Amendment of the Fair Labor Standards Act: Hearings, Sept. 25-Oct. 26, 1945

compensation; (3) direct relief or charity; (4) income in kind; (5) sums received for travel and expenses incurred in travel.

Total family income.-The sum of the earnings from wages or salaries of all family members.

Family unit.-One adult or two children.

Family unit income.-The wage or salary income of a family divided by the number of family units, or the median income of a group of families divided by the average number of family units in the group.

EXHIBIT 8

STATEMENT OF AMERICAN MERCHANT MARINE INSTITUTE

IN THE SENATE OF THE UNITED STATES, COMMITTEE ON EDUCATION AND LABOR, IN THE MATTER OF S. 1349, A BILL TO PROVIDE FOR THE AMENDMENT OF THE FAIR LABOR STANDARDS ACT OF 1938, ETC.

The American Merchant Marine Institute, Inc., is an association numbering among its members the great majority of steamship companies owning and operating American-flag tonnage. These companies, acting as general agents of the War Shipping Administration, are today operating for account of the Government our greatly expanded merchant fleet. On behalf of its members, the Institute appears in opposition to those provisions of S. 1349 which would bring seagoing personnel on board merchant vesels within the coverage of the Fair Labor Standards Act of 1938.

Under section 13 of the 1938 act, persons employed as seamen are now exempt from the provisions (secs. 6 and 7) governing minimum wages and maximum hours. S. 1349 would terminate this exemption. It is submitted that such a step would force upon the shipping industry conditions that would make it impossible to operate successfully under the American flag.

The 1938 act properly recognized that employment at sea is irreconcilably different from employment on shore. A vessel must be continuously navigated, day and night. The work of her crew must go on without halt and cannot be limited to any given part of a day or week. Today the crew of an oceangoing vessel is divided into three watches, each watch consisting of the bare minimum required by law to assure the safe navigation of the vessel. It can be readily seen that reduction of the workweek to a maximum of 40 hours would require 40 percent additional personnel. Such an increase would go beyond the limits of the accommodations of our existing ships, all of which were built to carry the crews required by our present statutes. Far more important is the fact that the addition of so many new members of the crew with the resultant increase in the pay roll would make it absolutely impossible for the American operator to compete with foreign shipping or with other forms of domestic transportation.

If the crew of a vessel were to be retained at its present size and the seamen required to stand an 8-hour watch each day in the week, S. 1349 would require that they be paid at an overtime rate for 16 hours per week. This would be even more expensive than the carriage of 40 percent additional crew members, were this possible. Neither alternative would leave any hope of success in meeting foreign competition that is not handicapped by any such requirements.

At this very time the Senate Commerce Committee is holding hearings on S. 292, the Merchant Ship Sales Act of 1945. The declaration of policy in S. 292 reads as follows:

"SEC. 2. (a) It is necessary for the national defense and development of the foreign and domestic commerce of the United States that the United States have a merchant marine (1) sufficient to carry its domestic water-borne commerce and a substantial portion of its waterborne export and import foreign commerce and to provide shipping service on all routes essential for maintaining the flow of such domestic and foreign water-borne commerce at all times; (2) capable of serving as a naval and military auxiliary in time of war or national emergency; (3) owned and operated under the United States flag by citizens of the United States; (4) composed of the best-equipped, safest, and most suitable types of vessels, constructed in the United States and manned with a trained and efficient citizen personnel; and (5) supplemented by American-owned facilities for repairs, marine insurance, and other auxiliary services.

"(b) It is hereby declared to be the policy of this act to foster the development and encourage the maintenance of such a merchant marine, and to facilitate the adjustment of the merchant marine from war service to peacetime operations."

EXHIBIT 10

STATEMENT OF CHESTER C. THOMPSON, PRESIDENT, THE AMERICAN WATERWAYS OPERATORS, INC., WASHINGTON 4, D. C., SUBMITTED TO SUBCOMMITTEE OF THE SENATE COMMITTEE ON LABOR AND EDUCATION ON S. 1349

This statement is made by Chester C. Thompson, president, the American Waterways Operators, Inc., a national association of domestic water carriers operating on the inland rivers, intracoastal canals and waterways, the bays, sounds, and harbors of the United States. The association maintains its principal office at 1319 F Street NW., Washington, D. C.

