word before us and made a statement. I will try to remember it word for as near as possible. He stated: "I have been a member of this organization for 35 years, most of the time as an official. I have seen some pretty rotten things pulled both by management and labor. But," he said, "this man Hoffa, and I don't know where he gets his authority, just pulled the rottenest deal on you fellows that I have ever seen an official pull on members of his own union. "If it is the last thing I ever do, I am going to find out I am leaving here by plane, going to Indianapolis, and I am going to find out where he is getting his authority. If it is the last thing I ever do, I am going to try to take the wind out of that man's sails." Shortly after that he left the meeting. Mr. KENNEDY. And Mr. Murphy died shortly afterward? Mr. DEARWESTER. I would say a little over a year or around a year after that, yes, and Mr. Hoffa seemed to skyrocket then. Mr. KENNEDY. And Mr. Hoffa's power increased thereafter? Mr. DEARWESTER. That is right. Mr. KENNEDY. But that was the first inroad into Ohio? Mr. DEARWESTER. To my knowledge; yes, sir. Mr. KENNEDY. The next witness will give about as important testimony as we have had, Mr. Chairman. The CHAIRMAN. Proceed. Call the witness. Mr. KENNEDY. Mr. Maxwell. The CHAIRMAN. You do solemnly swear the evidence you shall give before this Senate select committee shall be the truth, the whole truth, and nothing but the truth, so help you God? Mr. MAXWELL. I do. TESTIMONY OF GEORGE S. MAXWELL The CHAIRMAN. State your name, your place of residence, and your business or occupation. Mr. MAXWELL. George S. Maxwell, 1145 East 74th Street, Cleveland, Ohio; an attorney at law. The CHAIRMAN. Then I assume you waive counsel? Mr. MAXWELL. I waive counsel, sir. The CHAIRMAN. Thank you. Proceed, Mr. Kennedy. Mr. KENNEDY. Mr. Maxwell, what is your position? Mr. MAXWELL. With respect to what, Mr. Kennedy? You were born in Rawal Pindi, India; is that correct? Mr. MAXWELL. That is correct. Mr. KENNEDY. I mentioned to him yesterday, Mr. Chairman, he is the first witness from that location. Your parents were Presbyterian missionaries? Mr. MAXWELL. That is correct. Mr. KENNEDY. And you returned to the United States after the First World War and went to Princeton Theological Seminary; is that correct? Mr. MAXWELL. That is correct. Mr. KENNEDY. You were ordained and occupied a position as a Presbyterian minister until the middle of World War II? Mr. MAXWELL. That is correct. Mr. KENNEDY. And then, unable to get into the service in World War II because of physical disability, you resigned your ministry and became an official of the National War Labor Board; is that right? Mr. MAXWELL. That is correct. Mr. KENNEDY. And where you served through the end of the war? Mr. MAXWELL. That is right. Mr. KENNEDY. You settled in Cleveland in 1947 and began practicing as a labor relations consultant; is that right? Mr. MAXWELL. That is right. Mr. KENNEDY. Under the name of George Maxwell & Associates? Mr. MAXWELL. That is correct. Mr. KENNEDY. The majority of your clients were and still are trucking companies engaged in the hauling of iron and steel? Mr. MAXWELL. That is right, sir. Mr. KENNEDY. From the producing mills in the Ohio area to the fabricators of steel products; right? Mr. MAXWELL. Right. Mr. KENNEDY. You helped to organize the Steel Truckers Employers Association, Inc.? Mr. MAXWELL. Right. Mr. KENNEDY. And which is presently composed of some 25 companies engaged in the hauling of iron and steel? Mr. MAXWELL. That is right. Mr. KENNEDY. You went to law school at night and graduated in 1954 and admitted to the Ohio bar? Mr. MAXWELL. That is right. Mr. KENNEDY. In your capacity as labor relations consultant for this association, you handled the contract negotiations with the International Brotherhood of Teamsters; is that correct? Mr. MAXWELL. The Central States conference of the international brotherhood; that is right. Mr. KENNEDY. The contracts that are negotiated and signed on behalf of the Teamsters, are those contracts enforced and lived up to as a general proposition? Mr. MAXWELL. They are frequently modified by negotiations subsequent to their being signed with respect to particular conditions which are an aggravation or make it impossible for particular companies to operate in compliance therewith. Mr. KENNEDY. What does that all mean? No? Mr. MAXWELL. It means this: No is the answer. However, I don't need to explain to you, sir, or