Particular attention is directed to the rates of pay which would be payable under a strict application of the terms of S. 1349. Messboys would receive approximately $300 a month for the time actually worked, computed on the basis of 65 cents per hour for the first 40 hours' work and time and one-half for the remaining 44 hours work in each workweek.

The annual wage rates have been computed on the assumption that the employees would take off 122 days per year without pay, although if they should work any part of this time, their annual earnings would be substantially increased on the basis of the rate of $300 per month.

The rates for deckhands and wipers shown in above examples are computed on a percentagewise differential increase of the 65-cent minimum for the lowest paid classification (messboy), based on the existing wage differential in rates of pay for these job classifications. It should be strongly emphasized that the rates of pay shown on an annual basis allow for the employees taking 122 days per year "leave time" without pay. But the cost to the company would remain constant at the monthly rates shown because while one employee was taking "leave time," another man would be employed at the same rate of pay to perform the necessary work.

It is most interesting to consider the testimony presented by labor representatives in support of this bill. The most pronounced statement was made by Mr. Howard McKenzie, vice president of the National Maritime Union of America, who spoke for the CIO Maritime Committee on behalf of its many affiliates. Mr. McKenzie, in his written presentation which consisted of some 42 legal-size pages, devoted approximately 40 pages to the deep sea and Great Lakes operation and the balance to inland rivers. Insofar as the first two were concerned he advocated the full provisions of the bill. Insofar as river operators were concerned. however, he advocated that the minimum wage be set at 65 cents, but he admitted that the small craft operating on the rivers have structural limitations which do not permit carrying sufficient men to stand four 6-hour watches. He stated that: ". . . constructive compliance with the 40-hour provision of the bill can be secured in another way. The towboat companies have themselves shown how. The method needs only to be improved and extended.

"As stated, the towboat and barge companies allow their men, in lieu of short hours or weekly rest days, a number of paid leave days monthly. These paid free days range in number with different companies from 60 to 122 a year. There is no valid reason for either the diversity or the smallness of these numbers.

"The Fair Labor Standards Act now requires payment at the ratio of time and one-half for all hours worked beyond a 40-hour week. If the boatmen must work an 84-hour week, they should be compensated by being allowed paid free time in the same ratio-an hour and one-half for every hour worked beyond 40 weekly.

"To give the men credit for time and one-half, the number of leave days for all of them needs to be increased to 122 a year, the present maximum in some companies. In this way the practical difficulties of providing a rigorous 40-hour week on these types of boat could be overcome with substantial justice to thể men." [Emphasis supplied.]

From this last statement of Mr. McKenzie, which we have italicized, it is evident that his approach for river boatmen is entirely different from that which he used in the case of the deep sea vessels. Numerous companies on the rivers are meeting with Mr. McKenzie's representatives daily and as the economic situation permits they rapidly reach the 122 days which he states is all that is necessary to accomplish the purpose of the act insofar as hours and overtime are concerned. Negotiations between labor and management in this industry have made rapid progress, therefore there appears to be no need for statutory compulsion.

In order that the record may be clear it is felt that comment with respect to statements of certain officials should be offered. Mr. L. Metcalfe Walling, Administrator of the Fair Labor Standards Act, in his written statement beginning on page 9 advocates the elimination of the seamen's exemption. While it is true that he addresses himself principally to the deep sea operation, there are certain statements which bear upon the inland operations which do not precisely reflect the picture, nor are the reasons advanced by him applicable in the inland industry. It should be noted in passing that Mr. Walling stated that the Maritime War Emergency Board had dropped bonuses as of October 1, 1945, on deep sea operation, and it was his thought that the 65-cent minimum be adopted in lieu thereof in order to maintain incomes on the basis of seamen's wartime income. Such being

the case, it appears that his position with respect to inland seamen must be different for the reason that there has been no reduction in the take-home pay in the inland industry such as that in the off-shore trades. On the contrary, and as has been shown previously in this statement, inland seamen have enjoyed steady increases in their wages.

The domestic-water-carrier industry is an important element in the national transportation system. It is so recognized in the Transportation Act of 1940. The policy of Congress declared in that act requires that the inherent advantages of each form of transportation shall be preserved and maintained in the public interest. The domestic-water-carrier industry has proved its worth and its value during the war when millions upon millions of tons of war freight and equipment were transported by it on the inland waters of the Nation.

The industry provided transportation services in the war effort that could not have been furnished by any other transportation service. This included the movement of combat and other craft built in inland and Great Lakes shipyards for the Army, the Navy, and the Maritime Commission. The services provided by the industry in the harbors and on the inland waterways prevented a break-down in transportation in the critical period of the war, and thus helped to a most substantial degree in the winning of the war on all fronts.

