Mr. COLLET. Now if it becomes essential, for the purpose of getting an additional supply of lumber, to make a price increase for that purpose, then, as the acts of Congress have been interpreted, that is permissible and justifiable. Now if, in the making of that price increase for the purpose of obtaining production, that goes into the payment of additional wages, or it may go into something else. They say they can eliminate many of the obstacles to production with a little higher price. Now if they get a higher volume of production, absent the cost of stumpage, which, of course, is a very important item, their remaining overheads may remain fairly constant, and they will not need nearly as much of a price increase as they otherwise would.

Senator ELLENDER. That is for that one industry, Judge. Take the cotton compressing industry, when the wage was permissible up to 55 cents, an adjustment was made as to fees and other charges. Now you can readily see that if the minimum wage is now permitted to go up to 65 cents, as one witness pointed out, you are going to have an additional cost to that industry in the South of from 10 to 12 million dollars. Who is going to pay for that? Will the farmer absorb it or will you have to cause an increase in the price of cotton? Mr. COLLET. Åre you talking about a lumber case or some other case?

Senator ELLENDER. I am talking about the cotton compressors. You are certainly going to have to make somebody pay for that, and you can't escape upping the price of cotton goods.

Mr. COLLET. If they can't get additional production as a result of that, then it will inevitably go into the price, as we have agreed, certainly.

Senator ELLENDER. And in the industry that I am speaking of, cotton compressing and storage, there is no way to decrease the costs of that because it simply means the storage of bales of cotton, that is all it means.

Senator TAFT. They compress the bales, don't they?

Senator ELLENDER. Yes. There is no way of changing that picture and you have got the same case in the canning industry. In order to be able to permit the increase in wages up to 55 cents, some adjustment had to be made. Now if you put them up to 65 cents you are going to have to adjust prices in the canning industry and in the milk industry-all of which means higher and higher prices.

Mr. COLLET. Not inevitably, Senator. You leave out this question of production all the way through. Excuse me for saying so but I think that we must, in order to be accurate, include that in our costs, and I am sure you intend to.

Senator ELLENDER. I want to be fair.

Mr. COLLET. I know that, by your reputation, if by no other way, and by my experience this morning.

The CHAIRMAN. Are there any other questions of this witness? If not we will excuse the witness.

(Witness excused.)

The CHAIRMAN. Are there any other witnesses for this morning? [No response.]

Senator ELLENDER. Mr. Chairman, I am sorry to inform the committee that a witness who was supposed to be present is still ill in bed, and of course I have no idea of asking for further time. But I will ask permission of the committee to file his statement, and a few

other short statements that I have from other witnesses. I will go over the matter with Mr. McMurray here with a view of not having any duplication in the record.

The CHAIRMAN. Without objection, that will be permitted. (The material Senator Ellender filed follows:)

MINIMUM WAGE PROPOSAL

Any law that sets minimum wages, I think, should be based on the cost of living, and should not be an arbitrary figure. There are reliable indexes on the cost of living, and if we feel that a man is entitled to certain living standards, then the amount of compensation for such a living standard should be determined with variation, according to the cost of living in certain sections of the country and any adjustments made quarterly or annually, based upon the cost-of-living index.

MINIMUM LABOR SCALE TO WHOM DOES IT APPLY?

In considering minimum wages and other enactment by the Federal Government, there should be a clarification as to who was covered by such legislation. Heretofore, all business conducting interstate commerce was governed-but just what is meant by engaged in interstate commerce? Some judges have held that if the goods used or sold by this firm cross the State boundaries before sale or manufacture, then the firm is engaged in interstate commerce, although the products were sold exclusively in the State in which its business was domiciled. Recently it has been held that a supplier of goods selling to a firm engaged in certain type of interstate commerce was himself in interstate commerce. As an example, a man supplying cross ties to the railroad: although the cross ties were delivered in the same State in which they originate, the railroad crosses the State line, and being in interstate commerce, then, the cross ties were interpreted as an article of interstate commerce, and the supplier thereof is engaged in interstate commerce.

