have been 83 cents an hour, or only 8 cents more than the minimum wage proposed in this bill for the most unskilled workers. And bear in mind that these figures apply to 1947, one of the most prosperous years in our history.

I would not try to say what a 75-cent minimum wage would mean in other parts of the country, where the total income averaged twice this figure or more, but certainly it would have a very different and chaotic effect on the economy of the Southern States, where the whole income of everybody from all sources was only enough to pay 30 cents, and in some States 8 cents, an hour more than the minimum allowed for the most unskilled workers. In the South the effect of a 75-cent minimum wage would not be limited to the lower fringes of the economy; it would cut through the heart and center of the whole economy. It would stifle enterprise and create widespread unemployment.

S. 248 proposes that coverage be extended to include agricultural labor on the basis of a 75-cent minimum wage. Let us look at the facts of what this would do to cotton.

Senator PEPPER. Did you say that it extends coverage to include agricultural labor?

Mr. JACKSON. S. 248. I gathered this morning, Mr. Chairman, that you are confining this more or less to S. 653.

Senator PEPPER. Yes.

Mr. JACKSON. Since there has been sone discussion of this, let me mention very briefly the effect that it would have on cotton.

The average number of man-hours required to produce a bale of cotton in this country is approximately 217. On an average 500pound bale, therefore, the cost of labor would be $162.75, or 321⁄2 cents per pound of cotton. To this we must add the cost of seed, fertilizer, taxes, rent, ginning, and many other items of expense, which add up in the average case to 35 or 40 percent of the cost of labor. The upshot is that for the average cotton farmer to pay a 75-cent wage plus other costs, he would have to get a price of about 51 cents a pound for his crop. Only twice in the last century has the farmer's average price for cotton been even as high as the 211⁄2 cents needed to cover the cost of labor alone if all workers had received the 75 cents an hour proposed for the most unskilled.

Senator DOUGLAS. Would you permit me to interrupt?

Mr. JACKSON. Yes, sir.

Senator DOUGLAS. I had assumed that S. 653 was introduced by Senator Thomas on the 27th of January, and that it superseded S. 248, which he introduced on the 6th of January, and I wonder if you are not tilting at windmills on this agricultural question, in addressing yourself to S. 248, when I had inferred that it was really S. 653 that we had before us.

Mr. JACKSON. Senator, I understand that that is correct, but in sitting in the audience on one or two occasions I have had questions centering around the advisability of including a portion of the agricultural labor, and we simply wanted to point out here

Senator DOUGLAS. All right.

Mr. JACKSON. The effect that it would have in cotton.

Senator DOUGLAS. Well, I also wanted to point out that there was not probably as much reason for the nightmares which you may have had on this question, as you may have thought.

Mr. JACKSON. Well, we are mighty glad to hear that.

Never once has it brought the 51 cents necessary to cover all costs, including a 75-cent wage.

The plain fact is that there is not now and never has been a way for our 1,500,000 cotton farmers to pay 75 cents an hour, or anything like that figure, out of what they get for their cotton.

It is inevitable, therefore, that the wages actually paid in cotton growing are much less than 75 cents an hour.

Senator PEPPER. Would that cost you have detailed apply to the large cotton plantations where methods were more efficient probably than on the small family farm?

Mr. JACKSON. Certainly, to a lesser degree, Senator.

Senator PEPPER. The only thing that you have heard in the audience, that I am aware of, is the discussion as to whether in case of the large farming operation we might apply the standards of the Wage-Hour Act.

Mr. JACKSON. Yes.

Senator PEPPER. On the theory that they were large enough to be able to carry the weight of it; and in the House bill, I believe, the criterion is where there are 5,000 man-days in a year; is it not? Maybe that was just in the original.

Mr. JACKSON. That was in the original bill, I believe.
Senator PEPPER. Very well; go right ahead.

Mr. JACKSON. On January 1 of this year the average wage-not the minimum-paid in the southern cotton States to workers who received no additional compensation for room and board, ranged from 46 cents in Alabama to 59 cents in Texas. It is likewise inevitable that the minimum wages paid in those initial processing industries which prepare the cotton and cottonseed for market are also lower than 75 cents, as Mr. Todd pointed out a moment ago.

