Mr. TOLAND. Who is Mr. Davis? Mr. VAN DAME. Mr. A. F. Davis is the secretary and vice president of our company. Mr. TOLAND. I show you a photostatic reproduction of a check of the same date, December 20, 1941, bearing your signature, and ask you if that wasn't a bonus to Mr. Davis? Mr. ANDERSON. How much is it, Mr. Toland? Mr. TOLAND. $50,000. Mr. VAN DAME. That is correct. (The check, dated December 20, 1941, was received in evidence, marked "Exhibit No. 338," and is filed with the committee.) Mr. TOLAND. And Mr. Davis's salary is what? Mr. VAN DAME. In 1941 Mr. Davis's salary was $6,634.08. Mr. TOLAND. Right. The total amount that he received of salary, dividends, and bonuses for the year 1941, Mr. Chairman, was $135,614. Now, who is Mr. T. E. Jerabek? Mr. VAN DAME. Mr. Jerabek is a metallurgist who is in research development in our electrode plant. Mr. TOLAND. Isn't he classified on the pay roll of your company as a plant foreman? Mr. VAN DAME. I would say he could be classified as that. Mr. TOLAND. Well, isn't he? Isn't it a matter of fact that the records of your company show that Mr. Jerabek is a plant foreman? Mr. VAN DAME. The pay roll records do not show the classification, Mr. Toland. Mr. TOLAND. The records of the company as to his title. Isn't it true that he is designated as a plant foreman? Isn't his salary $4,120 a year? Mr. VAN DAME. That is right; $4,141. Mr. TOLAND. I show you a check bearing your signature for $25,000 to Mr. Jerabek, dated December 20, 1941, and ask you if that wasn't a bonus to Mr. Jerabek? Mr. VAN DAME. That is correct. (The check dated December 20, 1941, was received in evidence, marked "Exhibit No. 339," and is filed with the committee.) Mr. TOLAND. Who is William Irrgang? Mr. VAN DAME. Mr. Irrgang? Mr. Irrgang is located in plant 2, and is in charge of the development of War Department machinery. Mr. TOLAND. What is his title? Is he another foreman? Mr. VAN DAME. Yes; he could be classified as a foreman. Mr. TOLAND. I show you a photostatic reproduction of a check of December 20, 1941, in the amount of $15,000, and ask you if that wasn't a bonus to Mr. Irrgang? Mr. VAN DAME. That is right. (The check dated December 20, 1941, was received in evidence, marked "Exhibit No. 340," and is filed with the committee.) Mr. TOLAND. What is his salary? Mr. VAN DAME. I don't have that here. Mr. DREWRY. What was the amount of that check? Mr. TOLAND. $15,000. Mr. VAN DAME. I could estimate it. It is approximately $330 a month. Mr. TOLAND. Less than $4,000 a year, or approximately $4,000 a year? Mr. VAN DAME. That is right. Mr. TOLAND. I show you a photostatic copy of a check to Mr. Dill. I ask you who Mr. Dill is. Mr. VAN DAME. Mr. Dill is general counsel of the Lincoln Electric Co. Mr. TOLAND. And his compensation per annum is what? Mr. VAN DAME. In 1941 he earned $5,192.40. Mr. TOLAND. Right. I show you a photostatic reproduction of a check to Mr. Dill in the amount of $15,000 bearing your signature, and ask you if that wasn't a bonus? Mr. VAN DAME. That is right. (The check dated December 20, 1941, was received in evidence, marked "Exhibit No. 341," and is filed with the committee.) The CHAIRMAN. That is a lawyer. Mr. DILL. I am a kept lawyer. Mr. TOLAND. Who is Mr. Č. J. Bowers? Mr. VAN DAME. Mr. Bowers is our production manager. Mr. TOLAND. What is his annual salary? Mr. VAN DAME. I am sorry, but I don't have that here. It is approximately five or six thousand a year. exactly. Do you want to know it exactly? I can give that to you Mr. TOLAND. I would like to have the exact figures. Mr. VAN DAME. During the year 1941 Mr. Bowers earned $5,620.63. Mr. TOLAND. Yes. I show you photostatic reproduction of a check to Mr. Bowers bearing your signature dated December 20, 1941, in the amount of $13,000, and ask you if that wasn't a bonus? Mr. VAN DAME. That is right. Mr. TOLAND. I offer it in evidence. (The check dated December 20, 1941, was received in evidence, marked "Exhibit No. 342," and is filed with the committee.) Mr. TOLAND. Who is Mr. J. H. Morris, Jr.? Mr. VAN DAME. Mr. Morris, Jr., is the superintendent of plant No. 2, which is our electrode plant. Mr. TOLAND. And his salary in 1941 was $3,906, isn't that right? Mr. VAN DAME. Approximately. Mr. TOLAND. I show you a photostatic reproduction of a check bearing your signature to Mr. Morris, in the amount of $12,500, dated December 20, 1941, and ask you if that wasn't a bonus? Mr. VAN DAME. That is right. (The check dated December 20, 1941, was received in evidence, marked "Exhibit No. 343," and is filed with the committee.) Mr. TOLAND. Who is Mr. Dewald? Mr. VAN DAME. Mr. Dewald is the assistant to the vice president, and he is also in charge of our order department. Mr. TOLAND. What is his salary per annum? Mr. VAN DAME. In 1941 Mr. Dewald earned $3,958.27. Mr. TOLAND. Yes. I show you photostatic copy of a check dated December 20, 1941, bearing your signature, payable to Mr. Dewald, in the amount of $12,500, and ask you if that wasn't a bonus? Mr. VAN DAME. That is right. (The check dated December 20, 1941, was received in evidence, marked "Exhibit No. 344," and is filed with the committee.) Mr. TOLAND. Who is Mr. Raudebaugh? Mr. VAN DAME. Mr. Raudebaugh is manager of our cost depart ment. Mr. TOLAND. What is his salary per annum-in 1941? Mr. VAN DAME. In 1941 Mr. Raudebaugh earned $4,677.80. Mr. TOLAND. I show you photostatic reproduction of a check bearing your signature dated December 20, 1941, payable to the order of Mr. Raudebaugh, in the amount of $12,000, and ask you if that wasn't a bonus? Mr. VAN DAME. That is right. (The check dated December 20, 1941, was received in evidence, marked "Exhibit No. 345," and is filed with the committee.) Mr. TOLAND. Who is Mr. Griesinger? Mr. VAN DAME. Mr. Griesinger is the manager of our credit department; in other words, credit manager. Mr. TOLAND. How much does he get a year? Mr. VAN DAME. In the year 1941 Mr. Griesinger earned $3,426.91. Mr. TOLAND. I show you a photostatic reproduction of a check dated December 20, 1941, payable to Mr. Griesinger's order in the amount of $12,000, and ask you if that wasn't a bonus? Mr. VAN DAME. That is right. (The check dated December 20, 1941, was received in evidence, marked "Exhibit No. 346," and is filed with the committee.) Mr. TOLAND. Who is Mr. Hale? Mr. VAN DAME. Mr. Hale is our purchasing agent. Mr. TOLAND. What is his salary, or what was it in 1941? Mr. VAN DAME. In 1941 Mr. Hale earned $2,734.69. Mr. TOLAND. I show you a photostatic copy As the The CHAIRMAN (interposing). One moment, Mr. Toland. members know, we have up today the conference report on the pay bill for the Army and Navy and Marine Corps, and there probably will be a direct vote on the question as to whether or not the conference vote will be agreed to in regard to the pay of the lower grades. We had better take a recess, because we must have a roll-call vote on that. I imagine that the debate on the conference report will run an hour, and we ought to be able to continue this at 2:30. Mr. TOLAND. I would like to finish with these people. They are the principal people at this plant, and I don't want to keep them longer. The CHAIRMAN. We can't do both at the same time. The CHAIRMAN. All right. We shall take a recess until 2 o'clock. All witnesses be back. (Whereupon, at 11:15 a. m., the committee recessed until 2 p. m.) AFTER RECESS The hearing was resumed at 3 p. m., the chairman, Representative Vinson, presiding. The CHAIRMAN. Let the witness come back to the stand, please. Mr. TOLAND. Mr. Van Dame, will you tell the committee who Mr. George Hale is and what he does? Mr. VAN DAME. Mr. Hale is the purchasing agent of our company. Mr. TOLAND. I show you a check in the amount of $7,495.12, dated December 20, 1941, bearing your signature, and ask you if that is a bonus? Mr. VAN DAME. That is right. (Check referred to, dated December 20, 1941, was received in evidence, marked "Exhibit No. 347," and is filed with the committee.) Mr. TOLAND. Who is Edward E. Lodge? Mr. VAN DAME. Edward E. Lodge is foreman of the pump-press department. Mr. TOLAND. What is his annual compensation? Mr. TOLAND. You don't have it? Do you know? Mr. VAN DAME. I would estimate it at around $3,300 to $3,500 a year. Mr. TOLAND. I show you a check in the amount of $4,500 and ask you if that was a bonus? Mr. VAN DAME. Yes: it is. (Check referred to, dated December 20, 1941, was received in evidence, and marked "Exhibit No. 348," and is filed with the committee.) Mr. TOLAND. I hand you a group of photostatic reproductions of checks for 1940 and 1941 bearing your signature and I would like you to identify them as all being bonuses. Mr. COLE. Mr. Toland, are you going to show bonuses paid to these same individuals for 1940 and 1939? Mr. TOLAND. I am putting checks in for some of them for 1940 and 1941. Then I am showing the total bonuses paid by the company, and salaries, for those years. Mr. COLE. For 1939, 1940, and 1941? Mr. TOLAND. Yes, sir. Mr. COLE. I understand it is the position of this company