Mr. HALEY. That is correct.

Senator ELLENDER. It is my humble opinion that if some of the members of these unions would study this bill, with particular regard to fixing the rate for various classifications, they would find that eventually it would do away with their organizations.

Why would a man want to pay a few hundred dollars a year or $50 a year union fees, when he can have it done by law?

Senator TUNNELL. Is that the reason for your objection to this bill, that you fear that it will do away with unions?

Mr. HALEY. No; of course not.

Senator ELLENDER. I am in favor of inviting some of the union membership to study it and get a few of them on the stand. They might give you their views on that phase of it.

Senator TUNNELL. How is that?

Senator ELLENDER. I say, I would like to be in a position to discuss the matter with some of the union leaders. I thought that Mr. Green desired to testify. I proposed to discuss that point with him. Senator TUNNELL. Well, he did have a representative here who did. Senator ELLENDER. Yes. I thought it would be better if we could get it from the fountainhead rather than from some of his underlings. Mr. HALEY. In any event, it would seem to us that the real friends of labor would support the suggestion I have made, that workers who are under bona fide collective-bargaining agreements be exempted from the minimum wage law.

In any event, the wage-and-hour law should be amended to include the following features:

1. The law should be amended to give automatic exemption to any employee who is employed on a guaranteed basis of $10 per day, $50 per week, or $225 per month.

The Fair Labor Standards Act is fundamentally a wage law, and if substantial wages like $10 per day are paid, it would seem that a sensible position would be for employees so paid to be exempt from the law.

As a matter of fact, such an amendment would in all probability cause a number of wage increases, since many employers would no doubt be willing to make the necessary increases and guarantees in order to get away from the red tape, bookkeeping, and general bother of keeping the records and making the calculations required by the law. 2. The law should be amended to provide specifically that work time under the statute shall include only time spent by employees in performing services for which they were employed. This work definition is necessary to avoid repetitions of the difficulties which have arisen in the bituminous coal-mining industry concerning travel time.

3. The law should be amended to provide that no person shall be subjected to any liability, civil or criminal, under the provisions of the statute for any act done or omitted in conformity with any regulation or interpretation issued by the Administrator.

It will be recalled that the Administrator of the Wage and Hour Division had officially interpreted the act as not requiring recognition of travel time as time worked under the law in the bituminous coalmining industry.

Of course, the industry and the union relied on that, for the time being.

4. The act should be amended to provide that any claim for liability under the act may be compromised, settled, or released by agreement with the parties affected thereby, at any time. As you know, under the statute as presently drawn and under the decisions of the Supreme Court, a claim may not be conclusively settled for anything less than the arithmetic liability, including liquidated damages amounting to 100 percent of what is shown to be owed on a work basis.

5. The statute should be amended to provide a statute of limitations of 6 months for all claims accrued on date of enactment of the amendment, and a general provision that any other liability shall cease 6 months after it accrues, unless within such period action thereon is commenced.

The tendency of governmental officials appearing before this committee has been to minimize the effect of wage increases on prices. We do not see that the Government's position is sound in industry generally. But certainly it is wholly erroneous in connection with bituminous coal mining. Since labor cost constitutes about twothirds of the total cost of producing coal, it follows that any increase in labor cost will automatically mean an increase in cost of coal to consumers. You may rest assured that the bituminous coal-mining industry is not able to absorb any increased costs, ever how slight. Senator TUNNELL. You mean, they are not making profits?

Mr. HALEY. The coal industry, for many years, has been operating in the red or at a very slight margin.

Senator TUNNELL. Well, under the Guffey Coal Act did they still continue to operate at a loss?

Mr. HALEY. Under the Guffey Coal Act prices were not in effect for very long periods of time; but, during most of the life of the act, the bituminous-coal industry did operate at a loss; that is correct.

Senator TUNNELL. That is not my information on the operation after that act was in effect.

Mr. HALEY. Well, concerning the Bituminous Coal Act prices, the Bituminous Coal Act was enacted in 1937, and in the next year the industry lost $32,000,000, after taxes.

Senator TUNNELL. After taxes?

Mr. HALEY. Yes.

Senator TUNNELL. Well, there wasn't any tax. You mean income tax?

