costs or expenses under any contract made by or on behalf of the United States. Except as provided in (b) below, the Board, the Commissioner, or the War Food Administrator, as the case may be, shall certify to such departments and agencies, to be disregarded by them, the amount of the wage or salary paid or accrued, and not merely an amount representing the increase or decrease made in such wage or salary in contravention of the act or regulations, rulings, or orders promulgated thereunder.

(b) The Board, the Commissioner, or the War Food Administrator, as the case may be, is authorized, in any case in which it has found that an employer has made wage or salary payments in contravention of the act, to determine, in the light of such extenuating circumstances as are found to be present in each case and all other pertinent considerations: (1) An amount, less than the full amount prescribed in (a) above, which shall be disregarded by the executive departments and other agencies of the Government, and (2) the particular departments or other agencies of the Government by which the amount shall be disregarded, and to certify such amounts to such agencies.

(c) Any such determination by the Board, the Commissioner, or the War Food Administrator shall be conclusive and the executive departments and the other agencies of the Government which receive such certifications shall disregard the amount thus certified in determining the employer's costs or expenses for the purpose of any law or regulation including the Emergency Price Control Act of 1942 or any maximum price regulation thereunder; or for the purpose of calculating deductions under the revenue laws of the United States; or for the purpose of determining costs or expenses of any contract made by or on behalf of the United States.

(d) Payments made or received in violation of any regulations, rulings, or orders promulgated under the authority of the act are subject to the penal provisions of the act.

Dated this 30th day of November 1944.

FRED M. VINSON, Economic Stabilization Director.

Mr. GWYNNE. Before you call the next witness, Mr. Chairman, I would like to say I have a list of witnesses representing various organizations who wish to appear in support of the bill. On account of the situation in the House today I suppose it is going to be uncertain as to what time the subcommittee can sit. I wonder if, during he rest of the day, we could possibly call on those witnesses who are here from a distance, and who find it difficult to stay here longer than the day. Mr. FEIGHAN. I think that is an excellent idea. Do you know the witnesses?

Mr. GWYNNE. No, I don't. I suggest there may be some witnesses back there who would like to testify.

(At this point there was discussion off the record.)

STATEMENT OF HARRY J. GERRITY, GENERAL COUNSEL, NATIONAL ASSOCIATION OF BUILDING OWNERS AND MANAGERS

Mr. GERRITY. My name is Harry J. Gerrity; general counsel for the National Association of Building Owners and Managers. Our association represents office and loft buildings throughout the United States, and we are here to endorse this bill or a similar bill, whereby there will be some reasonable statute of limitations on actions under laws of Congress, such as the Fair Labor Standards Act of 1938.

The committee will be the best judge of what is a reasonable statute of limitations. I have no doubt that Congress has the authority to enact such a statute which will have a retroactive effect.

I might cite, for example, in the internal revenue laws there have been periods of limitation within which claims for refund may be filed by taxpayers for the recovery of taxes erroneously paid. At one time

that statute was 5 years, and Congress reduced it to 3 years, which did have an effect on actions which had accrued in which claims had not been filed.

In regard to cases under the wage-and-hour law, the Administrator in 1940 instituted two suits, one in Philadelphia and the other in New York, and it was announced in Philadelphia at that time that these were test cases. The Philadelphia case was that of the Kirschbaum Co., and the case in New York was the Arsenal Building Co. case. Those were suits by the Administrator for an injunction to compel compliance with the law.

Although the act had been effective since October 1938, those suits were filed in March of 1940. It was not until June 2, 1942, that the Supreme Court decided the Kirschbaum and the Arsenal Building cases, and held that the building services employees in buildings where goods were produced for interstate commerce were entitled to coverage under the wage-and-hour law. There was a restrospective liability on the part of these property owners running back to October 1938, and they didn't know anything about it until the Supreme Court decision in 1942.

Now, there is pending in the Supreme Court awaiting decision, two cases, one the Borelli case, against the Borden Co., and the other one involving a building known as 10 East Fortieth Street, New York City, which involve building service employees in an office building, a commercial office building.

