as being engaged in local cartage. They are employees who are sometimes referred to as pick-up and delivery employees of over-theroad motor carriers. These are the employees who, in contrast with working a regular route within a city, delivering beer or groceries or bread to a specified number of regular customers every day, they are the employees who go out on call and pick up freight for points outside the city, or they are the employees who distribute the freight which comes into any given city on any date from all over the country. It may be possible to tell in advance just how long it will take an employee who drives a bread wagon, shall we say, to deliver his bread to a certain number of regular customers every day. On the other hand, it is absolutely impossible to know in advance how much general freight will move in to any given city on any given day for distribution inside the city. It is equally impossible to know which shippers will originate freight in any given city and the quantities to move out of the city to points all over the country in any day.

Contracts covering employees engaged in this pick-up and delivery work and local cartage work have long recognized this fact, and they have provided, generally speaking, for a good deal longer hours than contracts of other employees. I might say, of course, that their wage rates have been based accordingly.

Senator PEPPER. You are addressing yourself to the provisions of the House bill and the proposed Senate bill, S. 653, which would bring the driver and the helper of motor vehicles under the hours provisions under section 7?

Mr. BEARDSLEY. Overtime.

Senator PEPPER. They are already covered by section 6, the minimum wage?

Mr. BEARDSLEY. That is right. I am not talking about the minimum wage provision, just the hours provision.

Now, I think what I have just said is proven by the survey of the Bureau of Labor Statistics. We have been able to isolate from the survey 100 of these contracts which apply to these employees engaged in pick-up and delivery and local cartage work, and I have shown the figures at the bottom of page 4 of my prepared statement.

Senator PEPPER. You are appearing in behalf of the language in S. 653 and the House bill?

Mr. BEARDSLEY. No, sir. I am appearing in behalf of the language presently contained in section 13 (b) (1) of the Fair Labor Standards Act by which employees of interstate motor carriers classified as drivers, helpers, loaders, and mechanics are exempt from the overtime provisions of the Fair Labor Standards Act.

We contend that Congress originally granted that exemption for a very realistic reason, that there has been no basic change in our industry which would warrant the withdrawal.

Senator PEPPER. We say the provisions of section 7 shall not apply with respect to: One, any employee employed during the greater part of any workweek or the driver or helper riding in motor vehicles in the performance of over-the-road transport operations as defined by the Secretary of Labor. Those categories would be exempted from the application of section 7.

Mr. BEARDSLEY. Yes, but only those employees. That would mean employees engaged in work in metropolitan areas would no longer be exempt. Loaders and mechanics would not be exempted. It would drastically affect the limited exemption we are now afforded.

Coming back to this Bureau of Labor Statistics survey, my statement states we have been able to segregate 100 contracts covering employees engaged in a metropolitan area

Senator PEPPER. Have you any idea of the number of people brought under the act as the bill is now proposed?

Mr. BEARDSLEY. No, sir, I don't; and I doubt that the Administrator does. In referring to these employees engaged in metropolitan areas, he apparently counts the number of contracts here to arrive at his percentage figures of 60 but, of course, that isn't a weighted percentage. One of these contracts provides a 48- or a 54-hour week, it might cover a thousand, and another one might cover 20; so we have no way of knowing precisely.

Now, at page 4 of my prepared statement, you will see that these so-called local drivers and helpers, who would have the exemption withdrawn if S. 653 were passed as it presently reads, work a good deal longer workweeks than the 40 hours which the Administrator contends local employees work. Only 18 out of those 100 contracts we isolated work 40-hour weeks. The balance of them work from 44 hours to 60 hours.

Senator PEPPER. You contend that under the present law, under the Motor Vehicle Carrier Act of 1935, that the Interstate Commerce Commission does have the power to establish qualifications and maximum hours of service for those employees?

Mr. BEARDSLEY. Oh, yes.

Senator PEPPER. But they haven't done so?

Mr. BEARDSLEY. No, sir; they haven't. I think the Supreme Court indicated it does have the power.

Senator PEPPER. Very well.

Mr. BEARDSLEY. Of course, the Administrator entirely ignores the special nature of the work performed by those employees whom I refer to as pick-up and delivery employees and local cartage employees, these employees who can't know in advance how much freight they have to distribute or how much freight they have to originate, and who necessarily work longer hours. The employee may be going out to pick up freight along a line, and after he has left one platform his employer may receive a call from another shipper and he will have to go back along the route where he has been before and pick up another shipment from another platform which he has just passed.

