There can be absolutely no justification for a policy which, in the interest of public-utility price regulation, shifts the ourden of paying for telephone service from the consumer to the workers in the industry. The subscribers to telephone service are entitled to low rates only if they are fair; and a rate cannot be fair to the public if it is based upon the suffering and privations of the people who must furnish that service by personal labor. Where unconscionable low-wage rates now exist, prompt application for price relief should be made by the operating companies so that respectable wages may be paid. To the discredit of the independent companies it must be said that they have not made these requests in the past. If Congress passes the proposed bill, they may be required to make the applications, but, if their claim is true, the State regulatory commissions will be required to approve their applications. According to our reliable estimates, outside of the larger independent companies it will be found that the great majority of all employees in the independent field receive less than 65 cents an hour at the present time.

The claim that some independent companies cannot pay the established minimum rate because of the small number of stations serviced by them can be quite deceiving. The number of stations (or telephones) serviced by a particular exchange has no direct relation to the amount of business done through that exchange. Nor does it directly bear on the profitable or unprofitable character of the business done by the exchange. Thus, the exchanges of the Chesapeake & Potomac Telephone Co. in Rockville, Md., and Marlboro, Md., each service a little more than 500 stations. But both of those towns lie in the metropolitan area of Washington, D. C., contribute to the economy of the Nation's Capital and are dependent for wage treatment and market prices on conditions in Washington. If we suppose for a moment that the Bell system sold those two exchanges to a Mr. Jones, who promptly incorporated each exchange into a separate private corporation and then conducted the exchanges as separate businesses with contracts for connections with the Bell system we would have two companies bordering on the right to an exemption under the act when economically they would not be entitled to such an exemption.

It should be very clear that an exchange with less than 500 stations but controlled by a larger company must contribute something of value to that larger company either in revenue or strategy of location which makes it desirable for the larger company to control it.

There are undoubtedly many of the smaller cooperatives and single exchanges companies not affiliated with larger companies which might properly be considered as entitled to some special treatment; but there are many others which seek such special treatment while not entitled to it. In this connection the committee should have the benefit of the experience of the Wages, Hours, and Public Contracts Division of the Department of Labor in dealing with applications for the granting of learners' permits under regulations promulgated by the Administrator of that Division. The NFTW has opposed the granting of many of such permits and in some instances has been successful in its efforts.

OBJECTIONS TO THE PRESENT FORM OF THE BILL

1. Exemptions

While approving of the principal purposes of the bill as proposed the National Federation of Telephone Workers presents to the committee two objections to the form of the bill. One of these has to do with the topic discussed in the paragraphs which immediately precede this one and is directed to section 7 which amends section 13 of the act. The particular language objected to appears on page 12, lines 7 and 8, and reads as follows:

"(10) Any switchboard operator employed in a public telephone exchange which has less than 500 stations."

This language should either be stricken from the bill or else modified in such a way as to eliminate any possibility for an abuse of the workers in such exchanges. Obviously the Congress would not intend to exempt the wealthy American Telephone & Telegraph Co. from the obligation of paying employees in its smaller units the same wages as must be paid by a small processer of tangible goods for shipment in interstate commerce. Nor does it intend to exempt the smaller "agency operated" exchanges of the A. T. & T. There should not be left any room for doubt, however, as to its intent with regard to the smaller units of other large or substantial combines or operating companies. Such a unit gives strength to and receives strength from the larger enterprise. 78595-45-63

Its ability to pay should not be confused with the ability of a small individually operated company in a sparsely settled area.

Accurate data on the wages in the very small companies is not available because, having less than eight employees, they have not been required to bring their wage cases to the National War Labor Board.

The National Federation of Telephone Workers believes that no exemption at all should be granted to telephone exchanges, but that, if any exemption should be granted, it should apply only to cooperatives servicing less than 300 stations and to such small enterprises as may be individually owned, be not controlled by or have intercompany relationships with other companies or enterprises which together service an aggregate of 300 stations. It further believes that no exemption should be granted to any company or exchange which has more than two operating employees.

2. Relief from overtime provisions

The second objection of the National Federation of Telephone Workers is directed to the provisions of section 4 amending sections 7 (b) (1) and 7 (b) (2). In both of these sections the language "certified as bona fide by the National Labor Relations Board."

