Since 1938 the Administrators of the Wages and Hours Act have gradually so broadened their definitions of wholesaling and so proportionately narrowed that of retailing in solid fuels that practically any sale of fuel to other than a private home for home heating denies the merchant any hope of the retail exemption provided by the Congress in the act. In fact, retailers selling and delivering at one time an entire season's supply of fuel to a private home, especially if the price is lower per ton than for a single ton delivery, are in danger of having this interpreted by the Administrator as a wholesale transaction. Such prejudicial and unfair rulings of the retail service functions in solid fuels can no longer hope to continue unchallenged by our industry.

Section 2: Our industry now desires to register objection to the provisions of section 13 (a) of the proposed act, which proposes to deny "retail exemptions" to retail establishments having more than four branches, or doing a dollar volume of business in excess of $500.000. This would appear to be discriminatory legislation, which would be most unjust and unfair to our industry.

First, since solid fuel is an exceedingly heavy and bulky commodity, the cost of delivery in a metropolitan area is of tremendous importance; and branch yards are usually established for the simple reason that the dealer finds it practical to reduce operating costs through relatively short hauls.

Second, in city areas, with crowded streets and congested traffic, it has been found quite impractical to attempt city-wide delivery from a central storage. Moreover, with the prevailing high prices for city real estate it is practically impossible to acquire additional central storage space to provide for expanding business and it is practical to acquire additional yards for storage space in the outlying districts where real estate values are not so inflated, and at the same time expedite deliveries.

Third, to our industry it seems entirely unfair to discriminate, for instance, between four and five branch yards. It also seems a discrimination to set any dollar and cents volume as a dividing line between wholesale and retail, or exemption and nonexemption.

Fourth. we fail to see the difference in status between a retail conern, with an annual volume of $500,000, and one with a volume of 5501,000 or even $500.999. It would seem to any casual observer that an attempt to tie into any law a restriction against legal growth and expansion is strictly discriminatory legislation.

Section 3: Regarding coverage by the Wages and Hours Act of ratchmer. and standard employee meaning men who because of age or other infirmities are incapable of performing fili vale abor services, but are very often employed largely as a form of penFon or charity-there are many of this type who are quite incapace of securing and performing full-time work, who would be ano matically forced out of such jobs and lose their employment to younger and more physically fit met..

Section 4: Our industry also fears and opposes sention. 4. of the proposed act, investing the Secretary of Labo the Secretary of Labor with the power to make in plait English

nation to do so far beyond the intention of the Congress when framing the law. Such expansion of governmental power and authority over private, legitimate business, has already reached the point where it must be checked if business is to survive. It is only a successful and flourishing business that can supply the taxes necessary for the Govern ment's operation.

Again we fear and honestly believe that it would be utterly impossible for the Department of Labor to administer the act free from bias and prejudice. An honest and fair administration of the act must consider the employer as well as the employee. No employer of labor could expect the Department of Labor to feel or act entirely without partiality.

It is also inconceivable that the act should carry a clause authorizing the Secretary to assume the legal obligations of the employee by instituting suit in his behalf against his employer. This is definitely not the true function of the Secretary since employees have ample access to the courts for the redress of any grievance.

To have a governmental agency assume the prosecution of the employer, as representative of the employee is too prejudicial to be permitted in our form of government.

Your chairman, the Honorable John Lesinski, was engaged in the retail coal business in our Detroit metropolitan area for a number of years, and his company was a member of the organization which I have the honor to represent here today. He was just, as far as I know, a regular "2,000 pounds to the ton" retailer who bought and sold at retail. We are confident he never had any slight doubt that his selling constituted a retail function. We believe he will confirm our statements regarding the accepted history and tradition as described above concerning the definitions of both wholesale and retail solid fuel sales.

In closing, we urge that whatever sort of an act you prepare, it be clarified, simplified, and made so clear in its definitions that businessmen may readily determine how it affects them.

We appreciate this opportunity to express our views on H. R. 263 and trust that they may receive some consideration.

Mr. LESINSKI. Any questions?

Mr. I UCAS. No questions.

Mr. LESINSKI. Mr. Bailey?

