effect of various counteracting influences, this is certain: After the war, family incomes will be very largely supplied by one breadwinner. The trend in this direction is increasingly observable in many centers.

"CURRENT FOOD COSTS IN OMAHA

"An indication of what the low-income family is faced with on the basis of present living costs is provided by the food budget, prepared by the Community Welfare Council of Omaha, an agency supported by the Community Chest" The budget is presented both in terms of quantity and in money cost. It is care fully drawn up for men and women, differentiating as to requirements depending on whether the man is 'active,' 'moderatively active,' or 'sedentary' and for the woman depending on whether she is 'active,' 'moderately active,' 'sedentary,' 'pregnant,' or 'nursing.' In addition, varying requirements based on age are specified for children through the age of 12 years and separately for boys and girls above that age.

"On the basis of prices as of February 21, 1945, the council found that a family of four comprised of an active man, a moderately active woman, a girl of 15, and a boy of 12 would need to spend $59.31 per month on food. A suggested program for a family of four for 1 week is given, in quantities and prices, where the husband and wife are both moderately active. For this family, the suggested weekly purchases under the heading of 'Meat, poultry, fish, cheese-8 pounds demonstrate that economy was a primary consideration in the council's recordmendations: 'Liver, 1 pound, 35 cents; chuck, 3 pounds, 28 points. 87 cents; heart. 2 pounds. 40 cents; cheese, 1 pound, 33 cents; codfish, 1 pound, 35 cents'total of $2.30 per week for this essential group of foods.

"Currently, a 70 cents an hour packing-house worker, at the generous estimate of take-home pay of $105 per month, on the basis of the Community Welfare Council of Omaha's carefully worked out budget, would be required to spend from $55 to $60 per month for food alone for a family of four. This is more than 50 percent of his monthly income, far above the 30 to 32 percent (in itsel high) which is usually assumed for low-income families.

"Every community has special features about the cost of living in relation to particular types of employment or particular groups. Omaha is no exception so far as packinghouse workers are concerned. For example, most of the large number of Negro workers with jobs in the packing plants of South Omaha reside on the north side of Omaha. That means that they must ride streetcars. traversing the city's main business district, for an average of from 5 to 6 miles Many white workers also take this long trip, the excessively crowded housing situation in South Omaha making this necessary. A large additional proportion of the workers drive automobiles from nearby small towns, up to a distance of 15 miles or more-an expensive form of transportation. A minimum of 5 percent are estimated to reside in Council Bluffs, a location which, in addition to the distance factor, necessitates a 5-cent toll charge for crossing the Missouri River.50

"The real cost involved in the time and inconvenience, as well as the money outlay, often entailed by getting to work is frequently overlooked in discussions of living costs. If complete evidence were available it is certain that many situations similar to that at Omaha would be found.

"The South Omaha area itself, where large numbers of packinghouse workers reside, when measured by housing conditions and other familiar criteria, reveals a substandard state of things which has been chronic for a long time and which reflects the substandard income status of a high proportion of the packinghouse workers. The detailed statistics demonstrating this are contained in the study. An Ecological Study of Omaha, by T. Earl Sullinger, professor of sociology at the University of Omaha. The study is based on "geographical units" as ememployed by the Census Bureau for its enumeration districts in 1930.5

Mimeographed material supplied by the Community Welfare Council of Omaha. 50 It may be ated that streetcar fares are higher in Omaha than in Chicago a 10-cent cash fare a compared with cents. In Omaha three tokens are sold for 25 cents: be: even for thook ads of this, the fare is still slightly higher than Chicago's 52 Publish burial research, department of sociology, Municipal Uni

set forth in the description of census enumeration or Sullinger's study.

of America, CIO, Geographical Wage Rate DifFly 1945, pp. 49-52."

In relation to the general problem before it, undoubtedly the committee will not regard as decisive its opinion on the ability of any particular industry to pay he modest minimum of 65 cents per hour. At the same time, it may be of interst to comment briefly on this factor relative to meat packing.

We have already cited the extremely minor part, 6 to 7 percent, which plant abor makes up of total costs in this industry. And we have given a summery portrayal of the handsome profit record of the industry during the war. This ecord, with labor costs being so relatively small, could not have been due irectly or chiefly to the low wages paid packing-house labor.

But questions may arise about the future. The immediate future is the financial eports for the year ending October 28. Remembering that volue of production s so important in determining profits in this industry, it may be noted that the Department of Agriculture estimates 1945 meat production as only 8 percent below the all-time record of 1944.

