been such well-known leaders of industry as Charles A. Cannon, president of Cannon Mills; Moses Pendleton, president of American Woolen Co.; Irving S. Florsheim, Florsheim Shoe Co.; Charles F. Johnson, Endicott-Johnson Shoe Co.; Donald Comer, Avondale Mills, Birmingham, Ala.; Clarence R. Bitting, United States Sugar Corp.; Ernest W. Greene, Hawaiian Sugar Planters Association; Everett E. Haskell, president, Beatrice Creamery; and William C. Broadgate, American Mining Congress. A few examples of labor representatives on these committees are Emil Rieve, Robert J. Watt, Boris Shishkin, David Dubinsky, Frank Fenton, Sherman Dalrymple, and Sidney Hillman.

The proposal has been made that the public members of the industry committees might be selected jointly by employer and labor representatives. Aside from the impracticability of this suggestion, I believe it is based upon a misconception of the role of public members in minimum-wage legislation. Their role here is unlike that of arbitrators. Under minimum-wage legislation, it is not a matter of compromise between two conflicting points of view but rather of responsibility for weighing the standards laid down by the law and the facts before the committee in order to effectuate the purposes of congressional policy. It might be worth adding that, in all of the States which have provisions for industry committees, the public members are chosen by the responsible labor-department officials. Senator PEPPER. What is required to put the industry recommendations into effect? Must the majority of the management representatives vote for it also or just a majority of the labor representatives and majority of the public members?

Mr. WEISS. A majority of the committee.
Senator PEPPER. Of the whole committee?
Mr. WEISS. That is right.

Mr. McCOMB. As I said at the beginning of this statement, and I repeat for emphasis, this law largely eliminates oppressive child labor where the act now applies, which is primarily in manufacturing. There can hardly be any controversy over the need for strengthening the child-labor provisions of the Fair Labor Standards Act along the lines proposed in S. 653. It proposes a more comprehensive and clear-cut basis of coverage, but keeps the present age standards. These are: 16 years for general employment, 18 years in occupations found and declared particularly hazardous for minors 16 and 17 years of age, and 14 years outside school hours in limited occupations under regulated conditions.

One major step taken in this bill is to bring the basic coverage of the child-labor provisions up to the act's present basic wage and hour coverage by providing a direct prohibition on the employment of oppressive child labor. The act now merely restrains employers from shipping in interstate commerce goods produced in establishments where oppressive child labor has been employed within 30 days before the goods are removed. This provision permits escape from liability for the employment of oppressive child labor simply by holding goods for more than 30 days after the improper employment of young children. The direct prohibition of employment of young workers contained in the bill would close this loophole as well as restrict employment in transportation and commerce where young workers are now outside the coverage of the act.

It is also important to make the child-labor standards of the act apply to all children in a covered establishment. The present law does this for producing establishments. The Thomas bill would do it in the additional establishments brought within the coverage of the act.

The purpose of establishment-wide coverage for the child-labor provisions of the act is to prevent undesirable child labor. It should not be made easy for an employer engaged in interstate commerce to keep an under-age child at work merely by shifting him out of one particular job labeled "interstate commerce" into another one labeled "intrastate commerce." It should be noted that the bill before you provides an express exemption from the child-labor provisions as well as the minimum-wage and overtime provisions for small retail and service establishments and also from the child-labor provisions for carriers delivering newspapers to the consumer.

Another improvement in the child-labor provisions made by this bill is contained in the rephrasing of the partial exemption for children employed in agriculture. In the interest of protecting children's schooling, the act as passed in 1938 provided that a child may not be employed in agriculture while he is legally required to attend school. Senator PEPPER. Pardon me, Mr. McComb. To revert to your statement in regard to carriers delivering newspapers to the consumer, does that cover newsboys?

Mr. McCоMB. Yes.

Senator PEPPER. They are exempt?

Mr. McCоMB. In this bill.

Mr. WEISS. Yes, in this bill they are exempted from the child-labor provisions.

Senator PEPPER. Provided their employment meets with other conditions laid down by the act. That is, they do not work except during hours when they are not supposed to be in school.