Mr. BAILEY. Mr. Chairman, I would like to say that I am vitally interested in the coal industry, because it is a major industry in my State of West Virginia. Eighty-four percent of our coal from West Virginia, in peacetime, goes into the Lakes trade. So I am vitally interested, and I would be very glad to hear you make some sensible suggestions as to exemptions that might be made along this line. Mr. URHEIM. I will read a proposed amendment.

Mr. BAILEY. We are going to have to write some realistic language into some of these provisions for some of these industries, to make it workable. If you gentlemen care to make any suggestions, I wish you would do so and hand them to the chairman so that we may have them for consideration.

Mr. URHEIM. I will submit to the Congressman an amendment that I feel would cover the situation as far as retail coal is concerned. It is worded as follows:

Section 13 of the Fair Labor Standards Act of 1938, as amended, be amended by adding at the end thereof a new subsection as follows:

(d) Any establishment shall be considered to be a retail establishment for the purposes of this section if by custom and tradition such establishment has been recognized by a particular industry as carrying on the retail function of that industry.

Mr. LESINSKI. At that point, Mr. Bailey, I wonder if you have missed something in the coal situation. The retail business is designed for local consumption.

Mr. URHEIM. That is true.

Mr. LESINSKI. And that is what you have eliminated. Now, that is one of the main objections to the bill, that it has not been specified as regards local consumption.

What we mean by "local consumption" in the coal business is that the bulk of the coal is delivered by the dealer locally.

Mr. URHEIM. That is right.

Mr. LESINSKI. It is true that I never knew that the ruling was that anyone selling coal to a small industry would be considered as doing interstate business. I never knew that because it never came up when the act was passed by Congress.

Mr. PANKOW. Well, then, Mr. Chairman, the point that I would like to stress is this, that if we sell coal to the individual or to the home owner, we also sell service, along with that coal. We are called in, as you know, to see that the coal burns properly. We perform that function also if we sell coal to a church or some small business place. We do not sell wholesale; if we did sell wholesale, we are practically through upon delivery of the coal. However, at retail we follow through with service.

Mr. LESINSKI. Your large coal sales come in by carloads to an individual plant, on the basis of 10 cents a ton commission? Mr. URHEIM. That is right.

Mr. LESINSKI. The same plant runs along getting coal, but they may run short of coal and they may have to buy from someone at a retail price. But even then, he gets a special price.

Mr. PANKOW. Yes, sir, he gets a special price because of the larger quantities.

However, we still follow through with that man, to see that the coal burns. We have a service that we operate. If they have a stoker system, we service that stoker system, we are at their beck and call. We have to see that his stoker operates properly, and that the coal burns properly.

Now, if it was a wholesale function, then we would not have to do that.

Mr. LESINSKI. There is one other thing, if you have mentioned I have forgotten it, that it costs more for you to deliver a ton of coal to the home owner.

Mr. PANKOW. That is true.

Mr. LESINSKI. When you deliver coal to an individual home owner, it has to be wheeled in and it has to be shoveled in through a window. However, when you deliver 10 tons of coal to a church, you just drop it through a chute, there is a manhole there, and all you have to do is raise the truck up and let the coal go down the manhole by its own gravity, and that is all there is to it. You can deliver your coal in

10 minutes.

On the other hand, when you deliver to a home owner, it may take you an hour to deliver the same amount of coal, or even less. It takes much longer to deliver that coal, when you have to take it to the window on a wheelbarrow.

Mr. PANKOW. It is obvious that we give the customer the benefit of the doubt. He is entitled to it. But I contend that still does not constitute a wholesale delivery, because of that fact, because we still stand back and do see to it that the coal is burned properly.

Mr. BAILEY. Mr. Chairman, I would just like to emphasize some of the facts brought out by Mr. Urheim in his presentation of the tremendous drop in the production of coal. That is accounted for largely by what? I think you mentioned that loss of 25,000,000 tons

a year.

Mr. URHEIM. The retail industry has itself since 1944 lost 25,000,000 tons a year.

Mr. BAILEY. I would just like to say that my State of West Virginia is the largest coal producing State in the United States. I have the second largest coal producing county in my district. I also have another county in my district that produces what we call strip mining coal. For instance, in Harrison County in my district we had 121 operations of strip mining during the war, and the production alone from that one county ran 6,000,000 tons. Since the war, that has practically stopped, that production of strip mining, because they have no facilities for washing and sorting the coal, and it has been pretty much eliminated. That accounts for a part of the 25,000,000-ton loss in a way.

