When the man puts his car in the garage, we act as banker for him. It goes into the total gross, but it is not an item of sales.

Mr. ADAMS. I don't own my own laundry, and the guest is charged for the amount of his laundry and it is a gross income, but I get a very, very small percentage out of it.

Senator DOUGLAS. Granted there is a lot of bookkeeping difficulty. If those items could be excluded, do you have any estimates at present as to how many hotels there would be?

Mr. SHERRARD. No. I would say it is well over a thousand, but Ț will be glad to send the figures to the committee.

Senator DOUGLAS. I would appreciate it.

Mr. SHERRARD. Why should our business be picked out for a gross figure of any kind?

Senator DOUGLAS. I understand you are opposed to it, but I am trying to get the area of the problem, so to speak.

Mr. PACKARD. In the philosophy of the economics of this business of ours, any dollar figure doesn't affect whether our business should be under it or not. We are either fish or fowl. My feeling is this:

Economically our business is undergoing considerable changes on the down side. The proposals that you make involving tips, let us say, and whether a record was kept or not-there is always that uncertainty added to our present economic problem, so we can't possibly rest assured in this business as to where we may stand.

Senator DOUGLAS. I don't mean to say this is the sole consideration in my mind, necessarily, determining or controlling consideration, I merely wanted to see if we could get some idea of what the area of the problem is with which we are being asked to deal.

Senator PEPPER. This deals not only with service establishments, but also with retail stores, selling establishments; and they would be, I suspect, considered together. If you didn't include one, you wouldn't include the other.

Mr. SHERRARD. On your gross business, for instance a resort hotel, that goes very fast: It may be a small house, but it is operated on the American plan with seasonal rates. You take in the small town, the little hotel down the street, operating on a year-round basis at $2.50 and $3 a day, his gross won't amount to that much.

I have a small hotel within two blocks of the Parker House that won't do $500,000 a year, but I have the same labor contract.

Senator DOUGLAS. I hesitate to ask people to produce more figures, but if at the same time you are producing the figures on the $500,000 limit if it is not too much trouble, if you could produce figures on the area of coverage if you had a million-dollar limit, I think that would be helpful, too.

Senator PEPPER. Yes.

Mr. SHERRARD. That is getting like the rent-control figure. If we get up to a high enough figure, we will see who is left.

Senator PEPPER. Are there any further questions? If not, I thank you gentlemen very much.

The next is the American Farm Bureau Federation, represented by Mr. J. Donald Parel, associate director, Washington office.

Mr. Parel, we are glad to have you.

STATEMENT OF J. DONALD PAREL, ASSOCIATE DIRECTOR, WASHINGTON OFFICE, AMERICAN FARM BUREAU FEDERATION

Mr. PAREL. Mr. Chairman and gentlemen of the committee, my name is Donald Parel. I am associate director, Washington office, of the American Farm Bureau Federation, and I am appearing as a representative of that organization.

This organization has a substantial membership in most of the agricultural counties in the United States and in Puerto Rico, aggregating over 1,325,000 farm families, which families produce a large part of the food and fiber of the Nation. Our policies with regard to particular issues are arrived at through the democratic process. Resolutions adopted at county and State levels form the basis for the development of national policies by elected voting delegates at the national convention which is held each year. It is with this background and within the scope of the resolutions adopted by the voting delegates that our board of directors interprets proposals pending before Congress and makes recommendations accordingly.

The welfare of the Nation depends upon the prosperity of all segments of our economy, and agriculture is indeed a substantial part of our economy. According to the last census report, the farmers in the United States produced 275 different agricultural commodities. They are produced under unique conditions, in that production is directly affected by drought, flood, wind, hail, freezing, insect infestation; and probably to a degree greater than any other industry, the price the farmer receives is set by factors over which he has a minimum of control.

The present Fair Labor Standards Act contains certain exemptions which are of great importance to the agricultural economy of the United States. The proposal reported by the Committee on Education and Labor of the House of Representatives, as does S. 653, exempts farm production from the wages-and-hours provisions. This is in accord with the present law. We urge that this exemption be retained.

