protected by political liberals and radicals, until the great numbers of freedomloving Americans revolt or we succumb.

The autocracy of the demogog, the labor leader, the radical professional reformer, is no less domineering, given the power to enforce the dictates of his will, than that of a tsar, or a Stalin or a Hitler or a Mussolini.

The opportunity to make the most of his talents, the freedom to exercise them, without trampling other peoples' rights, whether he succeeds or fails, eats or goes hungry, the right to be a fool or make mistakes even, is the only guarantee of economic or any freedom, and government cannot exercise that function for any man, except by giving him a job at the taxpayers' expense. It cannot do it by giving nearly autocratic power, camouflaged by a committee report, to a bureaucratic administrator, to place whole groups of workers, with out regard to their individual ability or personality, in preferred job classes. at arbitrary wage differentials.

Sooner or later the protected masses will level down to the plane that the productive work of the society can support, and that level will be ultimately decided by the enterprise, energy, ability, thought and willingness to accept economic risks on the part of the ambitious people of any community, not by politicians, labor leaders or reformers, all of whom have their rightful place in society, however.

V

Section 6 changes the minimum wage from the present 40 cents per hour, to 65 cents for the first year after the amendment would become effective; 70 cents for the second and 75 cents for the third and succeeding years. So far as these amounts are concerned, they don't mean much yet, even to those groups who are still exempt. They may in time mean everything to agricultural production. When the original wage-hour bill, or the Fair Labor Standards Act of 1938, S. 2475, was first under discussion, proponents hailed it as the emancipation of the low-paid, long-working lower classes, and then Congress proceeded to exempt the lowest paid, longest working groups from its so-called benefits. Domestic and service workers, who were being paid 15 to 25 cents an hour in the central and southern cities (and generally were not worth that) were exempt. Agricultural labor and "seasonal" and "area of production" employees were exempt, these latter three often being interchangeable.

The principal beneficiaries of the Act were organized labor in the CentralNorthern States, who were immediately and subsequently subject to 1%1⁄2 times labor contract rates of pay, often running up to $1.50 per hour, never under 75 cents that we know of, for hours over 44-then 42, then 40 per week, although contracts called for 48 to 54 hours per week at regular pay. So far as its avowed purpose of raising the living standards of the lowest paid and spreading employment were concerned, the bill was a gigantic political farce, benefitting principally the highest paid organized labor groups in exact proportion to their hourly rate of pay.

Agricultural labor was exempt, however, on the sound premise that most agricultural products, as contrasted with industrial products, are sold on a strictly supply and demand basis, in accordance with prevailing consumer buying power. It didn't help the agricultural worker then but it assured the production of food, feed and fibre. In the cities of the south it eventually caused an increase in the hourly wages of the lowest strata of unskilled manual laborers, stevedores, etc., that is when the 40-cent level was reached, but by that time supply and demand for labor had outdistanced the 40 cents. In the Western-Central-Northern cities 40 cents an hour has been obsolete for many years, under higher living cost conditions, and, of course, during the war, a closer average for all labor would be 75 cents in the south and $1.25 to $1.50 in the north, with the southwest and Pacific coast in between.

This organization has no brief for low wages as such. We are as fully aware as any social reformer in the world that the millenium of high wages for everyone would mean a uniformly high consumer buying power with the consequent tremendous expansion of volume outlets for agricultural products at high price levels, in theory at least. In practice it would also be true, providing that the high level of wages resulted in high compensating production of goods. High wages without high production is merely inflation, however it comes about.

High wage rates mean nothing so far as the national economy is concerned. until converted into earnings by work and production of a substantial total of all productive workers.

High wages for a few million and low wages, unemployment and strikes for the majority mean one of three things for high-acreage, high-productive agriculture; either the government underwrites or buys the product to feed the people at the paying taxpayers' expense, or agriculture goes bankrupt, or government underwrites the cost of production, the first and third being alternatives.

The key to the whole problem is a free and expanding industry, as this country is now an industrial nation, to provide the jobs, wages, and buying power. A simple solution, this premise has been adopted by lip service on the part of nearly everyone who has had anything to say about it, except the radicals, socialists and communists and their supporters, who are, as usual, the loudest talkers, but always with a string, that is if industry agrees to every conceivable concession to organized labor including high wages, short hours at regular time, restricted working conditions and low prices. High wages are justified by high production. Low prices, in the absence of corporate or patent monopoly, are the result of superior competition of goods or services or both.

