Hon. JAMES M. TUNNELL,

WAR SHIPPING ADMINISTRATION, Washington 25, D. C., September 27, 1945.

United States Senate, Washington, D. C.

DEAR SENATOR TUNNELL: The receipt is acknowledged of your letter of September 19, 1945, regarding hearings on S. 1349, a bill providing for the revision of the Fair Labor Standards Act of 1938.

I shall be glad to appear before your committee at any time that suits your convenience.

I have gone over S. 1349 and have had various discussions of the bill with members of our staff.

On the general principles of the bill, I do not feel that I am a competent witness.

When the Fair Labor Standards Act was passed, Congress exempted merchant seamen because the merchant seagoing profession is unique and should not be classified with professions ashore.

We feel that it is utterly impracticable to apply the 40-hour week to seagoing personnel as at sea practically the entire crew work a 56-hour week by standing sea watches of 4 hours on and 8 hours off.

We feel that nothing has happened since the act was passed to justify removal of merchant seamen from that exemption now.

With regard to the question of wages for the merchant marine, you are probably aware that the matter was gone into most thoroughly by the National War Labor Board in August 1945, at which time public hearings were held, briefs submitted, and decisions reached and promulgated by the National War Labor Board. Enclosures covering the action of the National War Labor Board are attached for your information and that of your committee.

It is my belief that I can add nothing to these data that would be helpful to your committee.

I shall await your further instructions.

Sincerely yours,

E. S. LAND, Administrator.

NATIONAL WAR LABOR BOARD,

PRELIMINARY STATEMENT IN MARITIME CASES

August 31, 1945.

On July 19 and 20, 1945, the National War Labor Board held a public hearing on 17 maritime cases involving approximately 100,000 seamen in offshore dry cargo operations. Thirteen of these were new cases which arose on certification by the United States Conciliation Service. The other four cases involve a request for reopening of closed contracts, in view of the similarity of issues with those in the open contracts. A list of both groups of cases is attached,

The unions in the 13 cases now before the Board for decision ask for an increase in monthly base wages, and for an adjustment in overtime compensation or a further wage increase in lieu thereof.' They contend that the requested wage increase is necessary (1) to eliminate substandard hourly wage rates; (2) to remove inequities as between seamen's wages and wages in comparable shore-side occupation; (3) to offset loss of wages and take-home pay resulting from past and anticipated reductions in war bonuses by the Maritime War Emergency Board; and (4) to insure the adequate manning of our merchant marine.

The operators object to any wage increase on the grounds that (1) present wages are not substandard, taking into consideration subsistence furnished by the employer and other contract benefits; (2) no true comparison can be made between off-shore and shore-side occupations, but if such a comparison were attempted, seamen's earnings, including penalty overtime and other contract benefits, would compare favorably with earnings in shore-side occupations; (3) from their inception, war bonuses have been related solely to war risk; (4) a wage increase would impair the ability of the merchant marine to compete in peacetime with other forms of domestic transportation and with foreign flag vessels; and (5) no wage increase can be granted without a change in the national wage policy.

The Board believes that the facts in this case warrant the use of Executive Order 9599, issued by the President on August 18, 1945, which authorizes the Board "to approve, without regard to the limitations contained in any other orders or directives, such increases as may be necessary to correct maladjustments or inequities which would interfere with the effective transition to a peacetime economy; Provided, however, That in dispute cases this additional authority shall not be used to direct increases to be effective as of a date prior to the date of this order."

The major premise of the unions underlying the substandard issue is that seamen are as much entitled as any other group of American workers to a wage which will enable them to marry, and to maintain their families at a level of health and decency judged by the American standard of living. The operators do not deny this premise, but contend that present wages are not substandard, taking into consideration subsistence, penalty overtime, and other contract benefits. The same conflict exists with respect to the comparison of seamen's wages and wages in comparable shore-side occupations. Whatever equities exist in support of the unions' position with respect to these two questions have been considered in connection with the total equities in the case.

