary of 
these transactions simply to avoid his ill will. That is the effect of 
your statement, is it not? 

Mr. Stein. Yes, sir. 

Mr. Kennedy. Tell me what the situation was as far as Paul 
Jjaf ayette is concerned. 

Was that the same ? 

Mr. Stein. Paul Lafayette and the Blocks, I didn't think they got 
a ny advantage. We were talking about Dan River stock. 

^Ir. Kennedy. We are also talking about the Food Fair Properties 
as well. 

The Chairman. I was talking about both in the last. But I did 
revert back to, refer it back to the Dan River stock. 

Mr. Stein. Insofar as the Food Fair Property stock and Mr. Lafay- 
ette and Mr. Block is concerned, they had called me and asked whether 
they could buy securities which were not yet released from the SEC. 

Mr. Kennedy. Were you trying to gain their good will also ? 

Mr. Stein. I did not want to create their ill will. I did not want 
to refuse them on something that I possibly could have accommodated 
them with. 

Mr. IvENNEDY. And also for Max and Louis Block, the same 
situation. 

Mr. Stein. Yes. 

Mr. Kennedy. As far as Paul Lafayette, did you transfer these 
bonds directly to Paul Lafayette ? 

Mr. Stein. There were Max Block, Louis Block, and Paul Lafay- 
ette, and two other individuals, amounted to $30,000 all told. 

Mr. Kennedy. Could you answer my question: Did you transfer 
the units, the bonds, directly to Max and Louis Block and Paul 
Lafayette ? 

Mr. Stein. It was sent to our New York attorney, who transferred 
them. 

Mr. Kennedy. Once again you did not go directly to the Blocks or 
directly to Lafayette, but went through an intermediary ? 

Mr. Stein. Yes. It was a distance away. 

Mr. Kennedy. For the four labor officials who received these bonds, 
you went through an intermediary. L^p in New York, you went 
through Mr. Madden, your attorney up there, who negotiated at that 
time tlie contracts with Lafayette and the Blocks. 

Mr. Stein. No ; we did not. 

Mr. Kennedy. Didn't he have discussions with Lafayette and the 
Blocks regarding the contracts ? 

Mr. Stein. Not Lafayette ; no. He had nothing to do with it. 

Mr. IvENNEDY. With the Blocks ? 

Mr. Stein. With the Blocks ; yes. 

Mr. Kennedy. You transferred these units up to him to Sydney 
Mathe, and he, in turn, made the transfer to the Blocks, is that 
correct ? 

Mr. Stein. He got their checks directly. 

Mr. Kennedy. So it would appear on the books — none of the names 
of any of these individuals, Lapensohn, Max Block, Louis Block, or 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11141 

Paul Lafayette, would appear on 3^0111- books and records as having 
received these bonds. 

Mr. Stein. Sure they would. 

Mr. Kennedy. The only thing that would appear from your files, 
and whichever appeared from your files, was that Sidney Matlie or 
Nathan Mathe received these rights. We would have to go to Nathan 
Mathe to find out what he did with them before we knew that the 
Blocks and Lafayette received them. As far as Lapensohn was con- 
cerned in Philadelphia, we would have to go to Jack Shore and 
Mandell. 

Mr. Stein. I am going to see if I can find this letter. 

Mr. IvENNEDY. Isn't it correct that you were attempting to hide or 
conceal these transactions ? 

Mr. Stein. No, Mr. Kennedy, not by any stretch of the imagina- 
tion. 

Mr. Kennedy. You don't have to stretch your imagination but a 
little to find out that they were hidden. 

The Chairman. The question is: If your records show that there 
were no records available other than yours to trace the transactions, 
would the names of Lapensohn, the Blocks, and Lafayette, appear 
on your records, showing that the stocks went to them ? 

Mr. Stein. They did appear on our records. What we did was 
this : If you will look at the common stock records 

The Chairman. I said stocks. The umts. 

Mr. Stein. The unit records. The units were delivered to Mr. 
Mathe, and on the date that it was delivered, he sent a letter to his 
stockbroker, telling him to put the stock in their names. 

The Chairman. That letter would not be in your file. 

Mr. Stein. No. 

The Chairman. I said so far as your records and files, there would 
be nothing in your records and files to show that they ultimately 
received the stock. 

Mr. Stein. Well, I guess that would be so. 

(The witness conferred with his counsel.) 

The Chairman. You have your explanation, and I am not chal- 
lenging it at the moment. But for our job, going out to investigate, 
and trying to find out what actually happened, we couldn't find it out 
from your records. 

Mr. Stein. I gave it to the investigator long before, when he came 
and asked me who was there. I gave him a list of all of them. 

The Chairman. You may have done that, but I am talking about 
your records, if we w^ere looking at your records. 

Mr. Stein. That is how I got it. 

The Chairman. You have made your explanation, and I am not at 
the moment challenging that, but I say as a fact, from looking at your 
records, we could not determine that the four blocks of stock went 
to those individuals. 

Mr. Stein. All you have to do is look at the register, where we have 
the original issue and the transfer sheets, which we have in the office. 
That is how I found out. I did not remember all those we gave it to. 
I got out the records and found it and gave it to your committee. I 
niade up a list and gave it to them. So I don't know. It is true, I 
did not have it in a typed form, but this was 7 years later, and I had 



11142 mPROPER ACTIVITIES IN THE LABOR FIELD 

no need for it, and I just did not keep any records. Bnt all I had to do 
was to go to my transfer sheets and get it. 

Mr. Kennedy. We could not go through the transfer sheet of every 
piece of stock of your company. When you go down the original list 
as to who received these units, none of the names of these union officials 
appear. That is correct. A^^ien you did transfer these rights, these 
individuals received a total of $9,000, or rights worth $9,000. Can 
you give us any explanation of liow you, under the law, could give 
these individuals $9,000 ? 

Mr. Stein. You are talking, sir, of tlie date that delivery was made 
of the rights. I explained, sir, that after the registration statement 
became effective, for the first time, the transfer agent makes up a list 
of the stock, and when they make up the list, they then type up the 
rights and forward them to the respective stockholders. 

I don't think that the stockholders of Food Fair Stores received their 
rights until the latter part of September. 

Mr. Kennedy. That is correct. 

Mr. Stein. That was the reason it was delivered then. 

Mr. Kennedy. Eight. 

Mr. Stein. Had they been prepared and ready, they would have 
been issued on the date of release, and we would have given them on 
that date, at which time it was only worth the $50. 

Mr. Kennedy. No. If you had issued them on the release dates, 
those riglits were still worth 75 cents or a dollar, on the release date. 
Even on the release date these rights would have been worth $9,000, 
even if 3^ou had not waited until the 29th of September, even on the 
13th of September or the l-ith of September these rights in fact were 
worth that amount of money. 

Mr. Stein. Mr. Kennedy, I notice on the sheet that you made up 
that you have listed these stocks as being worth something like $4 a 
share and the unit something like — — 

Mr. Kennedy. Let's talk about the units. 

Mr. Stein. I will, sir — and the units up to seventy-odd, which was 
affected by the price of the stock. Securities are sold on the date of 
issue. No one knows what is going to happen a minute before or a 
minute after, no matter how hot somebody may tell you an issue 
may be. 

How in God's imagination could anyone say that a stock having a 
book value of 15 cents would sell at $4, wlien the only thing that they 
had in the company at that time was two pieces of vacant property 
on which shopping centers were to be constructed, and cash, and a 
gleam in the eye for the future. Mr. Kopecky read Mr. Barton's 
affidavit and he said his best hope was that it may sell for approxi- 
mately $1.50. We don't know what the value of stocks are going 
to be after they are issued. But at the date they are issued, and that 
is the way every stock is taken, they only had the issue value price. 

Mr. Kennedy. ]Mr. Stein, I wish you would answer this question, 
the question I just put to you : At the time that these rights were 
transferred to these 4 individuals, they were worth $9,000. There is 
no getting away from that. At the time they were put on the market 
they were worth some $9,000. The rights were worth money on that 
day. Whetlier it is the 14th of September of the 27th of September. 

What you did was give these 4 individuals some $9,000. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11143 

You say it is to avoid bad will. I don't think you are permitted 
to do that. 

Mr. Stein. I did not say we gave them rights worth $9,000 to avoid 
bad Avill. 

Mr. Kennedy. You gave them the rights to avoid bad will. 

Mr. Stein. I said we gave it to them before it had a value. Mr. 
Kennedy, you and I had this out, I think, once before in discussing 
the question of the values and the effects. At some time you have 
to start in and at some time it has a starting value. These rights, 
these units, were agreed upon to be sold prior to the release, subject 
to it being released. It could have opened up under the market and 
it could have sold for less than 50. 

Mr. Kennedy. I agree, it could have. The point is that on the day 
that you transferred them, the 29th of September, when you actually 
transferred them, they were worth $9,000, isn't that correct? 

Mr. Stein. After the original issue, yes. 

Mr. Ivennedy. Isn't it correct that the day that you transferred 
these rights, they were worth $9,000 ? 

Mr. Stein. The date it was transferred it had a value, yes, of 
$9,000. 

The Chairman. You actually transferred the rights on the 29th 
of September? 

Mr. Stein. Somewhere around that time. I couldn't tell you the 
exact day, but it was prior to October 3. 

Mr. Kennedy. I would like to talk to you about the stock. We have 
talked about the units. The names of the union officials that you 
placed on the preferred list to purchase stock will be the next subject. 
Are you familiar with that ? 

Mr. Stein. To some extent, yes. 

Mr. Ivennedy. How did you go about making up this list of some 20 
mdividuals, union officials, who you gave the right to purchase stock ? 

Mr. Stein. We received a number of calls from many people. We 
received a number of calls from many people, people that we do 
business with, friends, and many of our employees. Some of them 
were labor people who called and requested could we try to get them 
some stock. You must bear in mind that we did not own this stock.; 
We sold this stock to Eastman Dillon. 

The most we could do is suggest. Although they promised to con- 
sider the names we gave them, they had no obligation to give it to us, 
and we could not force them to. The most we could do is promise these 
people, whoever they may be, that we will suggest. You will note the 
heading. I did not know there was going to be a McClellan committee 
in 1955. 