Industrial prosperity, universal, with the high wages and buying power that follow through the requirement of industry for labor, results in expanded demand and higher prices for agricultural products, and in turn, the need of the farmer and packer of food products to compete with industry for labor, or to compete with other agriculturists for the available supply of labor, when wage rates will rise and stay up to a level commensurate with the value of the service.

Wage-hour laws, except to control the exploitation of children or women in manual labor, would have no place in such a development. The presently proposed wage-hour law may or may not come into play, in those functions which would be removed from the exemption of the present bill. If the amendment becomes law, with the "area of production" exemption removed, and the level of wages unfortunately goes down to less than the 65-, 70-, or 75-cent minimum, then the result will be that those who pack and prepare food products for market will reach a point where they cannot afford to risk packing and shipping as much, so there will be less food shipped to market. There being less food, people in the higher buying power brackets will pay more, or price control and black markets will be maintained and those with lower buying power, unemployed, on strike and on relief will do without or with less.

With a poor crop of summer oranges in California, the small undesirable sizes sold on auction markets, Pittsburgh, Baltimore, Philadelphia, where all of the forces of supply and demand meet and are reconciled, for as low as 35 cents and often 50 and 75 cents for a 1% bushel box. Packing costs are usually estimated at 60 to 75 cents a box, aside from production, transportation and marketing costs. This is an extreme case but is not unusual under normal economic conditions. Perishable agricultural producers grow and pack an entire crop. The cost per unit up to point of sale is the same for each unit produced on each acre of a farm, grove or orchard. Only when it reaches market, whether at shipping point or destination, does the variation begin to appear in the price which the commodity brings. Difference in volume of supply available on a particular day: United States grade; actual quality; maturity; size; even the time of day, affect the wholesale price, which is reflection of what the retailer can sell for. A commodity of like character which will sell at $4 per package at 4 a. m., will not bring $2 at 10 a. m. on a Saturday morning, after the buyers have obtained their week-end supplies and only the bargain hunters are left, providing there has been an adequate supply to start with.

Unless Congress is convinced by a factual investigation that all of the elements of our economy, and this would apply to commercial services and industry, as well as agriculture, are economically able to support a minimum wage of 65, 70, or 75 cents per hour, at all times under foreseeable or predictable conditions, it should leave the present minimum of 40 cents in effect. This is not a brief for 40 cents an hour. We agree that this country could not support the present government or economy or even pay the service charges on, much less retire, the public debt on a 40 cents wage level.

VI

Section 7 (c) and 13 (10) relate to the "area of production" exemption in the present act, which is proposed to be omitted in the amendment. The "area of production" is as important to the production and preparation for market of perishable agricultural commodities, as the farm, grove, or orchard on which the commodity is grown, from a cost of production basis.

Commodities grown in Florida, Mississippi, Louisiana, Texas, California, Washington, Oregon, Michigan, Maine, or any other commercial producing State, unless

graded, sized, washed, packed, and sometimes kept in packing house or local storage for a while, are as worthless as if never grown. They are perishable and hundreds or even thousands of miles from anyone who will buy them for food. Whether the grower performs these functions on his farm, as many do, with family help, or whether the convenience, economy, because of specialized facilities and labor, he sells the product to a packer or pays him to do it, it is still part of the necessary function of the production of a package of food, which is what the producer grows to sell. If it costs the packer 50 cents to perform all of these functions, including furnishing the package, and he charges 10 cents a package for overhead and profit, making 60 cents altogether, it doesn't matter to the grower whether he pays the packer 60 cents and sells f. o. b. car or sells the commodity to the packer for 60 cents less and the packer sells f. o. b. car or whether the grower builds a packing house, hires the labor or uses hired farm labor, and tries to do the job for less than the packer if he can, if each method costs the same. If, because of specialization, one method is cheaper than the other, all factors considered, he will use that. A packer who would charge $1 when the growers in the area can do the same job for 50 cents a package would go broke for want of business. Commercial production is not a victory garden operation. There is only one point of similarity between a victory garden and commercial production, that is that the produce is grown to be eaten. The victory gardener, dependent somewhat on his success, pulls a tomato off of the vine and takes it in the house to eat. If he could do this all year around for all food he needs, we wouldn't need commercial production.

We would need no packing houses; no agricultural labor; no “area of produetion" labor; no trucking from farm, grove or orchard to the packing shed or to market; no rail or water transportation; we would have no cost of trucking and handling in the wholesale market, no waste or deterioration in either the wholesale market or the retail store, no labor costs at 11⁄2 times regular rate on Saturdays or for overtime or double pay on Sundays or holidays, no middle man. Sounds silly of course, but no more silly than the mouthing of those people, often in high position, elective or appointive, in the Government and in Congress, who are always complaining of the middleman's cost.

