I do not believe that there is any restaurant operating in Chicago, even though they are paying this $3 a day or whatever it happens to be, that can show a payroll that is much less than that 30 percent.

Now, if you take the bulk of your help, which happens to be the waitresses, and you take and pay them $36 a week instead of $18, you are doubling your payroll amongst the most employees. Actually, they are not the ones that need it, because they do get these gratuities. So I don't see how anybody-at least, I couldn't find a way to stay in business and pay $36 a week which the union felt the waitresses should get.

Yesterday, I heard you, Senator, mention to someone that he gained about $16,000, the difference between what he should have paid in help and what he did not pay by having his contract.

Senator CURTIS. I heard that mentioned here. I think it was someone else.

Mr. CARSON. I don't know. It was someone. I would like to point out that if you are seeking facts, I would like to point out, Senator McClellan, that if we had paid the actual salary the union wanted, there would not have even been the 7 or 8 percent left for the operator of the restaurant. In other words, there was never an attempt made by the restaurant to take advantage of the employees. It was just a bad setup where the waitress' salary was concerned.

Senator CURTIS. Are there some eating houses in this country where gratuities are sufficient and they pay no salary?

Mr. CARSON. Yes, there are, sir.

Senator CURTIS. What type of eating house would that be?

Mr. CARSON. Well, it would be a house where the tips were known to be very good.

There are places in Chicago where girls get only a dollar a day. There are other places where they get $10 a day. In other words, if a girl works in an industrial factory neighborhood, where a workingman comes in and he pays the price of the food and leaves maybe a nickel or a dime, that girl you have to pay her maybe $10 a day to keep her.

But if she is working in a place, say-well, I will take Wolfie's, in Miami Beach, where it is a resort town and everybody tips so well, those girls work for, maybe, $3 a day. I don't know.

Senator CURTIS. I don't know enough of the facts, and I am not attempting to appraise it or condone it or condemn it either, but what would have happened in the restaurant situation in Chicago if they had not the restaurant association?

Mr. CARSON. Well, in my opinion they never would have needed a restaurant association if the union would have worked out a contract like I am telling you. I think every restaurant man would have been happy to have every employee in the union if they would take and have a separate contract for a separate type of business.

When I argued with Cinegram, that was my argument. I was not opposed to paying-I have a chef now that I pay $180 a week. I don't have anybody working in the kitchen that gets less than $100. But I still can only afford to pay $18 a week. You can see my records. Even by paying the girls $18 a week, my percentage of labor cost in my business is still 27 to 28 percent.

You can understand in a barber shop, he sells nothing but labor.

In a food mart, where it is a self-service business, they have a small labor percentage.

But in the restaurant business, we have it combined. The only thing we can control is the labor cost. The food cost is more or less controlled by the customer.

If we cut down the portions, by increasing our labor cost, then we are not going to do any business. As far as our operating cost, the electricity, insurance, and things like that, we hardly control them, except for the exception where you might make a bad lease. So the only thing that you can control is the labor percentage of cost, and that is the thing that I fought.

If any union would come up today and bargain with me on that basis, I would be very happy to have a 100-percent union shop. Senator CURTIS. That is all, Mr. Chairman.

Senator GOLDWATER. Mr. Chairman?

The CHAIRMAN. Senator Goldwater.

Senator GOLDWATER. Mr. Carson, you said you have 50 employees in your present restaurant?

Mr. CARSON. Yes.

Senator GOLDWATER. You have two restaurants?

Mr. CARSON. Yes, sir.

Senator GOLDWATER. You have 50 in each or 50 total?

Mr. CARSON. No, the second restaurant has only opened up about 3 months ago and nothing has been done yet about the labor situation. When I spoke of the 50, I was speaking of Broadway.

Senator GOLDWATER. You speak of negotiating with the union. Do the negotiating yourself?

Mr. CARSON. Yes, I did, sir.

Senator GOLDWATER. Did you have a lawyer to help you?

Mr. CARSON. No, sir.

Senator GOLDWATER. You did it all by yourself?

Mr. CARSON. Yes, sir.

Senator GOLDWATER. Do you ever call on the association for their

help?

Mr. CARSON. No, sir.

Senator GOLDWATER. Have you always negotiated yourself?
Mr. CARSON. Yes, I have.

