and Puerto Rico. The membership of the association produces approximately 90 percent of the entire pack of canned vegetables, canned fruits, and canned fish. Many of the industry's products are undoubtedly familiar to the committee, as for example the major vegetables, canned peas, beans, corn, tomatoes, and tomato products, such as tomato juice. Many of the fruit products will also be familiar, such as canned peaches, pears, cherries, fruit cocktail, and many other fruits and berries. Canners of these products draw their raw material from thousands of farms, located in 44 States, and dependent in large measure for their cash return upon the producing of these canning crops.

During the 7 years since the enactment of the Fair Labor Standards Act, the canning industry has been subjected to detailed regulation under it. By this time, the industry has become familiar with the act and with the impact of Nationwide minimum wage and maximum hour controls upon its operations. On the basis of this experience, the association offers the following comments concerning the amendments proposed by S. 1349.

The attention of the committee is directed at the outset to several undisputed facts. During the hearings on S. 1349, no one challenged the Administrator, labor representatives, and spokesmen for industry-that the principle of a maximum workweek and penalty overtime cannot be applied to the seasonal operation of processing vegetables, fruit, or fish. The imposition of penalty overtime, it is recognized, cannot result in spreading work or in more people being employed. It will mean only competitive dislocations.

Moreover, it is recognized that penalty overtime should not be applied where necessary hours of work are not within the employer's control but dependent, as in all agricultural operations, upon rainfall, temperature, and other climatic conditions controllable neither by the canner nor by administrative regulation.

It is also undisputed that the relationship between the growing and harvesting of these crops (or the catching of the fish), and their immediate processing makes for virtual identity of farm and cannery labor. Hours of work in neither are controllable by farmer or processor. Wage rates and particularly penalty overtime in one necessarily affects the other. And it serves no purpose so to regulate processing as to prevent growing and harvesting or to cause spoilage and loss because crops cannot be competitively processed.

With these principles accepted, the issues presented to the committee with respect to the exemptions from rigid maximum hours in any workweek, come down to questions of method and detail. In the operation of the law to date, as will be shown below, much has been done both administratively and by interpretative development to work out the problem. Competitive readjustments have to a great extent been achieved. But the burden is on those sponsoring this legislation to prove why further changes should be made, why the existing exemption provisions should be amended so as to destroy their effect, and why the growers and processors in this part of the agricultural marketing industry, facing the most difficult period of readjustment, should be competitively dislocated, region against region and State against State. In the hearings to date, this showing has not been made.

There has been a great deal of general talk about the desirability in manufacturing industries, operating the year round under controllable conditions, of a rigidly limited maximum workweek achieved by the requirement of penalty overtime for work beyond the specified maximum. None of this discussion is admittedly applicable to the processing of seasonal agricultural commodities or fish. There has been extended discussion of desirable minimum wage levels in manufacturing industries. Once again, the bulk of this discussion was not directed, nor intended to apply, to processing industries whose labor supply, wage levels, and hours of work are inseparable from those prevailing in agriculture, where it is again recognized neither the existing law nor the proposed amendments are intended to be applicable. In these circumstances, there appears to be little to add to the material before the committee. Nevertheless, it seems desirable to call to the committee's attention the position of the industry with respect to the principal provisions of S. 1349.

SUMMARY OF THE PROPOSED AMENDMENTS

Insofar as the canning industry is concerned, S. 1349 would amend the Fair Labor Standards Act in several important respects.

First, it would increase the minimum wage immediately to 65 cents per hour and, after 2 years, to 75 cents per hour.

Second, it would permit the establishment of job classifications and minimum wages for those classifications above the level of "unskilled labor." The 65 to 75 cent minimum wage would therefore be a minimum for unskilled labor only. and higher minima would be fixed for other jobs.

Third, it would completely eliminate some existing exemptions from certain requirements of the act and would greatly curtail other exemptions.

Fourth, it would provide a uniform statute of limitations of 5 years within which employee actions against an employer would have to be brought.

THE PROPOSED INCREASED MINIMUM WAGE

The problem of determining the minimum wage level to be applicable throughout the 48 States and each of the Territories transcends the position of any one industry however large or important in the food supply. Yet several basic economic questions now confronting the canning industry and the farmers whose crops it takes, may have bearing on this point. During the war years production of the principal canned fruits and vegetables has greatly expanded to take care of military requirements which averaged 50 to 60 percent of the total wartime packs. Grower prices were raised by Government program. Yet the consumer price of the major vegetables did not reflect these increases which were in great part subsidized and in part absorbed by the industry.