Obviously, if the middleman or the grower wasn't forced to pay these costs there would be no point in incurring them but he does have to pay fixed costs, by the wage-hour law, by the railroads, by organized labor, regardless of his yield per acre, his cost of production up to harvest time or the price he receives either per unit or for his crop, whether he makes a profit or takes a loss.

Actually, it is a sound rule of economics, that the labor costs at packing shed, transportation and handling costs up to where he gets his price, are all a part of the cost of production, whether he sells f. o. b. on the basis of the price the commodity will bring at the place where the buyer sells it; whether he incurs the labor and transportation costs and sells delivered to a retail warehouse in the city or whether he ships and sells on consignment through a commission merchant or an auction, or competes with a victory gardener or a local truck farmer who sells direct to the consumer at his farm.

All price studies over the years have shown that with minute variations, the producer gets the same return. It doesn't matter whether one agency handles the produce from farm to consumer, or whether two, three, or four perform specialized functions and split the margin between the farm price and what the consumer will pay in a competitive market. OPA has proven that with price and margin control.

It is our position therefore, that unless Congress is prepared to take over the production and distribution of food, the "area of production" exemption is just as sound and justified as the agricultural labor exemption and the area of production is the entire area from which the agricultural product is drawn, not an artificial boundary concocted by some economist or a limitation on the population or distance from a particular town, whether it be 5, 10, or 50 miles distant or a town of 150, 1,500, 15,000, or 150,000 population by the United States Census of 1930.

Congress should write into the present act a definition of the exemption of the "area of production" as the entire area from which the first packer or processor draws his supplies, whether that packer be a private enterprise, a cooperative or an agent packing for the producer on a cost per package basis. This exemption should apply until the merchandise is loaded on a rail, water, or highway common carrier for transportation.

VII

Finally section 16 (b) in the amendment proposes to impose a 5-year statute of limitations on the employer for violation of any of the intricate bookkeeping requirements of the act.

Reduced to its ridiculous extremity, this means that a common day laborer could prosecute a complaint against an employer 4 years and 51 weeks after he had performed a week's work loading or unloading trucks or refrigerator freight cars during a busy spell, on the issue of whether he had been paid for 2 hours overtime that he knocked off 1 day when the boss had to leave to attend to something else.

It is not sufficient to say that a Government bureau in Washington would not entertain such a frivolous complaint.

They do every day, as the records will prove. Whoever wrote this clause in the amendment must really be an enemy of orderly society although it would certainly assure the agency administering the act a sure job for all time, they think. This is not comparable to the conventional statute of limitations where a prosecutor must prepare a case for presentation to a grand jury or where a plaintiff must risk time, effort, and attorney fees to try a suit for damages. This is a case where anyone of millions of people can, merely by complaint to a court of competent jurisdiction with the help of the Administrator, force an employer to keep minute records for 5 years, subject to the most exact particularity of employment of roving labor, and subject to double penalty for loss of records through fire, flood, storm damage, removal of place of business, or any of several causes that have nothing to do with the scale of living or anything related to normal law observance.

Congress should strike this proviso and if some statutory period of liability is deemed desirable, it should provide a period of time when the details, proof, and recollections of such transactions are fresh, but not over 3 months. A person who doesn't decide he has been underpaid in that time doesn't know whether he has or hasn't and should not be allowed to become a public nuisance by law.

CONCLUSION

We desire to express the hope and to urge Congress to weigh to end results of such proposals as are contained in the amendments under S. 1349. This is not yet a socialist or communist nation, and there are many millions of people who are determined that it will not be. The unorganized majority have been deeply concerned with the trend of recent years, both in politics and in the openly communist and alien teaching in our public schools and many of our universities, where American history is ignored and Freud, Marx, and almost anyone with a foreign name and enough cockeyed theories on what is wrong with our American secitey and economy is must reading. We look to Congress first to reverse this trend. We are fully aware that industry, as it has grown in the last 75 years has committed many wrongs. Millions of aliens brought to this country almost like cattle to build our industrial machine have left us with many social and economic problems. The answer is not to transplant the Government regulated peasant or serf system to this country, and that is the inevitable outcome of regimentation, dictatorship, and bureaucracy at the top, equality of the masses at the bottom, and the elimination of private enterprise, the keystone of American progress in the past.

