The CHAIRMAN. Right there, was there any pressure applied to any individual to get his vote in accord with the selection of Mr. McCormick?

Mr. HANLEY. Well, Mr. Chairman, as to pressure, I could say that I don't believe there was any pressure imposed upon anyone or any coercion. I am going to be honest and frank with this committee that I felt Mr. McCormick could do a good job. He had assisted in the negotiation and so on, and I naturally used my influence among the union people to support Mr. McCormick. I felt he was the man to carry on the job.

The CHAIRMAN. As to the employers, was there any threat of strikes or strike action if he were not approved?

Mr. HANLEY. No, sir; not by me.

The CHAIRMAN. Was there any that you know of?

Mr. HANLEY. Not to my knowledge, sir.

Mr. MILLER. It is not quite clear in my mind just what official capacity Mr. Hanley was operating in.

Mr. HANLEY. International representative for the international union.

Mr. MILLER. Did that qualify you to participate in this organization, in these operations, leading up to this?

Mr. HANLEY. May I explain that to you, Mr. Miller?

Mr. MILLER. Yes.

Mr. HANLEY. As international representative, I was required to assist local unions in the settlement-in negotiations, in the settlement of wage contracts, in the settlement of health and welfare plans, or in the settlement of any other disputes that may arise between the employer and the union. If I may go a step further, the sheet metal workers international association has a standard form of agreement that is nationwide, not only in the United States but in Canada. And in that agreement, there is a provision known as article VIII, section 2, which provides that any time that a dispute or controversy arises that cannot be settled by the local representative or by a representative representing the employers and the union, that the matter must immediately be referred to: one, the international association and the association representing the contractors, or the individual, or attorney, and they are to select 1 representative and the employers are to select 1 representative for the purpose of settling this dispute without a stoppage of work, strike, or lockout during the pendency of the dispute.

In other words, Mr. Miller, if I may explain further, if the sheetmetal contractors had a dispute with local 108, local 108 could not engage in a strike or shutdown or slowdown or cessation of work; and the contractors cannot lock out the men during the pendency of that dispute.

In other words, if I may, as an illustration-I would like to use one. May I do so, Mr. Chairman ?

The CHAIRMAN. Sure; go ahead.

Mr. HANLEY. For instance, we had a dispute here in the city of Los Angeles over what is known as a power-activated tool. A poweractivated tool is a gun that is used that uses cartridges, and long nails or spikes that can be driven in concrete or steel by the force of the impact of this cartridge. That is used many times in securing angleirons to walls; it is used in securing plates on foundations; it is used

53814-54-pt. 1—19

in many operations. That was a tool that was in common use and practice by the sheet-metal contractors throughout the Nation. Many small areas do not have them; they are not familiar with them, but in most of the metropolitan areas they are used and they are figured when the contractor is figuring the job.

In other words, the sheet-metal worker is always involved or always working on the installation of air-conditioning equipment or what is known as duct work which houses the air for the distribution throughout a building.

When a contractor is bidding a job—for instance, if he was bidding the installation of air conditioning in this building-would naturally bid it based on the fact that he was to use a power-activated tool to secure his angle irons or supports to the ceiling to hang that duct work from.

Do you follow me?

Mr. MILLER. I sure do.

Mr. HANLEY. So our local membership in local 108, I say "our membership"; the membership of the international association, became very much aroused because two men had been accidentally killed throughout the State of California, two or three-I wouldn't be exact, Mr. Chairman-over the firing of these tools or this cartridge through a wall. Some men were hit on the other side and were killed.

In other words, the spike they were securing the duct to the wall with, went through the wall, through the plaster, and hit a man in the chest on the other side and went through another man.

Mr. MILLER. Can the witness expedite it?

Mr. HANLEY. I can expedite this in just a minute. Our membership in local 108 voted to discontinue the use of those tools, abruptly. Naturally, the sheet metal contractors knew that would cost their people thousands of dollars. The membership were going to go on strike. It was not going to use those tools anymore.

The matter was immediately referred to me and referred to Mr. Ely and was settled without a day's loss of work or a man-hour lost. That was my job as international representative, to immediately come to Los Angeles, tell the membership

You are to continue to work, there will be no disruption, and this will he settled according to article VIII, section 2.

