ffect, for 6-month period, of the proposed elimination, by S. 1349, of the exemption of
seamen from the Fair Labor Standards Act of 1938 on representative inland
waterway carriers, members of the American Waterways Operators, Inc.
Source: Actual records submitted to the American Waterways Operators, Inc., by member carriers.
DEPARTMENT OF THE INTERIOR,
Washington 25, D. C., January 21, 1946.
Chairman, Committee on Education and Labor,
MY DEAR SENATOR MURRAY: I am glad to comment on S. 1349, a bill to
provide for the amendment of the Fair Labor Standards Act of 1938, and for other
purposes, in accordance with your request for a report on the bill.
The bill, unless amended as hereinafter suggested, would have an unfortunate
impact upon the economy of Puerto Rico and the Virgin Islands. Its immediate
effect, I am convinced, would be to paralyze much of the industry and commerce of
these areas, increase markedly their unemployment, and work hardship on all
elements of their population.
These consequences would follow as a result of what is probably an unintentional
omission in the bill. The proposed legislation contains a complete restatement of
section 6 of the Fair Labor Standards Act of 1938. However, it fails to include
the amendments to that section added by subsections (c), (d), (e), and (f) of sec-
tion 3 of the joint resolution of June 26, 1940 (54 Stat. 615). The act of 1940
authorized the appointment by the Administrator of special industry committees
to recommend minimum wages for employees in Puerto Rico and the Virgin
Islands; exempted employees in these areas from general wage orders issued by the
Administrator; declared that the statutory wage rates presented by paragraphs
(1), (2), and (3) of subsection 6 (a) should apply to workers in the islands only
when no wage order issued on recommendation of a special industry committee
was outstanding; and made special provision for minimum piecework rates in the
case of home workers. These provisions were enacted in the form of amendments
to sections 5 and 6 of the Fair Labor Standards Act, and are clearly interrelated in
their application. S. 1349, while it does not amend section 5, renders it meaning-
less by not retaining those portions of section 6 which refer to the work of the
special committees authorized by section 5 and which permit Puerto Rican and
Virgin Island employees to be covered by wage orders based on the special com-
mittee recommendations rather than by the rates flatly prescribed by section 6.
The 1940 act was passed because Congress was convinced, after a thorough
study of the labor situation in Puerto Rico and the Virgin Islands and of the
effect there of the Fair Labor Standards Act, that there was need of modification
of the act's operation in those possessions. The device of special industry com-
mittees, required to be partially composed of residents of the areas, was employed
to assure that the wages recommended would reflect a knowledge of the particular
local conditions and an understanding of precisely how an equilibrium might be
achieved in the islands between labor's need for a reasonable wage and the ability
of industry to pay it. There has been, in the intervening 6 years, no change of
conditions to justify withdrawal of this special treatment. On the contrary, to
discontinue the machinery which now gives recognition to the critical circum-
stances of Puerto Rico and the Virgin Islands would nullify the advances of the
past 5 years in the orderly raising of minimum wages. It is my hope that these
areas may gradually and eventually reach a point in their economic and political
development where they may no longer need to ask for special consideration in
these matters, but it is clear that that time has not yet arrived.
I recommend therefore that S. 1349 be amended so that the changes it proposes
are clearly confined to those portions of section 6 which they are designed to reach,
retaining in an effective form those provisions relating to the special industry
committees for Puerto Rico and the Virgin Islands and to home workers in those
islands. This may be accomplished by striking out lines 9 and 10, on page 3 of
the bill, and by inserting in lieu thereof the words "3. Paragraphs (1), (2), (3),
and (4) of subsection (a) and all of subsection (b) of section 6 of the act shall be
amended to read as follows:". As a further precaution it would be desirable to
add at the end of line 10, on page 9, the words "The provisions of this subsection
shall not apply to orders issued pursuant to the recommendations of a special
advisory committee for Puerto Rico or the Virgin Islands, or both, appointed
pursuant to subsection (e) of section 5." If so amended, this Department would
have no objection to the enactment of S. 1349.
Your attention is also directed to a typographical error in the bill: on page 12,
line 7, the designation “(10)” follows "(8)".
Because of the need for haste occasioned by the imminent consideration of this
bill by your committee, this report is being sent to you prior to its submission to
the Bureau of the Budget and, therefore, I have not been advised by that agency
concerning the relationship of the views expressed herein to the program of the
President.
(Discussion off the record.)
HAROLD L. ICKES,
Secretary of the Interior
The CHAIRMAN. Without objection we will meet tomorrow morn-
ing at 10 o'clock in executive session.
(Whereupon, at 11:35 a. m., the committee adjourned until Tues-
day morning, January 22, 1946, at 10 a. m.)
AREA OF PRODUCTION (see also AREA OF PRODUCTION.), 235, 1303.
COMMERCE:
Redefine commerce to cover seamen adequately, 247-248.
Amend to include industries affecting interstate commerce, or all em-
ployment affecting commerce, 270.
Interstate industries operating on intrastate basis, 270.
Unfair competition under present coverage, 270, 289.
Extend coverage to 19,000,000 in interstate commerce now excluded
in, 1301.
COURT REVIEW: Amendment requested, 432, 438-439, 452, 749-750.
DAMAGE SUITS (see also STATUTE OF LIMITATIONS):
Administrator requests direct recovery authority, 269.
Voluntary settlement amendment requested, 828; objections to, 828.
Responsibilities of Administrator to employers and employees, 269.
Elimination of double pay penalty, 269.
Liquidated damages, abuse of, 334.
EMPLOYER PROTECTION: Administrator's request for interpretative authority,
269.
INDUSTRY COMMITTEES: (See INDUSTRY COMMITTEES.)
RULES AND REGULATIONS: Request by Administrator to issue, 269.
"SEASONAL": Request of Administrator to clarify term, 243.
GRICULTURAL LABOR. (See COMPETITION; COVERAGE.)
GRICULTURAL PROCESSING:
Administrator's view, 240, 824, 830.
Effect on industry, 962.
Fair Labor Standards Act, 1938, 623-624.
Farmers, effect on income, 312, 464-465, 748, 895; cost to, 432; fair
price, 624..
Labor costs and value of product, apples, 449-450; food and agricultural
processing, 1321.
Operating costs and wage costs in relation to total costs, packing sheds,
929, 1311; canners, 1308.
Prices, passed on to consumer or absorbed by processors, 623, 830, 1307.
Profits, food and tobacco, 625, 1936-1939, 628; canners, 1936-1939 and
1943, 1309.
Wage increase 65 cents, 618.
COVERAGE (see also AREA OF PRODUCTION):
Cooperatives, status, 236-239.
Exemption, Administrator's view, 234-235, 242, 246, 834; request for
continuation of, 440, 450; apples, 835; beans, 947; fruit and vegetables,
959; union views, 619, 621, 1303-1304.
Individually owned farms, status, 236-237.
Number of workers, 234-235, 617.
DEFINITION OF, 9, 236, 238-240.
Nature of work, employers' view, 440; union view, 619.
Geographical differentials, cigarette workers, 1313.
Manufacture, comparison of food and fiber workers to, 1319.
Under 65 cents, tobacco, 261; food and fiber, 617.
Union contracts, canners, 65 cents minimum and premium pay for over-
time, 621.
Effect of competition on, 825.
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