Mr. WIER. Let me ask one more question.

I asked you a few minutes ago if all that you were getting now recently has been the 1712 percent commission on these contracts. Your answer was "Yes, that is all I am getting." You cut out the so-called surplus cut. Apparently several unions here have advised you that there is so much money due you but as a result of a 50-percent cut-here is a teamster's union, $4,963. That of course was in 1950. It was 50 percent.

Mr. LIEVER. You are speaking of the same cases that originated in 1948.

Mr. WIER. Here are a couple of cases in September 1954 where you are entitled to a 50-percent return. One of them is the American Safety Cable Co.

Mr. LIEVER. I have canceled all the contracts, sir.

Mr. WIER. I am just reading what they say here. Here is September 20, 1954, Peoria Hotel and Restaurants.

Mr. LIEVER. The company officials will verify that I canceled all those contracts.

Mr. WIER. Since September?

Mr. LIEVER. July.

Chairman McCONNELL. Mr. Ike Gould, president of the Hotel and Restaurant Employees Local 508 and Bartenders Local 491, Atlantic City, N. J.

There will be another witness after that because I understand both of you wish to leave for Atlantic City.

Mr. Longsdorf will be called next. We will try to finish those two and we will call that the end of the day.

Will you raise your right hand. Do you solemnly swear to tell the truth, the whole truth, and nothing but the truth, so help you God? Mr. GOULD. Yes, sir.

Chairman MCCONNELL. Mr. Derrickson.

TESTIMONY OF IRVIN GOULD, PRESIDENT, HOTEL AND RESTAURANT EMPLOYEES LOCAL 508 AND BARTENDERS LOCAL 491, ATLANTIC CITY, N. J.

Mr. DERRICKSON. Mr. Gould, for the record, will you give your full name and address and position?

Mr. GOULD. My name is Irvin Gould, "Ike" is the nickname. Most people if they know me call me Ike. If they don't know me they call me Irvin.

Chairman McCONNELL. By the time we get through, we will call you Ike, then.

Mr. GOULD. And then the address, I live on a farm. It is Box 306, Absecon, N. J. I am a chicken farmer. The office is 3 South Mississippi Avenue. I am president and business manager of the local and president of the joint board which comprises Hotel and Restaurant Employees Local 508 and Bartenders Local 491.

Mr. DERRICKSON. You were in that position at the time these two funds were established in Atlantic City in 1948 and 1949; were you not?

Mr. GOULD. Sir, when you speak of 2 funds, I have heard of the 2 funds and I think there is an erroneous impression created as to the 2 funds of the 2 local unions. If I may clarify that I would like to,

especially after hearing Mr. Wier. This insurance fund was set up after a negotiating committee of the 2 local unions had met—in fulfillment of your desires, Mr. Wier, there are 8 or 9 of us on the committee and we decided after many months of negotiations that this is what would be acceptable and it was only acceptable by the union negotiating committee after ratification by the membership and it was not just a voice vote. We were so determined that it should be done the right way and there was much hesitation and general talk of the union membership as to the acceptability of the fund at that time because it was comparatively new in 1948.

It was a new endeavor and new thinking in a way that we had a secret ballot vote as to whether it should be accepted or not and it was accepted with a tremendous majority.

Mr. DERRICKSON. That was to have the fund and not with respect to any particular policy?

Mr. GOULD. As to the policy, again going along with the thinking there were from 5 to 7-I was trying to recollect the exact companies-bids were taken from all of these companies and you could call them sealed or closed because they were not available to any other than Mr. Frank Amstutz, of the chamber of commerce.

Mr. Amstutz was the executive secretary of the chamber of commerce and the executive secretary of the Hotelmen's Association and he was selected as a cotrustee by the employers' group, and I was selected by the union group as cotrustee. We took these bids and scrutinized them.

Mr. DERRICKSON. I want to get to that in a minute. Before we do, may I clarify this business of two funds? Isn't the way it is that although there is 1 union involved there are 2 policies, that the 1 policy covers the union employees and the employees of the associated hotels? Mr. GOULD. The reason for that is you see, you are a year ahead of time on that

Mr. DERRICKSON. Isn't it true that the first one was between the union, involving the union employees who worked in the associated hotels, and after that was set up, approximately a year, there was another policy issued covering the employees of two hotels? Mr. GOULD. I can explain that in full.

Mr. DERRICKSON. We just want to get the picture.