The unions' request for a shortened work week and Saturday and Sunday premium pay is supported by the adjustments made in recent years by governmental action or voluntary collective bargaining in other industries, likewise exempt from the Fair Labor Standards Act, including various forms of trans

1 The specific demands are as follows:

NMU-55 cents per hour minimum instead of the present alleged minimum hourly rate of 34% cents (derived from present monthly base wage of $82.50 for assumed 240 hours) for an ordinary seaman, and 41% cents (derived from present monthly base wage of $100 for assumed 240 hours) for an able seaman; present differentials between classifications to be preserved; time and one-half after 40 hours a week; time and one-half for Saturdays and double time for Sundays. The NMU also asks for the incorporation of the 100-percent voyage or steaming bonus into the wage structure, and such further increase as may be needed for a 55-cents-per-hour minimum rate.

SIU-55 cents an hour increase, 5 cents an hour in lieu of a 48-hour week. MC & Ssame wage demand as NMU: Time and one-half after 40 hours a week. MFOW & W—$50 a month increase now and a further increase up to $100, to offset past and future bonus reductions; or an immediate increase of $100 per month and elimination of the voyage bonus.

2

portation where, as in this case, the operations cannot practically be concluded at any specified time of the day or week. However, it is the Board's considered judgment, under all the circumstances of this case, that this equity should not be separately appraised but should be considered in connection with other equities bearing on the main demand for a general wage increase.

The Board has given careful consideration to the operators' contentions as to the peacetime competitive problems of the merchant marine, and the union's claim that a substantial increase is necessary to keep our ships manned and to maintain morale and efficiency. In this connection the Board has also considered the possible savings in cost of recruitment and training which would result from an increase in base rates sufficient to hold men who would otherwise return to shore-side occupations.

The remainig issue arises from the reduction in take-home pay incident to reductions in war-risk bonuses, which have already occurred, and to their anticipated further reduction or complete elimination. Special bonus payments were originally instituted by collective bargaining several years prior to December 1941. On December 18 of that year the Maritime War Emergency Board was established by agreement of the parties, and given jurisdiction to determine the future course of war-risk bonuses during the war. Just prior to the creation of that Board, the bonus rate for specified voyages had reached the level of $80 a month for unlicensed and 66% percent for licensed personnel. It is estimated that this schedule represented, on the average, an additional payment of $61 per month for the unlicensed and 50 percent for licensed personnel. In its present form, the war-risk bonus scheme as administered by the Maritime War Emergency Board consists of a voyage bonus, an area bonus of $5 per day in areas of particular risk, and a vessel attack bonus of $125. The voyage bonus alone at its maximum amounted to 100 percent of the base wage or $100, whichever was higher. At present average earnings from the voyage bonus are $40 in the Atlantic, $72 in the Pacific, or $53 over all. All signs point to the reduction or complete elimination of the voyage bonus in the immediate future, leaving such risks as may still remain, such as the hazard of collision with floating mines, to be covered by the remaining area or attack bonus.

The unions contend that since these bonuses were established by collective bargaining they should not, in accordance with the Board's established policy, be disturbed except through collective bargaining. The Maritime War Emergency Board has stated however, that under the agreement by which it was established "any action taken on war-risk bonuses and war-risk insurance superseded the provisions of existing collective-bargaining agreements insofar as the latter were in conflict, and was mandatory". Any weight to be accorded to the fact that the bonuses were originally established by collective bargaining should be given in connection wth the unions' claim for retention of the bonus established by the Maritime War Emergency Board, based on the unanimous statement of the Maritime War Emergency Board in its decision 2 C, issued June 18, 1945, reading as follows:

"Decision 2 C is in accordance with the policy which the Board has adopted of establishing a world-wide floor of 33% percent ($40 monthly minimum) below which bonuses will not be reduced during the period of the war, to which period the existence, activities, authority, and jurisdiction of the Board are definitely limited in accordance with the statement of principles and the letter of the President appointing the Board at the request and on the recommendation of the parties signatory.”