The typical minimum wages for unskilled labor are 50 cents an hour in cotton gins, 50 to 60 cents in warehouses and compresses, and 60 cents in cottonseed-oil mills. These wages are all that the income from cotton and cottonseed will bear, even during these prosperous times.

For people who are concerned about low income in the South and its effect on the whole Nation, the task is to get at the roots of the problem, to understand why the region's income is low and what is required to get it up. Part of the answer is a lower cost of living, but that isn't nearly the whole story. The main cause is lower productivity per worker, occasioned by less capital and less land to join forces with the worker in turning out a product. We have more people, in relation to our land and capital, than any other part of the Nation. The shortage of capital has retarded industrialization, which means that agriculture carries an excessive burden in supporting too much. population.

In the Nation, only one person in five lives on the farm; but in the South, there are two in every five. In 10 Southern States, 43 percent of the Nation's farm population has to find a living on 24 percent of the land. These are the people with the worst income problem in America. Much study has been given this problem and it has been the consistent opinion of many authorities that the most urgent need of the cotton south is more industry, to relieve the pressure of too much population on too little farm land, and to turn some of the labor to more productive employment in factories.

Senator PEPPER. I hope, if I interrupt you, Mr. Jackson, that you will help those of us who have introduced legislation to help in our reorganization with respect to the standards of agricultural life.

Mr. JACKSON. Mr. Chairman, I think our organization has devoted about as much study to the commodity, the commodity of cotton, as any other commodity in the country. We have encouraged also the study of outside groups, many social groups, and of the Government, and invariably they come out with the answer that the real basic key to the answer to the cotton South-and most of the economy of the South revolves around cotton-is more industrialization, small industries scattered throughout the South, to help relieve the burden. that agriculture is having to carry now.

Senator PEPPER. Then, of course, education, health, more opportunities, of course, all those things have some bearing.

Mr. JACKSON. Yes; they are all part of it.

A great deal of progress is being made in this direction, coupled with progress in mechanizing and otherwise increasing efficiency of our farming operations. But the proposed law now before you would be the most powerful action that could be taken to block and cripple industrialization of the South. By shackling southern industry to a minimum wage that is much too high, it would demoralize much of the industry that we have and discourage new investments in the industry that we need. It would make it against the law for a southern businessman to start a new enterprise paying 55 or 60 cents an hour to people who otherwise would have to remain on the farm; making a lower wage when they have work and facing complete unemployment for a sizable portion of the time. Regardless of the high purposes behind this bill it would have the practical effect of keeping southern people on the farm in a low-income position and it would stifle opportunities for betterment.

Next to industrialization, what the farm people of the South need most is a great deal of advancement in farm technology. The opportunities are tremendous. Through mechanization and better yields, the cost of cotton growing can eventually be cut sharply, while research and better merchandising can materially strengthen our markets. The cotton industry today is analyzing its problems and facing up to them; it is making tremendous strides. But it can't be done overnight. We are at the threshhold of a great period of technical progress in the cotton economy, and we feel that this, coup ed with industrialization and a big expansion of education and extension work, is a sound and solid answer to the problem of low income in the entire South. We can't solve the problem by passing a law against low incomes; we have to solve it by making the region more productive, by creating more wealth.

In consideration of all these factors, we wish to make the following recommendations concerning the legislation now before you:

1. That agricultural labor be completely exempt, just as it is under the present law.

2. That exemptions accorded to processors of agricultural commodities under the present act be maintained.

3. That authority for defining the "area of production" as set out in the present act be transferred to the Secretary of Agriculture.

4. That a minimum wage of 75 cents per hour for industry in general is much too high; that it is out of line with the income of the South, and very probably will become more out of line later.

5. That whatever minimum wage is adopted should be subject to automatic adjustment upward or downward as the cost-of-living index moves upward or downward.

6. We strongly oppose the vast authority that would be delegated to the Secretary of Labor under the proposed legislation. Not only would the Secretary be empowered to increase the minimum wage to $1 an hour, but his broad powers of interpretation would practically amount to an abrogation of congressional authority. Certainly, whatever Congress decides about this great, fundamental issue, it should face the issue squarely and let the people know what it has decided, instead of delegating the most vital decisions to one individual. The National Cotton Council genuinely appreciates this opportunity, Mr. Chairman and gentlemen of the committee, to express its views to you on this subject.