But the Administrator simply recommends that Congress lump them all together, since they all work within the confines of a metropolitan area, whatever the Secretary of Labor might determine that to be, and say that the overtime exemption is no longer necessary for them.

I have attached to my prepared statement two, shall I say, exhibits, one of which is a table showing typical union contract covering local drivers, helpers, mechanics, and loaders in each of the 48 States. I should explain the fact that the word "helpers" doesn't appear in any one of those three headings, although it appears in the main heading. Helpers are included in there, but they were found in contracts covering drivers, mechanics, and loaders, and for some reason or other, they weren't segregated. However, you will find on the attachment which, I refer to as a summary, the helpers are segregated and shown there separately. Both of these exhibits were prepared by our industrial-relations department.

The agreements, of course, referred to in this table were collectively bargained and the wage rates were established with the knowledge that these employees were exempt from the overtime provisions of the Fair Labor Standards Act, and I might add also that there are just a few contracts shown here, but in every sense they are multiple employer contracts. The same contract may have been signed by 50 or 100 employers in a large city, but it is shown here as one contract. While I cannot say specifically how many employees are covered in these contracts, you may take it for granted that there are a good many covered.

Senator PEPPER. Assume a local transfer company operating in a city picking up goods, for example, at a railroad station warehouse and delivering them to consignees throughout the city. Is that kind of operator at the present time covered by the Fair Labor Standards Act?

Mr. BEARDSLEY. He is covered by the Fair Labor Standards Act and, in turn, I think he is exempted under section 13 (b) (1) from the overtime provisions, and as I stated before, I think the reason is obvious. Congress, when it first passed this law, realized that the employee has no set run that he must perform every day.

Senator PEPPER. At the present time all his employees are exempt from the operation of the Fair Labor Standards Act?"

Mr. BEARDSLEY. No, sir. He has people in the office who are covered. He has dispatchers on his platform. They are covered. Senator PEPPER. What percentage of the total number of employees of such a unit would you say are covered at the present time?

Mr. BEARDSLEY. I would have to guess, I really would. I just wouldn't know. I would welcome a statement by the teamsters' union.

Senator PEPPER. All the office staff is covered?

Mr. BEARDSLEY. Yes.

Senator PEPPER. And the dispatchers on the platform?

Mr. BEARDSLEY. Yes, sir; and, for example, employees who do nothing in the garage but wash and grease vehicles, they are not mechanics and they are covered.

Senator TAFT. How do you distinguish between a washer and a mechanic?

Mr. BEARDSLEY. If a person spends all day washing trucks, he is clearly a washer.

Senator TAFT. Why should the law apply to one and not the other? Both work on trucks.

Mr. BEARDSLEY. I think if we get back to that, that is one of the basic faults with the law, in that it tries to segregate between employees rather than covering employers.

Senator TAFT. Those are regulations of the Administrator rather than the law, are they not?

Mr. BEARDSLEY. It says "each employer shall pay to each of his employees engaged in commerce or the production of goods for commerce," so the language allows that application.

Senator TAFT. Why is a mechanic fixing a truck engaged in commerce and a washer washing a truck not engaged in commerce?

Mr. BEARDSLEY. They both are engaged in commerce, but the mechanic has this exemption applying to the overtime provision of the law. He is covered by the minimum wage.

Senator TAFT. Does it say "mechanics" in the law?

Mr. BEARDSLEY. No, but it makes an exemption for the employees over whom the Interstate Commerce Commission has jurisdiction to regulate hours, and qualifications. It has taken us 10 painful years to determine what our status is. It has been determined through a series of ligitations and administrative interpretations that today the Commission does have jurisdiction to regulate qualifications and hours of service of drivers, loaders, helpers, and mechanics.

Senator PEPPER. In S. 653 we make the criterion of coverage the activity of the employer so that if the employer is engaged in interstate commerce or business affecting commerce, all employees are covered unless specifically exempt. They would all be covered who are not specifically exempted by the law, and the bill specifically exempts any employee employed during the greater part of any work week or driver or helper riding in the motor vehicle in the performance of over-the-road operation as defined by the Secretary of Labor.

