As you know, there was a vigorous dissent by four Justices, and Justice Stewart's critical dissent was more vigorous than I could express without risking contempt of court.

So we are again then confronted with the necessity for plugging a major boycott loophole. There was a highly critical reaction in the press, in the trade publications, some of which I have included in my statement. The consensus was and is that congressional remedial action is necessary.

Now, the Brock bill won't do the whole job, but it is a step in the right direction. It is aimed at lowering costs in federally assisted housing by eliminating these restrictive codes and restrictive trade practices.

What are some of the products that are being restricted? Wall panels; partitions; wall and window units; kitchen, bathroom, stairway, and entrance units; trusses; house sections; and even completely fabricated houses.

I would like to give you an illustration of the cost picture with relation to a single component in a house which we call trusses.

In the old days, we used to call them rafters. Nowadays, they are factory made, or they can be made on the job.

I had a study made. A factory-made truss section which holds up the roof can be made in a factory in less than one-half of a man-hour. On the job, it requires several man-hours to make a comparable rafter. Further, the factory-made trusses help out by reducing material costs because they do not use so much lumber, and, as you know, lumber is in terribly short supply.

In Chicago in a medium-sized project house in the $30,000 to $35,000 range, the total cost of factory-made trusses is $544 for that house. Of this $544, $460 is the total cost of all the truss system which was made in the factory, and $84 is the erection cost on the job.

In comparison, a jobsite-made rafter roof for the same house would cost a total of $899, of which the material is $455. Because of the greater amount of material needed, the material cost in the job-made rafter would be practically the same as the material and labor cost in the factory-made truss system.

The erection cost of the jobsite rafters would be $444, five times the erection cost of the factory-made trusses. And this, of course, is at $12 to $14 an hour.

What does this mean? The National Association of Home Builders estimates that for each $100 increase in the cost of a house, some 15,000 families cannot get mortgages.

This $355 extra cost for only one of the units in the house-the extra cost of job-made rafters on the basis of the Home Builders' figures would deprive 50,000 families of homes. Whether it is 50,000 or 40,000 or 70,000 families, the point is made that the one single item of $355 extra could have that result.

I would like to call your attention to the prevalence of prefab restrictions. It is fair to estimate that there are thousands of such overt or secret restrictions against the use of prefab products in the United States today. I know this because many of our clients that make these products have as their first concern-before going into Chicago, into Dallas, into Cincinnati, or any other building community-what will be the attitude of the trade unions. It is quite common that these

unions in major construction areas will not permit the use of factorymade products.

I will mention just a few instances I know about personally. All of these occurred after the Landrum-Griffin law in 1959, which was supposed to eliminate product boycotts.

First, of course, is the National Woodwork case that I had in the Supreme Court. There the carpenters' union in Philadelphia boycotted all prefit and precut and Formica-clad doors that had been made outside of Philadelphia. Finally, the contractors had to capitulate by doing one of two things, either paying an exaction of several dollars a door, the extra for jobsite fitting, or sending back the factorymachined doors and putting in new blank doors, which had to be cut and finished on the job at large extra cost.

In Cincinnati on the Osher Medical Building project, factory-glazed windows were boycotted by the Glaziers Union. The boycott weapon employed by the Glaziers Union is very effective because in most houses and many buildings there is some plate glass which has to be put in by hand. In other words, it is necessary to have glaziers for that work. The glaziers, if they find any factory-made or preglazed windows on the project anywhere, will not go ahead, and will strike the project in order to prevent the use of the prefab windows. That is a technique. On the other project, that is exactly what they did. They threatened to shut down the entire project if factory-glazed windows were used. On the Murphysboro, Ill., project, the St. Louis Glaziers Union used the same tactics. They threatened to shut down an entire public housing project if any factory-glazed windows were used.

Of course, these days, preglazed windows aren't really put in with putty. The glass is built into the framework. There isn't any putty on it at all. But if any of those products were used, the glaziers would boycott them.

