ISOLATION OF EACH OPERATING UNIT These various factors contribute toward scattering the canneries geographically so that each one will be able to obtain its fish within close range. They also explain, in part at least, why most canneries are situated in isolated spots which, in most instances (except for the winter watchmen), are practically abandoned except during the very short summer period of intense activity. Even in those instances in which there is not complete isolation, the communities in which any canneries are located are mere villages. The very largest of them, Ketchikan, is a town of only five or six thousand people. SHORTNESS OF THE FISHING SEASON The salmon run, itself, takes place only in summer. In some places such as the Bristol Bay district, the run is normally congested into less than 30 days. In hardly any district does it exceed 6 weeks. In addition to these time restrictions imposed by nature herself, the Government, for sound conservation purposes, adds its own time restrictions. In Bristol Bay, for instance it is illegal to fish excepting during the period from June 24 to July 25, and even within these dates there are weekly periods closed to fishing, so that the actual number of days in which fishing may legally be pursued is not in excess of 22 days. To pursue this Bristol Bay illustration a little further, it should be noted that the annual pack of canned salmon in the Bristol Bay area in normal years is from 1,000,000 to 1,500,000 cases of salmon (a case being 48 1-pound cans). In other words, in a period of 30 days, from 48,000,000 to 72,000,000 cans of salmon must be fully processed and this processing done within 24 hours after the fish are caught. Even during this short 30-day period, during only a portion of which operations can continue, there are enormous variations in the supply of fish from day to day, primarily due to the unpredictable variations in the run of the fish and the character of the weather. CHARACTERISTICS OF THE INDUSTRY All of the foregoing contribute to the natural, in fact, the inevitably peculiar characteristics of this Alaska salmon industry: that it is all congested within a very short period of time, and that even within this short period of time there is enormous variation in intensity of operation, with periods of complete slack and idleness varying with periods of extreme activity. Nature does not wait for man's convenience. The salmon must be canned immediately. Otherwise, there will be a spoilage, economic waste and shortage of this essential food supply. THE FISHING DISTRICTS-FEDERAL REGULATIONS There are 19 separate fishing areas as established by the Fish and Wildlife Service. Fishing in the Territory is controlled entirely by the Fish and Wildlife Service of the United States Government. The Secretary of the Interior by congressional authorization promulgates and issues regulations annually, governing fishing for each year. These regulations control opening and closing dates of each one of the 19 established fishing areas as well as the type and amount of gear, etc., which may be used. They are amended, however, from time to time during the season by supplemental orders. The season in the various areas varies, but generally speaking any particular area is not open for more than 6 weeks and the greater portion of the catch within any such area is made within a 10-day period. The opening and closing dates in the various fishing districts have no relation to each other but are based on the history of the run within that particular area. It is the endeavor of the Fish and Wildlife Service to open the season in each area after some of the run has gone by and to try and close it before or at approximately the time the run reaches its intensity so as to insure an ample escapement. FLUCTUATION IN CATCH There is a very wide fluctuation, however, in the amount of the commercial catch during the dates when fishing is permitted. The average cannery puts up from 75 to 80 percent of its annual pack within a 10-day period, although the fishing season itself as set under the regulation might be as much as 6 weeks. Experience has proved that it is impossible to tell just when these fish are going to arrive as far as dates are concerned. Some years they may be early and some years they may be late, which also throws the true run out of proportion to the fishing season. In any area from year to year there might be THE UNION CONTRACTS The Alaska Salmon Industry, Inc., negotiates approximately 35 union contracts covering various phases of fishing and canning operations. A few of the contracts are of general application throughout the territory, but most of them are on a district basis. These districts are generally known as Southeastern, Copper River and Prince William Sound, Cook Inlet, Kodiak Island, Westward, and Bistol Bay. There is a great variance as to the fishing methods, type of gear, etc., within these six districts and also a considerable variance in type and species of salmon, all of which play a very important part in collective bargaining negotiations. All of the contracts provide for a minimum wage rate well in excess of the eventual contemplated rate of 75 cents an hour under S. 1349. It is only an exemption as to minimum hours that the proposed act has any application to this industry. SALMON FISHING AND CANNING ARE INTERDEPENDENT OPERATIONS There is no distinction recognized between the fishing and canning operations in Alaska. They are one interdependent operation. The success or failure of a canning operation in Alaska depends upon both fishing and canning. The operation entails fishing for salmon and canning of salmon in a complete process. THE CANNING EXPEDITION The history of the industry shows that it grew up under conditions whereby the whole operation, the whole expedition, the whole group was fitted together in Seattle or San Francisco-fishermen, cannery workers, machinists, carpenters, superintendents, supplies, cans, cartons, etc., along with doctors, nurses, first-aid equipment, etc.