As stated herein, the removal of the present seamen's exemption in the Fair Labor Standards Act, as contemplated in section 13 of S. 1349, will be detrimental to the domestic-water-carrier industry. The repeal of such exemption will single out one specific type of transportation for coverage under the Fair Labor Standards Act, and place burdens upon that one type that will most seriously handicap it in providing needed and desirable transportation services to the Nation and its shippers, and in competing for business with other types of freight-moving services.

The industry and its employees have made much progress in the matter of collective bargaining as to wages and working conditions. Negotiations for collective-bargaining agreements have been in the hands of those familiar with actual working conditions and practices peculiar to the industry. The economic condition of vessel personnel employed on the inland waterways and harbors can best be improved by collective-bargaining processes, and not by statutory requirements. Conditions in this industry are much different from those of any other industry and are so recognized by all concerned.

Therefore, it is strongly urged in the interest of the continued development of the domestic-water-carrier industry, in the interest of stabilized and maximum employment therein, that S. 1349 be amended so as to continue the present seamen's exemption in the Fair Labor Standards Act of 1938.

EXHIBIT 11

RECOMMENDATIONS OF THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC., WITH RESPECT TO THE FAIR LABOR STANDARDS ACT

The Associated General Contractors of America recommends that action taken by the Congress in amending the Fair Labor Standards Act should include a statute of limitations of 1 year during which actions could be brought for damages. With reference to S. 1349, the association recommends that section 16 (b), page 13, be amended to reduce the limitation from 5 years to 1 year.

The principal reason for making this recommendation is that the greatest uncertainty exists as to application of the Fair Labor Standards Act to construction operations. Many organizations in the industry could be bankrupt by suits brought under this act, even though the organizations made every effort to comply with the act, and even though they followed the instructions of the Federal agency for which they were performing work.

Suits brought under the act against general contractors would not be for payment of minimum wages, because construction wages, with negligible exceptions, are and have been higher than the minimum specified by the law. The suits would be principally for overtime pay, either for nonmanual employees, or for some manual employees who were employed in accordance with prevailing customs of the industry or union agreements.

UNCERTAINTY OF APPLICATION

The wage-and-hour law is limited in application to persons "engaged in commerce or in the production of goods for commerce." The extent to which various construction operations constitute engaging in interstate commerce, or producing goods for interstate commerce has not yet been determined, for the purpose of this act, although the law was enacted in 1938.

Decisions of courts alone can determine definite application of the law. There have not yet been sufficient cases decided to give a clear determination of appli cation of the law to construction operations.

Should the courts this year, for example, decide that certain types of construction operations are covered by the act, many general contractors who acted in good faith would be subject to suits for recovery of overtime payment, plus double damages, attorney's fees and court costs, for cases going back over a period of years. It is obvious that some protection in the Federal Statute is necessary.

INTERPRETATIONS OF THE ADMINISTRATOR

The principal guides at the present time to application of the law to construction operations, are interpretations of the administrator. The principal one of these applying to construction is Interpretative Bulletin No. 5, issued originally in December 1938, and revised in 1939 and 1941. Interpretative Bulletin No. 1 states, however:

"The statute does not confer upon the Administrator any general power to issue rulings including industries within the coverage of the act, or excluding them. Interpretations announced by the Administrator serve, therefore, to indicate merely the construction of the law which will guide the Administrator in the performance of his administrative duties, unless and until he is directed otherwise by authoritative rulings of the courts."

In an explanation to Interpretative Bulletin No. 5 in 1941, the Administrator rendered the opinion that the original construction of buildings was not covered by the act, but that the repair, maintenance, and reconstruction of the buildings used to produce goods for commerce were covered. He then stated that the line of demarcation between new construction and reconstruction was difficult to determine. He stated:

"Of course, 'original construction' and 'reconstruction' are legal concepts which have no existence, so to speak, in the natural order of things. For our purpose 'original construction' on the one hand and 'reconstruction' on the other must be taken to mean our best prediction of what the courts, having due regard to the policy which Congress has expressed in Section 2 of the act, to the specific technical details of the operations in question, and to the effect of previous court decisions, will hold to be included in the respective terms."

On the construction of facilities for essential instrumentalities of commerce, in 1941 the Administrator wrote:

"The division does not take a definite position concerning the status under the act of employees engaged in the original construction of essential instrumentalities of interstate commerce."

The uncertainty which exists by reason of statements of the Administrator also relates to production of construction materials. In his explanation of 1941 the Administrator stated:

"Employees engaged in producing materials such as sand, gravel, asphalt, concrete, macadam, or railroad ties, to be used solely within the State in the construction, maintenance, repair, or reconstruction of essential instrumentalities of commerce do not become subject to the act merely by reason of the use to which such products are put."

In March 1945 he reversed this interpretation. He stated:

"Employees must be considered engaged in the production of goods for interstate commerce when engaged within a State in such activities as producing ice, electric energy, railroad ties, crushed rock, bituminous aggregate, ready. mixed concrete, telephone or telephone poles, or other similar items for use or consumption wholly within the same State by interstate railroads, telegraph or

telephone companies, etc., in carrying on interstate transportation or communications; or for use or consumption within the State in the maintenance, repair, or reconstruction of essential instrumentalities of interstate trade, commerce, transportation, transmission, or communication."