Whether wartime volume can still be packed and sold is problematical. In all likelihood, volume will contract. Subsidies are not expected to continue without end. Grower prices present extremely difficult problems in view of govern mental guaranties on basic and other competing crops. The imposition of higher minimum wage levels, which will have uneven application to various regions, wil! undoubtedly intensify reconversion problems in this industry. What may happer cannot be foretold; what direct or indirect effect may follow on grower prices, On consumer prices, or on the ability of many parts of the industry to survive cannot be forecast. What is certain is that something must give, and that the greater the change in minimum wage, the more intense will be the dislocation to processors and growers in wide areas.

THE OVERTIME PROVISIONS

By and large, the practical effect of the regulations under the existing wage and-hour law has been to afford to the canning industry an exemption from the penalty overtime requirements only for 28 weeks in any 1 year. This overtime exemption breaks down into two parts. The first part relieves a canner engage! in "the first processing of any perishable or seasonal fresh fruits or vegetables" from the requirement to pay overtime during 14 weeks in any year. This is the exemption granted by section 7 (c) of the act.

The second part of the 28 week exemption stems from the Wage and Hour Administrator's finding on August 24, 1940 that the canning industry is a seasona industry. Section 7 (b) (3) of the act provides that a seasonal industry found to be such by the Administrator is not required to pay overtime to its employees during any 14 weeks in a calendar year for hours of work less than 12 hours in 1 day or less than 56 hours in 1 week. Overtime must be paid for hours in excess of these limits. This is the so-called limited hours exemption.

S. 1349 proposes to eliminate completely the unlimited overtime exemption of section 7 (c) and relegate the canning industry solely to a 14 week limited overtime exemption existing at administrative discretion. Administrator Walling admitted to this committee that the canning industry requires “overtime toler ances" of more than 14 weeks. He suggested that the committee further amend section 7 (b) (3) in some undefined way to grant more unchecked administrative discretion with respect to overtime. He offered no cogent reason for eliminating section 7 (c), which Congress enacted to insure that seasonal agricultura processing not be subjected to administrative whim in this important respect The canning industry strongly opposes any change in any of the overtime provisions affecting this industry and urges that the original reasons for. stal experience under, these provisions require their retention. The basis for this position will be made clearer by a brief description of the canning industry's operations. (A detailed description of the canning industry has been previously presented to Congress. See hearings before House Committee on Labor or S. 158 and H. R. 4557, 73d Cong., 1st sess., pp. 34, 51, 432, 445.)

As already noted, the canning industry is essentially a part of agriculture affording an essential means for marketing cash crops. Its sole function is to take what is harvested when ripe and prepare and process it so that it can be

ept, transported, and used until the next season. Economically the canning dustry is characterized by a large number of competing canners packing the me fruits and vegetables in widely separated States. There is no concentraon of control in a few large companies. It is basically a toughly competitive, dividualized industry, characterized by small rather than large concerns. or more than 20 years the number of active organizations in the fruit and getable portions of the industry has ranged from 2,000 to 2,200 enterprises. he lack of concentrated control is shown by the fact that no single company icked more than 9 percent of the total pack of any one fruit or vegetable. his is borne out by the Temporary National Economic Committee study in 1937 hich showed that the canning industry has far less concentration of control an other major industries.

Many factors of course have led to this. One of them is the ease of entry to business. For example, citrus fruit juices were a new product in 1939, put it by one canner in Florida. By 1939 about 200 canners in Florida, Texas, alifornia, and Arizona were engaged in producing citrus juices-and the price ad gone down from 98 cents in 1932 to 63 cents in 1939 for a dozen No. 2 cans. The small size of the enterprise and the wide dispersion of the industry is no cident. It exists for the same reasons which led Congress to afford the maxium hour exemptions here concerned. For as in all other agricultural operaons, the plant is located near the harvest field and its operation (or noneration) is utterly dependent upon nature and not man or governmental gulation.

In a highly competitive canning industry, the ordinary considerations inducg location of a plant close to the raw material supply are magnified. Moreer, it simply is impractical to locate the processing plant at any important stance from the source of supply. The harvesting glut of each seasonal prodt and rapid spoilage of the raw product militate against distant plant locaons. When a crop is ready for harvest, it must be harvested or spoil. When arvested, it must be processed or spoil. Spoilage is economically bad both for e farmer and the canner. This means, therefore, first that the plants are cated in the raw material producing area, and, second, that the processing ant must run day and night at the peak of the harvest season to prevent oilage.