-everything essential or necessary to the conduct of the operation was assembled and all the people necessary were assembled and they were taken to the canneries on a ship, put ashore there with their supplies. The ship laid at anchor on the anchorage and the anchorage in that area is 10 or 12 miles offshore, and they waited until the season closed and then everybody, the same people who came up on the ship, came back on the ship, and in addition they brought back the canned salmon which they had produced during the season. That method of operation was continued throughout the years with reference to the Bristol Bay district, with the exception that during the present war, the War Shipping Administration requisitioned all of the vessels of the industry. The same general method of operation, however, has been followed, even though the companies no longer had their vessels. THE EXPEDITION OF TODAY It is still necessary for virtually all canneries in all districts, where they do not operate their own vessels, to make special arrangements by charter, contract, or otherwise with a steamship company to take up their employees, inventories, and supplies to the canneries at a particular time. Upon arrival it is necessary for the employees to do the longshoring work in connection with the unloading of the vessels as the canneries are located in isolated areas and there is no one else available to do it. As the territory tended to develop, particularly after the discovery of gold. commercial transportation was established in some parts of the Territory. As a result, in southeastern Alaska and other sections of the Territory commercial transportation is used but still on an expedition basis by mutual arrangement or negotiation. The cannery operator works out an arrangement with one of the commercial transportation companies to send a boat of a agreed type of so much freight and so many passengers to a cannery on Kodiak Island or on the Peninsula or on Prince William Sound, or wherever his operation is located. The company accumulates the supplies at the commercial dock and gets its crew together there on a given date and that is the method they have used in later years. Wrangell have an opportunity to take advantage of a certain amount of Some of the canneries at Ketchikan and scheduled transportation to handle crews and supplies, but the ordinary cannery is located in what you would call an isolated area. general point of call for any commercial transportation. It is not in a town or necessary to work out by negotiation and as near to mutual satisfaction as It is therefore possible with the steamship company, a schedule where the ships will be diverted from their normal run or special sailings will be set up to call at the canneries in the spring when the crews are moved in and in the fall when they are moved out. The most northwesterly terminus in Alaska of regular commercial steamers is Seward. There are no normal routes, as far as ordinary commercial shipping is concerned, beyond Seward. The fishing and cannery supplies going up and the canned salmon coming back constitute the majority of freight both ways. It is the historical practice when the crews are made up to include a complete operating unit for fishing and canning. OPERATING COMPARISONS OF DISTRICTS There are varying weather conditions in the areas, all of which, however, are of such a nature to have a considerable bearing upon the operation. In Bristol Bay the ice and snow and tidal conditions are severe handicaps and only allow a minimum of time to get the cannery prepared for the opening of the season, and a minimum of time for putting away the boats and gear, dismantling of machinery, etc., at the end of the season. In the more southerly areas very severe storms are incurred and in excess of 13 feet of rainfall a year. SALMON IS NOT WAREHOUSED IN ALASKA It is essential that the canned salmon be removed from the canneries and to the States as soon as possible to protect it from freezing and elements of the weather. It has never been possible or commercially feasible to warehouse canned salmon in Alaska throughout the winter. PRESEASON AND POSTSEASON WORK In the performance of preseason and postseason work each and every member of the crew is an essential and interdependent part of the canning and fishing operation. The culinary crew much go in with the expedition. Men must be fed and this cannot be done without providing cooks and a culinary crew. The boats, gear, traps and nets, cannery machinery and equipment must all be made ready for the commencement of the fishing season. The work of carpenters, machinists, storekeepers, bookkeepers, and timekeepers, during the season, as well as preseason and postseason, cannot be segregated from or said to be any less a part of the general fishing and canning