You will note the way it is designated. You did not get this 
from my file, you got this from Eastman Dillon's file. 

Mr. Kennedy. I agree. 

Mr. Stein. It says "suggested names of labor men for consideration 
in connection with Food Fair Property stock." 

This clearly indicates that I could not promise anybody anything 
other than Eastman Dillon promised to give it favorable consider- 
ation. 

There is one other question that I would like to bring out at this 
time. I think Senator Curtis asked the question this morning as to 



11144 IMPROPER ACTIVITIES IN THE LABOR FIELD 

whether any of the employees received rights. I think what was — 
I think wliat yon meant, Senator, was whether any of our employees 
received any of this common stock that was given to these labor lead- 
ers on the suggested list. There was a tremendous amount, I think 
there were hundreds of our people, that were listed on that list and who 
received shares of stock from Eastman Dillon. 

Mr. Kennedy. Mr. Stein, did you approach some of these union 
officials, you or your representatives, to determine whether they would 
be interested in being put on this list ? 

Mr. Stein. I did not approach anybody. 

Mr. I^NNEDY. Did anybody in the company approach any union 
official to determine whether they wished to be put on this list? 

Mr. Stein. To my best knowledge there was no approach. I was 
mindful of the fact, Mr. Kennedy — you were kind enough to tell me— 
that you had several statements showing that some were solicited. I 
don't know whether there is anything wrong or not wrong in soliciting, 
but it was not my instructions to solicit. I never solicited from any one 
on this list to purchase any of this, to even suggest that they purchase 
the stock. 

Mr. Kennedy. Do you know if Mr. Schwartz, who was your labor- 
relations director — do you know if he solicited any union official ? 

Mr. Stein. I am sure he didn't go around soliciting any 

Mr. Kennedy. Do you know if he approaclied any union official to 
determine whether that official wished to be placed on this list? 

Mr. Stein. To my knowledge, he didn't approach anyone. 

Mr. Kennedy. You have discussed that with him, have you ? 

Mr. Stein. I discussed that situation with him, and he says to his 
best recollection he did not. 

Mr. Kennedy. These individuals who were placed on this list were 
given permission or the opportunity to purchase stock for a dollar, 
which was, in fact, worth $4. 

Mr. Stein. You see, Mi-. Kennedy, that is the old turkey; the 
chicken before the hen or the hen before the chicken. 

You and I discussed this before. This list was sent in to Eastman 
Dillon. We couldn't sell it. If Eastman Dillon did want to sell it, all 
they had to do was strike out the name. 

Mr. Kennedy. In fact, they did give it. 

Mr. Stein. That is all right, because they wanted to consider. We 
could not force them to do it. All we did was suggest it, these names. 
When they went to issue their confirmations, these certificates went out. 
By the way, they didn't send to everyone we asked. At a certain 
point, they stopped and would not take them. 

Mr. Kennedy. I do, because you were sending them in so late, I 
understand. 

Mr. Stein. I can assure you that I didn't make any profit on that. 
Everybody was ]')aying the same price for the stock, and Eastman 
Dillon confirmed this list here. After the stock came out and was 
selling at $4, if it sold at $4. that didn't mean that I gave them any- 
thing at $4 or that Eastman Dillon gave tliem anything at $4. 

Mr. Kennedy. All I say is that if you did not place them on this 
list, if you had not sent this list, instead of Max Block paying $2,000 
for 2,000 shares, he would have paid $8,000 for 2,000 shares, and instead 
of Lafayette paying $1,000, he would have paid $4,000. In summary. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11145 

instead of these 20 officials having to pay $12,100, they would have had 
to pay $48,400. This was a tremendous gift to them. 

Mr. Stein, in connection with the solicitation that was undertaken — 
Mr. Chairman, both of these witnesses are available to testify, but 
we have two affidavits here. 

The Chairman. Are the witnesses here ? 

Mr. Kennedy. They are not in the room, but they can be obtained. 

The Chairman. We can interrogate the witness about them. 

For your information, Mr. Stein, we have an affidavit from Mr. 
Anthony E. Matz. Do you know him ? 

Mr. Stein. I don't know the gentleman. I never met him. 

The Chairman. It says at the present time he is president of the 
International Brotherhood of Firemen, Oilers, and Railway Shop 
Laborers of Washington, D. C. You don't know him ? 

Mr. Stein. I don't know him, sir. 

The Chairman. You don't know what position he holds in labor? 

Mr. Stein. I do not. 

The Chairman. He said : 

I have been acquainted with Julius Schwartz for approximately 12 to 13 
years, and over the course of years have advised him in a general v?ay as to the 
manner and procedure in which he should conduct labor negotiations. Mr. 
Schwartz and I have not personally negotiated a collective bai'gaining agree- 
ment, but these contracts are negotiated at a local union level by the business 
agents and shop stewards and are signed, after ratification by the membership, 
by local union officials. 

In apiu-oximately the late summer of 1955, Mr. -Julius Schwartz confronted me 
at the Cherry Hill Inn restaurant located adjacent to the Garden State racetrack.. 
This vras the first occasion in a number of years that Mr. Schwartz and I 
hud been in contact. After exchanging the usual greetings Mr. Schwartz in- 
quired as to whether I had any extra money. Ue elaborated on this statement 
to the effect that a new company was being formed to be known as Food Fair 
Properties, Inc. Mr. Schwartz further indicated to me I could get in on the 
ground floor of this company by being able to purchase the stock at $1 a share. 
He also stated this would be a good investment, that I would not have to worry 
about risking my money, and that it was an investment which I could put away 
for a long time and forget about it. 

As a result of Mr. Schwartz's statements I indicated I was interested in pur- 
chasing some of these securities. At that point he told me he would be in further 
contact with me, or with my office, in order to inform me as to how payment 
should be made and to whom such payment should be made. Thereafter, just 
prior to the time I made payment Mr. Schwartz telephoned and left instructions 
with my office to the effect I should forward my check in pajTiient for the securi- 
ties to the underwriting firm of Eastman Dillon & Co. In furtherance of this 
I issued my personal check on September 26, 1955, in the amount of $300 to East- 
man Dillon & Co., and subsequently received 300 shares of common stock of Food 
Fair Properties, Inc. 

Of course, Mr. Schwartz may be the one to answer primarily, but do 
you have any knowledge of this having occurred? 

Mr. Stein. I don't know the gentleman. I never spoke to the gen- 
tleman, to my knowledge 

(The witness conferred with his counsel.) 

Mr. Stein. I said I never spoke to the gentleman. 

The Chairman. You would not have to speak to him to have knowl- 
edge of it. You speak to Mr. Schwartz. 

Mr. Stein. I have no knowledge. 

The Chairman. You have been talking to Mr. Schwartz, I am sure. 
He worked for you. 

Mr. Lucas. Mr. Chairman, may I inquire who prepared that affi- 
davit? 



11146 IMPROPER ACTIVITIES IN THE LABOR FIELD 

The Chairman. I don't know who prepared it, but we liave the wit- 
ness here in town if there is any question. 

Mr. Lucas. I would like very much to have Senators cross-examine 
that gentleman, if it is possible. 

The Chairman. Do you question this? You have Mr. Schwartz 
here. We can put him on the witness stand. 

Mr. Ltjcas. I would like to know who prepared the affidavit. If 
that gentleman knows everything that is in that affidavit, he is a 
wonder, with respect to the language that has been used, and so forth. 

The Chairman. A lawyer prepares an affidavit, or a member of the 
committee staff may write it up after talking to the witness. I assume 
this man is an intelligent man. As I understand, his attorney was 
present when it was prepared. I assume he had good advice. 

(The witness conferred with his counsel.) 

Mv. Lucas. We Mali delay it until we talk to Mr. Schwartz. 

The Chairman. Talk to Mr. Schwartz about it. I certainly would 
not put anything in this record or interrogate the witness about any- 
thing that I did not think had merit. I wanted to ask you if you 
knew anything about it. Did Mr. Schwartz rej)ort it to you, or did 
you ever hear of it ? 

Mr. Stein. No ; I did not, sir. 

The Chairman. Mr. Schwartz, if he did this, did not report it to 
you? 

Mr. Stein. Mr. Kennedy was kind enough to tell me, when I met 
him in his office several weeks ago, that he had several statements 
showing that they were solicited. I discussed it with Mr. Schwartz, 
and he said, to the best of his knowledge, he does not remember that 
he had solicited the setup. But I would like after I get through, to 
discuss it with him. 

The Chairman. Do you know Mr. Eugene A. Kennedy ? 

Mr. Stein. Yes. I haven't met the gentleman for about 5 years, but 
I knew him previous to that. 

The Chairman. He is now secretary and general manager of the re- 
tail Food Clerk Union, Local 1500, and he has served in that capacity 
since, approximately, 1940. Did you Imow him in that capacity, that 
he represented this union in that capacity ? 

Mr. Stein. I knew him in that capacity ; yes. 

The Chairman. He states in his affidavit : 

"In approximately August or September of 1955, Mr. Jules Schwartz contacted 
me to determine whether I desired to purchase stock of Food Fair Properties, Inc., 
which was to be issued in the near future. At that time I made no commitment, 
but reserved my decision. Thereafter, Mr. .Jules Schwartz contacted me again, 
and I told him at that time that I was not interested in purchasing these secur- 
ities, and did not want to be given any consideration. 

My decision for declining to accept this offer to purchase the stock of Food Fair 
Properties, Inc., was based upon the fact that I preferred not to have any invest- 
ment in any company afiiliated with those firms with whom the union, local 1500, 
has collective-bargaining agreements. 

Do you know anything about that contact of Mr. Schwartz with Mr. 
Kennedy ? 

Mr. Stein. No. I could not tell you about that. 

The Chairman. The import of these statements, if correct, is that 
Mr. Schwartz was out soliciting these labor leaders to get in on the 
ground floor on this stock. That is the full import of it, if it is a 
fact, if it is true. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11147 

Further, he says : 

That in approximately the month of August or September 1055, when Mr. Jules 
Schwartz approached nie to determine whether I desired to purchase stock of 
Food Fair Properties, Inc., I made no commitment and reserved my decision. I 
did tell him, however, that my sister, Mrs. Nicholas Novellino, might be interested. 
When Mr. Schwartz approached me later, I told him that my said sister was 
interested in purchasing 500 shares of the said stock. I thereupon requested that 
he make such a purchase for my sister. I sent Eastman Dillon & Co., the stock- 
brokers, my check in payment for the said stock, and my said sister reimbursed 
me later on. 

