istrator and his staff have put into field investigations, spending money which I assure you could be used for better purposes in policing the Fair Labor Standards Act and enforcing the act, and they ended up with the definition from which I have read.

In the 1944-45 field investigations and conferences with industry and labor representatives, at which our union was represented and at which Mr. Austern was present, and which went into every part of the country, at those administrative hearings, representatives of a number of cannery associations-I recall specifically the Illinois and Indiana canneries made very definite statements that they felt the exemption was not right and it would create competitive inequities within their industry, which the industry did not want. It is obvious that this definition would do that when, as in the case of the fresh fruit and vegetable canning industry, at present you have under the present definition 166,000 workers excluded from the protection of the Wage and Hour Act, out of a total of some 380,000 employed at peak.

You have situations where some of the plants of one company may be within the area of production and the other plants of the same company may be outside of the area of production.

You have situations where there are chains of competing companies, large, major competing canning companies; one chain happens to be located in smaller towns within the area of production and excluded from the act and another chain or major plant will be outside the area of production and therefore included under the act..

I would like to give you specific examples of this. But frankly, this definition is so impossible to apply that when you start to break it down with respect to any plant or set of plants, it is extremely difficult even for the Wage and Hour Administrator to determine which comes under and which does not.

At present, over 300,000 workers in the industry subject to this exemption are excluded from both the minimum-wage and overtime provisions of the act. As compared with the previous definition, thrown out by the Supreme Court in the Holly Hill case, there are now 51 percent of the workers exempted, as compared with 17 percent under the old definition. In the fresh fruit and vegetable packing industry, 40 percent of the workers are now excluded from both the minimum-wage and overtime provisions of the act, as compared with 10 percent under the old definition. The definition takes 20 percent of the canning industry from the protection of the act, as compared to 1 percent under the old definition. In the tobacco industry, the new exemption affects 20 percent of the workers as compared with practically none of the workers under the old exemption. In industry after industry, as you look at them, they are split down the middle, or a little way to one side of the middle, and therefore a competitive inequity exists, which cannot be justified, in terms of the declared purposes of the Fair Labor Standards Act to eliminate just this type of competition, and traffic in low wages and sweatshop conditions.

In making these remarks about the definition, I am not primarily criticizing the Administrator for the definition he made, although I do think even in the very small area of choice he had, he could have made a better and a less complicated one. He had extensive hearings. He went into this as thoroughly as anyone could. But what is the

point of going into anything so confused that it ought to be eliminated? No other solution is possible than elimination of the area of production exemption.

When the Pepper bill, S. 1349, was up in 1945, an amendment was placed in it from the floor of the Senate, I believe, proposing that the definition of area of production be left up to the Department of Agriculture instead of the Department of Labor. That does not solve it, Mr. Chairman. That does not help any. All it means is that the Department of Agriculture will have to get a larger appropriation for some division in order that it can go through the toils of trying to make sense out of this senseless section.

With this background, S. 2386, instead of attempting to make some order out of this chaos, as proposed by S. 2062 through the elimination of the exemption, S. 2386 proposes to expand the area of production exemption by making it applicable to any employee "employed in any operation in any establishment in which his employer is engaged" in performance of any of the specified operations.

Now this would simplify by removing from the protection of the law thousands of clerical, maintenance, and custodial workers who have nothing to do with the actual processing of commodities which are specified in the area of production exemption.

Furthermore, it would enable industry to obtain exemptions which were not even intended in the original writing of the law. I would like to ask a question with respect to that. There are a number of canneries that have can plants attached to them as part of an integrated operation. This is becoming more and more common in the industry.

Take the case of the Hunt Bros. plant, in Fullerton, Calif. Hunt Bros. is one of the up and coming operators in the canning industry. In Fullerton they have a can plant right next to the cannery. When you have a common collective bargaining unit, with employment through one common hiring office, will that can plant next to a canner receiving the area of production exemption also be exempt? I do not know whether it is or not. I would not presume to write legislative history by suggesting one or the other answer. But is that can plant to be excluded from the protection of the wage-and-hour law because it is part of the establishment of Hunt Bros., in Fullerton, Calif., if Hunt Bros. cannery comes under some present or future area of production exemption?

Perhaps you would say this is an extreme example, and that the establishment amendment is not meant to cover such cases.