Mr. WEISS. It is a straight exemption.

Senator PEPPER. How does that affect the present law?
Mr. WEISS. Under the present law they are not covered.

Mr. NYSTROM. Unless they are employed in or about the producing establishment.

Senator PEPPER. That is the way they wanted it. They give them the newspapers; they are not employed in the establishment. I think they give them the newspapers at some center of distribution, so that means they are not employed in or about the establishment; and, therefore, they are not brought within the coverage of the present law. Mr. McCOмB. They are not allowed to load trucks at the newspaper plant.

Senator PEPPER. These are the people the newspaper proprietors called the little independent businessmen.

Mr. McCомв. Experience has shown that this present exemption is extremely difficult to administer. In order to know whether the act applies, or whether a child is exempted, it is necessary first to determine the legal status, under a particular State law, of that child's absence from school. The many and varied exemptions in school-attendance requirements make this a very involved and cumbersome procedure. On the other hand, the school hours for the district can be readily ascertained as a matter of fact, and it will not be necessary to explore the ramifications of the legal requirements

regarding attendance in the particular State and the local practices in granting exemptions. The variation from State to State nullifies uniformity of application.

The proposed section 13 (d) in S. 653 has the effect of prohibiting a child's employment during school hours for the school district where he is living while so employed. This change in language will mean that an under-age child may not be hired to work during the hours when his local school is actually in session regardless of his legal status under the State school-attendance law. The law would not apply in any way to the work of children in agriculture while schools are actually closed because of crop emergencies. As under the present law, the proposed wording would not prevent children working for their parents on their farms, nor would it affect any employment on farms outside school hours or during school vacations.

Senator PEPPER. Under the present law, and if there is any difference under this bill, do newspaper producers have to pay the minimum wage, any minimum wage to newsboys?

Mr. McCоMв. No; they are generally exempt at the present time under the present law.

Mr. NYSTROM. Under the minimum-wage provisions there is coverage if the child is an employee engaged in either interstate commerce or production of goods for interstate commerce, where there is no exemption provided.

Senator PEPPER. I think the law doesn't contemplate he is so employed unless he is in or about the establishment.

Mr. NYSTROM. That is the child-labor requirement. The minimumwage requirements are on the basis of individuals engaged in production of goods for interstate commerce or engaged in interstate com

merce.

Senator PEPPER. At the present time, are the newspaper boys assured the minimum wage?

Mr. WEISS. Not in most cases.

Senator PEPPER. Do they get around it on the ground that they are independent contractors?

Mr. NYSTROM. That has been the contention; and, if they are independent contractors, they are not protected by the law.

Senator PEPPER. What is the practice at the present time? These boys are not actually getting the benefits of the law at the present time?

Mr. NYSTROM. I think, by and large, that is true.

Mr. WEISS. It is questionable whether many of them are in interstate commerce, because the test is on the individual employee's activity.

Senator PEPPER. All right.

Mr. McCOMB. This proposal for rephrasing the agricultural exemption to eliminate the loopholes of present coverage is a much-needed change that would simplify administration, result in better child-labor protection, and encourage better school attendance for rural school children, a step I am vitally interested in and one I am sure every Member of Congress will endorse.

Basic coverage provisions: As I stated earlier, the benefits of the Fair Labor Standards Act should be made available to millions of workers not now protected by the law. I believe this should be done by extending the coverage of the act to activities affecting commerce

and by eliminating or narrowing a number of exemptions. The Secretary of Labor has outlined the basic philosophy behind the proposals to extend coverage. I shall develop some specific objectives based on our experience in administering the law.

It is my considered judgment, based on a study of our 10 years' experience in the administration of the Fair Labor Standards Act, that a change in the basic coverage language is vitally needed. Based on the language of the present law, the courts have construed coverage in a way that has created an unequal treatment of employees working side by side in the same establishment, unfair competitive treatment between competing establishments, and considerable difficulties in administration. I am not implying a criticism of the courts in this matter, since I believe these decisions were sound in the light of the present coverage language of the law.