Mr. GOULD. You want to know why the two funds.

Mr. DERRICKSON. We just want to make clear why we are mentioning two policies here.

Mr. GOULD. I think if you knew why you would know why there were two funds.

Chairman McCONNELL. You tell it your way.

Mr. GOULD. That is the only way it can be clarified. I have a clear picture in my mind, Mr. Chairman, and that is what I want to bring out, that we had the entire hotel group that we had under contract in this one fund which is known as the Atlantic City Hotel Employees Insurance Fund, and still is.

In 1949 in negotiations the hotelmen canceled the contract which necessitated my people going out on the street and created a lockout or strike or whatever you may call it, and two of the hotels refused to go along with the associated group, namely, the Chelsea and the Ambassador, and that is why the two funds.

From then on, on July 1, 1949, after we had finally gotten together with the hotelmen and refined a contract, those two still stayed outside of the associated group, and we had to continue to give those people the coverage, and we gave them coverage under a fund which is known as the Hotel and Restaurant Employees Local Union 508Insurance Fund, covering the Ambassador and the Chelsea Hotels.

Mr. DERRICKSON. That is the reason why you have two funds?
Mr. GOULD. That is correct.

Mr. GRAHAM. Could I interrupt for a second and ask whether the meeting that you took it up with the full membership was for the purpose of negotiating for a trust fund?

Mr. GOULD. It was for the purpose of accepting the insurance fund, the insurance in the negotiations, ratifying what the negotiating committee had decided could be gotten at in the negotiations at that time because we started negotiating in December and it was then into July. Mr. DERRICKSON. Mr. Gould, how did you meet Mr. Earl Liever? When did you first meet him? How did this come about?

Mr. GOULD. I was truthfully trying to recollect how Mr. Liever got his bid in, and I believe one of our men that was on the field had recommended that the teamsters in Reading just had a program presented and would I consider a bid from this man, who turned out to be Earl Liever. I said, "I am taking bids from everyone because"using the phraseology of Mr. McConnell, the chairman "I am looking for the best benefit for the least expenditures."

Mr. DERRICKSON. Then his name was suggested to you by a man in the field. Do you mean one of your international representatives? Mr. GOULD. I am not certain.

Mr. DERRICKSON. Would you remember whether it was Mr. Ross? Mr. GOULD. Probably it was because Mr. Ross is a close friend of mine. He is an international representative. He is now our international vice president, and he visited with me as a friend, which he had even before he was with the international and before I was with the international because primarily when I got out of the service I was placed on the payroll as an international representative. Now I am on leave of absence with the international since I maintained the position I have had.

Mr. DERRICKSON. So it may have been him?

Mr. GOULD. So it may have been him.

Mr. DERRICKSON. What happened next? When did you first meet Mr. Liever himself in person?

Mr. GOULD. Again, if I am not mistaken, the first time I met Mr. Liever was when Mr. Liever-I was going to say Frasch, I think the name was—and Mr. Smith, Darrell Smith, and I met him again today for the first time in years and I am not certain whether Mr. Ross was at my home or not. It is right off a main highway going to Atlantic City where we have our home at the farm. They stopped in and presented the bid, what they had to sell us, and the worth of it. All I said to them was, "I will gladly take this to my cotrustee and give it all due consideration with these other bids."

Mr. DERRICKSON. Now, this morning you heard Mr. Liever say that the bids were presented to the trustees, in the Chamber of Commerce Building at a meeting. Were you at that meeting?

Mr. GOULD. Certainly.

Mr. DERRICKSON. And these bids of all these companies were presented at that time? Do you recall that?

Mr. GOULD. Mr. Amstutz, as I told you, was the cotrustee, and myself had those contracts at his office which was in the chamber of commerce quarters.

Mr. DERRICKSON. Were they sent to you by mail? I think in the case of the American Casualty they were brought in in person.

Mr. GOULD. They were brought personally. They were brought personally in the case of the Union Labor Life Insurance Co. They were brought personally by agents of two others, and I am uncertain now whether the Blue Cross was sent through the mail or presented personally, but there were 5 to 7 different bids that we worked on.

Mr. DERRICKSON. When they were presented, they were presented to you and Mr. Amstutz, the employer trustee, and there were only two?

Mr. GOULD. That is right.

Mr. DERRICKSON. You considered them together?

Mr. GOULD. That is correct.