Senator PEPPER. Mr. Jackson, I greatly respect everything you say, and I recognize that it has much plausibility and persuasion behind it. But I also feel that I could with propriety say that I heard all of those same arguments made in 1938 when we adopted the minimum-wage law for the first time.

A lot of very conscientious and concerned people from the South said it just should not apply to the South; that it would ruin the South; that "we just could not live under it."

A lot of my people felt very strongly that way. I think I was the only southern Senator who supported the minimum-wage law in 1938; advocated it strongly. Experience has not shown that it was so disastrous for the South as some feared.

I realize there is a rule of reason that has to apply to everyone. Seventy-five cents may or may not be too high, but all these things you say about the future of our South are very true. But I am convinced that also a part of it is lifting up the bottom-income groups to a little higher level of living, and increasing more purchasing power for our own products, and distributing our profits a little more widely among our people, so that I am convinced that a part of the problem is also raising the wage level of our workers.

I, for one southerner, do not want the South to become industrialized by the medium of a low wage; I do not want to steal industry from the rest of the country by sweatshop wages that we propose to pay in the South.

I think we can live competitively if we get fair freight rates and fair access to capital. I think the southern worker is as good a worker as there is in any part of the country, and that he can turn out as good a product, turn out as much of it, given time. I believe that our businessmen are capable of all the things that are necessary in industrial excellence, so I agree with a great deal of what you say, but I thought I might, with propriety, indicate that I did not agree with all of it.

Of course, I only say that because I am a southerner myself, in commenting in that capacity about it. But I greatly respect what you have told us, and there is great merit and weight in what you say.

Mr. JACKSON. The thing that our group feels very keenly, Senator, is that well, to begin with, I do not think there is any question but what they want to see everything done possible to stimulate purchasing power, to stimulate new income, new wealth.

The thing that they are awfully afraid of is recognizing the need for expanding industry, for taking the burden off agriculture, for increas

ing the efficiency of cotton production, in handling and marketing, is not to get the cart before the horse, not to get the wages up so high that they are going to regard a pretty fundamental development that is taking place down there now.

We are making a lot of progress in cotton, much more so than most people realize, and as cotton progresses down, so does much else of the economy progress, and we just feel that there is a danger that if you get that thing too high, of having a retarding effect, rather than stimulating the pretty substantial development that is taking place

now.

Senator PEPPER. I quite understand. Are there any questions, Senators?

Senator AIKEN. Cotton does produce seed, does it not? [Laughter.] Mr. JACKSON. Thank you.

Senator PEPPER. Thank you very much.

Mr. JACKSON. Thank you, Mr. Chairman.

Senator PEPPER. Next is the National Cotton Ginners' Association, Mr. John W. Mann, president.

Do you have a statement for us, Mr. Mann?

STATEMENT OF M. M. PASCHALL, ON BEHALF OF NATIONAL COTTON GINNERS' ASSOCIATION

Mr. PASCHALL. Mr. Chairman, my name is M. M. Paschall, and I am speaking for Mr. Mann.

I have a prepared statement, but it would be too long to give it all, so I will just take part of it, the most important points, with respect to the ginning operations.

Senator PEPPER. Thank you.

Mr. PASCHALL. My name is M. M. Paschall, and I live in Uniontown, Ala., where I am engaged in the ginning of cotton and in farming operations.

I raise approximately 62 bales of cotton per year, and the bulk of my other farming operations consists of the raising of planting seed, feed for livestock, and food for my family and tenant families on the farm.

The amendments you are proposing to the Wage-Hour Act are of vital importance to both the cotton farmer and the cotton ginner.

The bill would not only increase the minimum wage to 75 cents or $1 but by repealing the exemptions in the present act it would apply both the increased minimum wage and the overtime requirements to workers in cotton gins, warehouses, compress-warehouse, and cottonseed-processing plants.

In view of their working and living conditions, I cannot understand why the Congress would wish to apply to such workers the same minimum wage and overtime requirements applicable to manufacturing industries in the congested industrial cities.

The ginning, warehousing, and compressing of cotton and the processing of cottonseed are intimately related to the production of cotton. The costs of performing such operations are paid or are borne by the producer of the cotton. Some of such charges the farmer pays out directly; the remainder he bears through adjustment of the price he receives for his cotton and cottonseed.