Mr. URHEIM. Mr. Bailey, I do not believe that that provides for any of the 25,000,000-ton loss that you are talking about, for the reason that that is not the type of coal which normally moves to a retail yard and is handled and marketed by retail companies. The retail com panies get, by and large, the deep shaft and better grades of coal, rather than the strip and so-called lower grades of coal, which move to large industries and in export.

Mr. LESINSKI. That is for coking purposes?

Mr. URHEIM. In some instances.

Mr. LESINSKI. In some instances, it is for coking purposes.

In strip mining, no domestic people want to use that kind of coal. Mr. URHEIM. There are very few coals which are satisfactory for the so-called domestic production, which is the dominant part of the retail business.

Mr. LESINSKI. The reason for that is that there is too much smoke and too much ash.

Mr. URHEIM. And lack of preparation.

Mr. LESINSKI. And besides that, by the time your season is over, you have a lot of rags hanging in the furnace.

Mr. BAILEY. However, I did want to make the point that our industry in West Virginia has been seriously affected in that there is not the demand for coal, of course, that we had during the wartime, and it is showing up in our production figures in West Virginia, decidedly.

Mr. URHEIM. That is true.

Mr. LESINSKI. Mr. Bailey, the purpose of the testimony here was that there are more oil burners and there are more gas burners on

the market than there were prior to the war. That is the reason they were using coal. That is the difference.

Mr. BAILEY. Of course, I will have to say, Mr. Chairman, that since we have plenty of natural gas in West Virginia and quite a little bit of oil production, we are perfectly willing to ship their coal up to Detroit and Chicago.

Mr. LESINSKI. We have gas up there also, by pipe line.

Mr. PANKOW. We have a fresh lot of gas coming shortly now, they tell us. They are starting to sell gas furnaces up there, going out on a big campaign. They were not going to have gas there until 1950, but it seems that they are going to beat the gun considerably. Mr. LESINSKI. They have that pipe line up there for the gas in Michigan, in storage.

Mr. URHEIM. Might I say, Mr. Chairman, that we do not expect that this committee could by any stretch of the imagination solve the problem of competition between gas and oil and coal. That is a matter, apparently, which we are going to have to handle for ourselves. But I did want to point out that the overtime premiums that purely local businesses such as retail coal merchants have, that have been required during this seasonal period, have rendered our competitive position as against gas and oil much worse.

to

Mr. LESINSKI. Under union contracts today in Detroit, you have pay for overtime.

Mr. URHEIM. No, you do not, until after 48 hours.

Mr. LESINSKI. We do.

Mr. URHEIM. In other words, they have recognized the seasonal character of the industry, and the unions have agreed that so far as retail coal is concerned, they will operate on a 48-hour straighttime basis.

Mr. LESINSKI. We pay it after 40 hours.

Mr. URHEIM. You do in your particular establishment, perhaps, because that must be preferred to building materials and other materials which definitely throw you under the Wages and Hours Act, and you merely assume that it is going to be necessary for you to pay time and a half after the 40-hour period. Speaking of a retail coal merchant in the city of Detroit today-if I am mistaken you correct me, Mr. Pankow-they do provide for a 48-hour week.

Mr. PANKOW. That is correct.

Mr. URHEIM. Taking into account the fact that if people want coal on Saturday, they want to get delivery of the coal on Saturday. There are metropolitan units where the people are working on a 40-hour week with time and a half after that.

Mr. BAILEY. Pardon the interruption. Is it not true that in both Chicago and Detroit, in most instances, the rate of pay is in excess of the 75 cents?

Mr. URHEIM. The current rate of pay is $1.75 in New York and I believe $1.75 in Detroit.

Mr. LESINSKI. No. Our rate is $1.30 for labor and $1.35 to $1.45 for truck drivers.

Mr. PANKOW. We pay $1.65 for truck drivers, $1.75 for mechanics, and $1.55 for the initial starting period.

Mr. LESINSKI. The reason for that probably is that we are on 40 hours and you are on 48 hours.