The certificate of stock was registered in my said sister's name, was mailed 
directly to her, and she still is registered and legal owner and holder thereof. 

You knew nothing about Mr, Schwartz' making this contact ? 

Mr. Stein. No, sir. I did not. 

The Chairman. He had never reported it to you ? 

Mr. Stein. No; he did not. 

The Chairman. Would that have met with your approval, if you 
liad known he was out soliciting purchases of this stock, if these state- 
ments are true ? 

Mr. Stein. I would have objected, vrhether they were labor leaders 
or individuals, because we are not in the business of selling stock, 
and I would not want to stick my neck out to tell someone to buy stock. 
Our position is to sell stock, not to go ahead and to buy it. 

The Chairman. All right, Mr. Kennedy. 

Mr. Kennedy. I want to ask you now this question : Max and Louis 
Block were on this list for both the units and the stock; is that right? 

Mr. Stein. Yes, sir. 

Mr. Kennedy. AYliat is the situation as far as the pension payment 
in the New York area covering the Food Fair stores for the meat- 
cutters ? 

Mr. Stein. I don't know. 

Mr. Kennedy. Do you know that you have a better arrangement 
than any of the other food chain companies in that area ? 

Mr. Stein. I think our contract, if you will compare them today, 
we are at a disadvantage compared to other companies operating in 
that area, and I have been at odds with the officials of that Amalgam- 
ated because of it. 

Mr. Kennedy. In the New York area ? 

Mr. Stein. Yes, sir. 

Mr. Kennedy. Do you know specifically, then, about your arrange- 
ment, as far as the pension payments ? 

Mr. Stein. I do not. I happen to be familiar 

Mr. Kennedy. Do you know why your pension payments do not 
become effective, or you do not have to start to pay, until June 1, 1958, 
while most of the other companies had to start paying in the middle 
of 1956? 

Mr. Stein. I do not know why. But I can tell you of several other 
very 

Mr. Kennedy. Mr. Chairman, could I call Mr. Kopecky, who can 
give the figures from an examination of the files ? 

(At this point, the following members were present : Senators Mc- 
Clellan and Curtis.) 

Senator Curtis. Yes; Mr. Kopecky can testify here without Mr. 
Stein being disturbed. 



11148 1]\IPR0PER ACTIVITIES IX THE LABOR FIELD 

TESTIMONY OF GEORGE KOPECKY— Resumed 

Senatx)r Curtis. You have been sworn, haven't you, Mr. Kopecky ? 

Mr. KoPECKT. Yes, Mr. Chairman. 

Mr. Ejennedy. Have you made a study of the l^ew York area, Local 
342, the Butchers Union, as far as pension payments are concerned? 

Mr. Kopecky. Yes, I have. 

Mr. Kennedy. Have you made a study of the various companies in 
the Nevr York area as far as their pension payments to local 342 ? 

jMr. Kopecky. Yes. 

The Chairman. I will have to leave for a moment. We can either 
suspend, or you might waive, if you will, the right of a full quorum. 

Mr. Lucas. We would like to waive, your honor, and move on. 

The Chairman. All right. 

Proceed. 

Mr. Kennedy. You made a study of those contracts ? 

Mr. Kopecky. With regard to retail food chains. 

Mr. Kennedy. "^^Hiat did you find as far as the pension payments 
are concerned ? 

Mr. Kopecky. In Xew York, concerning local 342 of the Butchers 
Union, we noted there were 12 retail food chain contracts, and Food 
Fair Stores and one other retail food chain, known as Food Farm 
Super Market, commence paying $2 per week per employee into the 
pension fund, in the case of Foocl Fair Stores, beginning June 1, 1958. 
All of the others have been paying at as early a date as 1956. 

Senator Curtis. May I ask, are those pension funds all alike in 
every other particular ? 

(At this point, Senator McClellan withdrew from the hearing 
room.) 

My. Kopecky. In most instances they are alike, in calling for the 
payment of $2 per week. In three instances they are company- 
sponsored plan, wherein the company pays the contribution and ad- 
ministers its own plan as opposed to having the union administer the 
plan. But they are equally effective. 

Senator Curtis. But in three of them, the company guarantees the 
level of payment ? 

Mr. Kopecky. That is right. The company assumes the control 
and responsibility for the payment. 

Senator Curtis. And in the others, they are union managed? 

Mr. Kopecky. Union managed, and the companies make the 
contribution. 

Senator Curtis. The company makes the contribution to the pen- 
sion fund ? 

Mr. Kopecky. That is correct. 

Senator Curtis. And any hazard that the pension fund would run 
into, by reason of bad investments or mismanagement or so on, would 
be the loss to the beneficiaries of the pension fund ? 

Mr. Kopecky. That is correct. 

Senator Curtis. In the pension funds where the company guarantees 
a level amount, they are liable for that guaranty direct to the bene- 
ficiaries ? 

Mr. Kopecky. I have not scrutinized these particular plans in that 
regard as to whether the company guarantees it or not. 

Mr. Kennedy. Did you get the saving ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11149 

Mr. KopECKY. No, I have not given it. In the case of the New 
York area, the approximate saving to the Food Fair organization in 
this situation, due to the fact that they are not obliged to make this 
payment until June 1, 1958, amounts to approximately $25,000 a 
year. 

I^Ir. Kexxedy. What about in Philadelphia. That is $25,000 there. 
What about in the Philadelphia area ? 

Mr. KoPECKY. In tlie Philadelpliia area there are o major retail 
food chains, and in those 3 situations 2 of the firms were obliged to 
commence payment of $2 per week per full-time employee into the 
union pensioii fund beginning July 1, 1957. However, the third com- 
pany, Food Fair Stores, is not obliged to make such payment of $2 
a week until December 29, 1958, a grace period of approximately 18 
months. 

(At this point. Senator McClellan entered the hearing room.) 

Mr. Kennedy. What is the saving to the Food Fair, then, in the 
Philadelphia area? 

Mr. KopECKY. Based upon the number of employees with Food 
Fair, the annual savings would be in excess of $95,000, and over the 
full 18-month period it would approximate $142,000 savings to Food 
Fair. 

Mr. Kennedy. Are the other provisions in the contract generally 
equal ? 

Mr. KoPECKT. Generally equal, yes. 

]\Ir. Kennedy. What would be the savings in the New York and 
Philadelphia area together ? 

Mr. KoPECKY. It would be a total of $142,000 in Philadelphia for 
the 18-month period, and an annual saving of approximately $25,000 
a year in the New York area. 

Mr. Kennedy. Who was it that negotiated the contract in the 
Philadelphia area ? 

Mr. KoPECKY. In behalf of the union, it was Leon Sliacter. 

Mr. Kennedy. Leon Shacter is one of those on the list for the 
stock. 

Mr. KoPECKY. Yes, sir. Leon Shacter was permitted to buy 300 
shares of common stock of Food Fair Properties along with the other 
labor officials noted on the list. 

TESTIMONY OF LOUIS STEIN— Eesumed 

Mr. Kennedy. Have you ever made arrangements for Mr. Shacter 
to have any other financial dealings on behalf of the Food Fair 
Co.? "^ 

Mr. Stein. For the Food Fair Co.'s concern? No. I personally 
have had one deal with him. 

Mr. Kennedy. You had a deal with him? 

Mr. Stein. Not I. 

It was a group, a syndicate, maybe 30 or 40 people. 

Mr. Kennedy. What did you do ? 

Mr. Stein. We bought a large tract of land in Florida, amounting 
to vseveral millions of dollars. I think the total was $6 million, and he 
had, I think, a $9,900 interest. 

Mr. Kennedy. Did vou approach him about going in on that land 
deal? 



11150 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Stein. Honestly, to tell you, I can't recall but I will try to 
reconstruct. 

Mr. Kennedy. Didn't you call him on tlie telephone? 

Mr. Stein. I did not. It happened that he was at the office on some 
business, and this deal was at that time in just about the completing 
stage. 

Mr. Kennedy. Did you make a suggestion to him at that time that 
he sliould investigate this ? 

Mr. Stein. I didn't make a suggestion. I told him, as I can best 
reconstruct — because you can see when Ave have a deal involving mil- 
lions of dollars, $9,900 was not a big thing. But he knew about it, 
and I saw him and I happened to tell him about it, as I remember it, 
the conversation w^ent along like he coukl have a unit, or whatever 
else it represented. 

But he paid whatever everyone else paid. I don't know if he tried 
to sell it today w^liether he could get his money out of it. 

There may be a loss today. 

Mr. Kennedy. When did you have these discussions ? 

Mr. Stein. I w^ould think it would be around December of 1956 or 
January of 1957. 

Mr. Ivennedy. Was that at the same time this contract was being 
negotiated ? 

Mr. Stein. I could not tell you. 

Mr. Kennedy. When was the contract signed ? 

Mr. Kopecky. The contract w\as effective February 1, 1957. 

IMr. Kennedy. Was he in your office in connection w- ith this office ? 

Mr. Stein. No, sir ; we never 

Mr. Kennedy. What w\as he in your office for ? 

jSIr, Stein. I don't recall what he came in at that time for, sir. 
This is several years back. I am sure it was on some business. 

Mr. Kennedy. These other individuals we were mentioning who 
were allow^ed to buy stock, did you also place them on the list in order 
to insure their goodwill ? 

Mr. Stein. I did not place anyone to insure goodwill. I placed 
them on general principles that they were human beings that I knew, 
and that we have known them, many of them, I know the ones I spoke 
to, I have knowTi for many years, and I did not see anything improper. 

Mr. Kennedy. You considered at that time that you were preferring 
a favor on these people who received the stock ; did you not ? 

Mr. Stein. It may have been a disfavor had the price gone down. I 
think it was a gesture, rather than saying it was a favor. 

Mr. Kennedy. It could not have been a disfavor, because they did 
not have to purchase tlie stock. You put them on a list which' gave 
them the right to purchase the stock for a dollar which was worth 
$4. It could not have been a disfavor. 