My job was also to settle wage disputes, to assist in establishing welfare plans or other benefits, such as travel time, transportation, subsistence, et cetera. That was my function. Or to settle any other dispute that was assigned to me by the general president.

Mr. MILLER. I thank you. That is all.

The CHAIRMAN. Counsel, you may proceed.

Mr. MCCABE. I want to leave this point that Mr. Miller brought up for just a moment to go back for a second, Mr. Hanley, to this matter of selecting the administrator. I wonder if you would care to comment further? You mentioned, if I recall your words, that the employer group said something to the effect that "It is all right with us if you want to select the administrator and we will pick the auditor." Mr. HANLEY. That is true.

Mr. MCCABE. It has also been testified to that the conversation was more along the lines that "since you have already selected the administrator, we want to select the auditor." Is that true, sir?

Mr. HANLEY. Well, I can't say exactly whether that is true. There was some conversation as to "We select the auditor; you select the administrator. We want to select the auditor." I think that statement was made by Mr. Ely or Mr. Epstein or someone in his group. Anyway, I believe the gentleman's name was Mr. Dawson who was originally selected as the auditor of the fund. I can't tell the counsel or this committee honestly what was said 4 years ago in a meeting, but there was something to that conversation or somewhere along those lines.

The CHAIRMAN. Was Mr. Dawson the selection of Mr. Epstein, Mr. Ely, and his group?

Mr. HANLEY. Yes, sir.

Mr. MCCABE. What I wanted to bring out was the gist of this operation, whether the selection was presented to the employers as an accomplished fact, whether the selection had already been made, and whether it was accepted by them as a matter over which they had no practical control, or whether they merely said, "Well, you select the administrator, and then we will select the auditor."

There is a sharp distinction between those two situations and I would like to have you clarify it insofar as you can, sir.

Mr. HANLEY. Well, as to the selection, if the employers had not wanted to accept the selection of Mr. McCormick or the union selecting the administrator after the original negotiations with Mr. Epstein and his group, the employers could have certainly voted against it and we would have been in a tie vote and we would have not been able to appoint Mr. McCormick.

Mr. MCCABE. Can you tell us more precisely whether the conversation was along the lines, as I said at the outset, of the employer saying "If you want to select the administrator, we will pick the auditor," or along the lines of "Since you have already selected the administrator, we will then select the auditor." Which would you say would be the correct description of the transaction?

Mr. HANLEY. I didn't get that question.

Will you repeat it again, please?

(The reporter read from his notes as requested.)

Mr. HANLEY. Well, I couldn't say exactly what the statement was, whether the employer said, "Since you have already selected the administrator, we will select the auditor." I can't tell you whether that was the exact verbatim statement or not. But I had previously agreed with Mr. Epstein and his committee that we would select the administrator.

Mr. MCCABE. Mr. Hanley, since you cannot tell us, as you say, which was the verbatim report of the matter, can you tell us which was the fact of the matter?

Mr. HANLEY. No, I cannot. If I couldn't tell you verbatim, I couldn't tell you the fact of the matter.

Mr. MCCABE. Now, I would like to refer back to the conversation you had with Congressman Miller on the matter of your participation in these negotiations. You mentioned in your own earlier statement that you were advising and counseling with this local group. I would like to read to you, Mr. Hanley, and I will hand you this after I finish reading a short portion of it, from the constitution and ritual of the SheetMetal Workers International Association. I read to you article XI,

which is headed, "Local Union and Counsel Benefit Plans. Section 1. Responsibility."

It reads:

Whenever a local union or council establishes and operates any local district or State plan to provide sick, out-of-work, or death benefit or any other form of benefit or relief for the members thereof, said local union and council assume full responsibility for the operation and likewise full liability for the payment of all financial obligations in accordance with the established rules and regulations governing said local benefit or relief plans, and likewise in accordance with the laws of their respective States or Territories. This association shall not be in any way financially or otherwise connected, involved, responsible, or liable for the payment of any claims or judgments filed or rendered against any local union or council in connection with said local sick, out-of-work, or death benefit or other local benefit or relief plans.