An excellent example of this is the canning of peas. Peas mature very pidly and even continue to change and mature after being removed from the ne. Thus the canner studies the pea crop closely for the desired point of owth giving the best flavor and texture. Tenderness of the pea importantly fects the farmer's price. When this point is reached the canner attempts to et the peas from the vine into the sealed can in the shortest possible time. me canners attempt to complete the canning process within 3 hours after the a is removed from the vine in the harvest field.

In short, the harvest period is one beyond the control of man. It is controlled tirely by varying degrees of weather throughout the growing and harvest sea-rain, heat, frost, and so on. When the crop is mature it must be canned fore deterioration sets in. Otherwise the farmer loses economically, since vices for the raw as well as canned food are reduced by excess maturity and or quality and very often complete loss of the raw product. But this irregur flow beyond human control means that a rigid hours limitation designed to pread work" simply is impracticable. Administrator Walling in his stateent to this committee concurred in this view when he said:

"For a number of the industries in question the need for overtime work is parent. The industries subject to severe pressure of seasonal activity in e moving and processing of a crop fall in this category. In the canning of rishable fresh fruits and vegetables, for example, the entire available labor pply in the areas in which the establishments are located is frequently utied during seasonal operations. At such times employees often must work nsiderably more than 40 hours in order to prevent the spoilage of food. If purpose of section 7 is to spread employment through penalizing overtime ork, I wonder whether it would be appropriate to apply the penalty under ch circumstances. I doubt that the objective of the act to spread employent would be achieved since it would hardly be feasible for workers to move other centers for a few weeks of work except in some rare instances where ch seasonal work might tie in with other kinds of activities at other times the year."

Despite this recognition that the exigencies of fruit and vegetable canning quire exemption from the "spread work" basis for overtime requirements,

there have been assertions before this committee that in some way the preposed curtailment will facilitate the "spread work" and "economic betterment ideas underlying the proposed amendments. Such a conclusion is unfounded Indeed, this curtailment more likely would lead to uneconomic disruptions of the industry.

Under the operation of the present exemptions, all canners have an exemp tion available of 28 weeks to meet their individual seasonal canning demands. The individual canner is left to select on the basis of local growing conditions when to take the exemption. Such individual flexibility is essential because of the great variations both as to the length of the harvest season and the number of items canned.

The harvest season varies, for different products and areas. from a month to three months. Moreover, the typical canner strives to process at least twe different crops. Many can more. It is, therefore, not at all unusual that the total seasonal canning operations of a particular canner will extend over many months. He must, consequently, use the exemption when the barvest glut comes for each product and then work the necesasry hours at different times during the whole canning season. This flexibility is permitted under the present exemp tions. At the same time, no canner receives any competitive advantage, because all are limited by the same maximum of 28 weeks.

The proposal that section 7 (c) be eliminated and section 7 (d) (3) be broadened in some unstated manner would wholly destroy this uniformity. The Administrator would under this suggestion be able to fix, without any review of any kind, different overtime exemptions, for the same or different crop for different States, regions, and areas. Since the canned food price is fixed by national competition, such untrammeled discretion would set up new differentials having wholly unforeseen results. Even the best conceived differential, imposed by external Government regulation rather than supply and demand, inevitably leads to economic competitive inequalities, and consequently disruptions not found under the present overtime provisions are inevitable. These differentials would be magnified by any substantial increase in the minimum wage. At the proposed rate of 75 cents an hours, the total overtime and minimum payment would be $1.07 an hour. This is a substantial difference which would be necessarily reflected in increased prices in direct proportion to the different overtime limitations which might be fixed under the new proposal. The canning industry, due to inherent uncertainities of weather and related factors, is one of sporadic profits with a majority of organizations financially small in comparison to other industries. The magnified differentials could well serve to cripple or even wipe out an important portion of the industry in a bad year.

The original reasons for requiring these overtime provisions still exist, as indicated by Mr. Walling. This fact is further emphasized by the action of the Secretary of Labor in exempting the canning industry from the overtime require ments of Executive Order 9240 requiring the payment of double time for work on the seventh day of each workweek. This was granted for canned fruits and vegetables on August 25, 1943, and for west coast canned fish on June 7, 1943. There is not any question of "spreading work" or "broadening" the minimum wage coverage in the canning industry. In a seasonal rush, it is to the canner's and farmer's advantage to use all available labor. Long hours at those times result only from the fact that there is essential work for the available labor. An overtime penalty will not change this fact.