There has been a lot of litigation on that subject. The Supreme Court-I think there were five or six circuit courts of appeals that have rendered decisions, and the Supreme Court previously denied certiorari in about seven cases that have come up from the circuit courts of appeals, and one case which had come down from the court of appeals in New York State. But these two cases were decided the other way by the Second Circuit Court of Appeals and the Supreme Court granted certiorari. They may be decided today, or they may be decided next Monday, but those cases involve the ordinary commercial office building, and I just want to point out that if they are decided adversely we will have a situation where the law has been on the statute books since October 1938, and here it is June 1945, a period of 611⁄2 years, and the question of liability has not been definitely settled as yet.

We think, rather than leaving this as a matter of State regulation, or State law, as to when a suit should be brought, it is quite proper for Congress either to pass a general statute of limitations applying to situations such as are involved under the wage-and-hour law, or the wage-and-hour law should be amended so that it would have a specific statute of limitation within which suits could be brought.

The Government has always had, so far as suing the Government is concerned, a 6-year statute of limitations in the Court of Claims. I don't have the specified names, but I know some of the States have at recent sessions of the legislatures passed statutes of limitations which do affect actions under the wage-and-hour law.

Mr. SPRINGER. Those statutes that have been enacted by the several States are not uniform as to the limit, are they?

Mr. GERRITY. That is quite true, and there is a great need for a uniform statute of limitations which would apply to Federal actions.

I want to say that we heartily endorse the objects of this bill, and feel that there should be some reasonable statute of limitation. Thank you very much.

Mr. FEIGHAN. Thank you.

STATEMENT OF VINCENT P. AHEARN, REPRESENTING THE NATIONAL SAND AND GRAVEL ASSOCIATION AND THE NATIONAL READY-MIXED CONCRETE ASSOCIATION

Mr. AHEARN. Mr. Chairman, as the executive secretary of the National Sand and Gravel Association and the National Ready-Mixed Concrete Association, I should like to indicate the approval by these associations of H. R. 2788, and to urge this subcommittee to report it favorably to the House Judiciary Committee and to Congress. The joint meeting of the associations last month authorized and directed me to express to the Congress our opinion that the bill should be enacted into law without delay. It will do much to cure both existing and potential inequities and injustices.

The basic situation with which the bill deals is well known to the committee. It would serve no purpose here for me to elaborate on the general lack of fairness and equity which necessarily result when a Federal statute lacks a uniform Federal statute of limitations. When there is a different rule in each State, depending upon the attitude of that State toward various Federal statutes, the discrimination must, it seems to me, be apparent. Federal statutes, which should operate equally in all parts of the United States, operate unequally, and they do so, not because Congress, which passed them, intended to have one rule in New York and another in Arizona, but because New York and Arizona are now able to say how they think a law of the United States should be enforced.

Nor need I comment here upon the injustices which can result when periods of limitation are unduly long. Retroactive changes in the interpretation and application of Federal statutes, when limitation. periods are long, can ruin a business or an entire industry. Statutes are always subject to changing, and sometimes conflicting, interpretations by court and by administrative officials. The final, conclusive interpretation by the Supreme Court is necessarily retroactive as well as prospective. There is frequent occasion for not only hardship, but even ruin for the conscientious businessman who has tried to the limit of his ability to live up to statutory mandate. He can only hope that the price he will have to pay will not be too great. This bill will help him, and it should.

My purpose in appearing before you, therefore, is not to reiterate what seems to me to be obvious failures in the present legal situation. I think I can be of most assistance to the subcommittee if I illustrate for you in terms of a present-day situation which is facing our industry, just how the present situation works hardships. The two associations which I represent are in a situation now which cries out for some remedial action. It is because we have had the injustice presented to us so directly that we so earnestly urge the passage of this bill.

The crisis that faces these two associations at the present time concerns the Fair Labor Standards Act. In July 1939-almost 6 years

ago, and about a year after the act had gone into effect-these associations requested of the Wage and Hour Administration a ruling on the application of the act to a well-defined segment of the operations of many of our companies. I do not wish to get into the details of the wage-hour problem, but I believe I can state the question simply enough so that you can appreciate the fact that we were able to ask a specific question and to get a specific answer. The question was: Does the act apply to employees in these industries solely because the materials which they produce the sand and gravel and ready-mixed concrete is used in building instrumentalities of commerce, like highways and railroad tracks, even though it never leaves the State? As I say, in July 1939, these industries formally applied for an interpretation of the act as to these employees, and they received from the Chief of the Opinions Section of the Wage and Hour Administration, a categorical assurance that the act did not so apply. For various reasons there was occasion to seek and to obtain a reaffirmation of this position in 1940, and in 1941. And in May 1941, the Wage and Hour Administration confirmed its position in a formal public release. That statement said that

employees engaged in producing materials such as sand, gravel, asphalt, concrete, macadam, or railroad ties to be used solely within the State in the construction, maintenance, repair, or reconstruction of essential instrumentalities of commerce do not become subject to the act, merely by reason of the use to which such products are put.