The use of the quoted language indicates a lack of understanding as to how the National Labor Relations Act operates. A union may be bona fide withou ever having been certified as such by the Board. Many unions in the A. F. of L. the CIO, and NFTW hold contracts with employers not as a result of cer tification but as the result of the willingness on the part of the employers to aecept proof that they are the voluntarily selected bona fide collective bargaining representatives of their workers. It is only when an employer refuses to reeognize the union or when two or more unions claim to be the representative of a majority or when one union brings charges against another union that the NLRB and its certifying machinery come into play. The obvious result of including this language in the Act at a time when some unions are planning to push for guaranteed annual wages would be to throw a tremendous certifying obligation on the NLRB which the Board would be unable to discharge for many years to come unless its staff were multiplied many times ever. The only parties to gain by the creation of this situation would be the employers who would argue that they could not enter into an agreement for a guaranteed wage under section 7 (b) of the act until certification had been obtained. The situation might also result in the certification of many unions as bona fide which were not entitled to that characterization. Thus, where no contest exists, an employer and company dominated union might get together and obtain certification for the union. This language is most unfortunate and should be stricken from the bill. AL PHILIP KANE.

Hon. JAMES M. TUNNELL,

EXHIBIT 39

LAKE CARRIERS' ASSOCIATION, Cleveland 13, Ohio, November 7, 1945.

Acting Chairman, Special Subcommittee

Senate Committee on Education and Labor,

Senate Office Building, Washington, D. C.

Statement opposing extension of Fair Labor Standards Act to seamen (S. 1349) DEAR SIR: Lake Carriers' Association is composed of 33 companies owning and operating 324 ships which transport, between ports on the Great Lakes, com modities in bulk, such as iron ore, limestone; coal, and grain. Those ships constitute about 90 percent of United States ships on the Great Lakes of 1,000 gross tons register and over, and employ about 90 percent of the seamen necessary to the crewing of all such Great Lakes ships.

By telegram dated October 11, 1945, I informed Senator James E. Murray, chairman of the Committee on Education and Labor, that members of our association were opposed to S. 1349, insofar as it undertook deletion of the exclu sion respecting seamen from the Fair Labor Standards Act. Opportunity for hearing was requested. By arrangements made with Charles Kramer, chief of staff to Senator Pepper, chairman of the special subcommittee considering the bill, this letter is filed for the record on S. 1349.

MARITIME STATUTE LAW PRESCRIBES QUALIFICATIONS, DIVISION OF WATCHES, MAXIMUM HOURS, AND PAYMENT OF WAGES OF SEAMEN

Maritime statute law prescribes minimum qualifications for the issuance of licenses to officers and certificates of service to unlicensed seamen, fixes minimum watch divisions, establishes a maximum workday, and governs the payment of wages. Intial standards having been instituted more than three-quarters of a century ago, all requirements were made more rigorous and complete by the Seamen's Act, 1915, and the Seamen's Act, 1936.

Present law now prohibits division of officers and crew into less than three equal watches and a workday of more than 8 hours. Enforcement of the laws respecting qualifications, employment hours, and working conditions vests by permanent law in the Department of Commerce. However, those functions and powers have reposed during the war in the United States Coast Guard.

EXTENSION OF FAIR LABOR STANDARDS ACT WOULD RESULT IN CONFLICTS WITH MARITIME STATUTE LAW

Removal of the exclusion with respect to seamen contained in section 13 (a) of the Fair Labor Standards Act would produce several serious conflicts between that act and existing maritime statutory regulations:

(1) There would be dual control in the matter of hours and method of payment of wages between the agency enforcing the navigation and shipping laws and the Administrator of the Fair Labor Standards Act. The evils of dual control were recognized by the Congress in the original enactment of the Fair Labor Standards Act, 1938. Reasons militating against such dual control that were recognized in 1938 are equally valid at the present time.

(2) The Seamen's Act prescribes maximum hours and minimum division of watches on the basis of a single day. The Fair Labor Standards Act prescribes maximum hours on the basis of 1 week. The difference is explained by the underlying motives of the two laws. The Seamen's Act insures greater safety of life and property at sea. The Fair Labor Standards Act is designed primarily to spread employment by the shortening of hours and by the discouragement of hours in excess of 40 per week through the mandatory payment of overtime compensation.