The same basic considerations discussed for fruits and vegetables apply to canned fish. The criteria which impelled the origianl agricultural exemption apply today with force to support the fishery exemption. Uncontrollable seasona! peaks at the time of fish runs when fish are caught, the undoubted need for flexible opportunity to prevent spoilage by immediate canning, and the economic desirability of uniform treatment of fish canners to prevent uneconomic dis ruptions make highly important retention of section 13 (a) (5) in its present form.

UNIFORM STATUTE OF LIMITATIONS

The association strongly supports a uniform period within which employees more an employer for unpaid overtime.

Tuber the present act, the limitation period is left to be fixed by State law 51 Blue pids range from 6 months to 6 years or more. The resulting ninity Teased by the retroactive effect of charged interpretations

hes by ministrator or court decision.

The basic unfairness of a retroactive ruling is, of course, plain. As a practical matter, most industries, including the canning industry, live under the act as interpreted by the Administrator rather than taking each questionable point to court. But these interpretations can be and have been reversed by both the Administrator and the courts. Any change necessarily has retroactive effect because it is an interpretation of the law in force at all times since 1938. The reasons for the changes are immaterial in an employee action. Thus, an employer who has been in good faith abiding by the current interpretations can, without any fault on his part, find himself suddenly faced with liabilty for unpaid overtime plus the penalty of an extra amount equal to the unpaid overtime. This heavy burden is, of course, greatly aggravated when long limitation periods permit piling up liabilities for as long as 6 or more years. Such a liability could bankrupt an industry. Certainly it is an uncalled-for risk.

One year is ample time for an employee to ascertain his rights and bring an action. And it is a period which would prevent an undue accumulation of employer liabilities. Certainly employers as well as employees are entitled to some measure of stability.

To meet these difficulties (which have been detailed in hearings during this Congress on H. R. 2788 before a subcommittee of the House Judiciary Committee), it is recommended that the uniform limitation period be 1 year, rather than the proposed 5 years. In addition, to prevent any charge of unconstitutionality, it is recommended that all pending employee claims not barred under applicable State limitation statutes must be filed in court within 6 months after enactment of the amendment. Thus the suggested amendment would not have any retroactive effect to cut off claims which already may have accrued. Respectfully submitted.

NATIONAL CANNERS ASSOCIATION.

EXHIBIT 26

IN RE S. 1349, SEVENTY-NINTH CONGRESS, FIRST SESSION

To the Senate of the United States and its Committees and Subcommittees on Education and Labor considering S. 1349, Seventy-ninth Congress, first session.

The petition of J. Dewey Singleton, in his capacity of vice president of and acting for the Louisiana Syrup Association, respectfully represents that:

1. The Louisiana Syrup Association is a nontrading or nonprofit corporation organized under the laws of Louisiana, domiciled in the city of Lafayette, La. Its members are persons actually engaged in the production of sugarcane and persons actually engaged in the processing or manufacturing of sugarcane into sirup.

2. The membership of the association comprises and represents a great majority of the entire production of pure cane table or country sirup in Louisiana. 3. By resolution of the board of directors of the association petitioner, J. Dewey Singleton, in his capacity of vice president of and on behalf of the association, was authorized and directed to and does hereby file this petition protesting against the adoption and enactment of the proposed Senate bill 1349 insofar as pure cane sirup is concerned for the reasons hereinafter stated. 4. Sirup manufacturers are already forced to compete with a subsidized industry and cannot stand additional burdens, for the following reasons: (a) Cane sirup is not governed by the Sugar Act

When the so-called Sugar Act was adopted it was decided that cane sirup should be exempted from its provisions and consequently not entitled to the benefits accorded to sugar. Under the terms of the act and regulations, farmers growing and selling cane for processing into sugar receive benefit and incentive payments from the Government; but no such payments are paid by the Government to farmers growing and selling cane for processing into sirup. In order to compete with raw-sugar factories the sirup mills must match these payments. For example, the benefit and incentive payments disbursed by the Government to growers of cane processed into sugar is $2.82 per ton; and consequently, the sirup mills must pay to growers of cane processed into sirup the same amount paid by sugar factories, plus $2.82. In other words, sugarcane grown for sugar is subsidized but sugarcane grown for sirup is not.