Mr. Stein. Mr. Kennedy 

Mr. Kennedy. Being frank and honest about it, you would consider 
that you were bestowing a favor on them ; would you not ? 

Mr. Stein. It would have been a favor if it had gone up and a 
disfavor if it had gone down. 

Mr. Kennedy. Mr. Stein, at the time you placed them on this list 
or recommended that they be put on this list, you considered that 
you were doing them a favor ; did you not ? 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11151 

Mr. Stein. Because they 

Mr. Kennedy. Just answer the question. Then you can give any 
explanation you like. 

Mr. Stein. If you are putting it on a yes-or-no basis, I would say 
"no." As an explanation — may I please state that this is what I 
mean by "no." It may seem extreme to say if it sold at $4 an hour 
after it was released, it was not a favor. When you deal with human 
beings and people, you try to see whether you cannot be pleasant 
abou^ things, and you try to see that you incur, as I would call, either 
goodwill or prevent them to think ill of me. These are gestures which 
everyone finds themselves when they deal with people that they are 
in association with over a period of years. You don't look to be paid 
for it. You do it merely as a person-to-person relationship. 

Mr. Kennedy. You were not doing that for every individual that 
called you or talked to you, or everybody that you knew, every human 
being that you knew. You weren't placing them on a list so that 
they could purchase stock for a dollar which was worth $4. 

Mr. Stein. No. 

Mr. Kennedy. This was because of their connection with unions 
that you placed them on the list ; is it not ? 

Mr. Stein. Sir, there was 650,000 shares and out of the list of union 
people here, a small fraction of the people we deal with, and the 
12,000 is a very small fraction of the stock that was sold. If that 
were true, I could have put them down 

Mr. Kennedy. It is a small fraction for them. But for a particu- 
lar individual to make a $3,000, $4,000, $5,000 profit immediatelv, or 
get a $3,000, $4,000, or $5,000 gift is very nice. It might not be a lot 
on the basis of Food Fair's overall business, but for the particular 
individual it means a great deal. 

In summary, and you can make any comment you like, what 3'ou 
permitted tliese 20 union officials to do was to buy stocks or bonds 
worth some $90,400, and they only had to put up some $42,100. The 
units for 4 of these individuals were all handled through intermedi- 
aries, so that the transaction would appear to be hidden, or at least 
it was hidden, and at least in 2 cases we have information that the 
solicitation came on the part of management. 

Of course, as I pointed out to you before, to make any kind of a 
gift such as this is illegal. 

Mr. Lucas. Is that a question ? 

Mr. Kennedy. I told him he could make any comment he wished 
to after I made the summary. 

Mr. Stein. The only comment I would like to make, Mr. Kennedy, 
is that I think from your own scliedule you will note that only 

2 people, I think, or 3 people, out of the entire list, have sold their 
securities and all are holding them today, and the value of the 
securities, compared to the clay after it went out, now that it is almost 

3 years old, 2i/^ years, and no return on the common stock, the stock 
is now selling for about half or less than half of the price listed on 
this list. 

Mr. Kennedy. I might just add in conclusion regarding the con- 
tracts that you had witli these various individuals we have had some 
testimony that your contract with local 107 was advantageous over 
some of your chief rivals, and that your contracts with the meat- 
cutters were advantageous over j'our competitors. 



11152 IMPROPER ACTIVITIES IN THE LABOR FIELD 

The Chairman. I tJihik on that point Mr. Stein indicated he Avanted 
to discuss the trailer drops. That is what the counsel was referring 
to, I assume. 

Mr. Steik. I would appreciate, Mr. Chairman, and Senator, if I 
may give my resume of trailer drops. 

The Chairman. You may. You said you wanted to. Make it as 
concise and brief as you can. I don't want to limit you, but we are 
trying to get through this afternoon. Go ahead. 

Mr. Stein. As Mr. Kennedy knows, I am very intent and very in- 
tense on this particular point, because I honestly feel that our com- 
pany got the short end of the stick of this 1954 contract. We had 
something for 5i/o years, almost G years, known as a drop shipment, 
which, because we retained it in the 1954 contract, we were told that 
we had an advantage. 

The food-distribution industry has been going through an evolu- 
tion, and our company, together with Penn Fruit Co. and Best Mar- 
kets were the onh^ 3 companies that w^ere completely in the super- 
marketing field of food distribution. May I correct the one impres- 
sion that I think was a misunderstanding yasterday. 

Although Penn Fruit is in local 929, they gave their power of 
attorney to the truckers association the same as we did, and everyone 
was supposed to be bound by those terms. 

If we got an advantage, so did they, because we catered to the same 
people in the same trading area. So whether it was 107 or 929 made 
no difference. May I also call to your attention that Penn Fruit in 
1954 did a greater volume of business in the Philadelphia area than 
we did. We were not the largest. I hoped I could say that we were 
at that time. But to my best recollection, I think the figin-es would 
show that in the Philadelphia area the Penn Fruit had a larger 
amount of volume than we did, and had, I think, more drops than we 
did. I am only giving this for the background that it was not we 
alone whose foot would have been pinched and hm^t, but others who 
were equally involved, and to whom that meant as much. In 1949, 
we went into this union voluntarily, and told them our problem. We 
pointed out that other food concerns who had supermarkets exclu- 
sively were using the drop shipment. 

The union at that time — I think it was a Mr. Crumbock, who was 
heading it — told us that they would give us the drop shipment. From 
May of 1949 until December of 1954 we always had the managerial 
right to determine how to use trailer drops. Mind you, we didn't 
use trailer drops in every instance because it was impossible to. 
Unless you could get a full trailer load to go to a store and use it 
as a warehouse, putting it on the side of the store as if it were a 
part of the building you could not use a trailer drop. So when we 
shipped frozen foods and other items which did not take in a com- 
plete load of merchandise, we could not drop shipment. But they 
did give us a right to use our managerial discretion as to when we 
should and should not have trailer drops. 

In 1954, the union demanded in their contract that they do away 
with trailer drops. If it ever became more important, it certainly 
did at that time, not only to ourselves who had it, but to the American 
and the A. & P. ; they were beginning to feel the pinch, and there 
is no question about it, because they were shifting from what is known 



lAIPROPER ACTIVITIES IX THE LABOR TIELD 11153 

as conventional stores into the large supermarkets. Therefore, they 
were able to ship full trailer loads into these stores. 

The Chairman. May I interrupt you just a moment? 

I want to associate myself with Senator Curtis when yesterday he 
mentioned the fact that he thought that right belongs to manage- 
ment. You say you think so, too, and I want you to know that the 
Chair feels the same way about it. I think you should have the right 
to unload and handle such facilities as you want. I want you to 
know that I fully agree with you as to that. But it did become a 
problem, because they were trying to take it away from you. 

Mr. Stein. The other companies never had it in their contract. 

The Chairman. But they were trying to take it away from you. 

Mr. Stein. Right. 

The Chairman. That is right. 

Mr. Stein. As they were getting into the evolutionary process of 
developing these large supermarkets, the need for drop shipments 
became important to these two companies. 

The Chairman. That is your competitors. 

Mr. Stein. Right. We were appreciative of that position. But 
they had a problem with the union which affected our drop shipments. 
The problem that the union and those companies had was the fact 
that — well, you heard Mr. Cupp testify that he used straight jobs, 
meaning the straight trucks and not the tractor trailers, and on the 
straight jobs they always had helpers, helping the driver unload the 
truck. As I understand the situation, the union was concerned that 
by having these companies change over to drop shipments, they would 
lose the membership, the helper memberships, that the union had. As 
I gather, they adopted a phrase in that negotiation known as the 
vanishing American. In other words, they were trying to get a 
policy established, and we were attempting to help the American and 
A. & P. to establish a policy, whereby the union could swallow the idea 
of giving them the drop shipments but not getting hurt in a loss of 
membership. 

That is how it came about that the union had agreed to give them 
50 trailer drops Avith a right to review, or 75 trailer drops immediately 
for the term of the contract. I think you heard Mr. Gannon say that 
he didn't think that the American stores could use more than 50 in 
that year, because they had not renovated their stores or opened 
enough of the newer-type stores to need many more than 50 trailer 
drops. 

The union then insisted that approximately 50 helpers be picked 
up by the companies who had trailer drops, and we were assigned 20. 
The other 2 companies were to pick up a proportionate share, which 
would have picked up about 50 helpers, which we did not need. We 
were compelled to take the help to solve the situation that had been 
created, not by our doing, but because of an evolutionary change in the 
manner of doing business in the food-distribution field. 

It was that that caused us to take the helpers on, to assume that 
responsibility, make sure that the A. & P. and American got what they 
needed, or a good deal of what they needed during that term of the 
contract, and to get a labor peace out of the contract. 

That is my understanding of the trailer drop shipment. All we did 
when we jrot through was to have that riclit which we had since 



11154 IMPROPER ACTIVITIES IN THE LABOR FIELD 

1949. But Avhat we had to do for it is to add on 20 helpers that we 
did not liave prior to the 1954 contract. 

The Chairman. Did yonr company negotiate on the outside of tlie 
IMTLR in order to get this arrangement about you keeping your 
trailer drops and giving 20 men ? 

Mr. Stein. I checked up on that last night, sir, and may I tell 
the chairman the story as I understand it'^ The Pennsylvania Motor 
Truckers or labor relations, whatever their name is — I don't know, 
because I have never attended any of their meetings — provide that 
no company can negotiate, but nothing is to prevent them from dis- 
cussing it. When we got into the position where we thought there 
may be a trick, I understand that Mr. Schwartz and Mr. Cohen had 
a conversation and they told Mr. Blank that we would take a strike 
if we lost the trailer drops because we could not operate without them. 

I understand Mr. Blank went dow'n and conveyed that message 
with 107. He did not negotiate. I asked Mr. Blank about it. He 
testified to that effect, but I asked him before he left this room last 
night. He told me he did not negotiate. He merel}^ went down and 
told them the position that w^e intended to take. There is one other 
thing. May I at this time state, if it is of interest to the committee, 
and Mr. Kennedy. As you may remember, there was some question 
in Mr. Gannon's testimony that a telephone call came from the office 
of 107 while he was sitting with Mr. Gannon, to George Friedland. 
I have checked the office and I understand that Mr. George Friedland 
left for office. I don't know. 