Mr. HALEY. That is correct. There was no tax on the losses; no; but I was giving the industry picture as a whole, the income of the companies having income and then the losses of the companies having losses. Deducting the taxes, the losses were $32,000,000 in 1938. During 1937 the loss was $10,000,000 after taxes; $32,000,000 in 1938; in 1939 it was $13,000,000.

I am giving these in round figures.

Senator TUNNELL. Yes; I understand.

Mr. HALEY. In 1940 the industry made $3,000,000; in 1941 the industry made $19,000,000; and in 1942, the latest figure for which official Treasury Department information has been released, the industry made $30,000,000.

Senator TUNNELL. Yes, sir. It was on a profitable basis when the Guffey Act went out of existence.

Mr. HALEY. Yes, at the time the Guffey Coal Act went out of existence.

Senator TUNNELL. That is what I had in mind.

Mr. HALEY. It had been on a slighly profitable basis, if you could call an earning of this nature profitable, since 1942.

I heard some discussion this morning concerning the rate of investment. The investment in the bituminous coal-mining industry has never been determined completely, but it is certainly in the neighborhood of $3,000,000,000.

So, in 1942, the best year shown in the last 20 years, the industry made 1 percent on its investment. Taking the last 20 years together in the bituminous coal-mining industry, the industry, in that period of time, would show a net deficit of $100,000,000.

Senator TUNNELL. There was no special effort made by the coal mining interests to keep the Guffey Coal Act in existence, was there? Mr. HALEY. I am not advised on that matter. I might say that the National Coal Association does not participate in the campaign for or against the Bituminous Coal Act, since they have in membership companies which favor it and companies which oppose it, so we stay out of that fight, and as we needs must.

Senator ELLENDER. What is the rate per ton that you now pay to produce coal?

Mr. HALEY. To the tonnage workers?

Senator ELLENDER. Yes.

Mr. HALEY. It varies throughout the Nation. Mr. Ross will be able to answer that better than I can, certainly for the progressive coal mines; but it certainly is in excess of $1 per ton.

Senator ELLENDER. The next question I wanted to ask was: What effect, if any would the passage of this bill have on your having to increase the present rate of pay to produce this coal? In other words, if you should raise the minimum, the minimum fixed by the War Labor Board of 55 cents to as much as 75 cents within the next 3 years, what would be the effect?

Mr. HALEY. Well, I presume if this bill were adopted, and those tonnage workers who now make less than 75 cents per hour on the tonnage rate basis were automatically and artificially pushed up to 75 cents per hour, that, bringing into it the interrelated job-classification theory which was in there throughout S. 1349, there would be a comperable adjustment all the way up the line. That is certainly the theory of the bill.

Senator ELLENDER. So that the increase in the upper brackets might be as much as this bill seeks to allow in the next 3 years? Mr. HALEY. That is right.

Senator TUNNELL. But you said the number of those who would be reached would be inconsequential, did you not?

Mr. HALEY. I did not say the number of tonnage workers would be inconsequential. There are a number of them.

Senator TUNNELL. You mean they are earning less than 65 cents an hour?

Mr. HALEY. That is correct; yes, sir.

Senator TUNNELL. How do you account for that?

Mr. HALEY. Because they are elderly men.

Senator TUNNELL. Oh. Well, you said there were not so many of them.

Mr. HALEY. Well, when I say "not so many" there might be a few thousand in the industry.

Senator TUNNELL. There might be.

Mr. HALEY. Well Mr. Ross has several mines, and he will be able to tell you how many there are, and just what the distribution is. We made no survey on it, but we do know that there are some. Practically every hand-loading mine has several or more.

Senator TUNNELL. Let me get your position. Is it your position that your organization opposes this bill on the ground that you have certain substandard workers who would be injured by it?

Mr. HALEY. We have certain subproductive employees who would be injured by it.

Senator TUNNELL. I say, is that the ground for your objection? Mr. HALEY. Not the sole ground; that is one of the grounds, not the sole one.

Senator TUNNELL. The rest of it is that you are "just agin it"? Mr. HALEY. Yes; we are against it; no question about that.

Senator ELLENDER. Well, what I had in mind and intended to develop is simply this: That if today you fix, say, $1 per ton, when the minimum wage is 55 cents, if that wage is raised within 3 years to 75 cents, that would have a tendency of forcing you to raise your cost almost equal to that which is sought in the pending bill, is that not true?