Certainly there should be a clarification by Congress as to firms and businesses that will be governed by any proposed minimum wage standard. If this is not done and if the trend recently exhibited in judiciary circles was extended, it will be only a short time until a drug store in a small town will be construed as being in interstate commerce, and the delivery boy will be subject to all Federal wage regulations, not only as apply to minimum wage, but minimum age, overtime pay, etc. Eventually everyone engaged in any business will be interpreted as being in interstate commerce. If that is the intent and purpose of Congress, well and good-state clearly that it will apply to everybody in the country. But if it is the intention of Congress to limit these regulations to the old concept of interstate commerce, then Congress should incorporate into such measures a clear definition and prescription.

DIFFERENCE IN PRODUCTIVITY BY SECTIONS OF THE UNITED STATES

In considering minimum wages, etc., it is imperative that due consideration be given to the fact (whether we like it or not) that there is a difference in the productivity of people in different sections of the United States. Not only in this country, but throughout the world, people close to the Equator are not as industrious as people farther away from the Equator.

A man in the deep South, for instance in New Orleans, will not produce as much as a man in the northern part of the United States, for instance Detroit. I have discussed this with men of very broad experience in every section of the country, and it is the unanimous conviction of every one of these men that a man in the deep South will produce far less under the same circumstances than a man in the northern part of the country. The majority of these people feel that he will produce 60 percent as much, and the highest percentage ever given me was 75 percent. It is the consensus of opinion that it is due to climatic conditions and not to the difference in the qualifications of the man, and this is supported by many instances in which people from one section of the country were transferred to another section of the country, and almost invariably within 3 months they acquire the productivity of the section into which they have moved. In other words, when you send a southerner north, he speeds up, and when you send a northerner south, he slows down. It has been suggested that this could be overcome, partially by air conditioning all plants in the South. The southern industrialist would be loaded down with considerable capital and mainte

rance expenses; and operations such as agriculture and forestry, of course, do not permit air conditioning.

If through litigation or through union pressure or otherwise industrialists in the South must pay the same wages as industrialists in the North, then they cannot possibly compete.

For example, say that a plant in New Orleans pays the same wage as a plant in Detroit manufacturing the same product. Let us say that the productivity of the southern man is 66% percent (which is the highest). In order to produce the same number of articles as the Detroit plant, the southern manufacturer would have to employ 50 percent more men, and furthermore, he would have to have 50 percent larger plant, with 50 percent more parking area, more power to operate the 50 percent more machines, 50 percent larger pay roll to compute, and in fact, other than material purchased, all of his cost would be 50 percent more. New Orleans manufacturer would have to sell in the same market and at the same price as the Detroit manufacturer, and he would go broke.

The

I am a southerner, born and raised in the South, own my own home and plant in the city of New Orleans, and my three sons go to Tulane University, in New Orleans. I like New Orleans and I like the South. I will leave only if I am forced to do so, but if I have to pay the same wages as Chicago, Detroit, or Cleveland, I cannot afford the 50 percent handicap, and would be compelled to move my plant north, regardless of my feelings in the matter or the trouble and expense entailed in rehabilitating myself and plant in a northern city. Higher minimum wages and union pressure to secure uniform wages throughout the Nation will inevitably result in the removal of most industry from the South and will preclude industrialization of this area which so sorely needs a balance between industry and agriculture, and which has been designated America's economic problem No. 1.

STATEMENT Presented to THE SENATE EDUCATION AND LABOR SUBCOMMITTEE ON S. 1349 TO AMEND THE FAIR LABOR STANDARDS ACT OF 1938, BY A. W. DICKINSON, REPRESENTING THE AMERICAN MINING CONGRESS

My name is A. W. Dickinson, representing the American Mining Congress, an association which includes in its membership mining companies producing the greater part of the metals, coal, and nonmetallic minerals in the United States and Alaska.