He is not in the country. He will be back in a couple of days, 
but my best recollection is, and I vrould like to submit an affidavit 
to the effect, that in that year, 1954, he left for Florida on December 7, 
and returned on New Year's Day. I think it was either December 31 
or January 1. Either December 31 or January 1, 1955. 

The Chairman. You heard the testimony of Mr. Gannon ? 

Mr. Stein. I did, sir, and that is why I am bringing this. 

The Chairman. We can clear this up when Mr. Friedland comes 
back. 

Mr. Stein. Or I can give you the affidavit. 

The Chairman. Your affidavit would be from hearsay. 

Mr. Stein. I meant I could submit his affidavit or you could call 
him. 

The Chairman. In other words, Mr. Friedland can clear it up if 
he is given the opportunity to make a statement about it. The im- 
pression, you see, which has been gained here, and from the evidence 
yesterday, from the testimony that we heard, you were all obligated 
to go along and negotiate through MTLR. The statement was to the 
effect, if not a direct statement to the effect, that it was your com- 
pany that broke the line, and Mr. Cohen called Mr. Gannon out and 
told him that his lines were broken, that you folks were not going 
along, and therefore, Mr. Gannon questioned it, and Mr. Cohen said 
"I will prove it to you." 

He dialed a number, and played he was talking to Mr. Friedland, 
and then to further assure him that he was, he saicl that Mr. Schwartz 
would be called on the telephone in 10 or 15 minutes, and that occurred. 

According to Mr. Gannon's testimony, Mr. Schwartz after the tele- 
phone call, came in and told them that you folks were not going to 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11155 

hold the line, but you were goin^ to take their oflfer of this 20 helpers 
or employees, and get your unlimited trailer drops. 

Mr. Stein. May I do this, with the chairman's permission. Mr. 
Friedland will be back shortly in from Europe. I will have counsel 
get in touch with Mr. Kennedy. We can either submit an affidavit, 
or I am sure that Mr. Freidland will be glad to come down. 

The Chairman. AVe can determine that at the time. But I am just 
pointing out to you here the testimony that you heard yesterday. I 
assume you were here in the room. Of course, that raises a ques- 
tion. Would you state that these trailer drops are an economic ad- 
vantage or a disadvantage, or j ust a balance ? 

Mr. Stein. In dollars and cents, it may be a disadvantage. But 
they have what we call a convenient factor. Now, I know conven- 
ience means economic, and how that spells out is anybody's guess. 
Everybody could interpret the economics in a different fashion. But 
let me tell you it is more than what we call merely economics. The 
stores that are being put up, and which we have been putting up for 
many years, are such that you can't operate other than making that 
trailer a warehouse, part or the store. It is as if it is built in. We 
have tremendous openings in the walls of our buildings. 

These trailers are driven against these openings, and they are 
left there. Then as it is needed, it is taken out. That is the convenient 
factor. 

The Chairman. You originally have to invest in motor trailers, 
but in this evolutionary process that you say is taking place, the old 
equipment would not be satisfactory for that purpose, and, therefore, 
you get the new equipment. 

You need trailer drops, if you are modernizing, following the evo- 
lutionary processes, making progress in the distribution field, par- 
ticularly of food stores. 

That is, I would assume, the most modern and the most economical, 
if you have your equipment and your facilities constructed for that 
use. 

Mr. Stein. That is right. 

The Chairman. All right. Is there anything further? 

Senator Curtis. I want to ask something about that. 

The Chairman. Senator Curtis. 

Senator Curtis. The union demanded 20 more men be employed for 
this concession of trailer drops. Did you need that many more men ? 
Was there more work to do ? 

Mr. Stein. No, sir; we don't need them, and they were not needed. 
But we did that in order to be able to get an equitable solution to 
the problem that was facing our competitors as well as the union in 
what was termed as the vanishing American. 

Senator Curtis. It was a demand for featherbedding in return for 
what, so far as the drivers were concerned, was a labor-saving device ? 

Mr. Stein. It was a featherbedding so fas as we were concerned, 
because our trucks didn't need the extra people. We took some ad- 
vantage of them in the sense that when they are on the truck, we make 
them help unload the merchandise. 

But the time of traveling with the truck back and forth takes as 
much if not more time than merely unloading the truck, and it is a 
waste of money and, to our extent, the objection to that type of a deal. 

21243 O— 58— pt. 28 22 



11156 IMPROPER ACTIVITIES IN THE LABOR FIELD 

But in order to get harmony in the situation, we agreed to take our 
share. There were about 50 picked up. 

We only picked up 20 out of the amount. The others were picked 
up by the others. So you can see I don't think we had the majority 
or the greatest amount of trailer drops as was stated here yesterday. 

Senator Curtis. That is all, Mr. Chairman. 

The Chairman. Are there any further questions? 

Mr. Kennedy. I have just a few more. 

The Chairman. All right. 

Mr. Kennedy. Mr. Stein, you retained the law firm of Blank & 
Eudenko, is that right ? 

Mr. Stein. We did, sir. I did. 

Mr, Kennedy. How were they paid, Blank & Rudenko ? 

Mr. Stein. Blank & Rudenko were paid $20,000 a year until the 
new association was formed, and then we are to get a credit for them 
for whatever w^e must pay into that association. 

Mr. Kennedy. Were they paid by Food Fair Co. ? 

Mr. Stein. All excepting 2 checks; 1 for $10,000 and 1 for $2,500. 

Mr. Kennedy. Where did that come from ? 

Mr. Stein. That came from Powhatan Sales Co. 

Mr. Kennedy. What is that ? 

Mr. Stein. That is a distribution company that services our stores. 

Mr. Kennedy. Are they wholly owned by you ? 

Mr. Stein. No, they are not. 

Mr. Kennedy. Did they do work for Powhatan Sales ? 

Mr. Stein. No, we did not. There was a credit due us of a much 
larger amount than this amount, and when the bill was settled, our 
comptroller asked that this amount be settled by Powhatan Sales, 
asked Powhatan Sales to honor those bills for our account. 

Mr. Kennedy. Powhatan Sales honored this bill for an amount 
that they owed you ? 

Mr. Stein. There was a credit due our company of a much larger 
amount than the $12,500. I think there was $45,000 or $50,000 alto- 
gether. The figure escapes me at the moment. 

Mr. Kenntjdy. Are you going to get the books and records on the 
matter dealing with Mr. Gordon ? 

Mr. Stein. Yes, certainly. I think we have them here. 

Mr. Kennedy. The matters we discussed last night? 

Mr. Shapiro? 

Mr. Shapiro. I have them here. I have them in a safe place at 
the hotel. 

Mr. Kennedy. Will you make them available? 

Mr. Shapiro. Sure. 

Mr. Kennedy. I am talking about the $9,000 checks that were 
cashed. 

Mr. Shapiro. Somebody is getting that for us in Philadelphia. 
Do you mean the $11,000 check we talked of yesterday ? 

Mr. Kennedy. Yes. 

Mr. Shapiro. That is being made available. 

Mr. Kennedy. Do you have books and records on that ? 

Mr. Shapiro. Not here. 

Mr. Kennedy. Do they have them anywhere ? 

Mr. Shapiro. Yes, sir. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11157 

Mr. Kennedy. You will get them, showing what happened to them ? 

Mr. Shapiro. Yes. When do you want them ? 

Mr. Kennedy. We were told, initially, you had no records. 

Mr. Shapiro. When you talk about records, it is a loose word. We 
have cash checks and the original checks. In other words, the $11,000 
was paid out in order to cash the checks of the warehousemen. 

Mr. Kennedy. We want to get the records to show what happened 
after the checks were cashed. 

Mr. Shapiro. If there were any, we will get them ; yes. 

Mr. Kennedy. Do you have any books and records on that? 

Mr. Shapiro. That matter is being looked up, and whatever books 
and records we have will be sent to you. The information we have 
at present is that there were very few occasions on which any of this 
cash money used for cashing checks was left over. On those occasions 
which there was, there will be evidence produced to you as to what 
happened to the cash. 

Mr. Kennedy. We requested certain paid bills to certain individ- 
uals, companies, and hotels. Are you going to make those available ? 

Mr. Shapiro. We have given you some. 

Mr. Kennedy. I want to get assurance at this time. 

Mr. Shapiro. Certainly. We have a list of a number of things 
we have not turned over to your investigator yet, but they are all 
being made available; yes, sir, 

Mr. Kennedy. Was Mr. Lapensohn on the Food Fair Christmas 
list for 1954, Mr. Stein? 

Mr. Stein. No, sir. 

Mr. Kennedy. Was he on the Christmas list for 1955 ? 

Mr. Stein. I don't think he was ever on our list. 

Mr. Kennedy. We would like to have the general ledger for the 
preferred-stock purchase fund. Do you want to w^rite these down? 
The preferred-stock purchase fund. We have already requested this, 
and I don't know^ why it was held out. 

Mr. Shapiro. The only reason is because nobody was there to take 
them. You are talking about a truckload of records. 

Mr. Kennedy. The preferred-stock purchase fund; allowance and 
discounts. 

Mr. Shapiro. Is this receipts, Mr. Kennedy, you are talking about ? 

Mr. Kennedy. These are the accounts which you removed from the 
general ledger. We would like to know whey they were removed. 

Mr. Shapiro. I think you know why. I thought we had an arrange- 
ment with you. We understood these were matters of private infor- 
mation for the company that had no relevancy to the question now at 
issue. 

Mr. Kennedy. Now we want them. 

Mr. Shapiro. We would like to raise that question, Mr. Kennedy. 
If there is any particular account that he refers to that does not involve 
the privacies of the company, then maybe we can work it out. I said 
that to Mr. Bellino in Philadelphia. But, certainly, the money we 
received, we certainly didn't receive it from any labor people. We re- 
ceived it in the ordinary course of our cash business. These are the 
questions we raise as not being pertinent to this issue. Any expendi- 
tures you have asked for we have given you, the whole ledger, except 
those items. 



11158 IMPROPER ACTIVITIES IN THE LABOR FIELD 

On the impression of what might have been taken, whatever was 
taken out of those books was taken with the agreement of Mr. Bellino, 
and he has a list of the pages and the titles of each page removed from 
the book. It is entirely the proposition of whether it is or is not per- 
tinent. 

