——————— |How the Wallace family gol their $4.8 million profit By WILLIAM KASHTAN A few-weeks ago I drew attention to the “theoretical” concept being advanced by Larry Sefton of the Steelworkers as a reason for his unions raid on Mine-Mill. At the Ontario- Federation of Labor convention Sefton apparently felt it neces- sary te preface his line of argumentation on this matter with the declaration that the trade union movement is faced with major problems which includes an onslaught by employers and governments. And what conclusion did. he draw from these employer and government-attacks on the trade union movement? If the press reports him correctly, Sefton stated that “we need unity to make gains”! © One might almost be impelled to congratulate Sefton on his position were it not for the fact that the word and the deed do not coincide. Fire and water do not mix; neither does unity and raiding. _A raid by one union on another is certainly no way to build up unity for new gains and new advances. Yet the central issue facing the trade union movement is precisely that of projecting policies which would open the door for a great new advance. : * ¥ * How do matters stand in this regard? It is no secret to say that the great promise of the merger of the TLC and CCL is still to be realized. The workers had great hopes that the merger would strengthen unity all down the line. The practice however has been different. Where there should be unity there is division and a sharpening of jurisdic- tional squabbles. The workers had great ‘hopes that the merger would result in a powerful drive to organize the unorganized. Here, too, practice has been different. Instead of growth there has been stagnation and retreat and a continuing decline in union mem- bership, particularly in the mass production industries. : Instead of organizing hundreds of thousands of unorganized, which is-now decisive for the advance of the trade union move- ment, the direction of many affiliates of the Canadian Labor Congress and its leaders has been turned inwards, disorganiz- ing organized workers. Cannibalism, not class and trade union solidarity, has become the watchword of too many top leaders. The workers expected the merger to strengthen the CLG: Instead there are less uniOns affiliated to the Congress than, when it was first founded. In face of automation, technological developments and changes in the composition of the working class, the workers expected the CLC to advance a bold program of action to meet these challenges to the trade union movement. Where is that program? Where is it being implemented? * * * If Sefton were really serious about the need for unity on sound working-class and trade union principles there are a number of areas which could be immediately explored to make that possible. The first principle. — all unions should be in one trade union centre with their autonomy and democratic rights fully preserved. The second principle — all unions in one industry should cooperate for mutually agreed aims, whether it be bargaining programs, organization of the unorganized, or legislative and political action. Sooner or later the unification of all unions in each industry will be on the agenda but the path to its achievemen will necessarily take on many forms. With all the diversity of forms, however, one cardinal point needs to be maintained: unification must come by agreement not by raiding. The third principle — united action now around a forward- looking program which could check and defeat the offensive of monopoly and make the. trade union movement an ever . more effective force in the fight for peace and Canadian independence. . This is how “unity for new gains” could ‘be achieved. Ana the way to move in ‘that direction is to end raiding before it destroys the trade cau oe movement. . If Larry Sefton weenie: to be eer this is Phar. he should be advocating and working for. BERLIN... War or Peace? PUBLIC MEETING Sunday, December 3, 2:30 p.m. BUENA VISTA HALL, WHITE nea Speaker — William Stewart — Pacific Tribune Staff — © EVERYONE WELCOME e@ Question Period | Sa SPECIAL PT FEATURE “Tlusions about the advantages of “partnership” be-} | tween capital and labor received a rather shattering blow last week when the owners of Burrard Dry Dock decided to divide the kitty. When Burrard became a public company in 1947, hund- reds of small investors, many of them employees of the com- pany, were sold shares in the enterprise on what appeared to. be attractive terms. While the Wallace family re- tained all of the Class B vot- ing stock, the buyers of the Class A stock were, on the sur- face, offered what appeared to be guarantees of their partici- pating in the profits of the company. It was stipulated, for example, that the shares held by the Wallaces would receive no dividends in any year until the Class A shareholders had been paid 45 cents a share. After that Class B could be paid only 15 cents. If further divi- dends were paid, they would be shared equally by the two classes of shares up to 30 cents a share. F After that, the fine print states that Class A will receive no further dividends, and it does not say what Class B may receive. It is stipulated, how- ever, that if the company is liquNlated, the assets will be divided equally, share for share, by Class A and Class B, implying that they have an equal equity in the assets of the company. Except in 1955, the dividends paid in all years have been at the minimum rate of 45 cents on the Class A, with the Class B receiving 15 cents in some years, nothing in others. In 1955, each class was paid an additional 30 cents. In the meantime, the undistributed profits have been growing rap- idly, until they now amount to something over $14,000,000. e At this point, the sharehold- ers might have anticipated that the Wallaces would adopt a policy of increasing the divi- dend rate to the maximum 75 cent rate on A shares, in order to pay themselves annual divi- dends of 45 cents on their own shares. This would have re- sulted in annual dividends of $337,500 to the Wallace family, and $187,500 to the other shareholders. Such an expectation, how- ever, would have been a com- plete misreading of capitalist morality. It would naively as- sume that the Wallaces, in fact, regarded the other investors as partners. HON. CLARENCE WALLACE, above, in the days when he was Lt.-Gov. of the province. his company, Burrard Dry Dock Lid. made, came from over $180 million “defence” contracts in the last seven years, and direct federal sub- sidies, which up to the end of 1960 totalled $2,318,420. A large portion of the profit]. pre has actually nappeuil is that Wallace has taken ad- vantage of the open end pro- — vision of the Class B dividend conditions to take the money out all at once. He can’t pay himself more than 45 cents @~ share without paying the A shareholders 75 cents, that is true. But if he does that just once, the sky is the limit on how much he can pay on his own shares. The extra 30 cent dividend- on the A stock for | one year costs the company just $75,000. Having made that payment this year, the Wal- lace’s have declared a divid- end for themselves of $6.50, totalling $4.8 million. We may be sure that the A sharehold- ers will now wait a good many moons before they again re- ceive a 75 cent dividend. e Pundits in the daily press have expressed puzzlement over this move, on the grounds of high income taxes on the large dividend. If the $4.8 million is divided among 2 few members of the, Wallace family, they will presumably have to pay a steep personal income tax which would take the largest part of the divi- dend. That however, is a naive misconception by said pundits who either don’t realize, or don’t want to say, that high income tax rates on big in- comes are a gimmick to fool the public. The fact is that of the $4.8 million dividend paid, only $58.50 is subject to personal — income tax. The remainder was — paid to an incorporated com- — pany called Wallace Enter- — prises Limited, and as such is; 4 tax-free. Ross nominated in Winnipeg W. C. Ross, Manitoba leader of the Communist Party, was nominated pe week as the party’s candidate in the federal constituency of Winnipeg North. The major part of this con-; stituency is made up of Ward 3 which has elected four Com- munists to public office as al- dermen and school trustees. In his address to the nomin- ating meeting, Ross pointed out! § that the decision to contest Winnipeg North was in line with the national policy of the | Communist Party to run can- didates in only a selected num- ber of federal constituencies where the party has a strong| 3% base of support. “Only our party can give! $4 the voters of Winnipeg North the opportunity to express Ww. ¢. ROSS themselves on a policy of peace and disarmament instead of the present subservience to q the USA,” said Ross. ‘ SPECIAL... JXMAS OFFER 1-YEAR PACI $3.00 . for New Gift Subs Only FIC TRIBUNE @ MAKE YOUR XMAS GIFT COUNT # > GIVE THE PACIFIC. 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