Respectfully submitted,

EXHIBIT 20

JOHN R. VAN ARNUM, Secretary.

TESTIMONY OF RUSSELL SMITH, LEGISLATIVE SECRETARY, NATIONAL FARMERS UNION TO THE HOUSE LABOR COMMITTEE ON VARIOUS BILLS TO AMEND THE FAIR LABOR STANDARDS ACT OF 1938, NOVEMBER 13, 1945

Almost exactly 1 year ago the delegates to the National Farmers Union's Thirty-ninth Annual Convention adopted a program that is still the guide to Farmers Union national officials in the execution of policy. In that program the delegates declared that "it is time to check and reverse the dispossession of American farm families from the land" and that "fair competition must be established within American agriculture. As the first point of a program

designed to attain that objective, the delegates recommended that the Fair Labor Act be extended "to include all farm wage earners" and that the act be amended "to set a minimum of 60 cents an hour, the least that will sustain purchasing power necessary to meet dietary needs.”

It is pursuant to that mandate that I appear here today to urge the adoption of a bill that will not only increase the minimum wage, but that will broadly extend the coverage of the act. The members of our organization believe that every industry that can be covered ought to be covered, and they particularly urge the application of the minimum to hired workers in agriculture.

We regard this legislation as being agricultural legislation as much as nonagriculture, just as we regard measures directed toward the maintenance of continuous full employment as being agricultural legislation.

It is significant that the quotations I have taken from the 1945 program of the Farmers Union are part of the section entitled "Action to save family-type farming." The preamble to that section reads as follows: "For years, farm organizations, legislators, and Government spokesmen have declared that familytype farming must be made the basic pattern of American agriculture, that it is the basis of rural democracy and thus one of the foundation stones of democracy for all Americans. Yet, with few exceptions, no realistic effort has been made to advance this pattern in agriculture."

We are primarily interested in amendment of the Fair Labor Standards Act. then, because we believe that such amendment can be an instrument for the promotion of family-type farming, the basic tenet of our whole agricultural program. Almost since the inception of the Farmers Union in 1902, we have believed that in the best and broadest sense the family-owned and operated farm is the most efficient agricultural unit. We have believed that it is far more efficient than the so-called factory farm so far as social and democratic values are concerned. But more pertinent to the legislation under consideration here today we have also believed that for a large part of agriculture the family farm also was the most efficient from the standpoint of cold production cost efficiency, Throughout those years, our members have believed that the most serious handicap with which they contended in trying to improve the efficiency of the family-type farm was the ability of the large farm to hire labor at sweatshop and subsweatshop wages. The payment of such wages in agriculture cheapens the value of all labor in agriculture, and so renders of little worth the work of the independent operator himself.

So far as our members are concerned they are perfectly willing to pay fair wages themselves for such labor as they are required to hire. It is their conviction that in the long run they will be more than compensated for the payment of such wages by the partial restoration of fair competition between large-scale farms and family farms that would be the result if those large operators were compelled to pay moderately good wages. They feel that in effect the factory farms now enjoy a subsidy in the form of human sweat and human energy that enables them to compete unfairly with family farmers.

The belief of our members that the welfare of hired farm labor and of family farmers is closely interwoven has recently received scientific confirmation. In September 1944, the Department of Agriculture published a document entitled "Wages of Agriculture Labor in the United States" prepared by Dr. Louis J. Ducoff in consultation with a committee of seven other social scientists in the Department. This document contains the following passage:

"The welfare of both farmers and their hired workers are closely tied to general economic conditions in the country as a whole.

"Real net farm income rises with increases in the volume of nonagricultural employment. In times of extensive unemployment, farm wage rates are low both because of the pressure of a surplus labor supply and because of reduced farm income. Thus mass unemployment during the depression years (exceeding 13,000,000 persons) carried with it a level of farm wage rates of approximately $1.25 a day (in terms of 1940 dollars), and a very low level of real net farm income. Farm income climbed out of the depression and rose to succESSively higher levels with progressive increases in nonagricultural employment. The recovery of farm wage rates, however, was much slower, as considerable unemployment still prevailed as recently as 1941. Farm wage rates attained a level of $2.50 a day (in 1940 dollars) only when unemployment was reduced to almost a minimum level. The significance of full employment to both farmers and hired farm workers is evident from the relationships shown in figure 23

"The interdependence between farmers' income and income received as wages by hired laborers means that the two change in the same direction, and overall national or regional figures on farm income and farm wages indicate that