Since coverage under the present law depends on the activities of each individual employee, it frequently happens that, with two employees working side by side in the furtherance of their employer's business, one employee will be entitled to the benefits of the act while the other will not. Another result of individual employee coverage is that one employer may have all of his employees subject to the requirements of the act while his competitor, possibly across the street, may be subject to the requirements of the act for only one or two employees.

I can best illustrate these problems by considering two wholesale grocers located in the same city. In both cases these wholesale grocers receive substantially all of their merchandise from outside of the State. In one case, the wholesale grocer will sell part of his goods to retail establishments located in a neighboring State. In this case, it is likely that all of the employees of this wholesale grocer will be subject to the act because they are either engaged in activities relating to shipment of goods from outside the State or in activities relating to the shipment of goods outside of the State. The other wholesaler may hold all his goods for local distribution within the State and be competing directly for the retail markets in that State. In his case, however, while those employees who are engaged in activities relating to the ordering of goods from other States or to the unloading and handling of goods moving from outside of the State to their final destination in the State would be subject to the act, his other employees engaged in warehousing activities and in shipping of goods from stock to retail customers in the same State would ordinarily not be subject to the provisions of the act.

Employees in this second type of establishment cannot understand why a Federal law will give benefits and protection to fellow employees in the establishment but not to them. Employers have also called our attention to unfair competition from competitors who are able to restrict their sales solely within the State.

Other examples of competitive inequities under the present coverage language are to be found in such industries as lumber and brick manufacturing. Some of the establishments in these industries necessarily operate over fairly broad areas and are subject to the requirements of the act. There are many other establishments, however, which can restrict their operations to a single State and thus escape the obligations of the act. The situation was so acute during the early days of the act that several industry committees

composed of representatives of labor, management, and the public— urged the Administrator to recommend to Congress that these competing establishments be brought under the act. This unfair situation will again arise if the minimum wage is increased.

In addition to the inequities among employees and between competing employers created by this coverage language, there have been difficulties in administration arising from the fact that our inspectors must investigate the duties of each individual employee in order to determine whether coverage exists. It is not enough to find that an employer is engaged in commerce or in the production of goods for commerce, but it is necessary to determine coverage with respect to every employee who is paid less than the minimum wage or who does not receive the overtime benefits of the act.

I suggested in my 1948 annual report to the Congress that in order to correct defects in the present language, the coverage of the law be extended to "activities affecting commerce." This phrase, which had been used in the original National Labor Relations Act as well as in the Labor Management Relations Act of 1947, on an employer basis would bring about complete coverage of establishments engaged in commerce or in the production of goods for commerce. It would also extend the coverage of the act to intrastate lumber, clay products, and other manufacturing establishments which compete directly with interstate establishments in the same field. This proposal is incorporated in the Thomas bill. Extension of coverage along the lines of this bill would solve the major problems we have encountered in the administration of the act and would at the same time, extend the benefits of the act to millions of additional workers who are as much in need of the protection of the act as those now covered.

Senator PEPPER. Pardon me, Mr. McComb. What do you mean by those last few lines?

For example, take the lumber industry. Would you look at the actual activities of a given lumber industry in a given area to see whether or not they do in fact compete with covered industries, or would you simply look at the volume of business it does and its general relationship to the economy, and base your judgment on that? Mr. McCомB. I don't think you would necessarily look at the amount of business it does, unless there is a question of whether he is in the wholesale or retail business.

Mr. WEISS. It is on an individual employer basis, individual enterprise basis.

Senator PEPPER. So you actually would go into the matter of whether a given employer or given industry is actually affecting commerce by being in competition with an industry that is engaged in interstate commerce or in the production of goods for commerce? Mr. McCOMB. Yes.

There is one specific problem connected with the coverage language of the law which I feel I should call to the attention of the committee. Under a recent decision of the Supreme Court, Vermilya-Brown Co., Inc. v. Connell (335 U. S. 377), coverage of the Fair Labor Standards Act was held to extend to employees of American employers on foreign bases leased by the United States. In the specific situation ruled upon by the Supreme Court, the base involved was that in Bermuda which was obtained on a long-term lease by the United States Government. I feel that it would be very difficult, if not impossible, to enforce the