to the Senator, as lawyers, that frequently when a contract contains terms that are too onerous for the parties to continue in effect, those contract terms can be modified by subsequent negotiations, and as representative of the Steel Truckers Association, I did, in behalf of the association as a group, and of individual companies, negotiate modifications of the Central States area agreements on behalf of and for the association and these individual companies. Mr. KENNEDY. In other words, you would obtain changes in the contract for the association members and for the individuals? Mr. MAXWELL. That is correct, sir. Mr. KENNEDY. Were those changes that were made in the contract on behalf of these individual members of the association always put in writing, the changes? Mr. MAXWELL. No, they were not always reduced to writing. Mr. KENNEDY. With whom were the changes in the contracts negotiated? Mr. MAXWELL. In nearly every instance, negotiations terminated at least with Mr. James Hoffa. Mr. KENNEDY. Isn't it a fact that the negotiations themselves in changing or altering the terms of the contract were conducted with Mr. Hoffa? Mr. MAXWELL. In a majority of instances they were conducted only with Mr. Hoffa. But in all instances they required his approval before they could be made effective. Mr. KENNEDY. Isn't it a fact that in many of the cases where modifications or changes in the written contract were made with Mr. Hoffa, they were not sent back to the membership for approval? Mr. MAXWELL. Mr. Kennedy, let me say this: To my knowledge, there were cases in which no subsequent approval of the members of the unions were secured. However, this was not a part of my responsibility and I cannot say how many times that occurred. There were instances when they were submitted to the members who were employees of the particular companies I represented, and of that I do know from personal knowledge. Mr. KENNEDY. All right. For those where the approval was actually gained, from somebody who has had experience in the business, isn't it a fact that the truckdrivers to whom this proposition is being proposed, after Mr. Hoffa has already agreed to it, have very little choice, as a practical matter, of approving or disapproving? Mr. MAXWELL. That is correct. Mr. KENNEDY. I mean, this is almost a perfunctory step even where the approval is gained? Mr. MAXWELL. To use a legal term, because I don't like quite the lightness of perfunctory, let us say it was pro forma, if I may use that word. Mr. KENNEDY. It is an improvement. Mr. MAXWELL. Thank you, sir. Mr. KENNEDY. And in other cases, as you point out, the membership was not consulted; the agreement was made with Mr. Hoffa himself? Mr. MAXWELL. I said to my knowledge there was no subsequent approval of the members, and the agreement was complete when reached with Mr. Hoffa. Mr. KENNEDY. It is understood, for instance, that the owner-brokers, although it is not specifically written into the contract, it is understood that the owner-brokers will receive a 75 percent return on the work that they do and the trips that they make? Mr. MAXWELL. A fixed percentage. That is not always 75 percent. Right. It varies. But there is in nearly every case with the owneroperator a lease form signed covering his equipment in which a specific percentage of the gross revenue derived from the operation of that equipment is to compensate him for his services as a driver and for the rental of that equipment. Mr. KENNEDY. Hasn't it been possible where you have had a fixed percentage, that you can make an arrangement with Mr. Hoffa, himself, to lower the fixed arrangement on behalf of certain companies? Mr. MAXWELL. That is correct, sir, and that has been done, in behalf of certain companies. The permission of Mr. Hoffa has been secured I say the permission-the concurrence of Mr. Hoffa in the amendment of those agreements to reduce that percentage has been secured. Mr. KENNEDY. Isn't it correct that if you had an absolute enforcement of the contract as it is written that these companies would be put out of business, the contract as it is written? Mr. MAXWELL. In many cases this would be true, that had they to comply with all of the terms of the contract it would be economically impossible for them to continue in business. Mr. KENNEDY. So to obtain these modifications is a tremendous advantage, for one company to obtain the modifications and for another not to obtain them? Mr. MAXWELL. That is right. Mr. KENNEDY. It