Four years went by. In March 1945, about 2 months ago, the Wage and Hour Administrator changed his wind. Mr. Walling again issued a public statement in which he said that certain court decisions in other situations led him now to believe that his previous decisions were wrong. I happen to think, and counsel for our associations likewise believes, that Mr. Walling is in error in his new opinion, but that is beside the point here. The important fact is that Mr. Walling may be right. If the courts ultimately sustain his present position they will, of course, sustain it as a general proposition, which will make it applicable to work done in July 1939, just the same as in July 1945.

Mr. Walling himself recognized that his change of position would be a drastic blow to these industries. He attempted to soften that blow so far as he could by assuring us that he would bring no injunction action based upon any noncompliance with his latest ruling which may have existed before April 15 of this year. We are grateful for that, but that does not begin to meet the real problem which we face. That problem is the problem of employee suits. These industries, under the present statutes of limitations in the various States, could be driven into bankruptcy by such suits.

If Mr. Walling's latest position is sustained by the Supreme Court, these employees' suits would assert a claim for double the amount of the overtime not paid and for all the prior years which they are allowed to sue for under the statute of limitations in their particular State. A great many of the States allow recovery for 3 years, some for 6 years, and some perhaps even more. Those suits cannot be settled, under Supreme Court decisions, for any lesser amount. If the employee is covered by the act and has not been paid for overtime worked, he must be given not only the amount of the overtime but an equal amount by way of compensatory damages-plus, of course, attorneys' fees and

court costs. The courts have also ruled that they have no power under the Wages and Hours Act to mitigate the amount of recovery, no matter what the equities may be. In our case, for example, it is utterly irrelevant that these industries have sought guidance from the Administrator, that they have been given guidance, not once but frequently, and that they have conscientiously lived up to the letter of the obligations which they were told by responsible Government officials were imposed upon them by this Federal statute. None of that is even relevant in an employees' suit. Our members are no better off than an employer who deliberately and knowingly violated the act on the chance that he might get away with it.

That, gentlemen, is the situation which these industries face today. It is a situation which I think everyone would agree should not be permitted to exist. It is a situation in which law-abiding, highminded, conscientious employers can literally be crucified by circumstances over which they have absolutely no control.

H. R. 2788 will certainly aid in the solution of this problem. Not only will it make the statute of limitations uniform, but by reason of the shorter period of limitation which it fixes, it will reduce the potential liabilities of these companies under employee suits to at least bearable proportions. I don't think that even then the situation can be considered a fair one. I think there is much to be said in favor of a rule which would permit businessmen to rely upon authoritative administrative interpretations without incurring the possibility of retroactive liabilities. But certainly this bill is a long step in the right drection. I sincerely urge the subcommittee to give it unqualified approval.

STATEMENT OF ROY P. OHLIN, REPRESENTING THE BELL

AIRCRAFT CORP.

Mr. OHLIN. Mr. Chairman, the previous witness said something about inadvertent violations. Any violations, particularly of the Fair Labor Standards Act that we have been guilty of have not been inadvertent. We have tried our very best to comply with the law. At the beginning we established our wage classification. We went to the Treasury Department; we got their approval. As you know, we do business with the United States Government. The United States Government is our chief and perhaps only customer. We had to satisfy the Army in respect to the wages that we were paying.

As I said, we tried our level best to comply with that law. After having gone along for a period of years, the Labor Department comes along with a ruling that we do not think is correct, but, nevertheless, as a result of that ruling, we are now faced with a test case in Georgia, and we may be faced with other litigation. We don't know.

We had upward of 34,000 employees in Buffalo; we have 31,000 employees at Atlanta now. There should be some time when we know what our liability will be. There should be one time when the Government of the United States knows what its liability will be, and, therefore, in all fairness, I think there should be some period at which we can feel we can close our books.

We don't mean by that that anybody who has a fair claim should not have a right to be heard, and a right to try his claim, but we think