Evening star., 1955-05-22
How Unions Spend


agement is familiar sight. But it
will be novel experience for unions.
The United States Chamber of
Commerce is worried about how the
unions will use their future fiscal
power.
Congress Interested
Congressmen are becoming in
terested. A Senate Labor subcom-
mittee has nibbled at the question
and intends to explore it further.
And almost everybody is at least
curious.
Recent action of few unions has
increased the speculation. They may
be only isolated events. Or they may
be straws in the wind.
Q The AFL Teamsters Union bought
about 81 million worth of Mont
Zomery Ward stock during the
recent proxy fight, pledged to vote
the stock for the existing manage
ment and promptly won a contract
that even the United States Army
could not force on Ward President
Sewell Avery during World War II.
Q John L. Lewis has used United
Mine Workers reserves to buy two
Washington banks and then merge
them into one, becoming in the proc
ess, one of the biggest bankers in
Washington.
. A National Labor Relations Board
f,.iol r1,1o1 in rnnonf
case it was proper for a union
owning business to bargain for
labor contract with a directly COM
peting business. In other words,
business-owning union could have
the power to strike and picket a
business competitor.
. An NLRB trial examiner ruled
in another case that union which
owned factory building could prop
erly rent the building to an owner,
who, as part Of his rent" had to
agree to hire only members of the
landlord-union.
o The AFL Hatters Union loaned
a hat company $250,000 to induce
the company to stay in business.
The CIO United Auto Workers
offered WHY'S Motors 100000 to
help set up distributorships.
. The CIO Auto Workers bought
stock in the Deepfreeze Appliance
division of Motor Products Corp. in
order to keep another company from
buying the stock and controlling the
company.
. The AFL Electrical Workers
bought a majority of stock in a
Washington insurance company and
took over control.
An independent union offered to
raise 81 million to provide enough
capital to keep the Wanamaker de-
partment store in New York oper-
ating.
. The AFL Potters Union officers
buy common stocks with union
funds. playing the stock market with
great success.
The AFL Central Labor Union in
Philadelphia has hired a securities
counselor to help advise In invest
ment in stocks.
Most Prefer Bonds
These instances of use of union
controlled funds to influence man
lgement decisions and to invest in
common stocks are exceptions to
the rule. The vast majority OF
unions invest their money almost
ntirely in Government bonds.
A typical union will put about
.hree-quarters of it's money in Gov
rnment bonds, keep 10 per cent in
ash and split the remaining Is per
lent among stocks, real estate, mort
cages and loans.
Almost all union officials now say
hey want to keep it that way. They
are not in business to make money,
hey say. Their only interest is in
afety, and, in the case of treas
lries, IN liquidity. They say exten-
i've investment in common stock
1ould lead only to trouble-even-
ual loss of some money and the
lck for the union officials.
They remember the '20s when
lore unions did dabble in stocks
nd did buy into businesses. Many
Unions lost their shirts, and many
inion leaders lost the confidence OF
heir men.
At the same time most union
leaders agree there is O growing
trend toward purchase Of common
stock. There are two reasons:
Common stocks are desirable as
imitation hedges-they increase In