Deposits and loans of Florida National group of banks in cities on main line of Florida East Coast Ry.-Jacksonville to Miami and comparable data for com peting banks in those cities Mr. BALL. As you can see, there is adequate competition along the entire route, ranging from 1 other bank in Vero Beach, which is much. larger than ours, to 44 other banks in Miami. Mr. Leighty also told Mr. Brock that I controlled the Florida East Coast reorganization and receivership. I would like to introduce an exhibit which proves those allegations false. I will read this exhibit, if you like, or just put it in the record. The CHAIRMAN. It may be inserted, sir. The CHAIRMAN. Yes, sir. It may be inserted in the record. MEMORANDUM CONCERNING RECEIVERSHIP, TRUSTEESHIP, AND REORGANIZATION OF THE FLORIDA EAST COAST RAILWAY CO. The Florida East Coast Railway Co. was placed in bankruptcy, under the jurisdiction of the U.S. District Court for the Southern District of Florida on September 1, 1931. Mr. William R. Kenan, Jr., and Mr. Scott M. Loftin were appointed receivers in bankruptcy. On On February 21, 1941, the Florida East Coast Railway was placed in trusteeship with Senator Scott M. Loftin and Mr. Edward W. Lane as trustees. March 23, 1942, Mr. Lane died, and was replaced by Gov. John W. Martin as substitute trustee on April 10, 1942. On September 11, 1953, Senator Loftin died and Governor Martin remained as sole trustee, until his death, on February 22, 1958. The chief executive officer, Mr. A. A. Jackson, was appointed receiver of the debtor properties on February 26, 1958, pending appointment of new trustees by the court. On March 11, 1957, the Federal district court appointed J. Turner Butler and William J. Hallowes as trustees, who remained in these positions until reorganization was completed on January 1, 1961. While the railway was in receivership and/or trusteeship, the management, operation, and direction of the railway was under the jurisdiction of the receivers or trustees appointed by the Federal court, and who reported to the Federal district court. During the period of bankruptcy several plans of reorganization were submitted. Among these were plans prepared by a bondholders committee; by the owners of the property; 1 by the St. Joe Paper Co.; and by the Atlantic Coast Line Railroad Co. Ultimately, a plan was approved by the Interstate Commerce Commission, and submitted to the Federal court for approval, based on modifications of plans that had been prepared by interested parties. The final plan of reorganization which was adopted and became effective on January 1, 1961, and which established the present capitalization of the railroad, was the one finally recommended by the Interstate Commerce Commission, and approved by the Federal Court for the Southern District of Florida. During the course of the receivership and trusteeship, Mr. Ball had no control of the railroad's affairs, nor did he exercise any direct management function until December 15, 1959, when he was appointed chief executive officer by the trustees, following Mr. Jackson's retirement from that position on December 1, 1959. Mr. Ball's appointment as chief executive officer on December 15, 1959, antedated the Interstate Commerce Commission's order dated November 3, 1958, approving the final plan of reorganization; and also the U.S. district court' approval of the plan of February 13, 1959. Mr. BALL. Again speaking with Mr. Brock, on page 63, Mr. Leighty misled the committee: Mr. BROCK. You settled for 10.28 cents an hour. Then in December, Mr. Ball made an offer of 5 percent against the 4.5 percent which you had achieved, which was actually more than you had gotten in the labor negotiations with the rest of your industry. Mr. LEIGHTY. You do not have all of the facts before you, Congressman. In order to get that amount of money, we had to give up certain rules, certain of our vacations and holiday rights and other rights in order to get that amount of money, which we did not do and had not even been requested to do on any of the other railroads. 1 The owners of the property were Kenan interests who held all of the stock for the bankrupt company. Mr. Leighty has failed to point out that the strike was called by the 11 nonoperating unions which he represents; that the strike was called without those employees being given an opportunity to vote for or against a strike, after they learned that the FEC was not a party to the national negotiations. Nor were they given an opportunity to vote on the railroad's offer of a 5-percent increase spread over 18 months, which offer had no provisions for any rule changes, as Mr. Leighty misrepresented to this committee. On page 65, Mr. Leighty stated: "* injunctions served against us." **. We have not had any Mr. Leighty failed to point out that the very organization of which he is president precipitated the shutdown of Cape Kennedy. This was done by placing his pickets at entrances to the cape, bringing construction to a standstill, in order to obtain Government intervention into the FEC strike. The National Labor Relations Board has ruled that his actions were an illegal secondary boycott and the unions have been enjoined from instigating similar shutdowns at the cape in the future. Mr. Leighty, in speaking to Mr. McGrath, also said: *** But I might say that because of Mr. Ball's activities down there, Mr. Rice of the Atlantic Coastline and Mr. Smith of the Seaboard Airline resigned from the board of directors. I called Mr. Rice, and he has sent a letter to the chairman of this committee, denying Mr. Leighty's statement. With your permission, Mr. Chairman, I will read this letter into the record. The CHAIRMAN. It may be inserted, sir. Mr. BALL. All right. (The letter referred to follows:) Hon. WRIGHT PATMAN, ATLANTIC COAST LINE RAILROAD CO., Jacksonville, Fla., June 11, 1965. Chairman, House Banking Committee, U.S. House of Representatives, Washington, D.C. DEAR CONGRESSMAN PATMAN: Information has come to me that statements have been made relating to my service on the board of directors of the Florida East Coast Railway, and I should like to state the facts for the record. Being a director of another railroad, it was necessary for the Interstate Commerce Commission to authorize my serving as a director of the Florida East Coast Railway. In its order authorizing me to serve in that capacity, the Commission conditioned such authorization upon concurrent service on the FEC board of officers of the Southern Railway and the Seaboard Air Line Railroad. When Mr. J. W. Smith, president of the Seaboard Air Line