HIGHWAY CONSTRUCTION

A further example of uncertainty of application of the act to construction was provided in highway work. In March 1939 the Bureau of Public Roads, then in the Department of Agriculture, instructed State highway departments to insert a clause in all Federal-aid highway work requiring compliance with the Fair Labor Standards Act. This action was taken following advice by Elmer F. Andrews, Wage and Hour Administrator at that time.

In July 1940 the United States Comptroller General ruled that the Government had no legal authority to require compliance with the law as a matter of contract conditions. He wrote:

"You are informed that, aside from any consideration as to whether employees engaged, wholly within a State, in the construction, alteration, or repair of a road are covered by the Fair Labor Standards Act, as to which I express no opinion, and which appears from the correspondence to be somewhat an open question with the Wage and Hour Division, Department of Labor, there would appear to be no legal authority-as there would appear to be no need for the inclusion in government contracts of a requirement for compliance with the act, or of any other reference to the statute."

WAR WORK

One further example of the uncertainty faced by general contractors with respect to the act is in the case of wartime construction. Under cost-plus-a-fixed fee contracts the general contractor is for all practical purposes the agent of the Government. As such he is subject to the instructions of the Government agency for which he performs the work.

At the present time a great number of suits are pending against contractors for alleged failure to pay overtime pay to nonmanual employees whose status under the wage-and-hour law has not been clearly determined. These contractors were operating under orders of the War or Navy or other departments as to ovetime pay. These contracts are now closed. Should the suits be decided against the contractors, they would be required to pay from their small fees the damages, attorney's fees and court costs even though they had followed instructions of the federal agencies.

CONCLUSION

These examples have been cited to indicate the uncertainty which prevails as to application of the Fair Labor Standards Act to construction operations. General contractors, acting in good faith, in compliance with established practices of the industry, in accordance with union agreements, or under instructions of Federal agencies, are subject to suits brought for alleged failure to pay overtime required by the wage and hour law.

These suits in many cases could be brought long after the contract had been completed, and probably long after all records of the contract had been discarded.

In many instances it would be impossible for the contractor to locate now witnesses necessary for defense in suits, because of the nature of construction operations where a contractor works in one location on one project and may never work in that State again or with the same set of workers. Should a suit be decided against a contractor, it would be impossible for him to locate others who worked on the same project to make proper payments to them.

These examples suggest to this association the vital necessity for a statute of limitations which will require suits under the Fair Labor Standards Act, and others, to be brought within a reasonable time.

EXHIBIT 12

A STUDY OF TEXTILE WAGES IN THE SOUTH

Presented to the United States Senate Committee on Education and Labor by William P. Jacobs, President, American Cotton Manufacturers' Association, Washington, D. C.

In order to fully understand the textile wage structure in the South it is necessary to consider all major contributing factors which combine to influence the environment of a wage schedule.

The need of wage increases or decreases depends upon a wide variety of factors existing in the area, such as the cost of living, standards of living. living conditions, working conditions, available markets for the manufacturers products, the price which the market offers, length of apprenticeship, experi ence, education and skill required, job content, the nature of the work, the general economy of the region, wage schedule of the region and of competitive industries in the region and in the world. These and other similar factors combine to demand and justify a given wage standard.

Thus the determination of a wage is a most complicated undertaking and one which requires not only a wide range of information but also a type of specialized skill in its analysis and adaptation.

Such skills are seldom available to legislative bodies and rarely ever are lawmakers equipped with adequate experience in a specific industry to guide them safely to such important conclusions as influence the incomes of so many men and women or the permanence of the industries which offer such men and women employment.

WAGE STRUCTURE COMPLICATED

It is safe therefore to assume in the beginning of this study that the determination of wages or wage minima, or wage standards, or the adoption of permanent governmental machinery to set wage classifications, is at best a most difficult undertaking and one in which Congress can easily do more harm than good.

Since the past is often a helpful guide in determining the future it is some. times also helpful in gaging the present. And so it may be worth while to glance at the trend of textile wages through the years passed and particularly through the upsetting period influenced by World War II and its preparatory period.

THE WAGE TREND

According to the Bureau of Labor Statistics of the United States Department of Labor the average hourly earnings of southern textile workers has been according to the following schedule:

Thus during the war period the average hourly earnings of the southern textile mill workers have increased from 45.8 cents in December 1941 to 68.6 in July 1945, an increase of 49.7 percent.

If the comparison is extended back to the time when Great Britain entered the war so as to cover the United States war preparatory period the figures would show an increase from 36.3 cents per hour in September 1939 to 686 in July 1945 or an increase of 88.9 percent. This comparison would appear to more fully reflect the abnormal increases which resulted from the war.