Local union funds, derived from sources specified in this constitution, shall not be appropriated, loaned or donated to support or otherwise finance any of the benefit or relief plans referred to in this section or to otherwise provide relief or to maintain the good standing of members.

Participation in the above-mentioned local, district or State plans shall be purely optional, and no member shall be required as a condition of membership to participate in said plan or to contribute to the support and maintenance thereof.

Mr. Chairman, that is the end of the reading of article XI.

Now, Mr. Hanley, I would like to hand you this so that you may refresh your recollection by reading it. I would like to ask you to tell the committee how, in the light of this article, you felt that, as an international representative, you could and should participate in these welfare plan operations.

(Document handed.)

Mr. HANLEY. Very good. As international representative, I was governed by the directives and the orders of the general president of the international association, Robert Byron, and when a local union opens its agreement-when I said "opened," excuse me, Mr. Chairman-when it reopens its agreement for annual wage negotiations, it is required to notify the international association of the amount which it is requesting from the employers. It is, also, required to notify the international association of any additional benefits that it is seeking, such as an increase in travel time or in mileage, such as the establishment of a welfare plan, such as the establishment of a vacation fund or a pension fund. Before that union can get approval to take any strike action or any economic action, the international union assigns myself or whatever representative is in that district to make a thorough investigation and to meet with the parties involved, the employers and the union, and a complete report to the general office as to what the nature of the dispute is and whether requests that the union is asking are in line with the normal requests and whether or not they can be justified by area practice or by metropolitan area practice.

We make a report to the general office and the union is advised whether or not they can proceed to continue to negotiate that point with the employers.

In other words, the international association, according to article II, section 3 (b), the general president has complete authority to take away the rights of the local union to negotiate anything if they so elected and feel that it cannot be justified or that it is going to cause a large loss of time to the employer and a large loss of money to the membership.

So, namely, how I became involved in the welfare plans is through the fact that the local union here, 108, sends a request to the general office, or local 273 in Santa Barbara, saying, "We want to establish a vacation fund, a welfare fund, or a pension fund."

Before they are permitted to take any action in reference to that negotiation, a thorough investigation must be made by the international representative in the district or a special representative assigned by the general president, and then the general president must communicate with the local union or the representative thereafter.

So, naturally, when I come to this area, I am negotiating with the employers for the establishment of a welfare fund which the local union is attempting to establish. Or, first I come in and make a preliminary investigation and write back to the general president and say, "The local union is requesting of the employers the maximum allowable under wage regulations and in addition thereto they are requesting from the employers the establishment of a welfare plan at so many cents per hour, and the welfare plan is to provide the following benefits. It is my recommendation that you permit this local union to continue or that you notify this local union that this is not established in the area or that you feel it would cause a great loss of man-hours or time, and, therefore, they should wait another year."

Mr. MCCABE. Mr. Hanley, I think the committee can well appreciate how the international union would want to know about activities going on, and how it would be necessary to report back, but I do not think that goes directly to the question which Mr. Miller raised a while ago, and which I would like to pinpoint now. That question. is this: Even though as international representative you were required to be informed of the activities of local unions in your area, at the same time can you reconcile the active, direct participation in these negotiations, which has been testified to here, with the article in the international constitution which specifies rather clearly, I think, that all welfare and health plans be matters of local concern and that the international will have no responsibility, financial, or otherwise?

Mr. HANLEY. It says financial or otherwise, but it does not say that a local union shall be given permission to strike over a welfare plan. It does not say that the international shall not tell the local union when they are out of line.

For instance, Mr. Counsel, we have had some local unions that asked 70 cents an hour increase in wages, or maybe 15 or 20 cents an hour in other benefits, that cannot be approved, and it is completely out of line. Then, I think it is the international's business or international's right to say, "You are completely out of line." That only prevents labor disputes.

Mr. MCCABE. Granting that, in your earlier discussion of the development of this plan, you indicated nothing out of line in these negotiations. What I would like to determine, sir, is the participation, the active participation, of an international representative in negotiations which, by the constitution, are directed to be primarily and entirely local.

Mr. HANLEY. They are directed to be primarily entirely local with reference to the operation or the financial operations of the plan. But it does not say in this constitution that the international will not