Mr. BEARDSLEY. If you broaden the act to comply with activities affecting commerce, I suspect it will take 20 years to find out if there is an activity that doesn't affect commerce.

In any event, as I previously stated in presenting this table, you will see that the service is generally longer than 40 hours and the wage rates I don't think can be called sweatshop. It seems to us if Congress should now withdraw these overtime exemptions which presently apply to the employees shown in this table, our industry would be thrown into utter confusion.

We can't know, of course, precisely what would happen. But, certainly, a lot of conflict would arise between our employers and our employees. The employers being faced for the first time with respect to the employees in these categories with the need for complying, first of all, with these very complicated contracts-this table may not appear to be so complicated, but when you take the premium rates and all the other complications that enter into these contracts, they are complicated and hard enough to comply with to begin with. Senator PEPPER. Do all the drivers and helpers actually on the road receive a minimum of 75 cents an hour, would you say, at the present time?

Mr. BEARDSLEY. Senator, I would be amazed if they didn't, that is all I can say. I can't say all of them-I don't know how many employees we have, but there are thousands and millions of them, and there might be one working somewhere for less, but I think by and large their wage rates are well above the minimum, whether they are over-the-road drivers or drivers within the city.

As I stated, these employees having been considered exempt, have been placed on pay scales which reflect their longer workweek in the contract, and that is proven, I believe, by the fact that in 1947 the annual average take-home pay of our employees, according to the Department of Commerce figures, was $3,176, compared to $2,628 in all private industry. We think those figures show that our employees are being paid a good deal better than employees in private industry and can by no stretch of the imagination be said to be exploited.

The national transportation policy, which Congress enacted, provides for the recognition and the preservation of the inherent advantages of each form of transportation. That policy was passed and is considered part of the Interstate Commerce Act.

The enactment of the language proposed in section 13 (c) (1) of the act, S. 653, will stultify Congress's own national transportation policy in that it will hamper and restrict our industry's present ability to provide swift and flexible handling of package freight and necessarily lead to important freight rate increases.

The past 25 years have seen radical changes in our economy. Today merchandising practices are characterized by low inventory and fast turn-over, practices made possible only by the service afforded by motor transport. We feel certain that this subcommittee will not want to sponsor legislation which might turn back the clock a quarter century.

Senator PEPPER. Thank you, Mr. Beardsley.

Mr. BEARDSLEY. Thank you, Senator.

Senator PEPPER. Is Mr. See here? Mr. Harry See of the Brotherhood of Railroad Trainmen.

Mr. WIXCEY. We may pass him for the moment. He must have misunderstood, because I am quite sure he wants to appear, and the office is trying to find him.

Mr. Scott, the next witness, is here.

Senator PEPPER. Mr. Scott is here. Is Mrs. Shulman here?
Mrs. SHULMAN. Yes.

Senator PEPPER. Very well. Is the CIO Telephone Workers' representative here?

Mr. WIXCEY. I believe he decided not to appear.

Senator PEPPER. We will hear next the National Association of Motor Bus Operators, Mr. Jack G. Scott, general counsel.

STATEMENT OF JACK GARRETT SCOTT, GENERAL COUNSEL, NATIONAL ASSOCIATION OF MOTOR BUS OPERATORS

Senator PEPPER. We are glad to have you, Mr. Scott.

Mr. SCOTT. My name is Jack Garrett Scott, and I am general counsel of the National Association of Motor Bus Operators, which is a national trade organization of the intercity motor carriers of passengers, as distinguished from the local transit carriers of passengers.

The association represents about a thousand, including the members of the affiliated State associations of the total of 1,500 intercity motor carriers of passengers who are subject to the jurisdiction of the Interstate Commerce Commission.

Of this 1,500 there are about 200 who have gross annual revenues of $100,000 or more. Consequently, our industry is one predominantly of small enterprises, but we cover the whole United States, and it is estimated and, I think, somewhat accurately, that we serve approximately 50,000 communities that have no other method of commercial passenger transportation.

As you know, we are comprehensively and expressly regulated by the Interstate Commerce Commission and by State commissions and, as in the case of trucks, we have a 24-hour a day every-day service we have to perform, which distinguishes us in those particulars from most industries.

We employ about 65,000 people as a total. I give you that background because we feel that our industry in recent years has become a very important part of the national transportation system.