Mr. HALEY. That is exactly what I wanted to make clear.

Senator ELLENDER. That is all I had in view. I didn't have in mind these older men or the crippled going in there to earn a few crumbs. I did not have that in mind, but just the idea that by increasing the minimum wage from 55 cents to 75 cents, there would be a tendency of making those in the higher brackets dissatisfied and a demand for more probably would be made, and probably would be granted.

Mr. HALEY. Certainly. I want to emphasize that. Any increase in wages in the coal industry since the industry operates at such a narrow margin, and since such a high percentage of cost goes to labor, that would result in an increased cost to the consumer.

To that extent, certainly, it would lower the standard of living for those who must pay the increased cost. That is the whole theory we have heard so much of in recent years.

Senator TUNNELL. The same argument would have some potency if people were manufacturing silk, or something else in the neighborhood, wouldn't it.

Mr. HALEY. It would have a degree of the same force. However, I do not believe that any industry in America has had such a high percentage of its total cost going to pay rolls.

Senator TUNNELL. You don't charge the coal up to anything, do you? That is just in the ground.

Mr. HALEY. Of course, the cost of the coal and the depletion aspects of it enter into it. That is, the coal itself costs something but that is insignificant. Coal can be leased on a royalty basis for 10 or 15 or 20

cents a ton.

The labor to produce it is $1.50 or more. factor always.

Labor is the controlling

We think that industries like the coal industry, which gives great amounts of work, should be encouraged; and that the workers should be protected in their jobs.

Of course, if the labor costs in producing coal go high enough the industries and home owners using coal will buy natural gas, where

there isn't any labor, and the net result of that would be that labor itself loses.

Senator TUNNELL. It seems to me that I remember you can get five or six thousand tons of coal from an acre.

Mr. HALEY. I am not familiar with that subject, but that certainly would seem to be reasonable.

Senator TUNNELL. The land, underlaid with coal, is selling for probably $30 or $40.

Mr. HALEY. I am not familiar with that, but that sounds like a general figure, but I have no knowledge.

Senator TUNNELL. I am familiar with the farms being sold for that, that is the reason I know.

Mr. HALEY. Well, I will certainly accept the Senator's information as being better than my own.

Senator TUNNELL. What I am trying to get at is that the actual cost of the coal in the ground has not been very high.

Mr. HALEY. That is correct. You are correct in your assumption that it is the labor costs that make the price.

Senator TUNNELL. Yes; labor and the machines, and so on.

Mr. HALEY. Primarily the labor.

Senator TUNNELL. That is all I have. Thank you.

Mr. HALEY. Now, Mr. Warren Ross is vice president of a little company out in Illinois, and be has some specific information on these elderly workers, which he would like to have permission to give. Senator TUNNELL. Thank you. We will hear you, Mr. Ross.

TESTIMONY OF WARREN P. ROSS, VICE PRESIDENT, PANTHER CREEK MINES, INC., SPRINGFIELD, ILL.

Mr. Ross. My name is Warren P. Ross. I am vice president of Panther Creek Mines, Inc., a coal producer, operating two coal mines in Springfield, Ill., and having a production of 600,000 tons per year.

I am opposed to amendment of the Fair Labor Standards Act of 1938 as proposed in S. 1349, because it will work a severe hardship on our company and many other coal-mining companies and will most certainly force us to reduce our operations and may eventually put us out of business.

Our company employs 600 men working under a union contract with the Progressive Mine Workers of America. Approximately 200 of these men receive a wage of $1 or more, per hour for actual working time and extra pay for travel time from portal to portal and $75 annual vacation pay per man. The remaining 400 men are diggers who load the coal into mine cars. Each of these diggers works alone in his own room and is paid at the rate of $1.08 per ton, plus oneninth extra for travel time. The basis of this rate, established by negotiations with the union, is the amount of coal an average digger can reasonably load to earn the same rates of pay as the other employees who are paid an average of $1 per hour.

The average hourly earnings of these diggers is $1 per hour, with some earning as high as almost $2 per hour. The age average of these diggers is 60 years. Due to their advanced age and for other causes, many of these diggers do not, even at the prevailing high loading rate. earn 75 cents per hour or even 65 cents per hour. Of the 395 diggers employed by the company for the semimonthly pay period ending August 31, 1945: 63 had average earnings of $1.25 or more per hour;