The Chairman. The Chair will determine about that. You will be 
advised, 

Mr. Kennedy. What other financial transactions have you or your 
company, or any of the officials of Food Fair, had with Mr. Lapen- 
sohn? 

Mr. Stein. As far as I know, none. 

Mr. Kennedy. Has the Food Fair Co. ever made any payments to 
Mr. Lapensohn ? 

Mr. Stein. No, sir. 

Mr. Kennedy. They never have ? 

Mr. Stein. I am speaking for myself, and I am sure I am speaking 
for my associates. 

Mr. Kennedy. Your what ? 

Mr. Stein. My associates. 

Mr. Kennedy. Your associates/never have ? 

Mr. Stein. That is right. 

Mr. Kennedy. Have you? 

Mr. Stein. I said I am speaking for myself, and I am sure I could 
speak for my associates. 

Mr. Kennedy. Weil, have you discussed any other payments made 
by any of your associates to Mr. Lapensohn, the fact that they did 
make such payments ? 

Mr. Stein. No, I was trying to cover all of them when you raised 
the question. 

Mr. Kennedy. And also as far as your company ? 

Mr. Stein. That is right. 

Mr. Kennedy. The only transactions that you have had of any kind 
are the ones that we have discussed here today ? 

Mr. Stein. Yes, sir ; to the best of my knowledge. I am sure that is 
it. 

Mr. Kennedy, Also, dealing with Mr. Max Block, whose name 
appears on this stocklist, and about whose union Mr. Kopecky testi- 
fied, has Mr. Block ever approached you about giving any busmess to 
his son-in-law, Martin Zeitler? 

Mr. Stein. He did. 

Mr, Kennedy, And Mr, Zeitler is in a packaging and paper cor- 
poration. When did Mr. Block approach you on that ? 

Mr. Stein. It must be quite some years back. I don't recall, ex- 
actly, 

Mr. Kennedy. 1953? 

Mr. Stein. I gave the records to your investigator's. In fact, we 
sent a letter on it. You have a letter in the file. 

Mr. Kennedy. What did Mr. Block say to you at that time? 

Mr. Stein. He just asked if we had an opportunity to give his 
son-in-law some business, would we do it. I know for a long time he 
didn't get any business, because his price wasn't right. I remember 
that distinctly. It came up because a note was sent down to see if 
they could do some business with them, and they told us they couldn't 
because his price wasn't right. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11159 

Mr. Kennedy. Did you, in fact, do business with him later on? 

Mr. Stein. Eventually I understand they began doing some busi- 
ness. It was some time after his original request to me. 

Mr. Kennedy. How much business did you do with Mr. Zei tier's 
company ? 

Mr. Stein. You would have a better recollection, unless I have the 
letter with me. 

Mr. Kennedy. Let me give you the figures, and you tell me if they 
are incorrect: 1955, $48,729.68; 1956, $166,614.97; 1957, $298,361.26; 
making a total of $508,705.90. 

The Chairman. Is that substantially correct, so far as you know ? 

Mr. Stein. That is supposed to come from our records, sir. 

The Chairman, What kind of business is that ? 

Mr. Stein. I think — as I best can recollect, this was some years 
ago — they make cellophane bags, printed items, used in packaging 
merchandise and wrapping merchandise. 

The Chairman. As I understand it, Mr. Zeitler is the son-in-law 
of Mr. Block, and Mr. Block is an officer in the union ? 

Mr. Stein. I don't know. 

Mr. KoPECKY. Mr. Block is a vice president of the International 
Butchers' Union and, in addition, he is also president of two local 
butcher unions in New York, local 342 and local 640. These local 
unions have contracts with Food Fair Stores. 

The Chairman. Is there anything further ? 

Mr. Kennedy. He doesn't actually make the paper himself; does 
he, Mr. Stein ? You don't know ? \ 

Mr. Stein. No. 

Mr. Kennedy. Actually, they have between 11 and 17 percent of 
Food Fair's business ; isn't that right ? 

Mr. Stein. Is that what it has there ? 

Mr. Kennedy. Yes. 

Mr. Stein. Then that is what it is ? 

Mr. Kennedy. And Food Fair, in turn, amounts to about 40 percent 
of all of Mr. Zeitler's business. That is something you would have 
no knowledge of. 

The Chairman. You wouldn't know about that ? 

Mr. Stein. May I say this, and I think our records will so indicate, 
for a long time he couldn't get any business from us because he wasn't 
competitive. It may have been something like 6 months or more. 
We will be glad to submit the bills to show that it was always on a 
competitive basis. As you know, it is 11 to 17 percent, so we do about 
85 percent with other people. 

Mr. Kennedy. He was only married to Mr. Block's daughter in 
December of 1952. 

Mr. Shapiro. That wasn't our fault at all. We had nothing to do 
with it. 

Mr. Kennedy. Maybe that is why he didn't get business earlier. 

Mr. Lucas. Mr. Chairman, may I confer ? 

The Chairman. Yes. 

(Witness conferred with his counsel.) 

Mr. Stein. Mr. Chairman, my counsel reminds me of one of the 
salient facts I had not stated insofar as the drop shipments are 
concerned. 



11160 IMPROPER ACTIVITIES IN THE LABOR FIELD 

After the 1954 contract was signed we found ourselves in a tre- 
mendous hassle with 107 because they interpreted the contract differ- 
ently than we did. We interpreted that we would have our drop ship- 
ments as usual if we took on these 20 helpers. It was no more than 
about 2 weeks after the new year started Avhen we changed a store from 
one location to another and they refused to allow us to have drop ship- 
ments on the theory "as usual" meant only the old stores and we 
couldn't apply it to any new stores. 

The Chairman. They got a little technical with you ; didn't they ? 

Mr. Stein. All through 1955 and 1956 we did not make any trailer 
drops in any stores that were opened in those years. You had the 
impression that we had unlimited drops, but that is not correct. 

We could only drop them on stores which we had in operation prior 
to December 31, 1954. 

The Chairman. In other words, at the time of the contract. 

Mr. Stein. That is right. 

The Chairman. Any new venture after that, any new facility, you 
were denied the right to drop, according to their interpretation of the 
contract ? 

Mr. Stein. And we opened up, I would say, many, tens of stores, in 
the area, all of which were denied the drop shipments during those 2 
years. 

The Chairman. When we speak of unlimited, it was related to the 
contract, at the time of the contract. You thought you were getting 
them unlimited for all time, and then they raised that issue with you 
afterward. 

Mr. Stein. The second matter that we had is that in thinking we 
had the same rights as before, when we took our merchandise, truck- 
loads, from one warehouse to another, we always paid the contract 
rate. After the new contract was signed they compelled us to pay, I 
think, something like $3.16 per truckload over and above the normal 
rate specified in the contract. The third problem we had was, although 
the contract called for rates for fish drivers, if the truck of fish went 
from one warehouse to another, they compelled us to pay double time. 

In other words, for what was a 1-day run we would have to pay 2 
days. Those were only part of the many problems that we had with 
107. What I am attempting to say is we didn't have a bed of roses. 

The Chairman. I am sure you didn't. 

All right. Is there anything further ? 

Mr. Schwartz, come forward, please. 

TESTIMONY OF JULIUS S. SCHWARTZ, ACCOMPANIED BY HIS 
COUNSEL, SCOTT W. LUCAS AND HARRY SHAPIRO— Resumed 

The Chairman. Mr. Schwartz, you were sworn yesterday. You 
will remain under the same oath. 

I think your counsel requested or suggested that they wanted you 
to testify. I will let you start, and we will interrogate you later. 

Mr. Lucas. Mr. Chairman, I requested Mr. Schwartz to come and 
testify, but Mr. Stein has covered all that I expected Mr. Schwartz to 
testify on before this committee. 

The Chairman. All right. I was just giving him the opportunity 
to speak first. I thought he may have something in mind. 

All right, Mr. Kennedy. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11161 

Mr. Kennedy. Mr. Schwartz, did you approach any of these indi- 
viduals to determine whether they wished to buy any shares of stock of 
Food Fair? 

Mr. Schwartz. To my best recollection, I did not approach anybody 
specifically to buy stock. 

Mr. Kennedy. Do you deny that you made an approach to any of 
these individuals? 

Mr. Schwartz. I deny that I made a direct approach to anybody 
to buy stock. 

Mr. Kennedy. Do you deny that you discussed this ? 

Mr. Schwartz. No ; I do not deny that I discussed it. 

Mr. Kennedy. Mr. Eugene Kennedy states : 

In approximately August or September 1955, Mr. Jules Schwartz contacted me 
to determine whether I desired to purchase stock of Food Fair Properties, Inc., 
which was to be issued in the near future. 

Did you contact him at that time? 

Mr. Schwartz. I had a continuous relationship with him and many 
other union men, and we have many discussions. At the time that that 
stock was coming out, there was quite a bit of excitment around and I 
had many calls about it, not only calls from union people, but nonunion 
people, my neighbors, the dentist, and a lot of friends. 

In the particular case of Kennedy, I recall conversations with him. 

Mr. Kennedy. You do recall the conversation ? 

Mr. Schwartz. And we discussed stock. Not only on this stock, 
but on previous occasions, other stocks. 

Mr. Kennedy. Did you tell him at that time that this stock was 
available ? 

Mr. Schwartz. I wouldn't tell him that any stock was available for 
this reason. We had no stock for sale. 

Mr. Kennedy. Did you tell him there was a possibility of him 
securing some stock? 

Mr. Schwartz. There was a possibility, in that there was a new 
company being formed. We exchanged views, and I mentioned I 
would try to get it for him, or try to get him some. 

Mr. Kennedy. You would not deny this, I take it, that — 

in approximately August or September, Mr. Jules Schwartz contacted me and 
asked if I desired to obtain stock in Food Fair Properties. 

Mr. Schwartz. I don't know whether he contacted me or I con- 
tacted him. 

Mr. Kennedy. But you don't deny the statement ? 

Mr. Schwartz. That statement ? I am not sure of the statement. 

Mr. Kennedy. You don't deny it, do you, Mr. Schwartz? 

You do not deny the accuracy of the statement ? 