is a great advantage for the company who can obtain them? Mr. MAXWELL. That is correct. Mr. KENNEDY. The second point which would logically follow is if you are close or an associate or friend of Mr. Hoffa, you can obtain these modifications, while perhaps if you are not friendly you will be turned down on the modification? Mr. MAXWELL. Let me say this, Mr. Kennedy: I have not always been successful in securing the relief that I requested. I think your statement is correct, that being on friendly terms with Mr. Hoffa is an aid in securing his concurrence in these modifications. Mr. KENNEDY. Doesn't he in fact have a life and death control over these companies, the operations of these companies? Mr. MAXWELL. That is perhaps an extreme statement, but as I have indicated to you, did he elect not to modify the agreement and to enforce all of their terms, many companies would find it economically impossible to continue. To use the words "life and death" carries, again, connotations that perhaps seem a little harsh. Mr. KENNEDY. The death of the company. I don't mean the death of the individuals at this moment. Mr. MAXWELL. Economically the company would die. Mr. KENNEDY. Mr. Chairman, this is a memorandum which he will be able to identify. The CHAIRMAN. I hand you herewith a memorandum with some attached figures or calculations. Mr. KENNEDY. Maybe Mr. Kaplan can identify it. The CHAIRMAN. Have you been sworn in this hearing? Mr. KAPLAN. No, sir. The CHAIRMAN. You do solemnly swear the evidence you shall give before this Senate select committee shall be the truth, the whole truth, and nothing but the truth, so help you God? Mr. KAPLAN. I do. TESTIMONY OF ARTHUR G. KAPLAN The CHAIRMAN. State your name, please. Mr. KAPLAN. Arthur Kaplan. The CHAIRMAN. You are a member of the staff of this committee? Mr. KAPLAN. Yes, sir. The CHAIRMAN. As such, have you assisted in conducting the investigation that is now under inquiry? Mr. KAPLAN. Yes, sir. The CHAIRMAN. Í present to you here a document which is in the nature of a carbon copy of a memorandum. I ask you to examine it and state if you identify it, and where you procured it and what it is. (The document was handed to the witness.) Mr. KAPLAN. Yes, sir. This is a carbon copy of a memorandum which was secured on an examination of files of the Glenn Cartage Co, in their offices in Cleveland, Ohio. The CHAIRMAN. It may be made exhibit No. 73. (Memo referred to was marked "Exhibit No. 73" for reference and may be found in the files of the select committee.) Mr. KENNEDY. Could I read this memorandum dated June 20, 1955 The CHAIRMAN. Is that the one that has just been made an exhibit? Mr. KENNEDY. It was part of the document which has been identified. The CHAIRMAN. It is a part of exhibit No. 73. It may be read. Mr. KENNEDY (reading): This memorandum pertains to a telephone conversation I had the above date with George Maxwell. George confirmed my opinion that no steel representative sits on the grievance committee and, likewise, that the grievance committee consists of all dry freight carriers, none of whom are sympathetic to the broker problem. George told me that in 1954 he made five separate deals with Hoffa, concerning percentage pay rates for major carriers who are members of his association. He had one company decreased from 74 percent to 70 percent, three companies decreased from 75 to 72 percent, and one company decreased from 80 percent to 72 percent. This does not include Hess, who was decreased through their own deal with Hoffa from 75 percent to 72 percent. George further said that Hoffa is very tough in these open meetings, but you can talk to him in a closed, private session; that this is the way in which most of the steel carriers operate. Is that correct, Mr. Maxwell? Mr. MAXWELL. To the best of my recollection, that is a fair statement of my conversation with Mr. Gurin. Mr. KENNEDY. Does that summarize the situation? Mr. MAXWELL. Yes, sir. Mr. KENNEDY. Mr. Maxwell, have you found any instances where companies in Ohio have had difficulty sending certain drivers into Detroit? Mr. MAXWELL. We have two kinds of difficulties, Mr. Kennedy. As you know, the contract has a union shop clause. Carriers who send drivers in frequently have those drivers stopped and inquired of as to whether they are in active membership. If they are found to be delinquent in the payment of their dues, a complaint is made of this, frequently to the carriers; sometimes, if it is repeated by any one |