(3) Extension of the Fair Labor Standards Act to seamen would constitute a substantial amendment to the Seamen's Act. To the extent that the Seamen's Act was so amended, it would be reasonable to infer that Congress was shifting the safety requirements from a day basis to a week basis. Maximum hours for each seaman would be changed from 8 hours per day to 40 hours per week. The total number of hours per week is not equally divisible by 40; nor is 40 divisible by 7. Since ships must be operated around the clock, there could be no equal mathematical division of the officers and crew into watches and compliance with a maximum 40-hour week, unless that division were 5 or more. In other words, instead of 3 watches, a ship would have 5 or more watches.

(4) Maritime statutes prescribe standards for the crewing of ships, in the interest of safety, of life and property. In determining the number of persons required in a ship's complement the administrative agency must not only give consideration to the number required to navigate the ship but to the physical ability of the ship to house and feed and to provide adequate safety and lifesaving devices. For that reason a certificate of inspection fixes the maximum number of persons who may be on board a ship while she is being navigated. The mandate of the Fair Labor Standards Act respecting maximum hours is nowise tempered by safety considerations.

(5) Maritime statute law and the tradition of the sea recognize that licensed officers are ships' executives. The Fair Labor Standards Act leaves to administrative determination those who are bona fide executive employees. Present regulations follow a rule of thumb in the definition of executive employees. Among other requirements, an executive employee may not perform more than 20 percent of the same kind of work as those whom he supervises. On a ship there is telescopic supervision; that is to say, a junior officer is supervised in some measure by the work of each of his superiors. By the very nature of an officer's work in the navigation of a ship or in the operation of her machinery, the highest officer of the department performs in many instances substantially the same kind of work as the officers whose work he directs and supervises. If present regulations of the Administrator were to apply, even masters and chief engineers might not be regarded as bona fide executive or administrative employees.

40-HOUR WEEK ABOARD SHIP WOULD RAISE SERIOUS PROBLEMS RESPECTING QUARTERS AND SAFETY

Crewing and safety problems incident to the institution of a 40-hour week for merchant seamen would be fully as alarming as the legal conflicts between maritime statute law and the Fair Labor Standards Act. The average Great Lakes cargo ship now employs 36 men. Institution of a 40-hour week would require, at least, an increase in the number of watches from 3 to 4, with 2 additional licensed officers and 10 more unlicensed crew members. Even with those additional men, regular overtime could not be avoided, and there would be a minimum increase in pay-roll expense of about 42 percent.

Of the Great Lakes fleet operated by members of this association, only 25 ships have been constructed since enactment of the Seamen's Act, 1936, which, among other provisions, required substantial additional crews. The remaining 299 vessels range from 15 to 50 years of age. Few of the ships would be permitted by their present certificates of inspection to carry as many as 48 persons, and none of the older ships has additional space which could be utilized for the housing of additional personnel.

EMPLOYEES OF RAILROADS, MOTOR AND AIR CARRIERS ARE EXEMPT FROM `MAXIMUM-HOUE PROVISIONS

In its present form section 13 of the Fair Labor Standards Act excludes from the maximum-hour provisions, in addition to seamen, the employees of railroads and motor and air carriers. The amendment to section 13 proposed by this bill would result in bringing only seamen or the employees of water carriers within those provisions. Such action would be irreconcilable with the policy of Congress to avoid overlapping jurisdiction on common subjects. Congress has heretofore made more complete provision for the protection of seamen in the enactment of maritime statutes than it has for the employees of carriers in other modes of transportation. In the extension of the Fair Labor Standards Act to transportation employees, there is more room for overlapping conflicts with respect to seamen than any other such employees.

Very truly yours,

EXHIBIT 40

A. T. WOOD, President.

Hon. JAMES M. TUNNELL,

NATIONAL COUNCIL OF FARMER COOPERATIVES,
Washington 6, D. C., October 31, 1945.

Chairman, Subcommittee on Minimum Wage,

Committee on Education and Labor, United States Senate,

Washington, D. C.

DEAR SENATOR TUNNELL: Enclosed is a short statement concerning the policy of the National Council of Farmer Cooperatives on the related subjects of wages, full employment, and social security adopted at a meeting of the executive committee on September 7 and 8, 1945.

