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Although cash-light unions often have less latitude in their investments —strike reserves need to be in banks or in short-term securities easily convertible to cash in an emergency—many a well-established union such as the United Auto Workers has learned to invest and still protect itself. The U.A.W. buys heavily in securities dated to mature about contract expiration time, in case of a strike has the money ready. "Our criteria are security, fluidity and yield—in that order," says U.A.W. Secretary-Treasurer Emil Mazey. In quest of security for its $33 million invested funds, the U.A.W. has nearly 73% in Government bonds, a large amount in federal savings-and-loan associations, plus $2,000,000 in General Motors Acceptance Corp. debentures, which Mazey counts no risk. "If G.M. ever gets in trouble," says Mazey, expressing a familiar thought, "then the U.S. will be in trouble too." The U.A.W. also owns some $21,000 worth of common stocks, representing one share of stock of each company with which the union has a contract. They were bought so the union would get announcements and annual reports. The stock returns have proved so much more profitable than the U.A.W.'s other investments that the union is considering a move into common stocks.
For all the new horizons in union investment, many unions refuse to be convinced, e.g., the huge United Steelworkers union, which still buys only Government bonds. "We have a strong feeling that the business world is not for us," says Union Secretary-Treasurer I. W. Abel. "For one thing, adventures in speculative stock purchase might give the enemies of labor a chance to attack the union's tax-free status." Probably a greater fear among most unions is voiced by Joseph T. De Silva, Los Angeles local secretary of the Retail Clerks: "These funds are even going to own some corporations before long. When that happens, the traditional union-management rivalry will exist only in negotiations." While businessmen once worried about the prospect of the wealthy unions buying in and dictating to management, some union leaders feel that investments in common stock will have just the opposite effect. The unions will become more aware that if the company suffers, so will its own members.