Railroad, resigned from the FEC board, it was therefore required by the order of the Interstate Commerce Commission that my resignation also be submitted. This was done by my letter of March 14, 1963, photocopy of which is attached hereto. It is hoped the foregoing will clarify any question that may have arisen concerning this matter. Sincerely yours, Mr. EDWARD BALL, W. T. RICE. ATLANTIC COAST LINE RAILROAD CO., Jacksonville, Fla., March 14, 1963. Chairman of the Board, Florida East Coast Railway Co., DEAR MR. BALL: In view of the resignation by Mr. John W. Smith, president of the Seaboard Air Line Railroad Co., from the board of directors of the Florida East Coast Railway Co., and in view of the restriction contained in the order by the Interstate Commerce Commission authorizing me to serve as a director of the Florida East Coast Railway only so long as a representative from the Seaboard Air Line Railroad Co. and the Southern Railway System shall also hold the position of director of the Florida East Coast Railway Co., it is necessary that I now tender my resignation as a member of the board of directors to take effect immediately. With my warm personal regards to you and other members of this board, I am, Most cordially, W. T. RICE. Mr. BALL. I also called Mr. Smith, but I was unable to reach him because he was on the road. I am sure the committee finds it tiresome and time consuming to hear these conflicting statements over and over. I might suggest that the committee consider asking Mr. Leighty and myself to swear simultaneously under oath to the statements we have made concerning the strike, and settle the matter once and for all. Congress has the machinery to take it from there. I am appearing here this morning as a representative of the individuals to whom Mr. du Pont left his estate in trust. I repeat, "in trust." In trust for the beneficiaries crippled children and aged people. I have no personal interest in the estate other than as an administrator. But I do have a duty to Mr. du Pont-to the beneficiaries and to the courts. I am doing my best to fulfill that duty. I try to administer his estate as if I thought with his mind and work with his hands. Mr. du Pont was a kind and benevolent man. His interest in the public welfare was the equal of any man in this Congress and that is going pretty far. This is evidenced by his will. His estate is administered in a fair and business-like manner. Our executives and officers have been with us many years, many over 20 years. We do not pay large salaries. Our highest paid executive officer receives less than a Member of Congress received before the recent increase. Only nine receive in excess of $20,000 per year. Yet, our turnover is minimal. Why? Because these men take pride in what they are doing what they are building—they are a part of a team which takes satisfaction in knowing that their labors benefit untold thousands. We have 4,750 employees-excluding the Florida East Coast Railroad-many of whom are union members. We have contracts with 12 labor unions-excluding the Florida East Coast Railroad-right now. (The following information was submitted for the record:) UNIONS HAVING CURRENT CONTRACTS WITH COMPANIES OF THE DU PONT ESTATE 1. International Association of Machinists, AFL-CIO. 2. United Papermakers and Paperworkers of America, AFL-CIO. 3. International Brotherhood of Electrical Workers. 4. International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America. 5. International Printing Pressmen and Assistants' Union of North America, AFL-CIO. 6. International Brotherhood of Pulp, Sulphite & Paper Mill Workers, AFLCIO. 7. International Brotherhood of Firemen & Oilers, Power House Employees, Operators & Maintenance Men. 8. Amalgamated Clothing Workers of America, AFL-CIO. 9. Order of Railway Conductors & Brakemen. 10. Brotherhood of Locomotive Engineers. 11. International Association of Machinists. 12. Communications Workers of America. Mr. BALL. We are not antiunion. We are scornful of the leadership of some unions and feel them lacking in responsibility to their membership. Certainly, that is not crime enough to force people to divest themselves of their private property. We would not think of asking the Congress to force the Order of Railroad Telegraphers, of which Mr. Leighty is president, to divest itself of its investment in the publication "Labor." (I notice in their 1963 annual report that Mr. Leighty received $45,000, but the strike benefits to the members were only $36,000. But, at least the members received more than the $22,000 put in the officers' pension fund. And, evidently, the strike is not hurting the growth of the unions, as their net assets increased $29,000 during the first year of the strike.) (The following information was submitted for the record:) DURING THE REPORTING PERIOD DID YOUR ORGANIZATION DIRECTLY OR INDIRECTLY: 8. Have any account, in banks or other financial institutions held in o nome other than that of your organisahan? 9. Liquidate or reduce any liabilities without disbursement of cock? 10. Create or participate in the administration of any business enterprises or ether organizations which met the definition of a "sebsidiary organisation" as that term is defined in the instructions on page 21.. 11. Acquire any goods or property in any manner other then by purchase or dispose of such property in any manner other than by sele? 12. Create or participate in the administration of a trust or other fund or organite hon, e primary purpose of which is to provide benefits for members no their benghoaries as defined by Section 3(1) of the Act? (If the answer to any of the above questions, other then 13 and 14 which have been answered "Yes") No. רם าณ НЯ C 17. Did your organization have any contingent liabilities? ...... details must be provided in Item 18 below. Soo speciße Instructions for items JA ADDITIONAL INFORMATION. The Order of Railroad Tolographors contributod 22,500.00 to a ponsion fund covoring fiftcon officers and employoos, which contribution is shown undor Iton 61 of Statement of Roceipts and bioburooronte. Tho And was authorized by the dologatos at the 1920 convention and is adminiotorod by the Finance Cormittoe, which consists of the President, Grand Coorotary-îrokuror and nombers of the Board of Directora. Each of the undersigned officers of the above labor organization declares that he is the officer required to sign this report and that the information contained in this report and any companying documents, i to the best of his knowledge and buitel, was, jaget, and complete, 71 SIGNED ..St.Louis, 1964 |