Upon examination of S. 1349 we find in sections 3, 5, and 8 proposals to amend the Fair Labor Standards Act of 1938 in such manner that the inining industry would be directly affected. These proposals are: (1) To increase the statutory minimum wage from the present minimum of 40 cents an hour to a minimum of 65 cents with subsequent automatic increases to 70 cents and 75 cents; (2) to establish higher than statutory minimum wages under industry committee functioning and administrative orders; and (3) to enact a 5-year statute of limitations for employee suits under section 16 (b) of the Wage and Hour Act.

INCREASE STATUTORY MINIMUM WAGE

Little less than catastrophic would be the effect on our national economy of arbitrarily imposing a 621⁄2-percent increase in the rate of unskilled labor, from the statutory minimum of 40 cents an hour to 65 cents, with a later increase of 872 percent, to 75 cents an hour. This reckless concept is so shocking that even the Administrator of the Wage and Hour Division has warned that it seems preferable for the Congress to specify the wage rates "which will reflect in its judgment as to what our economy may be able to afford during the next few years without substantial increases in prices or curtailment of employment."

In general, mining is a high wage industry, as shown by the report of the United States Bureau of Labor Statistics for July 1945 which gives average hourly and weekly earnings as follows:

Notwithstanding the fact that mining wages in general are as shown above, there are spots and areas in a number of sections in this country where the imposition of minimum wages as contemplated in this bill would result in serious hardship to both employer and employee. The inflexible application of a blanket minimum wage scale to the widely varying conditions in the States and regions of our country will be more fully explained to the committee in the next few minutes by a mine operator who is present here today.

ESTABLISHING HIGHER THAN STATUTORY MINIMUM WAGES

The proposal to authorize the Administrator to establish wage differentials "between interrelated job classifications" would, by statutory enactment, place the setting of mine wages Nation-wide under a centralized Federal control. By such a grant of power the Fair Labor Standards Act would be distorted from a minimum-wage law to a law placing the entire wage structure in all States and regions under the control of a Federal Administrator in Washington. This is wrong. The War Labor Board has wrestled with this problem of establishing wage differentials and has found it impractical in application. We suggest that the committee can secure valuable information by inviting the former WLB Chairman, Dr. George W. Taylor, to appear and give testimony on this matter. It is the firm belief of the mining industry that agreement upon the wide range of wage rates for skilled workmen can only be reached through negotiation between the managements of the various industries in different parts of the country and the workmen themselves. Even so stanch a representative of labor as AFL President William Green castigates this Federal fixing of wage differentials as contemplated in S. 1349, as an "invasion by the Government of the domain of free and voluntary collective bargaining between labor and management."

STATUTE OF LIMITATIONS

S. 1349 would provide a 5-year statute of limitations on employee suits for unpaid wages, overtime, and liquidated damages under the Wages and Hours Act. There is no limitation under section 16 (b), the penalty section of the act, and the present situation is such that many mining companies could be driven into bankruptcy by employee suits, particularly in view of recent Supreme Court decisions. Certainly a limitation should be placed on the time in which such suits can be instituted, but 5 years is altogether too long. The very life of a mining enterprise may be placed in jeopardy through employee suits arising from unintentional violations of the Wages and Hours Act. In many instances mining employers acting on information received from officials of the Wage and Hour Administration have later been subjected to back pay restoration endangering the financial structure of their companies, and recently court decisions have held that agreements and settlements made with employees or even former employees do not release the employer from maximum liability under the act. The American Mining Congress advocates enactment of the Gwynne bill, H. R. 2788, which would amend the Fair Labor Standards Act to limit the time for the institution

of such suits to 1 year. This bill has been reported by the House Committee on the Judiciary and is now on the House Calendar.

We also respectfully urge upon the committee the amendment of section 16 (b) of the act to the end that the awarding of "liquidated damages" be discretionary with the trial court, and that in the case of unintentional violations of the act the provision be made that liquidated damages shall not be awarded.

We also recommend amendment of the act to provide that no person shall be subjected to any liability, civil or criminal, under the provisions of the statute for any act done or omitted in conformity with any regulation or interpretation issued by the Administrator.