operation than that of the man who does the actual fishing or actually places the fish in the can, during the actual fishing and canning season. They are all cogs in a single interdependent work unit. The work of carpenters, machinists, and beach gang is just as much a functional part of the processing of the salmon as the preparation of boats and gear is part of the catching and taking of fish. It is all work which has a necessary and direct relationship to the processing and canning of the salmon. All of the members of the crew are as much a part of and just as essential to the catching, taking, processing, and canning of the salmon as any other member of the crew. FISHING AND CANNING ARE INTEGRATED The operations both onshore and offshore are integrated and they are continuous. If the fishing operation produces more fish than the cannery can pack, then the fishing or some portion of it must be discontinued, because there is no object to transporting fish into the cannery beyond the capacity the cannery can handle. In fact, the law prohibits this because in so doing it prohibits the wanton waste of food, so the entire operation must be synchonized at all times as we follow the operation through to the temporary warehouses-salmon cannot be stored in the open in portions of Alaska, particularly southeastern and Prince William Sound, because of the heavy rain. When warehouses become blocked, the cannery must stop, and when the cannery stops the fishing must stop. So there is a provision in all of the contracts which permits the cannery to take a fisherman, number of the tender crew, a seiner, gill-netter, or anybody else anywhere and put him to work in the cannery; put him there as a slimer, a retort man or, as happens frequently, call him in to do longshoring, to lay his boat up, because the salmon must move in order to clear the warehouse and permit the operation to continue. The superintendent cannot ship the crew home until the salmon is loaded and gone. If he does there would be nob dy there to load it when the ship came in, so he must hold his crew, or enough of his crew, to load the salmon before he can close the cannery, because he cannot with any margin of safety go away and leave the salmon there. THE FAIR LABOR STANDARDS ACT AND COLLECTIVE BARGAINING CONTRACTS The existing contracts between the unions and the industry are inconsistent with the provisions of the Wages and Hours Act. It would be impossible to apply the act to them. In virtually all cases the employees are granted a guaranty, generally in excess of the work period. A basic wage by the month or by the season is paid and is in effect from the time of embarkation at Seattle until return. This basic wage only covers hours of work between 8 a. m. and 5 p. m. It is paid regardless of extended periods of idle time throughout the season when only a few hours of work are performed on slack days but nevertheless considerably exceeds all proposed minimum wage provisions of S. 1439. Any work which is performed after 5 p. m. is paid for at what is called an overtime rate, although it is not overtime in the true sense of the word, because it may be that no work was performed during the period from 8 to 5. A penalty rate is payable for all work performed after 10 p. m. and before 8 a. m. The overtime rate or a special rate is also paid in addition to the basic rate with reference to work such as longshoring, even though that work might be performed between the hours of 8 to 5. In some areas there is no overtime hourly rate during the fishing season as employees are paid a percentage or lay, in lieu of overtime, which is based upon the size of the pack. This has been a very remunerative method of pay for the employees. There is no record of hours kept. The employee is merely paid a basic rate plus an agreed amount for every thousand cases packed at the cannery. These pay and work conditions are all the result of collective bargaining and are peculiar to the Alaska canned-salmon industry. There have never been negotiations with any union or collective bargaining with any union on the basis that the Fair Labor Standards Act was or should be applicable to any labor performed under any of the contracts. Nor has there ever been any contention in negotiating existing contracts that the Fair Labor Standards Act was applicable to this industry. There has never been a claim presented by any union for adjustment or settlement which was predicated upon the Fair Labor Standards Act. The union contentions in negotiations with the Alaska Salmon Industry, Inc., and their demands have been contrary to the theory of the Fair Labor Standards Act. THE NRA CODE AND EXECUTIVE ORDER 9240 That maximum hours restrictions in this industry are economically unsound was pointed out by the Honorable Hugh S. Johnson, NRA Administrator, in his report to the President of the United States, under date of May 15, 1934, relative to NRA Code No. 429, covering the canned-salmon industry, in which he said: "It is impossible in this industry to provide for any substantial increase of employment except by requiring enough personnel in each cannery for a twoshift operation inasmuch as 75 percent of the labor must be transported 2,000 miles, or more, and the volume of work to give double-shift employment normally occurs only on 2 or 3 days of the season. A double-shift requirement would be entirely unreasonable and would increase costs out