Mr. DERRICKSON. Now, when you considered them, you and the other employer trustee determined that American Casualty was the company from whom you wanted to buy?

Mr. GOULD. Yes. The American Casualty was the American Casualty pertaining to the hospitalization, and life was the Connecticut General Life, because in the picture-not at that time but a little laterwe had a Mr. Niel who was then an executive with the Connecticut General Life who presented the cost, the premium cost of the $1,000 life on the term policy.

Mr. DERRICKSON. This analysis and consideration of these bids was made by you and Mr. Amstutz?

Mr. GOULD. That is correct.

Mr. DERRICKSON. And a decision made by you?

Mr. GOULD. That is correct.

Mr. DERRICKSON. At the time of this meeting you mentioned that Mr. Frasch, Mr. Liever, and Mr. Ross came to your house on the way down.

Mr. GOULD. I said I am uncertain whether Mr. Ross was there or not. It was Mr. Darrell Smith. Mr. Ross may have been there at that time.

Mr. DERRICKSON. Was Mr. Amstutz there?

Mr. GOULD. No.

Mr. DERRICKSON. Was that prior to the meeting when you and Mr. Amstutz considered the bids?

Mr. GOULD. Prior to the meeting?

Mr. DERRICKSON. Yes.

Mr. GOULD. Surely.

Mr. DERRICKSON. At that time you had the bids of the other companies?

Mr. GOULD. We did not have them all. I think it was a period of several weeks before there was any decision made.

Mr. DERRICKSON. What happened at that day at your home? Did you go over the bids?

Mr. GOULD. They did not see the bids. The bids were in Mr. Amstutz's office.

Mr. DERRICKSON. You did not open any bids that day in your home?

Mr. GOULD. I had none. How could I open them?

Mr. DERRICKSON. I am just asking you the question.

Mr. GOULD. I am trying to answer them as emphatically as I can. Mr. DERRICKSON. Then you are saying that that day they came to your home, which was prior to the consideration of bids by you and Mr. Amstutz, that Mr. Liever-and you say Mr. Smith.

Mr. GOULD. I believe Mr. Smith and Mr. Frasch.

Mr. DERRICKSON. Came to your home and you simply talked about what they had to offer?

Mr. GOULD. That is correct.

Mr. DERRICKSON. You did not have bids of other companies in order to make any comparisons?

Mr. GOULD. No, sir.

Mr. DERRICKSON. Can you establish what date that was?

Mr. GOULD. I cannot, sir, because it was sometime in July that we consummated the contract, which would give you the legal right to go into insurance coverage. So it was sometime in July, probably the first or second week. I would not know, because if I am not mistaken, it was August 1 of 1948, that the insurance coverage was supposed to have started. It could have been June or July because we allowed receipts of several months to go into the fund to build up somewhat of a

reserve.

Mr. DERRICKSON. Mr. Gould, this discussion of American Casualty Co.'s bid which you had that day with those people in your home without Mr. Amstutz, were similar kinds of meetings held with representatives of other insurance companies that had made bids? Did you have other meeetings with those companies to consider what they had to offer in your home without Mr. Amstutz?

Mr. GOULD. That was the only one that was in my home. I think that was on a weekend.

Mr. DERRICKSON. Did you have them anywhere else?

Mr. GOULD. I had them at my office. I believe I had two other men come to visit me at my own office with their bids. I conveyed them to my cotrustee, Mr. Amstutz.

Mr. DERRICKSON. Mr. Amstutz was not there?

Mr. GOULD. There was no decision made on my part. I only took their bids and what they had to say with respect to their bringing them to me.

Mr. DERRICKSON. During any of these discussions and at the time you and Mr. Amstutz discussed these and decided to take the American Casualty Co. proposal, did you know what the retention rate would be!

Mr. GOULD. Sir, truthfully, I knew nothing of retention rate. I thought I knew a little bit about insurance because one of my duties in the Army was an insurance officer, and I sold a lot of insurance to my men, but I didn't understand retrospect or any of that that I have heard today.

Mr. DERRICKSON. Did you know what rate of commission Mr. Liever was going to receive on that policy?

Mr. GOULD. No, sir, not at that time.

Mr. DERRICKSON. Did you know anything about the retrospectivecommission agreement which was entered into 1 year later?

Mr. GOULD. No, sir, not at all.

Mr. DERRICKSON. When did you first hear about that retrospective commission agreement?