We urge the need for an amendment to provide that any claim for liability under the act may be compromised or released by agreement with the parties affected thereby at any time. This for the reason that under recent decisions of the Supreme Court a claim brought under the act may not be conclusively settled for any payment less than that set forth in the law, plus an additional equal amount as "liquidated damages" to which is added "a reasonable attorney's fee." The unfairness of the situation thus created becomes readily apparent when one considers the many, many claims brought by Wage and Hour Division field agents under the act which have in the course of the past 7 years been settled to the satisfaction of all concerned, but which may now be reopened by suit for an amount equal to that paid in settlement plus attorney fees.

We now ask that the committee hear Mr. W. Lunsford Long, a mine operator of wide experience in a brief outline of his experiences under the administration of the wage-hour law.

Hon. ALLEN J. ELLENDER,

CHICKASAW WOOD PRODUCTS CO., INC.,

Gretna, La., October 5, 1945.

Senate Office Building, Washington, D. C. DEAR SIR: We have been very pleased to note your strong fight against the so-called Pepper bill, S. 1349, to amend the Fair Labor Standards Act.

We have never approved of a minimum wage in principle, as very often a minimum wage has a tendency to be a maximum wage. Handicapped labor, especially in times of plentiful labor, is not hired until the better class of labor is all employed. Many jobs can be just as well filled by poor labor, and part-time labor, where it can be only offered in the homes in the nature of a part time as well as a source of income. It is perfectly sound for a laborer to accept whatever wage the law of supply and demand can pay him for this irregular class of labor. Our business was built up on farmers and their labor, especially farmers with most of their energies concentrated on raising cotton; using their off-season time and their own timber to manufacture material for our plants. It made it possible for them to keep their labor busy and available for the cotton crop, and we sold our completed package for around $1 in the nineties, and for less than $2 up until the last war. After the last war we sold at between $2 and $3 and we made money every year. Now we are selling at the ceiling price of around $6 and lose money.

When the minimum wage law went into effect we were paying 25 to 30 cents for our minimum wage, and the price of barrels was about $2.50. We are now paying our common labor a minimum of 55 cents, but have only 10 men classed as common labor or about one-fourth of the number employed. This is an increase for common labor of over 100 percent since the war began. If the men would work like they did prior to the war, the situation would not be too unsatisfactory. With the same number of men we formerly made about 150 barrels an hour. We now make less than 100. While we do not contend that the increase in wages has lowered the efficiency, we cannot attribute it to the fact that we have had a union during these 4 years for the first time in the 60 years we have been in business; nor to the war years. Perhaps all three have played a part. Most of our men have been with us from 10 to 30 years, and we believe they like to work for us. Before and during the early part of the war we had 175 to 200 employees; today the ceiling prices are such that we cannot possibly produce material without losing money, so our crew has been cut down to about 50. We only handle just what material our northern plants, who have a higher ceiling price, produce as a byproduct. Our northern plants are engaged in the manufacture of whisky barrels. We do not make this type of package at Gretna.

In view of the above you can see it is impossible for us to accept any higher minimum, as we have been losing money ever since we have been forced to accept the artificial minimums.

Yours very truly,

M. R. WELLFORD, Treasurer.

Senator ALLEN J. ELLENDER,

NATIONAL SHRIMP CANNERS ASSOCIATION,
New Orleans 12, La., October 9, 1945.

United States Senate, Washington, D. C.

DEAR SENATOR ELLENDER: Members of our association are very much alarmed and concerned about the various bills proposing changes in the Fair Labor Standards Act (wage and hour law).

We had noted that there are proposals to increase the minimum wage from 40 to 65 cents per hour with additional provisions for increasing the rate to 75 cents over a period of 2 years. It would be natural to assume that the proposed increase of more than 60 percent in the minimum wage provided for by law would cause increased costs and increased prices of the items being produced by this labor and of other items since an increase in the minimum wages would probably be reflected by increases in semiskilled and skilled labor rates. This would