The present law, however, would be changed by both the House proposal as well as by S. 653, by the elimination of the overtime exemption contained in section 7 (c), granting exemption to first processors of milk, whey, skimmed milk, or cream into dairy products; or in the ginning or compressing of cotton; or in the processing of cottonseed-by cottonseed-oil mills-or in the processing of sugar beets, sugar-beet molasses, sugarcane, or maple sap, into sugar, or into sirup. The "area of production" of this section would also be eliminated by the provisions of these bills, as well as the provisions of section 13 (a) (10) of the current act, which provides that neither the minimum-wage nor the overtime requirements of the act shall apply

to

any 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.

Section 7 (b) (3) of the present act also provides partial exemption from overtime requirements for agricultural industries found by the Administrator to be of a seasonal nature, which applies for a maximum period of 14 weeks in any calendar year. The pending legislation, if enacted, would materially change this partial exemption-particularly changing the hours permitted to be worked before the overtime provisions would be in effect. The present law permits 12 hours per day or 56 hours per week during 14 weeks. S. 653 would change this overtime period to 40 hours per week for the 14-week period.

I believe it cannot be denied that the increased costs, resulting from elimination of the present agricultural exemptions, would be levied on the farmer. It is very unlikely that the increased costs would be absorbed by the agencies performing the various processing and handling operations. It would indeed be theoretical to believe they would be passed on to the consuming public. It is almost inevitable that the farmer will bear the increased costs for such services by reduction of the price which he receives for his crops. We therefore strongly urge maintaining the agricultural exemptions of the present

act.

In 1938 the Congress passed the Fair Labor Standards Act. This law is generally recognized as the Wage-Hour Act. During the time the 1938 act was under consideration, the American Farm Bureau Federation took a very definite position on minimum wages and maximum hours, appearing before committees of Congress in support of the general principle of a wage-and-hour law, providing, however, that a clear definition of "agriculture" be had, and that the provisions of the minimum wage and the provisions covering maximum hours should not apply to labor employed by farmers.

The Federation, in recent years and repeatedly since early 1946, when Congress was considering the raising of the minimum-wage rate-has taken a very definite position in regard to what changes in the act affecting minimum wages might serve best the public interest. Our delegate body and board of directors have directed the executive officers of the Federation to oppose, without compromise, any increase in the minimum basic wage that is not tied to a cost-of-living index. It is our position that the minimum wage should go up if the costof-living index goes up, and that when the index goes down, the basic minimum wage should be adjusted accordingly under a formula provided in the law.

The American Farm Bureau Federation believes this to be a sensible and sound approach-one that will not strait-jacket our economy, and one that places proper emphasis on real wages as distinguished from hourly rates of pay. We have followed this principle in our support of agricultural legislation by relating parity prices for farm products to the current prices of things farmers buy. The parity concept should be applied to minimum wages as well as to farm prices. We earnestly solicit your committee to give careful consideration to this proposal, and request that you make provision for it in any minimum-wage legislation which you decide to report to the Senate.

The executive officers of the American Farm Bureau Federation appreciate this opportunity to reflect the considered judgment of its delegate body and board of directors on this important legislation,

and I wish to thank this committee and its chairman for the courtesy of granting us this opportunity to be heard on this important issue. Senator PEPPER. Mr. Parel, first the committee wishes to thank you for complying with our request and reducing your statement to a brief and succinct and clear statement of your views.

Are there any questions?

Senator DOUGLAS. No.

Senator PEPPER. Senator Taft?

Senator TAFT. Mr. Parel, I suggested a while ago that instead of the sliding scale based on the cost of living, that it be based on other wages, that the principle of the minimum wage is not really based on cost of living, because, as Mr. Tobin said, the result of the increase in the minimum wage in some cases would throw people out of work altogether, and in that case it might be based on other wages. For instance, all people in the manufacturing industries get an average wage and you might have a sliding scale of 60 percent of that wage, and that would prevent the necessity of our revising it from time to time. and waiting long beyond the time it should have been increased.

