Now, as far as the effect on what you should also be concerned about in addition to the collective bargaining that exists in the industry is its effect on Government work.

Let's take a typical case of the atomic energy job for Weston, Ill.

It has been calculated that if industry promotion funds requiring payments of 5 cents an hour should be in effect in this local area at the time of construction, they will add $1.2 million to the construction of this plant, and that is without any material benefit to the Govern

ment.

Senator YARBOROUGH. For the economic reactor?

Mr. GRANEY. That's right.

Now, as I pointed out, the members of the National Constructors Association do both engineering and construction. In performing their engineering services, it is extremely vital that they be free to select materials and equipment from an objective engineering standpoint.

It would be inconsistent with this professional approach to be contributing funds which could be at crosscurrents with any objective engineering appraisal they might make.

In addition to that, the role that the Government would play in the various activities that Mr. Healey pointed out, urban renewal and the other Government-sponsored construction programs-you would be in the same position of contributing to funds that are aimed to influence engineers or designers that have an engineering obligation to do other than be influenced by propaganda.

In many places in the country we work for industries, and it is conceivable that we would be contributing to funds which are at crosspurposes to objectives of our clients.

If we are building a refinery, we could be contributing to a fund to promote electric heat, or one of our members working to build a powerplant, could be contributing to a fund to promote oil heat. There is no interest to us, the engineer-constructor, and no interest to our client.

It is because this legislation, if passed, will have a very serious effect on collective bargaining in the construction industry-and it is not at all unrealistic; it is very, very practical to assume it will-that we urge its defeat.

Thank you.

Senator YARBOROUGH. Gentlemen, I realize this is a perplexing problem, this question of jurisdiction, and I guess it is still going on, as in the oil refineries along the coast of Texas.

The craft unions have different standards, they have different opinions on competency to do work. Right now there is a difference between two unions there. One is an industrial union and the other is a craft union, and it is perplexing, which should do the work. I want you to understand it is perplexing to us, too.

You are faced with the problem of doing your work speedily, efficiently, thoroughly, and at a profit, and at the same time to give a good product.

Thank you for your contribution.

Mr. GRANEY. Thank you.

Senator YARBOROUGH. The next witness is Gilbert Dorsett of Dallas, Tex., and Robert Wood of Pennsylvania.

Good morning.

STATEMENT OF GILBERT G. DORSETT, PAST PRESIDENT, SHEET METAL AND AIR-CONDITIONING CONTRACTORS' NATIONAL ASSOCIATION, INC.; ACCOMPANIED BY ROBERT B. WOOD, VICE PRESIDENT, LIMBACK CC., PITTSBURGH, PA.; AND JAMES H. FERGUSON, DIRECTOR, INDUSTRY RELATIONS, SHEET METAL AND AIR-CONDITIONING CONTRACTORS' NATIONAL ASSOCIATION, INC.

Mr. DORSETT. I am Gilbert G. Dorsett, Keetch Sheet Metal Works, Tex., and immediate past president of the Sheet Metal and Air-Conditioning Contractors' National Association. Accompanying me are Robert B. Wood of Pittsburgh, Pa., who will also make a brief statement; and James H. Ferguson, director of industry relations for the national association.

SMACNA is the spokesman for some 30,000 small businessmen, contractors in the United States who are involved in one way or another in the sheet metal and air-conditioning business. This association is, and has been, vigorously opposed to the enactment of S. 3149, its companion bill in the House, H.R. 15198, and the legislative proposals on the same subject that have been before the past several Congresses.

For a number of years, this association and numerous other national contracting groups have utilized industry funds. These funds have been properly managed by the various management groups who have contributed to them. We must point out the fact that these funds have been formed by management, contributed to by management, and have been administered by management for the purpose of advancing the industry in which they are engaged.

We can see no justification for organized labor seeking to have joint administration of these funds. These funds can best be utilized by the groups who know the market, engineers, architects, and others who can have a part in advancing the industry which has made the funds possible.