Indicative of the present and of the future beyond October 28, a number of lues on the profit outlook are worth citing. Packing companies are paying ceilng and near-ceiling prices for livestock, showing their conviction that a demand situation is in prospect which will be highly profitable. Demand not only comes from meat-hungry Americans but, in addition, from much hungrier populations in Europe who, through UNRRA, loans, or cash on the barrel, are anxious to onsume hundreds of millions of pounds of meat. In the face of this demand situation, the packers evidence no worry over curtailed purchases by the Army procurement officers.

Further evidence that the packers are "sitting pretty" is the current active refinancing, facilitated by recent and prospective profit records, and the extensive recent purchases of independent packing company plants by larger companies, particularly in the South, where wages are especially out of line with living costs. Nor is it to be overlooked that, as in other industries, substantial tax refunds are slated for the packing companies; and further, with the Treasury Department's recommendation for the repeal of the excess-profits tax, that great additions are in prospect for stockholders from this source.

As for continued high volume, livestock numbers out on the range and in the feed lots assure slaughter totals far above prewar averages for at least 2 to 3 years.

After that? Much of the answer depends on whether the mass of consumers have sufficiently full employment at sufficiently high income levels to buy meat in the quantity and quality justifying farmers to maintain livestock production. It needs no proof that workers whose earnings are computed on the basis of rates at less than 65-or 70-cents per hour for 38 hours a week (prewar average in meat packing) do not provide the national foundation which will induce farmers to maintain their livestock output.

There may be irony in the circumstance that packing house workers, who help produce the Nation's meat, provide a large-scale example of the impediment to full employment, on the farm and in the factory, which arises when mass purchasing power is too low. How real this is may be made more vivid by again examining the meat item components which are advised for low-income workers by Omaha's Community Welfare Council. (See the quoted statement above, by Omaha's Community Welfare Council. (See the quoted statement above.) Packing-house workers are far from unique in illustrating this problem en masse. That is the significance of their situation in pointing to the urgent need for the legislation which is proposed in this bill. Respectfully submitted.

UNITED PACKINGHOUSE WORKERS
OF AMERICA, CIO.,

By LEWIS J. CLARK,

International President.

(Prepared by Research Department, 515 Engineering Bldg., 205 West Wacker Drive, Chicago 6, Ill.)

EXHIPIT 22

BRIEF OF MICHIGAN BEAN SHIPPERS ASSOCIATION, MICHIGAN BEAN PRODUCESS ASSOCIATION, NEW YORK STATE BEAN SHIPPERS ASSOCIATION, AND ROCKY MOUN TAIN BEAN DEALERS ASSOCIATION, IN OPPOSITION TO THE ELIMINATION OF SECTION 13 (a) (10), "AREA OF PRODUCTION" EXEMPTION FROM FAIR LABOR STANDARDS ACT, AS PROPOSED BY SECTION 7 OF S. 1349

This brief is respectfully submitted by courtesy of the permission which the committee extended through Mr. R. B. Bowden, executive vice president of the Grain and Feed Dealers National Association, at the conclusion of his testimony on October 9, 1945.

My name is William P. Smith. I am attorney for the above-named associa tions, whose members compose the major part of the dry edible bean industry in the United States, both farm cooperative and independent shippers, as well as growers. I also own and operate a 200-acre farm at Eaton Rapids, Mich., located in the heart of the bean-producing area of that State.

In Michigan, with which I am more intimately familiar, approximately one third of the bean crop is handled by farmer-owned cooperative elevators, acting through their agency, the Michigan Elevator Exchange. The balance is handled by independently owned elevators, the stock of many of these also being owned in whole or in large part by farmer-growers. These elevators, including the coop eratives, handling approximately 98 percent of the Michigan bean crop and totaling in excess of 300, are members of the Michigan Bean Shippers Association. Several thousand of the growers have their own organization, the Michigan Bean Producers Association, which is highly representative of the farmers' interest in this large and important cash crop.

The New York State Bean Shippers Association's members consist of some 100 elevators in that State and handle the processing and marketing of approximately 95 percent of the dry edible beans grown there, where this crop is, likewise, an important part of farming operations, particularly in the western portion of the State.

The same situation is true of the Rocky Mountain Bean Dealers Association, comprised of some 150 members, located in the States of Colorado, New Mexico, Wyoming, Nebraska, Idaho, and Montana, and handling approximately 85 percent of the dry, edible bean crop therein.