The carrier members of this association are engaged in the transportation of every commodity which is susceptible to movement by water, including a very large volume of petroleum and petroleum products, coal, sulfur, steel, and grain, and general cargo. The carriers in the association are divided into three general classes: (1) private carriers, who perform as a division or department of a corporation or business whose principal business is other than the transportation of cargo by barge; (2) contract carrier, or those who transport commodities, generally bulk commodities, at established rates under contract with a few shippers; and (3) common carriers, or those who transport for the public generally at rates filed with the Interstate Commerce Commission and subject to its control.

Territorially, members of this association operate almost everywhere in the United States where water transportation is feasible, particularly throughout the Gulf Intracoastal Canal from western Texas points to Louisiana and Florida destinations or from the same origin points over the entire Mississippi River system, including the Ohio River and its tributaries and the Illinois Waterway. They also operate on the Atlantic Intracoastal Waterway from Miami, Fla., to Wilmington, Del., on the Columbia River, and in various ports, harbors, and adjacent navigable waterways.

The domestic water carriers are intensely interested and concerned about the provisions of sections 6, 7, 8, and 13 of S. 1349, as the provisions thereof will have a most adverse effect upon the successful conduct of their businesses. Section 13 of the bill contemplate the repeal of the seamen's exemption contained in the present Fair Labor Standards Act of 1938.

It is the considered opinion of the industry that the removal of the present exemption and the placing of seamen (deckhands, firemen, oilers, wipers, cooks, messboys, etc.), including licensed boatmen (masters, pilots, mates, and engineers) under the provisions of the Fair Labor Standards Act will destroy the industry because it cannot operate successfully and profitably under the act. The legislative history of the Fair Labor Standards Act clearly shows that the maritime unions themselves advocated the exemption of seamen and were supported in such position by the industry because both knew from experience that it was not possible to successfully operate vessels under its provisions. There have been no developments since 1938 that have indicated this position was not proper, in fact war operations, and those presently prevailing, indicate the need of continuing the seamen's exemption contained in the 1938 act.

Employees on the vessels of domestic water carriers are not underpaid. Through collective bargaining processes they have received substantial increases in compensation and improved working conditions during the period they were exempt from the Fair Labor Standards Act. The industry and its members will continue to grant increases in compensation and to improve working conditions for such employees when and as general economic and busi ness conditions warrant. Due consideration must be given to the fact that the principal competitors of the water carriers, namely the truck lines and railroads, are, and will continue to be, exempt in whole or in part from the provisions of the Fair Labor Standards Act.

The following indicates the typical increases in compensation received by domestic water carrier vessel personnel. Similar increases could be shown for other classifications of such personnel.

Compensation, Prior to June 1, 1943

Messboy received $90 per month, or $1,080 per year, with 72 days off per year. Actually worked 3,516 hours per year with hourly rate of 31 cents.

Deckhand received $115 per month, or $1,380 per year, with 72 days off per year. Actually worked 3,516 hours per year with hourly rate of 39 cents.

Wiper received $120 per month, or $1,440 per year, with 72 days off per year. Actually worked 3,516 hours per year with hourly rate of 41 cents. Compensation, June 1, 1943, to June 1, 1944

Messboy received $90 per month, or $1,080 per year, with 105 days off per year. Normal basis: 3,120-hour work year at hourly rate of 35 cents. War basis (work 9 out of 12 days): 4,066-hour work year at hourly rate of 43 cents (monthly earnings, $145; yearly earnings, $1,740).

Deckhand received $115 per month, or $1,380 per year, with 105 days off per year. Normal basis: 3,120-hour work year at hourly rate of 44 cents. War basis (work 9 out of 12 days): 4,066-hour work year at hourly rate of 54 cents. (monthly earnings, $184; yearly earnings, $2,208).

Wiper received $120 per month, or $1440 per year, with 105 days off per year. Normal basis: 3,120-hour work year at hourly rate of 46 cents. War basis (work 9 out of 12 days): 4,066-hour work year at hourly rate of 57 cents (monthly earnings, $192.50; yearly earnings, $2,310).

Present wage scale

Messboy receives $121.50 per month, or $1,458 per year, with 105 days off per year. Actually works 3,120 hours per year at hourly rate of 47 cents.