that the payment of bonuses is a customary process. If we have only the bonus for 1941, we can't tell whether it is an increase over their normal basis. Mr. TOLAND. I have that. Mr. COLE. We will have to have it broken down on a comparative basis for individuals rather than just the total in dollars. Mr. TOLAND. I have the totals, and then we have shown it as to the principal officers. I have it for 1939, 1940, and 1941, which I am going to put in also. You have identified those as all bonus checks for 1941 and 1940? Mr. VAN DAME (examining the checks). Yes, sir; they are. (Checks referred to, 38 in number, were received in evidence, marked "Exhibits Nos. 349A through 349LL," and are filed with the committee.) Mr. TOLAND. I would like to offer in evidence, Mr. Chairman, a compilation of all the salaries and bonuses of the company for the years 1934 to 1941. The CHAIRMAN. Let's take the bonus separate from the salaries. (Compilation of bonuses and salaries referred to was received in evidence, marked "Exhibit No. 350," and is printed in the appendix of this volume.) 70533-42-vol. 4— 4 Mr. TOLAND. In 1939, the year in question by Mr. Cole, the office bonuses were $202,079.16, and the factory bonuses were $282,752.81, making a total of $484,831.97. The CHAIRMAN. What year? Mr. TOLAND. That is 1939. That was 134, percent increase over the bonuses of 1938. In 1940, the office bonuses were $357,720.34; the factory bonuses, $600,960.52, making a total of $958,680.86, representing 97 percent increase over 1939. Mr. MAAS. What was the increase in their gross volume that year? Mr. TOLAND. The increase in the gross volume: from 1938 they went from $6,000,000 to $24,000,000 in 1941, and this year it is expected to be $36,000,000. Mr. MAAS. Then the increase in the bonuses was not out of line at all with the increase in their gross business. Mr. TOLAND. Well, I think that the percentage shows that it was. Now, in 1941, the office bonuses were $246,093.79, and the factory bonuses were $1,779,711.39, making a total bonus of $2,025,805.18. which was an increase of 111 percent over the bonus in 1940. In addition to the bonus of $2,025,805.18, it is a fact, is it not, that on the 31st day of December the company took another million dollars and set that up as a trust fund? Isn't that right? Mr. VAN DAME. That is correct. Mr. TOLAND. Mr. Chairman, this is the trust fund agreement. On December 31, 1941, in addition to the $2,025,805.18 bonus, the company entered into an agreement whereby it deposited on the 31st day of December the sum of $1,000,000 in cash with the Cleveland Trust Co., which sum was to be handled in accordance with a resolution of the Lincoln Electric Co., dated December 18, 1941, creating a bonus and profit-sharing plan, and I would like to offer in evidence a copy of it. I ask that the memorandum I just read from be printed but not the agreement. (Memorandum referred to was received in evidence, marked "Exhibit No. 351," and is printed in the appendix of this volume.) (Trust agreement referred to was received in evidence, marked "Exhibit No. 352," and is filed with the committee.) Mr. TOLAND. Then I would like to offer in evidence. Mr. Chairman, the following memorandum : The Lincoln Electric Co. first started distributing bonuses in the year 1934. The office bonuses are carried in their financial statement under administrative and general expenses, and the factory bonuses are carried under costs of the goods sold. The balance sheets and profit and loss statements for the years 1934 through 1941 are exhibits. The exhibits show the bonuses and the salaries paid for the years 1934 through 1941. During the 8 years in which bonuses were paid, in only 3 did the total office and factory salaries exceed the total office and factory bonuses. This occurred during the years 1934, 1935, and 1938. Beginning with the year 1939, apparently as the result of the defense program, the percentage of bonuses paid to salaries paid during the year 1939 was 150.1; 1940, 259.2; 1941, 427.7. The total bonuses paid were $5,143,234.97 and the total salaries paid were $2,681,562.13, exclusive of branch office bonuses and salaries. The percentage of bonuses paid to salaries paid over the 8-year period was 191.8. An analysis of the recapitulation of factory pay roll, wherein there is a showing as to the salary earned by individuals on an 11 months' basis, and the total bonus paid, discloses that out of a total of 737 employees only 1 percent received less bonus than salary earned. |