In the Burlington, Ky., public school project, the Glaziers Union pursued the same tactics and prevented the use of factory-glazed windows.

In St. Louis on the Closter Office Building, the Glaziers Union engaged in a boycott strike to prevent the use of these factory-finished windows.

Then in a large Highland Park, Ill., apartment project, just a short time ago, the Carpenters Union struck because factory-glazed windows were being used.

Shortly after that in Chicago, in a large apartment project, the carpenters prevented the use of factory-machined and prefinished doors. This was a counterpart of the Philadelphia boycott of factorymachined doors in the National Woodwork case.

The Chicago situation is bad, but it is a situation that prevails in many construction areas. You can't use prefabricated products in many areas. Sometimes a deal is worked out with the local union, but this eliminates the cost saving.

Similarly, on high-rise apartments, the Glaziers Union or the carpenters will not permit a builder in many places in the country to use factory-prepared windows, doors, and other prefab products.

In Decatur, Ill., the Carpenters Union struck to prevent the use of high-quality, premachined, Formica-clad doors; and just recently the

Court of Appeals here in the District of Columbia held that was perfectly lawful on the basis of the National Woodwork case.

Finally, the recent Holiday Inn project in Detroit is a glaring example of union obstruction of technological advances. It is a replay of the old Bradley case in New York City, where you will recall the local unions wouldn't put in Wisconsin electrical fixtures but required that they be taken out and put them back by New York electricians.

What happened in Detroit? A Detroit contractor bought highquality bathroom units, completely fabricated bathrooms, made in Wisconsin. These were finished, the tile was in, the toilets were in, the lavatories, the tubs, everything. The room was finished on the outside so one wall would be the interior corridor of the inn. These bathrooms were to be inserted in an opening in the framework of the building. The units were trucked to Detroit and were put in place. The Plumbers Union said, "No, we have to take them all out and put them back in again."

After a long fight, the contractor capitulated and the plumbers took out the bathtubs, took out the lavatories, took out the toilets, and replaced them at a cost of $12 an hour.

This case is now in litigation, the contractors claiming a loss of upward of a million dollars-a most flagrant repetition of the old Bradley case racket.

Gentlemen, it is abundantly clear that these boycott abuses are unjustifiable, and the economic restrictions severely impede essential advances in the construction industry.

This Brock bill won't solve the whole problem, but it is a major step in the right direction. It will prevent product boycotts and other work restrictions in the vital area of federally assisted housing.

This will not only help the consumers who need homes; it will help all of us, the taxpayers who help pay for the federally assisted housing. We appreciate the opportunity of testifying. I hope we won't have to come back here again 10 years from now. Thank you very much. Senator TowER. I hope not, too, Mr. Mahin.

Mr. Marx, do you want to add something to what has been said? Mr. MARX. Yes, sir, if I may.

Senator TOWER. All right.

Mr. MARX. I have submitted a statement.

Senator TOWER. Any statements that you want to submit will be printed in full in the record.

You can proceed informally, if you would like.

Mr. MAHIN. A Mr. David Jasper, vice president and general counsel, representing the Air Conditioning Institute, has a paper he would like for me to submit.

Senator TowER. Yes, indeed, we will include that in the record (see p. 141).

I understand he couldn't be here today.

Mr. MAHIN. Yes.

STATEMENT OF WILLIAM B. MARX, EXECUTIVE DIRECTOR, AMERICAN BOILER MANUFACTURERS ASSOCIATION

Mr. MARX. Mr. Chairman, I would like to have my statement printed in the record, and I will summarize it.

80-741-72- -9

Senator TOWER. Without objection, it will be done (see p. 144). Mr. MARX. My name is William B. Marx. I am executive director of the American Boiler Manufacturers Association.

Our association is composed of some 45 member companies that design, manufacture, and sell boilers or steam generating systems that range in size from the large public utility units and nuclear units down through the industrial range into the large residential range.

Last year our shipments totaled some $900 million and we sold roughly 7,000 boilers.

Generally, we manufacture units that are larger in size and fewer in number. We do not manufacture units that go to small residences, but large developments, public developments.