Mr. Schwartz. On one occasion or so, I may have been in touch with 
him, but I did not directly approach him first on that stock. 

Mr. Kennedy. Who approached who? 

Mr. Schwartz. I don't recall, but we did have discussions. 

Mr. Kennedy. He states that you did approach him. 

Jules Schwartz contacted me to determine whether I desired to purchase stock 
of Food Fair Properties. Inc., which was to be issued in the near future. 

Do you deny that you did that ? 

Mr. Schwartz. I don't think I did that. 

Mr. Kennedy. Do you think it is possible that you did it? 



11162 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Mr. Schwartz. It is possible. 

Mr. Kennedy. Then Anthony Matz states : 

In approximately the late summer of 1955, Mr. Julius Schwartz confronted me 
at the Cherry Hill Inn Restaurants located adjacent to the Garden State Race- 
track. This was the first occasion in a number of years that Mr. Schwartz 
and I had been in contact. After exchanging the usual greetings, Mr. Schwartz 
inquired as to whether I had any extra money. He elaborated on this state- 
ment to the effect that a new company was being formed to be known as Food 
Fair Properties, Inc. Mr. Schwartz further indicated to me I could get in on 
the ground floor of this company by being able to purchase the stock at $1 
a share. He also stated this would be a good investment, that I would not 
have to worry about risking my money, and that it was an investment which 
I could put away for a long time and forget about it. 

Is that correct ? 

Mr. Schwartz. I wouldn't agree with all of it. Of course, again 
I am testing my memory. There was discussion with Mr. Matz, and 
we had greetings. I think I may have suggested to him that a new 
company was being formed, but I certainly don't recall saying to him 
"you could buy this, put it away," and things of that type. 

Bear in mind, we had no stock for sale and I wasn't going around 
soliciting it. If I wanted to solicit, I could solicit hundreds of people. 

Mr. Kennedy. But you did discuss this stock with him? 

Mr. Schwartz. That is right. 

Mr. Kennedy. And you did point out to him at this meeting that 
the Food Fair Properties, Inc., that the stock for the Food Fair 
Properties, Inc., would be made available? 

Mr. Schwartz. It wasn't a meeting of any type. I think it was 
the night I was out with a couple of neighbors for dinner and I ran 
into him, and I recall several of the people at my dinner table talking 
about it. 

Mr. Kennedy. Did you tell him at that time there was a possi- 
bility 

Mr. Schwartz. That there was a possibility and I would try to 
get him some. 

Mr. Kennedy. You suggested this to him; did you not? 

Mr. Schwartz. I can't say definitely that I suggested to him. I 
don't remember. 

Mr. Kennedy. Do you deny that you did ? 

Mr. Schwartz. That I suggested it? 

Mr. Kennedy. Yes. 

Mr. Schwartz. I can't say that I deny it. I will admit that I 
talked to him about it. 

Mr. Kennedy. Mr. Matz says this is the only time he has ever 
purchased any stock, and this was the one transaction that he had. 

Mr. Schwartz. That is his business, not mine. 

Mr, Kennedy. But it would appear from all the facts surround- 
ing it, and the fact that Mr. Eugene Kennedy never purchased it, 
but his sister purchased it, it would make it appear that their state- 
ments as to what occurred are correct. 

Mr. Schwartz. I cannot agree that the statements are absolutely 
correct. 

Mr. Kennedy. You just can't deny ; is that correct ? 

Mr. Schwartz. I can't deny that I did talk to those men, and I 
talked to many othei^, union people and non-union people, neigh- 
bore, doctors, dentists, and among those there were hundreds of 
people on these lists. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11163 

Mr. Kennedy. Did you make it a practice to entertain union offi- 
cials occasionally ? 

Mr. Schwartz. Yes, I did. 

Mr. Kennedy. Did you ever entertain Mr. Lapensohn ? 

Mr. Schwartz. Never, 

Mr. Kennedy. You never took him out? 

Mr. Schwartz. No. 

Mr. Kennedy. How about Mr. Cohen? 

Mr. Schwartz. Do you mean Raymond Cohen? Never. I never 
met Raymond Cohen until 21/2 years after he took office. I never saw 
him before. 

Mr. Kennedy. What about Miss Seigel in Baltimore. Do you 
know her? 

Mr. Schwartz. I know her, yes. 

Mr. Kennedy. Who was she with ? 

Mr. Schwartz. She was a business agent for the clerks union for 
many years, and I will have to admit that she and I had our wrangles 
for 10 or 12 years, over the bargaining table. I 

Mr. Kennedy. She was ultimately fired by the Retail Clerks? 

Mr. Schwartz. I don't say she was fired. I think she got into the 
middle of a jurisdictional dispute and evidently resigned. 

Mr. Kennedy. She got fired from the Retail Clerks, as we un- 
derstand the records of the Retail Clerks, for being too close to the 
officials of Food Fair. 

Mr. Schwartz. I can say this to you right now, Mr. Kennedy, 
what you just said is news to me. 

Mr. Kennedy. Where did she go to work after the Retail Clerks ? 

Mr. Schwartz. I think she is with a poultry outfit in Baltimore. 

Mr. Kennedy. Where did she first go to work ? 

Mr. Schwartz. Immediately after that she came to work for us for 
a couple of months under a provision of the contract. 

Mr. Kennedy. She came to work for Food Fair ? 

Mr. Schwartz. Yes, under a provision in the contract. 

Mr. Kennedy. You had to give her a job? 

Mr. Schwartz. She had to have a job. I think there is a clause 
there that when a business agent is on leave 

Mr. Kennedy. She wasn't on leave. She was fired. 

Mr. Schwartz. No, she was on leave from us, from the company. I 
don't have a contract here, but there is a provision in most contracts 
that when an employee becomes a business agent, you make a provision 
for them to come back to work. We complied with our contract. 

Mr. Kennedy. Was that a contract with the union ? 

Mr. Schwartz. That is a contract with the union, yes. 

Mr. Kennedy. I think as long as the union fired her for betraying 
her trust, I doubt so much that they would have enforced the contract 
to insure that you gave her a job. 

Mr. Schwartz. I didn't even know she had been fired. 

Mr. l^ENNEDY. She went to work for you, you knew that, did you 
not? 

Mr. Schwartz. She was out of the union. I didn't know she was 
fired. Ithink the union was pfeced under trusteeship, wasn't it ? 

The Chairman. Mr. Schwartz, before you leave I think I ought to 
ask you this question, which I do not believe has been answered by 
you. 



11164 IMPROPER ACTIVITIES IN THE LABOR FIELD 

In Mr. Gannon's testimony yesterday with respect to the neijotia- 
tions just before the contract was made, during the period of nei^otia- 
tions, I tliink he said on the hist day that you received a telephone 
call about 10 minutes after Mr. Cohen had presumably telephoned Mr. 
Freedland. Did you receive such a call ? 

Mr, Schwartz. I never did. In fact, I was quite shocked to hear 
that story yesterday. 

The Chairman. You say that story is not true? 

Mr. Schwartz. It is not true. I did not receive the call. We sat 
in a room. If any phone calls came, they came m that room, and there 
were 8 or 10 other representatives of other companies at that time in 
there. 

The Chairman. I thought maybe you overlooked it. I want to know 
what the answer was. 

Mr. Schwartz. I heard the testimony and I burned. 

Mr. Shapiro. We were just talking about that. We Avere a little 
reluctant to cover it because of the lateness of the hour. 

The Chairman. I want to get this record as complete as I can. If 
something is said that someone thinks is untrue, that affects him, I 
want to give him the chance to answer it. 

Mr. Schwartz. Senator I want to thank you for that, too. 

The Chairman. I am not passing judgment, but it is in the record, 
and to me it is a pretty damaging statement. 

Mr. Schwartz. It was a mean statement, too. 

The Chairman. I didn't say that. You said that. That is a matter 
of opinion. But if you were under obligation, if your company had 
entered into this agreement with MTLR, as a membeFof it, and had 
given them the power of attorney, and then went out and negotiated 
on the side, or broke down the line, as they termed it, and by doing 
so in effect destroyed the bargaining effectiveness of the others, and 
they had to yield by reason of it, I think it is something that is out of 
line. 

(The witness conferred with counsel.) 

Mr. Schwartz. Getting back to that question of breaking the line, 
there was no line broken by us. 

The Chairman. If Mr. Gannon's testimony is true, with all of its 
implications as to the deal having been made by your company on the 
side with Mr. Cohen, in which he could come in there and call the head 
of your company and say, "Listen, are you going to standby what you 
told me," and was using that to establish the fact with the others he 
was negotiating with that the line had been broken, if those facts are 
true, then it looks to me like there was a breaking of the line. I don't 
see how anyone could draw any other conclusion. 

Mr. Schwartz. I might say this, that no line was broken, and the 
story is not true. I heard that story myself from Mr. Cohen. 

The Chairman. Is there anything further ? 

Mr. Shapiro. Would you mind letting him tell that conversation 
he had with Mr. Cohen yesterday, Mr. Chairman ? 

The Chairman. Mr. Cohen is here. That would be hearsay. Mr. 
Cohen is here and we have tried to get the truth out of him and he 
wouldn't talk. I couldn't call Mr. Cohen here and get anything out 
of him, I don't think. 

Mr. Schwartz. Maybe he will talk on this subject. 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11165 

Mr. Lucas. Mr. Chairman, this is extremely important, if the Chair 
will permit this witness to repeat exactly what Ray Cohen told this 
witness yesterday with respect to the telephone call. We don't vouch 
for Cohen's veracity, you understand, but I would like to have that 
story told anyway. 

The Chairman. I have no objection, only it is in a sense, cluttering 
up the record. I want to say this. When one in Mr. Cohen's position 
is given an opportunity to come up here and testify and help clear 
these things up, maybe because he didn't we are having to have other 
witnesses here. 

Mr. Lucas. I appreciate that, Mr. Chairman. But he did not take 
the fifth amendment on a number of things, and I doubt if he will 
take it on this question, about that telephone conversation. I would 
like to have Mr. Schw^artz repeat it if permissible. 

Mr. Kennedy. If I may say so, one of the points here is the relation- 
ship which has existed between Food Fair and 107. 

The Chairman. All of that can be taken into account. How long 
is the statement ? 