We request permission to file the statement in the record of the hearings on the minimum wage bill, S. 1349, which your subcommittee has been holding. Respectfully yours,

(Enclosure.)

JOHN H. DAVIS, Executive Secretary.

STATEMENT ON FULL EMPLOYMENT AND LABOR

Full employment of labor, capital, and natural resources under our American system is the result of optimum production of needed goods and services. Our free, expanding economy normally generates its own new production to employ the gradual increase in our supply of workers and to employ those who are displaced by labor-saving improvements in production and distribution. Increased production efficiency, which is reflected in lower unit-production costs, provides opportunity for a constantly increasing number of jobs, more goods and services per customer, and hence a gradually higher standard of living for all.

It is the function of our Government to provide a favorable business climate in terms of such factors as money, taxes, and monopoly regulations, and fair trade practices, in order that private enterprise through effective labor, thrift,

and investment can fully use our manpower, capital, and natural resources in a system of free economy. Under such conditions unemployment should be largely transitional, pending the reestablishment of conditions which will absorb such workers in productive private enterprise. It devolves upon Government in times of emergency to assist persons in need or distress to a subsistence income through well-planned and managed work and relief programs thus improving the business climate by providing incentives to greater development and use of individual initiative, skills, and management.

A free economy should be protected by a government which restrains its activities to that of an umpire, rather than participating in management or capitalist roles. Real wages under such circumstances will be advanced by competition through adjustments in wages or prices or both as fast as increased man-hour productivity will permit. It is important that gains in real wages benefit workers generally instead of being limited to select groups through monopoly practices. If maximum employment is to result, it is essential that increases in the general standard of living be reflected in the real earnings of self-employed persons such as those engaged in agriculture and services.

In a free economy, labor and management, if properly responsible to the public and in their own long-time interest, will negotiate conditions of employment voluntarily and will reduce strikes and lock-outs to a minimum. Production or services essential to the daily welfare of the people should be maintained with the aid of appropraite public conciliatory machinery, where voluntary efforts fail.

EXHIBIT 41

NEW YORK TRAP ROCK CORP.-IN THE MATTER OF SENATE BILL No. 1349 TO THE SENATE COMMITTEE ON EDUCATION AND LABOR

New York Trap Rock Corp., a corporation of the State of New York, with its office at 230 Park Avenue, New York 17, N. Y., asks leave to file this memorandum in opposition to that portion of S. 1349 which proposes the repeal of the present exemption of seamen from the operation of the Fair Labor Standards Act of 1938 (sec. 13 (a) (3)) insofar as that repeal would affect the business of the corporation, which is the production of crushed or broken stone, and of those in similar situation who, for the most part, are producers of sand and gravel.

The exemption, as it stands, applies to only one class of our employees, to wit, captains of deck scows. Employees of this class and type are seamen (Gale v. Union Bag & Paper Corp., 116 Fed. 2d, 27; certiorari denied, 313 U. S. 559). It is, we think, clear that as to employees of this class the exemption should be continued. A description of the use of deck scows and of the duties of deckscow captains in the case of this corporation (which is to a great extent typical) will most briefly show the reasons for this contention which is based upon considerations of practical necessity.

THE USE OF DECK SCOWS IN THE BUSINESS OF THE CORPORATION

This corporation is engaged in the business of producing crushed or broken stone which is used in street and highway construction and as a coarse aggregate in the manufacture of concrete, in the production of riprap stone which is used for the construction of piers and breakwaters and similar purposes, and in the production of related products. For the delivery of these products to the purchasers and users thereof, the corporation owns and operates a fleet of nonself-propelled deck scows, about 165 in number.

The quarries and plants of the corporation are on the banks of the Hudson River, the southernmost being at Haverstraw which is approximately 30 miles from West Thirty-sixth Street and the North River in the city of New York which is the terminal of the down river Hudson River tow; the northernmost quarry and plant is at Stoneco which is 70 miles from said terminal. The vessels in question are towed from these plants or quarries to said terminal by tugs hired for the purpose and from the terminal are taken to their several points of destination, which point may be in the city of New York or as far eastward on Long Island Sound as Port Jefferson, or to points in New Jersey such as Paterson, Passaic, Hackensack, Newark, Perth Amboy, or New Brunswick, and occasionally to points along the south seacoast of Long Island such as Fire Island, and down the Jersey coast into the Shrewsbury River.