We have been making packaged boilers, or, correctly, shop-assembled boilers, for many years.

In fact, we think perhaps we were one of the early manufacturing industries to design a packaged product.

They were first built in 1931.

Today, because of the economies of size and the advances in transportation, we are able to ship about 90 percent of our units of this type, that is, shop assembled.

Only the very, very large steam-generating units used by public utilities are built in the field to a great degree. Almost a hundred percent of the smaller units are built in the shops.

We have faced for some years sporadic attempts on the part of the Pipefitters Union to prevent installation of some of our products, based on the fact that some of the outside piping on the front of the unit had been traditionally their work.

Over the years, as we put these boilers together, the manufacturer has been able to assume more and more responsibility for the complete unit.

In the old days one manufacturer took responsibility for the burning equipment, another for the controls, another for the safety devices, and the boiler manufacturer for the pressure vessel.

However, with the packaged boiler, the boiler manufacturer is able to assume complete responsibility for the operation of the system, which, of course, is a great advantage to owners and the reason why we found very rapid and quick acceptance of this type unit as it came on the market.

Much of the external piping on the front has to do with the fuel burning equipment and various safety devices.

What we have run into in these instances I speak of, where the pipefitters have refused to install, is a demand that either this piping on the front of the boiler be removed and be replaced by their men, or that an amount of money equivalent to the number of man-hours involved in that particular fabrication be given the union for this work.

I mentioned that over the years this has been rather sporadic. In 1963, we could see that it was becoming increasingly common around the country.

As a result, in four cases in the Twin Cities area, the association members, as a group, decided to file unfair labor practice charges. We did, and I won't go into any great detail, but the litigation was long and expensive.

We followed by approximately 1 year the National Woodwork Manufacturers case. Our case started in July of 1963, went through the National Labor Relations Board twice and into the Eighth Circuit Court of Appeals in St. Louis twice. We filed for certiorari in the Supreme Court in 1969, and in June of 1970, that petition was denied. So that particular piece of litigation is now dead.

Since that time, however, we have experienced a number of incidents. Just briefly-and these are ones that have been reported to the association-we have experienced some 13 incidents involving about 34 steam-generating units.

Of these 13 incidents, 10 have been in public buildings of some kind or another post offices, hospitals, apartments, and universities—and three in private institutions.

So we still have the problem.

Although most of our units today seem to go in without stoppage, there are many areas around the country where our manufacturers run into the situation where some kind of settlement has to be worked out between the contractor and the union, usually involving the manufacturer, so that installation can proceed.

In two of the 13 instances, unfair labor practices charges were filed, and the problem was resolved that way.

We feel there are some other considerations involving packaged products. Perhaps boilers are a good example, with certain special considerations as well.

First of all, our product is defined actually, and I believe in a legal sense, as an "inherently dangerous" product.

Therefore, we see any trend in which some less skilled party would take part in the work would probably detract from the safety of this unit.

Not only that, it would make it very difficult for any single party to warrant the product; thus it would really be a step back to 1931 when the first packaged boiler was introduced, when three or four people took responsibility.

Under the present standards which govern the design and installation of steam generators, and the present State laws and regulations of insuring boilers, we really don't see how any single person could take this responsibility.

We feel that this whole system of regulating the manufacture, design, and installation of boilers would simply fall apart.

Second, in this day and age we see, as everyone else does, of course, great, great stress on increased quality of products.

We have always been very closely self-regulated. We build to standards set by the American Society of Mechanical Engineers, which are over 50 years old, with an outstanding record of safety.

However, because our manufacturers build units from large nuclear reactors down, we are seeing greater and greater quality requirements. We see the stress that the Atomic Energy Commission has been putting on the quality and safety of nuclear equipment very rapidly being carried through our entire product line, through the large conventional steam generators and the industrial steam generators, right down into the smaller units which we manufacture for public housing. We simply do not see how this additional quality, that is definitely going to be required, can be carried through if we are not allowed to