We again stress that these funds are levied by management, collected by management from management, and are strictly a management function. All unions have a dues structure which they levy against their members for the funding of their union activities. We, who are their employers, certainly do not seek to have any representation on a trust agreement to help them administer these dues.

We have always felt that it was their money to do with as they saw fit. Many activities, such as joint apprenticeship administration, local joint adjustment boards, national joint adjustment boards, and many others have always been jointly funded. The unions pay their portion of the necessary costs from their dues funds, and we pay our portion. There is no more plausible reason for the unions to have trustees on our funds or dues, than there is for us to have trustees on their dues. Perhaps a point must be cleared up which has seemed to confuse many people. An industry fund is not considered a fringe benefit to any person or group. It has been established as an amount per hour on each hour worked by the union members for his employer. The only reason that this has been done is because it enables each employer to be sure that he pays equitably for his part of the fund. Since each employer must make a report for the various health and welfare, pension, vaca

tion, and other funds for the benefit of the union members, it is a very simple matter for him to use the same tabulation of hours that have been worked, to establish his payments to his industry fund.

Another point which seems to need clarification is the opinion of some people that this issue would remain of a permissive nature. Such is considered highly unlikely by those familiar with construction industry bargaining. If a union knew that they could gain the control or veto power of the management groups' dues or funds, it would most certainly be their aim to do so. Knowing that it could be done, they would use every method, including work stoppage, to attain this end. One must realize that through the power of strikes alone, the unions could attain this so-called permission. When a union is on strike, the members can usually find some other employment to make their expenses, but the employer group is out of business and must face a decided financial loss. The fantastic wage settlements which have been a matter of grave concern to Government as well as management, and to responsible labor leaders in the past few months, certainly serve to show the edge which organized labor already has over management. It is our sincere belief that any type of legislation which would allow joint administration of industry funds would make this edge much greater.

Some people who are interested in this legislation have made a number of references to safeguards which they feel can be built into such legislation. As a practical matter, we feel that it would be almost impossible to build adequate safeguards to effectively protect management's functions, interests, and rights; or for that matter, to even fully protect the unions. We certainly feel that management has been honestly and properly handling their funds in the past, and have in no way encroached on organized labor's rights or privileges. On this premise, we can see absolutely no reason for any legislation which would even have to consider safeguards.

Most national contracting associations have a method of settling grievances and disputes which may arise from their working agreements. The Sheet Metal and Air-Conditioning Contractors' National Association, with the cooperation of the Sheet Metal Workers' International Association, have adequately handled these issues in the past. Through a system whereby the International Union pays their part of the cost and SMACNA pays its share, we have jointly reduced work stoppages or strikes to practically zero on these issues.

This has been satisfactorily done without either side having any power of veto over the other's funds. We do not feel that this could have been accomplished, nor our National Joint Adjustment Board function properly, if such a confusing situation existed. Again we can see no reason for changing a system which has proved to be working smoothly and to the advantage of both labor and management.

I should also point out that many other construction industry segments-particularly the electrical-have had dispute settlement machinery many years on a pay-your-own-way basis and have felt no need to change to a basis whereby management would pay all the freight. It is difficult for us to believe that Congress would want to disrupt these long-existing plans just to satisfy the demands of a small segment of the industry.

To summarize our viewpoint, we wish to make it known that we, as individual contractors, as well as representatives of our national as

sociation, feel that it should be our right to raise our own funds to further our industries, thereby furnishing more job opportunities to the union members who are our employees, without any possible hindrance from any group who may not wish to recognize our managerial rights. In our Nation, which recognizes and is based on the free enterprise system, we who represent the management side of such a system, should be entitled to some management prerogatives.

We earnestly solicit your consideration of our position and hope that you will help us to retain administration and control of our own funds. Thank you, sir.

Senator YARBOROUGH. Thank you, Mr. Dorsett.

Now, you heard Mr. Buster's testimony this morning?

Mr. DORSETT. Yes, sir.

Senator YARBOROUGH. He spoke about the painting industry, the employers and the unions.

I gather from your statement here that that wouldn't be true that unions wouldn't be contributing to the industry promotion funds, or hadn't been in the past. Has there been any joint effort at industry promotion between management and labor in your industry?