Deckhand receives $139 per month, or $1,668 per year, with 105 days off per year. Actually works 3,120 hours per year at hourly rate of 53 cents.

Wiper receives $139 per month, or $1,668 per year, with 105 days off per year. Actually works 3,120 hours per year at hourly rate of 53 cents.

Proposed under 65 cents minimum without overtime payments and under generally existing practices

Messboy will receive $158 per month, or $1,896 per year, with 122 days off per year. Actually works 2,916 hours per year at hourly rate of 65 cents.

Deckhand will receive $180 per month, or $2,160 per year, with 122 days off per year. Actually works 2,916 hours per year at hourly rate of 74 cents.

Wiper will receive $180 per month, or $2,160 per year, with 122 days off per year. Actually works 2,916 hours per year at hourly rate of 74 cents.

In addition to the compensation shown, all vessel personnel is furnished subsistence, meals, and lodging, which costs the employers or the operators of vessels, according to the National War Labor Board, $1 per day per person. That this figure is too low is indisputably revealed by the records of the employers, which indicate an average cost of $2 per day per person.

If the present seamen's exemption in the Fair Labor Standards Act is repealed, and vessel personnel made subject thereto, the following compensation must be paid in addition to the cost of subsistence, which is an expense to the employers the same as wages paid:

Proposed rate under S. 1349 with 65 cents hourly minimum and time and one-half for all hours over 40 per week

Messboy will receive $300 per month or $2,389 per year (assuming he takes off 122 days per year without pay). Actually works 2,916 hours per year at average hourly rate of 82 cents.

Deckhand will receive $340 per month, or $2,720 per year (assuming he takes off 122 days per year without pay). Actually works 2,916 hours per year at average hourly rate of 93 cents.

Wiper will receive $340 per month, or $2,720 per year (assuming he takes off 122 days per year without pay). Actually works 2,916 hours per year at average hourly rate of 93 cents.

The above computations do not take into consideration that on Saturday afternoons, Sundays, and holidays, the vessel crews only perform the work required for safe navigation, and only work 8 hours per day while vessel is in port. The existing and accepted practice in the industry grants boatmen a considerable number of days off with full pay, the number ranging up to 122 days per calendar year and averaging in excess of 100 days per year per employee.

The wage rates shown above only cover the three lowest paid classifications of vessel personnel employed on river towboats. Other wages for similar personnel are comparable. Mates, engineers, and assistant engineers, pilots, master pilots, and captains now receive wages far above those shown here for the common labor aboard these vessels. Master pilots on the Mississippi River system, for example, generally receive, now, $550 per month, plus 105 days a year "leave time," which is paid for at the regular monthly rate.

EXHIBIT 10

STATEMENT OF CHESTER C. THOMPSON, PRESIDENT, THE AMERICAN WATERWAYS OPERATORS, INC., WASHINGTON 4, D. C., SUBMITTED TO SUBCOMMITTEE OF THE SENATE COMMITTEE ON LABOR AND EDUCATION ON S. 1349

It is the considered opinion of the industry that the removal of the present exemption and the placing of seamen (deckhands, firemen, oilers, wipers, cooks, messboys, etc.), including licensed boatmen (masters, pilots, mates, and engi neers) under the provisions of the Fair Labor Standards Act will destroy the industry because it cannot operate successfully and profitably under the act. The legislative history of the Fair Labor Standards Act clearly shows that the maritime unions themselves advocated the exemption of seamen and were supported in such position by the industry because both knew from experience that it was not possible to successfully operate vessels under its provisions. There have been no developments since 1938 that have indicated this position was not proper, in fact war operations, and those presently prevailing, indicate the need of continuing the seamen's exemption contained in the 1938 act.

Employees on the vessels of domestic water carriers are not underpaid. Through collective bargaining processes they have received substantial increases in compensation and improved working conditions during the period they were exempt from the Fair Labor Standards Act. The industry and its members will continue to grant increases in compensation and to improve working conditions for such employees when and as general economic and business conditions warrant. Due consideration must be given to the fact that the principal competitors of the water carriers, namely the truck lines and railroads, are, and will continue to be, exempt in whole or in part from the provisions of the Fair Labor Standards Act.