The bean industry, as represented by these rowers and elevator operators, is firmly opposed to the elimination of the "area of production" exemption as now, and since its inception, contained in section 13 (a) (10) of the Fair Labor Standards Act of 1938, as is now proposed by section 7 of S. 1349, which is under consideration by your committee.

Under the authority of the congressional directive to define the "area of production," contained in section 13 (a) (10) of the present act, the Wage-Hour Administrator, upon petition of the bean industry, held an extensive hearing in Washington in November 1938. This was the first of such hearings so held, and as the result of 394 pages of testimony by growers, elevator operators, and marketing specialists, the Administrator, on December 22, 1938, promulgated the following definition:

"SECTION 536.2. "ARFA OF PRODUCTION" AS USED IN SECTION 13 (a) (10) OF THE FAIR LABOR STANDARDS ACT.-An individual shall be regarded as employed in the "area of production" within the meaning of section 13 (a) (10), in handling, packing, storing, ginning, compressing, pasteurizing, drying, preparing in their raw or natural state, or canning of agricultural or horticultural commodities for market, or in making cheese or butter or other dairy products.

"(c) With respect to dry edible beans, if he is so engaged in an establishment which is a first concentration point for the processing of such beans into standard comercial grades for marketing in their raw or natural state. As used in this subsection (c), "first concentration point" means a place where such beans are first assembled from nearby farms for such processing but shall not include any establishment normally ring a portion of the beans assembled from other first concentration point

he denied that the existing regulation, defining tes to dry edible beans, has operated and been manner satisfactory to the Wage and Hour that its administration has caused very little

lifficulty insofar as the bean industry itself is concerned. No cases at all involvng the question have been taken into the courts by the Administrator, and only one court action has been brought by an employee. In this only controversy to reach the courts, Remington versus Shaw, decided by the United States district Court, western district, Michigan, January 12, 1942, the court fully sustained the Administrator's definition.

In any consideration of this matter, it is of importance to note that dry edible beans are received by the elevator and leave the elevator in their raw or natural state and with their form unchanged. In most parts of the United States, the Deans are received in "thresher-run" condition—that is, in the same condition in which they come from the fields-but it is mandatory that the beans be cleaned and processed to the official United States or State grades before they can be entered into distributive channels for distribution for consumption.

For example, the State of Michigan, which has its own bean-grading standards and regulation, expressly provides therein that

"No dry edible beans of picking stock grade or "no established grade" will be permitted to move between plants within the State of Michigan without inspection, except for the purpose of processing to grade, and shall not be placed into trade charnels for consumption until they are processed to meet the requirements of one of the established grades" (Michigan State Department of Agriculture Regulation No. 501, p. 7).

The official United States standards for beans also make it mandatory that"Beans shall be graded and designated according to the respective grade requirements of their appropriate class and according to the special grades applicable." Various factors determine the extent of the bean-producing areas in actual practice. In Bean Culture, by E. V. Hardenburg, of Cornell University, published in 1927 by the MacMillan Co., this is clearly brought out, on page 44, as follows: "Extent or geography of dry-bean production varies with such factors as rainfall, distribution, temperature, cropping system, and marketing facilities. The factor of light rainfall in the autumn accounts in part for the importance of the industry in western New York, in the "Thumb' district of Michigan and in the important bean districts of the Middle and Far Western States." And, this further factor, particularly significant here:

"Owing to the necessity of special labor-saving devices to clean and prepare the crop for market, the prospective grower must first assure himself that such facilities are available to his locality."

There is no question but that after the beans have been threshed they still are not in condition where they can be shipped out of the area of production, nor will they be accepted by the consumer. With any substantial quantity of beans, it is impossible for the farmer to put them into the condition which consumers demand; with any quantity at all, it is both impractical and uneconomical. Hence, since beans became of any importance commercially, it has been the established custom for the elevators to buy the farmers' beans on the basis of the condition in which they will be compelled to place them for the consumer, and to chearge the cost of placing them in this condition to the farmer himself by making a deduction from the price paid to him for the beans in their thresher-run condition. In other words, this is an essential step in preparing the beans for the market, which the farmer cannot, as a practical matter, otherwise reach. As he cannot perform this operation himself, he merely pays others to do it for him. It was for the foregoing reason, that the Committee on Ways and Means of the United States House of Representatives (Rpt. No. 728, 76th Cong., 1st sess., accompanying H. R. 6635, Social Security Act amendments of 1939) specifically referred to and exempted the cleaning of beans as "agricultural labor" on the ground that "such services are an integral part of farming activities."