Mr. DORSETT. No, sir, there has not been in the past.

Senator YARBOROUGH. If you have an industry promotion fund, wouldn't you welcome some contribution from the employees? You have 30,000 contractors in the sheet metal business. I imagine it is like everything else. Construction involves technological processes, and methods of doing things in the field of industrial engineering that nobody wants his business liquidated, and technological advances have liquidated more businesses over the last half century than all other

causes.

I feel that that is true, and I hope this bill passes, but I hope it passes only if we have good results. It is no credit to us if we pass bad legislation. People are afraid of most new legislation, and sometimes it is proved that this fear is well grounded.

When we get new legislation, American ingenuity often works it out. If the bill passes this session, I am hopeful that these things that you gentlemen fear won't come true. We are not here to slow up the industrial growth of America, but to promote it. We stay ahead in this world only by brainpower. We have used up so much of our natural resources that stores of them in other continents far outweigh ours. We have got to use our brainpower to stay ahead, and American industry so far, I think, is ahead in the world, but we have got real tough competitors across the seas, as we know, in Germany and Japan in particular, and I am counting on you gentlemen, if this bill passes, to use that American ingenuity and know-how to make it work constructively for your own benefit.

Mr. DORSETT. Sir, I would like to point out that we in management have published all of these various publications to take care of the situation you were talking about, to keep our business from deteriorating. These are modern ways of meeting technological problems.

Senator YARBOROUGH. You don't have any cooperation between labor and management?

Mr. DORSETT. No, sir; these are published strictly by management. Senator YARBOROUGH. If you have extra copies you desire to leave, the committee will accept them, and I will order them filed as ex

hibits. They are too voluminous to reprint, but if you have surplus copies, if you care to leave them, I will order them filed, and incorporate them by reference and instruct counsel when the committee comes to consider this bill in our executive session to have these available for our examination.

Mr. DORSETT. Thank you.

Senator YARBOROUGH. You are accompanied by someone else, Mr. Dorsett?

Mr. DORSETT. Yes, Mr. Wood.

Senator YARBOROUGH. Do you have an additional statement?

Mr. Wood. I would like, Mr. Chairman and Senator Fannin, to elaborate on Mr. Dorsett's remarks.

My name is Robert B. Wood, I am vice president of the Limbach Co., Pittsburgh, Pa., director and vice president of the Sheet Mental Industry Association of Western Pennsylvania, as well as a director of the Sheet Metal and Air Conditioning Contractors' National Association.

I wish to speak to you primarily as a contractor. What affects our business and its costs will affect our customers' costs, including the cost of buildings for the U.S. Government.

Industry funds are taxes by businesses upon themselves to achieve common objectives. These objectives are goals consistent with the goals of our economy-to make more effective and efficient the relationships, procedures, and processes of our business, the construction industry.

It has also been traditional that responsible management has control over the funds needed to advance its industry.

S. 3149 is a bill which would let labor share with management the direction as well as the control of industry funds. They would thereby determine: First, how, where and when there is to be advancement of the industry; and, second, the financing of committees supposedly to interpret provisions of collective bargaining agreements.

The vast majority of businessmen-contractors are opposed to both of these incursions into their proper function in our economy. The industry funds as now managed cannot be used for antilabor purposes. But managed by labor, they would be used only for programs exclusively advancing labor-particularly labor leaders' goals. There is perhaps nothing wrong with advancing their aims, but why with industry moneys?

If labor agents control these funds, vital interests not directly and immediately furthering their causes would go under-to our detriment and to the disadvantage of increased productivity and quality. The long-suffering construction customer, including the U.S. Government, would be the ultimate loser.

You gentlemen know the awesome power of the construction unions today. We merely have to look at the inflationary wage settlements forced on contractors in the last couple of years and at the accelerating trend right now.

For instance: In Columbus, Ohio, an increased wage package for steamfitters of $3.445 over 3 years was forced on top of a wage package already $4.645 per hour. This is a 74-percent increase. In addition, the contractors were stuck with many restrictive conditions in the contract.