of all reasonable proportion to existing conditions. * * * Statistics gathered over past years indicate that the average hours worked by a cannery employee from the date of employment to the date of discharge are not excessive due to long inactive periods combined with comparatively brief periods of long hours. While overtime has not been paid generally, it is provided for in the case of cannery workers who are employed on an hourly basis outside of Alaska." "A large percentage of the fishermen are taken to Alaska under collective bargaining agreements negotiated by the Alaska Fishermen's Union. The terms of these agreements are very advantageous for the fishermen, and the relationship between the Alaska Fishermen's Union and the employers is entirely satisfactory." It is apparent to anyone having a knowledge of the fishery industry that it is impossible to operate upon any set schedule of working hours. This was realized by the Secretary of Labor with reference to the application of Executive Order No. 9240. The Secretary of Labor, under date of June 7, 1943, made the following determination: "Upon application of interested parties for an exemption of the fish-processing industry in the States of Washington, Oregon, and California, and in the Territory of Alaska from the provisions of Executive Order 9240, and after an investigation of the relevant factors bearing upon this application, I find that the nature and exigencies of operations in this industry make it necessary and advisable for the successful prosecution of the war to determine that the pro visions of Executive Order 9240 shall not apply to the west coast and Alaska fish-processing industry as defined herein. "Now, therefore, by virtue of the power vested in me by Executive Order 9248, it is ordered that the provisions of Executive Order 9240 entitled 'Regulations Relating to Ovetime Wage Compensation,' shall not apply to employees engaged in the processing of fish, including the canning and reduction thereof, and operations incidental thereto, in the States of Washington, Oregon, and California, and in the Territory of Alaska." The factors controlling the fishing industry make it absolu ely essential that it be exempt from any legislation or regulation as to maximum working hours. * * CONCLUSION If legislation were enacted which would limit the present seafood and fishery exemption under the Fair Labor Standards Act to only those "employees employed in the catching, taking, of fish", it would unavoidably lead to innumerable conflicts and disputes. The different employees within the industryfishermen, canners, trapmen, tendermen, machinists, carpenters, cooks, etc.-all live together in one little community, all work together upon the single objective of getting out the season's pack, all are functional parts of one interdependent work unit. To apply one set of rules to certain individuals and an inconsistent set of rules to certain others of the same outfit, all of whom consider themselves part of the same unit, would inevitably create jealousies, bitterness, and disputes. It could not be otherwise. Congress should pass legislation for the good of industrial peace and not be guilty of enacting legislation which would foster industrial strife and unrest, particularly where such legislation could not accomplish any economic good. It is therefore submitted that section 13 (a) (5) of the Fair Labor Standards Act should not be subject to amendment. Respectfully submitted. Dated: October 15, 1945. ALASKA SALMON INDUSTRY, INC., EXHIBIT 86 ADDITIONAL TESTIMONY OF SECRETARY OF LABOR L. B. SCHWELLENBACH Hon. JAMES E. MURRAY, Chairman, Education and Labor Committee, United States Senate, Washington, D. C. DEAR SENATOR MURRAY: I am taking this opportunity to make available to the Committee on Education and Labor material which appears pertinent to one of the issues raised during the hearings held before the subcommittee considering S. 1349-the effect of the increased minimum wage on the cost of living in the country. The material, which has been prepared in this Department includes four tables showing corporate profitability for recent years, figures on labor-cost ratios of manufacturing industries and an estimate of increased productivity in manufacturing industries. This material supplements tables estimating the direct cost of the proposed minimum in 19 industries which were submitted to the committee by the Administrator of the Office of Price Administration. Estimates as to the extent to which this increased cost can be absorbed without affecting prices will depend largely upon the three factors of profitability, labor-cost ratio, and increased productivity in various industries. I am also submitting a study made by the Bureau of Labor Statistics concerning the effect of the 65-cent minimum wage in the basic lumber industry, which shows that manufacturing costs in this industry, which will be among the most seriously affected industries, will be increased on the average only about 3.2 percent. Yours very truly, L. B. SCHWELLENBACH. UNITED STATES DEPARTMENT OF LABOR, BUREAU OF LABOR STATISTICS CORPORATE PROFITS AND PROFIT RATIOS IN RECENT YEARS The four attached tables present the available summary data on corporate profits during recent years. The most extensive information on corporate profitability is found in reports assembled by the Office of Price Administration. Table 1 is derived from these |