Senator GOLDWATER. I want to get to one other subject that was mentioned in this this morning. You have been in the restaurant business in Chicago since 1941?

Mr. CARSON. That is right, sir.

Senator GOLDWATER. Have you ever had occasion to use the police labor detail?

Mr. CARSON. No, sir.

Senator GOLDWATER. Do you know about it?

Mr. CARSON. I didn't even know that one existed.

Senator GOLDWATER. When did you first hear about it?

Mr. CARSON. Now.

Senator GOLDWATER. Today?
Mr. CARSON. That is right, sir.
Senator GOLDWATER. From me?
Mr. CARSON. That is right, sir.

Senator GOLDWATER. If you ever had to call the police, would you expect a member of the labor detail or would you expect a member of the regular force?

Mr. CARSON. I would expect a regular policeman.

Senator GOLDWATER. You have never heard of this detail?

Mr. CARSON. I have never heard of it; no, sir.

Senator GOLDWATER. It is rather amazing. Have you ever had any labor trouble, where you have had strikes?

Mr. CARSON. No, sir.

Senator GOLDWATER. Any violence?

Mr. CARSON. Never, sir.

Senator GOLDWATER. Any threatened violence?

Mr. CARSON. Never, sir.

Senator GOLDWATER. That is all I have, Mr. Chairman.

The CHAIRMAN. Senator Church?

Senator CHURCH. No questions, Mr. Chairman.

Mr. KENNEDY. Mr. Chairman, I would just like to have the witness remain while we put another witness on regarding the advantages this witness obtained through the deal that he made with the union. I would like to call Mr. Gotsch, who was sworn yesterday.

TESTIMONY OF GERALD GOTSCH-Resumed

Mr. KENNEDY. Have you made a study of the books and records of Mr. Carson's former interests in Peter Pan Restaurants?

Mr. GOTSCH. No, I have not, sir. 6162 North Broadway store is owned by him presently.

Mr. KENNEDY. What about the other interests, when he had the interest in Peter Pan in 1953 ?

Mr. GOTSCH. The study was made under the present ownership.

Mr. KENNEDY. I am talking about when Mr. Carson had the ownership.

Mr. GOTSCH. No, we did not.

Mr. KENNEDY. Why didn't you make a study of those books and records?

Mr. GOTSCH. Of Peter Pan?

Mr. KENNEDY. Yes. Are the books and records available?

Mr. GOTSCH. No, they aren't, sir, as I remember.

The CHAIRMAN. Are the books and records of the former Peter Pan Restaurant available?

Mr. CARSON. No, sir.

Mr. KENNEDY. Where are they?

Mr. CARSON. I don't know, sir.

Mr. KENNEDY. What did you do with the books and records?

Mr. CARSON. The bookkeepers would know what they did with them. I don't know.

Mr. KENNEDY. You have no idea where they are?

Mr. CARSON. No, sir.

Senator GOLDWATER. Do you have your own bookkeeper!

Mr. CARSON. I have a bookkeeping firm.

Senator GOLDWATER. You hire them?

Mr. CARSON. We hire outside C. P. A.'s.

Senator GOLDWATER. Are books kept on the premises?
Mr. CARSON. Yes, sir.

Senator GOLDWATER. They are in your possession?

Mr. CARSON. Yes, sir. I gave Mr. Gotsch the books of the restaurant I operate.

Mr. KENNEDY. We will get into that-the restaurant you own at the present time. I am talking about the former ownership. We wanted to go through the former ownership.

Mr. CARSON. I didn't have them; no, sir.

Senator GOLDWATER. When was that restaurant sold?

Mr. CARSON. 1953.

Mr. KENNEDY. Did you make a study of the books and records of Mr. Carson's restaurant at the present time?

Mr. GOTSCH. Yes, sir.

Mr. KENNEDY. Did you determine how many employees he had, how many were union and how many nonunion?

Mr. GOTSCH. Yes, sir.

Mr. KENNEDY. Tell us about it.

Mr. GOTSCH. This is the restaurant located at 6162 North Broadway. He has a total of 32 employees. The only union employees are three bartenders and the organist. There are 8 miscellaneous kitchen workers, all of whom are nonunion, 7 paid lower than the scale and 1 paid above the scale. There are 3 cooks who are nonunion; 2 are paid below union scale and 1 paid above.