Mr. Lucas. It is a very short statement. 

The Chairman. Make it brief. But I want to say that the Chair — 
I will not say I would not believe what you say, but I am saying when 
a witness comes up and he evades, as Mr. Cohen has, he doesn't stand 
very high in dependability with me. 

Mr. Schwartz. I will give you the story as briefly as I can. It 
was a very, very difficult negotiation. On the last day of the nego- 
tiation, as you heard yesterday, Mr. Gannon carried the ball because 
Mr. Clark had collapsed a night or two before. I understand from 
Mr. Cohen, and this is Raymond Cohen and not Arnold Cohen, that in 
order to break the back a little bit he called Mr. Gannon in and they 
spoke for a minute or two, and then he made a play, which happens in 
negotiations, where he said : 

Look, you boys are tough, but I think they are folding. Food Fair is folding, 
and I will show you what I can do here. I am going to try to get George Fried- 
land on the phone. 

He dialed some numbers, as I understand it. Mr. Gannon went 
for it, and that was a breakdow^n, and we finally got a settlement. 
There never was a call. 

The Chairman. I can appreciate Mr. Cohen would do that, if he 
thought he would get by with it. You are not telling me anything I 
w^ould not suspect with regard to him. But I don't know whether 
Mr. Gannon would be so stupid or not unless or until he thought that 
that telephone call had come through to you. 

Is there anything further ? 

Senator Curtis. There was no subsequent call to you ? 

Mr. Schwartz. No, sir. 

The Chairman. That is very conflicting evidence. 
, Mr. Kennedy. I think, of course, we have to keep in mind that you 
had, as your bargaining representatives, the MTLR during this pe- 
riod of time ; that Mr. Blank does admit, and your company does ad- 
mit, that they carried on behind MTLR's back a meeting. Then 
there is Mr. Gannon's testimony that followed that this conversation 
with Mr. Cohen took place, the call was placed, the call was made, and 



11166 IMPROPER ACTIVITIES IN THE LABOR FIELD 

subsequently you got your unlimited drops, you put the 20 helpers 
on, and you got a better contract than anyone else. 

Mr. Schwartz. We did not. 

The Chairman. That is a matter of opinion, whether you got a 
better one or not. We have some proof here. You say you did not 
and others say you did. 

Senator Curtis. Who were the other people in the room at the time 
this second telephone call was testified to ? 

Mr, Schwartz. We weren't in the room. Presumably the second 
telephone call? I can give you the list of the people. * There were 
representatives in there from the Frankfort Grocery Co. 

Senator Curtis. Who was it? 

Mr. Schwartz. Herman Hyme. You had a representative from 
the William Montgomery Co. I think Robert Montgomery, You 
had two representatives from the Penn Fruit Co., from Barney Kor- 
schin, and a man named Patterson. You had in that room repre- 
sentatives of the American Stores, specifically, I think, Blaney Bar- 
ton, and it could have been their retired vice president in charge of 
labor, Fred Johnson. There might have been one or two others. That 
room is a large room used as a caucus room. Incidentally, too, as 
part of our negotiations, and the one that brought back this particu- 
lar settlement, happened to be the counsel for the MTLRA, Mr. Segal, 
Mr. Segal happens to be general counsel not only for the Motor 
Truckers Association but Penn Fruit Co. and also a director of that 
company. I heard here in testimony that 929, which was the union 
that they were members of, was not in this negotiation. But I do 
happen to have this in my pocket. When the Motor Transport Labor 
Relations put out the final settlement, here is what it read, and I 
think the committee has these facts in front of them. Here is a letter 
dated December 30, 1954, addressed to "Dear members," It is from 
the Motor Transport Labor Relations, Inc, 

Dear Members : We are enclosing a r^sum^ of the matters agreed upon is our 
negotiations with Mr. Raymond Cohen, secretary-treasurer of local 107, who 
acted as negotiator for his own local as well as for locals 470, 929, 676, 384. 312, 
and 381, all matters covered by this resume became effective January 1, 1955. 
As soon as the attorneys for this association and the attorneys for the union 
draw up the new agreements, copies will be mailed to each member of this as- 
sociation. Additional copies may be had for the cost of printing. We suggest 
you read this resume carefully and if you have any questions regarding it, 
call this office at once. 

Very truly yours, 

Motor Transport Labor Relations, Inc., 
James P. Clark, President. 
Hugh F. Gannon, 

Vice President and Treasurer. 

They were as much a part of this contract as anyone else and sat in 
the room while negotiating this. 

The Chahiman. All right, thank you very much. 

We will not announce the closing of the hearing, as it will be con- 
tinued. But the Chair wishes to express for the record the thanks of 
the committee to those staff members who have worked on these cases. 

On the Philadelphia case, they were Mr. Leo C. Nulty, Jerry Al- 
derman, Ralph DeCarlo, George S. Nash, Albert Vitarelli, Herbert 
Rose, John Flanagan, Francis X. Plant, J. Edgar Parkhurst, Ralph 
Mills, Carmine Bellino. On the New York case were Mr. Robert 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11167 

Dunne, Charles Wolfe, Francis Ward, Joseph Unger, and Andrew 
Macyko, Maurice Frame, Robert J, Cofini, Luther L. White, John 
Prinos. 

These staff members have a terrific job to do when we go into these 
investigations, especially as broad as these two have been, and particu- 
larly when we encounter the obstructions that we frequently do. 

In investigating locals 596 and 107, those who had the facts refused 
to give them, and we had to dig and dig to get them out. It is quite 
complimentary to the staff to be able to develop these things under 
such handicaps. I am grateful to them and wish to express that for 
the record. 

This has been done under the direction largely, of course, of chief 
counsel, Mr. Kennedy. 

This committee or no other committee of its kind could make any 
successful investigation without a staff that is competent and able to 
do this difficult work. 

The committee will stand in recess until 2 p. m. next Wednesday, 
May 14, the room where we will meet will have to be announced 
later. We are not sure that we can have the caucus room. If we can, 
we will be here. 

Mr. Lucas. Mr. Chairman, before the close of the record, we desire 
also to thank the chairman of this committee and the counsel and 
members of the staff, and also the other members of the committee who 
sat patiently and listened to the testimony that we offered. 

The Chairman. Thank you. Senator. I want to tell you again it 
is a pleasure to have you up here. I hope you hurry back. 

Mr. Shapiro. I want to add my words as a stranger, having been 
treated very courteously. 

(Whereupon, at 4 : 50 p. m. the committee adjourned, with the fol- 
lowing members present : Senators McClellan and Curtis, to reconvene 
at 2 p. m. Wednesday, May 14, 1968.) 



APPENDIX 



Exhibit No. 30A 



GVlOAjd Wal,' Paper & Paint Co. 

05110 



Wl^olesale and Retail Supplies 
N. E. CbR. 13th «& GIRARD AVE. 

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11169 



11170 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Exhibit No. 308 




Qi^OAjd Wa]^ Paper & Paint Co. 

Wholesale and Retafl Svpplies 05142 

N. E. COR. 18th & GIRARD AVE. 

PorctliU Enatifla • PmbUa FRemont 7-3204 

Philadelphia 28, Pa , I T ^^ iftK^ 



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IMPROPER ACTIVITIES IN THE LABOR FIELD 11171 



Exhibit No. 30C 



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Wholesale and Retail SappUcs 05603 

N. E. COR. 13th & GIRARD AVE. 

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21243 O— 38— pt. 28 23 



11172 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Exhibit No. 38 




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IMPROPER ACTIVITIES IN THE LABOR FIELD 11173 

Exhibit No. 39 




11174 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Exhibit No. 39A 




IMPROPER ACTIVITIES IN THE LABOR FIELD 11175 

Exhibit No. 39B 




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Exhibit No. 42 



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IMPROPER ACTIVITIES IN THE LABOR FIELD 11177 

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11178 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Exhibit No. 49A 
ATTACHMENT U 

Imprints of 3 steuaps furnished by Mrs. 
Lsfkovltz of Rolee. "Riese stamps made by 
True raft Printing Co. 



Ism. 



XQRKfIi)ERAliONIST\ 



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NEW YOP.i; 3TAT-; f£D:iA-,;:^i cf laqoh 

DEf'ClSIT TO ACCOONT CF 
NEW YORK FEDERATIONIST 



IMPROPER ACTIVITIES IN THE LABOR FIELD 11179 

Exhibit No. 52 



Mr. Hor 
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Mr. Ban* J. Hachold 
NlAgftra-Mohewk Power 
300 Erie Boulevard W 
Syracuse 2 , Hew York 

D«ar Mr. Macho Id: 

Wa wara a«tjcayly^lai<V4 to r^^flva your chack In tha amount of 
$7500.00 o^y^fTnfnhe hk ^lT^u tt of tha 1952 edition of the 
YORK FFD^^/tIONIST. ^ou can be sure this nonay will be put to 

good U8< 



wa return a copy of tha contract and 



On bahalf of^. ^qrtj Mrtira organisation I want to azpraaa o\ir alncara 
thanks for your woadarfnl cooperation. 

Sincaraly youra, 



IWL 
anoloiura 



D. M. Lion 

Director of Publicity 



11180 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Exhibit No. 52A 



Mr. Barl* J. Maehold, 
magarft-Holutwlc Powor 
300 Brl« Boul«T«r4, 1 
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Mar Mr, Haohold: 



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tissBsnt to app«ar in tho 1953 edition 
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toward fighting tbo proposod logls- 



70U. 



Wo prosiuM thar^wv-illll rocolvo copy and plats for the advertise- 
ment through the usual channels and we are enclosing Invoice, 
which please send to your accounting departaent. 

With kindest personal regards, I renaln 

Cordially yours. 



IWL 
enc. 



George Mason 



IMPROPER ACTIVITIES IN THE LABOR FIELD 
Exhibit No. 54A 



11181 







11182 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Exhibit No. 54B 




IMPROPER ACTIVITIES IN THE LABOR FIELD 11183 

Exhibit No. 56 




11184 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Exhibit No. 59A 




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IMPROPER ACTIVITIES IN THE LABOR FIELD 11185 



Exhibit No. 59B 




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11186 IMPROPER ACTIVITIES IN THE LABOR FIELD 

Exhibit No. 60F 



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