It thus appears that the question as to what would eventually happen to this bonus floor was left open. Presumably, if not eliminated by the Maritime War Emergency Board itself, the bonus floor could be reduced or eliminated only through collective bargaining or through action of some governmental agency authorized to settle labor disputes. No realistic and final determination of the present dispute can be made without settling this issue. In this connection note may be made of the action already taken or about to be taken by Canada, Sweden, and Great Britain relating to the status of war-risk bonuses after the war. In

2 The principle of a wage adjustment in lieu of overtime was instituted by President Roosevelt in the railroad industry. Operating and nonoperating railway employees-Brotherhood of Locomotive Engineers and Brotherhood of Railway Trainmen and the Representative Carriers, November 4, 1943, and December 27, 1943. The same principle was applied by the War Labor Board in the trucking industry. Central States Area Negotiation Committees and the International Brotherhood of Teamsters, AFL, cases 4448-4648, February 1944. See also Interstate Steamship Co., case No. 376, March 5, 1943.

'Letter dated August 4 from John M. Carmody, Chairman of the Maritime War Emergency Board, to Dr. George W. Taylor, Chairman of the National War Labor Board.

Sweden this action has taken the form of integration of a portion of the bonus into the wage structure. In Great Britain a similar proposal is under discussion. The main assumption of the Board in determining what wage increase is appropriate and the effective date thereof is the complete elimination of the voyage bonus. Weighing all the equities in the case arising out of the issues of substandard wages, overtime, and the elimination of the bonus, and considering the fact that the wage increase will not be retroactive and the prospect that no part of the increase will take effect for at least 30 days hereafter, the National War Labor Board is of the opinion that a fair and equitable determination of all the wage and overtime issues in dispute calls for an increase of $45 per month in the base rate for all classifications, if and when the present voyage bonus has been completely eliminated.

The question raised as to whether the operators should be named in the contract as employers, or, as in the last contract, as general agents for the War Shipping Administration, has no real significance. Whatever the designation in the contract, the operators are the employers for the purposes of this dispute, as contemplated by the War Labor Disputes Act.*

There is likewise no real issue as to the so-called closed contracts involving the SUP, MM & P, and MEBA since the operators have indicated they are prepared to negotiate with these unions on the basis of the Board's decision."

By virtue of, and pursuant to, the powers vested in it by Executive Order 9017 of January 12, 1942, and the Executive orders, directives, and regulations issued under the act of October 2, 1942, and the War Labor Disputes Act of June 25, 1943, etc.

I. Effective from the date of the elimination of the present "voyage bonus," each classification shall have added to its present base wage the sum of $45 per month. II. The foregoing terms and conditions shall be incorporated in a signed agreement reciting the intention of the parties to have their relations governed thereby as ordered by the National War Labor Board.

III. Since this directive order may involve a question of increased cost to the United States, the directive order shall become effective only if also approved by the Director of Economic Stabilization.

First group

Representing the public: George W. Taylor, Lloyd K. Garrison, N. P.
Feinsinger, Jesse Freidin.

Representing labor: Van Bittner, John Brophy, Robert J. Watt, Paul
Chipman.

Representing industry (dissenting): Clarence Skinner, Vincent P.
Ahearn, Earl Cannon, W. B. Maloney.

LIST OF CASES INVOLVED

111-11640-D-General agents of War Shipping Administration (east coast) and National Maritime Union, CIO. The companies which are in

cluded are:

Agwilines, Inc.

American Export Lines, Inc.

American South African Line, Inc.

American-West African Line, Inc.

Black Diamond Steamship Corp.

Grace Line, Inc.

International Freighting Corp., Inc.

Lykes Bros. Steamship Co., Inc.
Marine Transport Lines, Inc.
Moore-McCormack Lines, Inc.

Sec. 2 (d) of the War Labor Disputes Act provides that the term "employer" shall have the same meaning as in section 2 of the National Labor Relations Act. The latter section defines an employer as "any person acting in the interest of an employer, directly or indirectly

*

5 Transcript of hearing, pp. 242, 243, 320.