It does seem, while the cost of living has a bearing on it, that it has more relation to what is paid generally in the industry than it has to the cost of living as a logical basis, when you consider what the logical basis for minimum wages is.

Mr. PAREL. I noticed the other day that you had made the proposal. Our executive committee is to be in Washington, I believe, within the next 10 days. I will take it up with them.

Senator TAFT. I would like to have you consider it.

Senator PEPPER. I would like to ask one question. Do you think any segment of agriculture, for example, the large and what I usually call corporate farms, because they are actually run by business corporations-I don't say that with any disparagement, but I have seen lots of farm enterprises that looked as if they were not distinguishable in nature from a lumber operation or an operation where they take stumps, as they do in my country, pine stumps and dig them out of the ground and take the naval stores products from them. Other big corporations carry on other operations where they deal with something that grows out of the ground in the nature of a crop.

Do you think there is any segment of agriculture to which we might recommend the application of this Fair Labor Standards Act?

Mr. PAREL. I would like to say, first, the American Farm Bureau Federation probably has within its membership very few corporate farms. It has a large membership in Illinois, Iowa, Alabama, Mississippi, and other such areas where you don't get your large corporate farms.

The bill originally introduced in the House just didn't seem to approach it from the standpoint of the thinking of our people, at least. Those large corporate farms, I don't think, are as many in number as some people might suspect. I have no suggestions to make as to how to meet that particular situation.

I think it is true, however, that they compete in any agricultural area for the labor that is available and would tend in that immediate area to set the wage of the other farmers who are not the large operators if they were brought under the act.

Senator DOUGLAS. Following up Senator Pepper's question, it is true, is it not, that in California, in the Imperial Valley and in the

Central Valley, a large proportion of the land is held by vast farms of 5, 10, 20 thousand, and in some cases 40 thousand acres? There is a friend of mine who talked with a man who said he was running a family farm of 40,000 acres.

Agricultural laborers on that farm have a pretty rough time, from what I am able to learn. Do you think any protection should be offered to them?

Mr. PAREL. If it could be done, perhaps, without jeopardizing the agriculture of the farms in the area other than the large corporate farms, I would not imagine that the Farm Bureau would object seriously.

I do not know how you would do it. I don't believe the House did it.

Senator TAFT. How does the wage regulation under the Sugar Act work?

Mr. PAREL. I may be misinformed, but I believe the act itself sets a minimum wage.

Senator TAFT. Yes. How has that worked?

Mr. PAREL. It seems to be working satisfactorily.

Senator AIKEN. One thing disturbs me a little about this, Mr. Parel, and I would like to get your opinion on it. It seems to me that the corporate farm employs from 25 to a thousand employees, that it would adjust itself to the change in exemptions much more easily than the small farmer who hires 1 or 2 men.

Mr. PAREL. I agree.

Senator AIKEN. He would be the one that would be hit because the corporation farm would be put on different shifts, if necessary; whereas, your small farmer, hiring one or two extra men, wouldn't be in a position to double that number and still continue in business. That is a serious effect, I would say here, and I believe that these corporation farms are more corporation than farms in a great many cases, and should come under it, but how we are going to bring them under without harming the so-called family farmer is a problem that we are confronted with at this time. We cannot say, I believe, that we are going to have one law for the corporation employing 200 men on its farm or gardens or orchards and another law to apply to the farmer who hires a couple of extra men for a portion of the year. I would say that doing away with exemptions for the processing of maple sirup, which is a seasonal operation, and you don't know from one day to another whether you need help the next day, or will need them 20 hours, sometimes they work all day and all nightthey have to to save it-I would say that type of farmer would be so seriously affected that he probably wouldn't be able to produce maple sirup. At least, he wouldn't be able to produce it without a substantial increase in price. It is high today. About 85 percent of the cost of maple sirup is represented by the cost of labor.

Senator PEPPER. I have noticed in a great many cases, but I don't know whether it is true in every case, where you find this large corporate farm in an area, you generally find there is something similar to that, that is generally the type of competition. It is seldom that you find one big corporate farm isolated and then completely surrounded by small family-sized farms.