In view of this situation, which finds its direct counterpart in the Administrator's definition of "area of production" relating to dry edible beans, it is clear, we submit, that the processing of the beans to the grades required for marketing in their raw or natural state is an essential prerequisite to the farmer's crop having any market at all in the present day and age. No elevator buys the beans for its own use, and could not possibly be considered as the market for which the farmer must, of necessity, prepare his crop. Furthermore, he certainly is not growing the beans for his own use, but for market, and as an integral part of his preparation of the crop for the consumptive market which it is designed to reach, the processing, including hand-picking, grading, drying, etc., must of necessity, both practically and legally, be performed within the actual "area of production."

Under normal conditions, the dry edible bean crop returns to the farmers of the United States an average exceeding $50,000,000 annually. The acreage

planted will range from 1,500,000 to 2,000,000 acres, and on this area fr 12,000,000 to 15,000,000 bags of beans are produced each year.

The leading type is the white navy or pea bean, 90 percent produced! Michigan, and most of the remainder in New York State. This type compri on the average one-third of all beans. The Great Northern bean, a comparati newcomer, is a large white bean competing with the navy bean in the ret grocery trade, and since 1928 has represented on the average 13 percent of 24 total supply of all edible beans. These are produced in concentrated areas southern Idaho, south central Montana, northwestern and central Wyoming, L western Nebraska.

Other principal types of beans are the small whites and limas from Ca fornia, marrows from New York State, pintos from Colorado and New Mex pinks from California, small reds from southern Idaho and California, and r kidneys from Michigan and New York State, and cranberries from Califor and Michigan.

It has always been the settled practice in the bean industry to make a dedi tion for processing the beans, from the amount paid to the farmer for the By the very nature of the commodity itself, as well as the manner in which t farmer sells his beans to the elevator, this is absolutely essential.

The reason for this deduction from the farm price is very apparent. A heretofore stated, the beans are delivered by the grower in thresher-run core tion and of varying grades. If they were of equal quality, it might be arg that the processing cost could be passed on to the consumer, but with each of the beans of a different grade and carrying, as they do, a uniform base pri it is necessary for the grower to take a corresponding deduction to bring lower grades to that uniform level for marketing. This is an entirely differe situation from that involved in production of a manufactured article.

In hand-packing the beans to grade, the same amount per pound deduc from the farmer for this operation is paid to the bean pickers. The eleva historically operate on an exceedingly small margin of profit, and could survive if they were required to absorb the charge. In the ordinary free matk with the law of supply and demand dictating the price which the const will pay, it is equally impossible to pass the charge along to him.

The only alternative, therefore, which removal of the present exemp would bring about, would be to increase further the deduction of the am paid to the grower. It is not believed that such a solution is the purpose intention of the Congress. As stated by Congressman Biermann of Iowa. the time he introduced the amendment which became section 13 (a) (10): "The amendment I have offered includes only the first processing of th that come off the farm. The important point is that the farmer pays the for this processing.

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"The Members from the South will agree that the man who raises the co pays for ginning the cotton. when the cost of ginuing the cotton creases the farmer gets just so much less; and our contention and the ot tion of the farm organizations is that this bill designed to help labor should be so worded that it puts another burden on the agriculture of this coUL** (Congressional Record, May 24, 1938, pp. 9741, 9742.)

Furthermore, the basic intent of Congress in its enactment of the Fair L Standards Act was, as shown by its preamble, to eliminate certain "labor ditions detrimental to the maintenance of the minimum standards of necessary for health, efficiency, and general well-being of workers." Such ditions, it is declared, should be eliminated as they constitute an unfair n. of competition, lead to labor disputes, spread such undesirable labor cond among the workers of the several States, and interfere with the orderly. fair marketing of goods in commerce between the States.

But Congress declares it to be the further policy of the act, to eliminate ». undesirable labor conditions without substantially curtailing employmen earning power.

In the first place, the evidence in the hearings before the Wage-Hour ministrator is clear that the conditions which the Congress sought to or by the enactment of this legislation do not even exist among the bean eles. employees. The record is replete with testimony that many of the bean pra own their own homes, have put their children through college, work whe as they choose, coming and going at will, that the same individuals work the elevators year after year and the labor turn-over is negligible, that of the bean pickers are wives, daughters, and relatives of the farmers