There is one hostess, nonunion, paid above the union scale. Of course, as Mr. Carson pointed out, the waitresses are all paid below the union scale.

Mr. KENNEDY. How many waitresses are there?

Mr. GOTSCH. 17 in all.

Mr. KENNEDY. And all paid below the union scale?
Mr. GOTSCH. That is correct.

Mr. KENNEDY. How many employees does he have?
Mr. GOTSCH. 32.

Mr. KENNEDY. How many are members of the union?
Mr. GOTSCH. In the restaurant category, only three.
Mr. KENNEDY. Only three?

Mr. GOTSCH. Yes, sir.

Mr. CARSON. That cannot be right, sir.

Mr. KENNEDY. That is what your books and records show.

What is the total saving to Mr. Carson in not having to pay union scale?

Mr. GOTSCH. Approximately $13,500.

Mr. CARSON. Where do you come to that figure?

Mr. KENNEDY. He will tell you, if you want to know.

Mr. CARSON. I would like to know, yes, because I think this is stigmatizing the restaurant business in Chicago.

Mr. KENNEDY. Not the restaurant business in Chicago. It is a question of your restaurant.

The CHAIRMAN. Give a breakdown of these figures, how you arrived at the total.

Mr. GоTSCH. Senator, that is based on the union scale for each craft. The miscellaneous, for example, who are nonunion. Let's take the waitresses. There are 17 waitresses paid $3 a day and the union scale is $5.33 per day. Therefore, each waitress would be shorted, more or less, from the union scale, $2.33 per day.

That figure, of course, is multiplied by the number of working days in the year. That is how we arrived at, for instance, the amount of money from the waitresses.

The CHAIRMAN. In other words, you have taken the union scale. and then taken the wages as reflected by his records, and determine the difference, and the thirteen-thousand-and-some-odd dollars is the difference between what he would have to pay out if they were all union and lived up to the union standards and requirements about wages, and that which he actually does pay out!

Mr. GOTSCH. That is correct.

The CHAIRMAN. The $13,000 plus makes the difference?
Mr. GOTSCH. That is right.

TESTIMONY OF CHRIS CARSON-Resumed

The CHAIRMAN. Have you any other ideas about it?

Mr. CARSON. Senator McClellan, yes. I would like to ask a question. It seems to me that of that $13,000 that Mr. Gotsch is talking about, $12,000 of it is waitresses. Senator, you are presuming that the $5.50 that the union is asking as a salary for a waitress is the proper one.

The CHAIRMAN. Is it what?

Mr. CARSON. Is the proper salary. If you are to presume that

The CHAIRMAN. I don't know whether it is proper or not. I don't know whether it is too high or too low. We are talking about your dealing with the union. That is what the union says they should be paid.

Mr. CARSON. That is right, Senator.

The CHAIRMAN. But you don't put them in the union and, therefore, the union does not tell you how much you shall pay them.

Mr. CARSON. That is right, but may I tell you this: You are looking for facts, and I hope I am giving you some.

I think I am giving you some that will possibly help you. The union comes along and says that a man that works behind the kitchen as a broiler man all day long is entitled to whatever Mr. Gotsch says.

I don't know. If he will tell you what the union scale is for a boiler man-he has the figures there. I don't know what it is. Is it about $90 a week, Mr. Gotsch?

Mr. GOTSCH. The salary for a broiler man is $14.58 a day.

Mr. CARSON. If we are to presume that is in balance, then they come along and say they want $5.50 for a waitress, and the waitress, on a Saturday night-and I am sure there are other restaurant men here who will bear me out--will make $15 in tips. Does that seem to you like her base pay is a fair one? Where she makes $20? She makes $6 more than the man who stands behind in the kitchen, by a hot stove! The CHAIRMAN. I am not arguing how much should be paid for anything. I am simply talking about your dealing with unions. They have a scale. They make a contract with someone, and I assume their scale is supposed to prevail. In other words, if the union has a standard scale of $5.50 for waitresses, it would hardly be proper for it to go out and make different contracts with different restaurants. If they say that is the standard, that is the minimum that should be paid. You do not put your employees into the union. I am not saying you should or should not, but I am talking about the union.