or horiticultural commodities for market, or in making cheese or butter or other dairy products."

The purpose of this exemption was to prevent the working of hardships on plants located in rural areas where costs of living are comparatively low and where operating margins are very small due in many instances to limited volumes of production.

Therefore, we recommended that the following amendment be inserted:

"On page 12, line 8, strike out the period and insert a semicolon and add subsection 11 to read as follows:

"(11) To an individual employed within the area of production (as defined by the Administrator) engaged 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, provided, that in the case of milk and dairy products employees shall be deemed employed within the area of production if they are employed (1) in a receiving plant engaged in receiving, cooling, and shipping milk or cream, provided at least 95 per centum of the volume of the supply of milk or cream for such plant during the preceding calendar year was received from farms located within the same county as the receiving plant or in contiguous counties; or (2) in the case of employees employed in a manufacturing plant engaged in the manufacture of dairy products, provided at least 75 per centum of the volume of the supply of milk or dairy products of such plant during the preceding calendar year was received (a) from farms located within the same county as the manufacturing plant or in contiguous counties, or (b) from receiving plants or other manufacturing plants so engaged, located within a radius of 75 miles of the manufacturing plant where the employees are employed. In determining the volume of dairy products, the milk equivalent thereof shall be the basis of determination.'

Prices for farm products, finished manufactured goods, average farm wages, interest rates on bank loans and for farm credit, prices of fluid milk at the farm level, and even Government payments to dairy farmers to promote wartime milk production vary very materially from region to region in the United States. In view of these considerations, would it not be in violation of economic principles and price stablization efforts to attempt to establish uniform wages at drastically higher levels for all industries, job classifications, and regions in the United States?

The dairy industry committee believes that there is no substitute for full production and increased productivity per worker in contributing toward increased real income per capita. We believe that such an objective is best served by leaving a very considerable flexibility to wage rates as determined by local conditions rather than having minimum wages and wage differentials set rigidly by Federal law, irrespective of the effect on individuals, business concerns, regions, and the total national economy.

TABLE I.—Regional War Labor Board VII, Kansas City, Mo., wage bracket determination No. 44-Part I, job classification wage rates Industry: Dairy products; area: Seventh region; effective date, Aug. 16, 1944

TABLE I-Regional War Labor Board VII, Kansas City, Mo., wage bracket determination No. 44-Part I, job classification wage rates-Continued

TABLE II. Dairies wage-rate bracket, Eighth Regional War Labor Board, Dallas, Tex., area, revised Dec. 12, 1944

Creameries, consisting of: milk processing; manufacture of ice cream and ices; manufacture of creamery butter; power refrigeration; maintenance and repairs, garage; sales and distribution of milk and milk products

TABLE II.-Dairies wage-rate bracket, Eighth Regional War Labor Board, Dallas, Tex., area, revised Dec. 12, 1944-Continued

1 These occupations may or may not receive commission in addition to base pay. Amount of commission varies with each company.

PROPOSED AMENDMENTS TO THE FAIR LABOR

STANDARDS ACT

TUESDAY, NOVEMBER 13, 1945

HOUSE OF REPRESENTATIVES,
COMMITTEE ON LABOR,
Washington, D. C.

The Committee met at 10:30 a. m., Hon. Augustine B. Kelley presiding.

Mr. KELLEY. The committee will please be in order.

Our first witness this morning is Mr. Russell Smith, Washington representative of the National Farmers Union.

Mr. Smith, you may proceed.

STATEMENT OF RUSSELL SMITH, LEGISLATIVE SECRETARY, NATIONAL FARMERS UNION

Mr. SMITH. Mr. Chairman, and gentlemen of the committee; my name is Russell Smith. I am the legislative secretary of the National Farmers Union.

Almost exactly 1 year ago the delegates to the National Farmers Union's thirty-ninth annual convention adopted a program that is still the guide to Farmers Union national officials in the execution of policy. In that program the delegates declared that "it is time to check and reverse the dispossession of American farm families from the land" and that "fair competition must be established within American agriculture." As the first point of a program designed to attain that objective, the delegates recommended that the Fair Labor Act be extended "to include all farm wage earners" and that the act be amended "to set a minimum of 60 cents an hour, the least that will sustain purchasing power necessary to meet dietary needs."

It is pursuant to that mandate that I appear here today to urge the adoption of a bill that will not only increase the minimum wage, but that will broadly extend the coverage of the act. The members of our organization believe that every industry that can be covered ought to be covered, and they particularly urge the application of the minimum wage to hired workers in agriculture.

We regard this legislation as being agricultural legislation as much as nonagricultural, just as we regard measures directed toward the maintenance of continuous full employment as being agricultural legislation.

It is significant that the quotations I have taken from the 1945 program of the Farmers Union are part of the section entitled "Action To Save Family-Type Farming." The preamble to that section reads

as follows: "For years, farm organizations, legislators, and Government spokesmen have declared that family-type farming must be made the basic pattern of American agriculture, that it is the basis of rural democracy and thus one of the foundation stones of democracy for all Americans. Yet, with few exceptions, no realistic effort has been made to advance this pattern in agriculture."

We are primarily interested in amendment of the Fair Labor Standards Act, then, because we believe that such amendment can be an instrument for the promotion of family-type farming, the basic tenet of our whloe agricultural program. Almost since the inception of the Farmers Union in 1902, we have believed that in the best and broadest sense the family owned and operated farm is the most efficient agricultural unit. We have believed that it is far more efficient than the socalled factory farm so far as social and democratic values are concerned. But more pertinent to the legislation under consideration here today we have also believed that for a large part of agriculture the family also was the most efficient from the standpoint of cold production cost efficiency.

Throughout those years, our members have believed that the most serious handicap with which they contended in trying to improve the efficiency of the family-type farm was the ability of the large farm to hire labor at sweatshop and sub-sweatshop wages. The payment of such wages in agriculture cheapens the value of all labor in agriculture, and so renders of little worth the work of the independent operator himself.

So far as our members are concerned they are perfectly willing to pay fair wages themselves for such labor as they are required to hire. It is their conviction that in the long run they will be more than compensated for the payment of such wages by the partial restoration of fair competition between large-scale farms and family farms that would be the result if those large operators were compelled to pay moderately good wages. They feel that in effect the factory farms now enjoy a subsidy in the form of human sweat and human energy that enables them to compete unfairly with family farmers.

The belief of our members that the welfare of hired farm labor and of family farmers is closely interwoven has recently received scientific confirmation. In September 1944 the Department of Agriculture published a document entitled "Wages of Agriculture Labor in the United States" prepared by Dr. Louis J. Ducoff in consultation with a committee of seven other social scientists in the Department. This document contains the following passage:

The welfare of both farmers and their hired workers are closely tied to general economic conditions in the country as a whole.

Real net farm income rises with increases in the volume of nonagricultural employment. In times of extensive unemployment, farm wage rates are low both because of the pressure of a surplus labor supply and because of reduced farm income. Thus mass unemployment during the depression years (exceeding 13,000,000 persons) carried with it a level of farm wage rates of approximately $1.25 a day (in terms of 1940 dollars), and a very low level of real net farm income. Farm income climbed out of the depression and rose to successively higher levels with progressive increases in nonagricultural employment. The recovery of farm wage rates, however, was much slower, as considerable unemployment still prevailed as recently as 1941. Farm wage rates attained a level of $2.50 a day (in 1940 dollars) only when unemployment was reduced to almost a minimum level. The significance of full employment to both farmers and hired