However, what is to prevent the encouragement through this amendment of a tendency on the part of employers to set up this kind of integrated operation where, because there will be a little bit that is subject to the area of production exemption, they will be able to bring in new plants, or new factories, textile mills, can plants, anything they choose? These are, I admit, extreme examples, but within the scope of various processing industries, this could be done in a way which would not represent such an extreme example. There would be a direct encouragement and invitation to employers to set up operations that would receive the exemption. In the case of many food and processing employers, this would be easy to do. It would have certain advantages to them in terms of closeness to source of supply

and so forth. We urge very strongly that the committee not act favorably on this establishment amendment, and that the committee remove the entire area of production exemption from the act.

I should like to comment on two of the other major exemptions as they apply to industries processing agricultural commodities. Your committee, I know, and Congress in general has received over a period of years many complaints from industry with respect to the administration of the Fair Labor Standards Act. It has been said that the Administrator favored the workers whom, of course, the act was intended to protect and acted against the interests of employers.

For the past 10 years, our members have been caught in the toils of these various food processing exemptions, and I should like to state to the committee that in our opinion the workers involved have suffered very tangible losses through interpretations of the Wage-Hour Administrator which went even beyond the intent of the law in removing them from overtime as well as minimum wage benefits.

I would like to refer to one instance of this. Section 7 (c) of the act, as you know, completely excludes from the overtime provisions of the law for 14 weeks employees engaged in various types of first processing operations. It would certainly appear obvious that when Congress wrote this exemption into the law-and I will refer to the major industries involved-that the fresh fruit and vegetable canning and packing industries were given ample time-over 3 months in which to perform seasonal operations without paying overtime. I think the history of the act will sustain my contention.

But from the minute this act was passed, the employers, having had a taste of blood, were greedy for more. They began a campaign for further exemptions almost immediately after the act was passed. In 1940 they prevailed upon Representative Barden to introduce amendments which would have completely excluded from the minimum wage and overtime provisions of the act several million workers engaged primarily in the food and fiber processing industries and also in warehousing and other activities.

I think it is public knowledge-if not, I will state it for the recordthat a deal was made to kill these amendments introduced by Representative Barden in return for a promise by the Wage-Hour Administrator that he would give the canning industry and the fresh-fruit and vegetable packing industry the seasonal exemption of section 7(b) (3), which he had discretion to apply or not apply in accordance with his findings, in addition to the first processing exemption of section 7 (c).

On August 24, 1940, the Administrator issued an order which told the workers that, in addition to 14 weeks when they had to work without any overtime, there would be 14 more weeks during which they would have to work up to 12 hours a day and 56 hours per week without receiving overtime.

This was something that was done by administrative action, which I honestly do not believe was even intended as the law was written. Senator BALL. Your phraseology is slightly in error. The Administrator never issues any orders to employees telling them they have to work so many hours.

Mrs. SASULY. I accept that, Senator. The Administrator applied the seasonal exemption of section 7 (b) (3) to these industries. He

pyramided it on top of the 7 (c) exemption, but so far as the workers were concerned the effect was the same.

Nineteen-forty-you will remember that was a year when there was not too much employment and workers could not be too choosy about jobs. I could go on and give you other examples of what we believe to be discriminatory action by the Administrator. One recent one was with respect to the question of off-site cannery warehouses, where during the war the 7 (c) exemption had been extended to cover them, supposedly to alleviate a situation interfering with war production. But after the war was over, in 1947, the Administrator continued this exemption again, with the same type of fantastic language and definitions which at every point seems to be the end product, once you start in with definitions not based on economic facts or necessity.

I noticed one of the reductio ad absurdums was given by a witness before your committee representing the Association of Motor Carriers. Mr. Scott was so impressed with the success of the food-processing industry in obtaining exemptions that he demanded from your committee a seasonal exemption for workers employed on sightseeing busses and resort transportation, on the theory that these are seasonal industries and should be treated as fairly as the tomato industry. The ice industry asked for a similar exemption.

These people have some logic on their side. If you are to give one industry a set of exemptions, no matter how irrational they may be. you might as well give them to the other industries also. You cannot hold your finger in the dyke when these original exemptions are given without economic fact or basis.

With respect to 7 (c), S. 2386 proposes an amendment similar to the establishment amendment to section 13 (a) (10). It proposes that the exemption be extended to any of the employer's employees. As I understand this language, it could have the same effect as the amendment to 13 (a) (10), which extends the exemption on an establishment basis.

The Administrator testified before your committee that 125,000 employees in the meat-packing industry would be affected by this amendment to section (c) and that some 20,000 additional employees would also be affected, while performing jobs totally unrelated to the operations which are spelled out in section 7 (c). They would be excluded from overtime protection, or could be excluded.

So, Mr. Chairman, we do not see what S. 2386 does to alleviate the present confusing situation with respect to the food processing exemptions, and to the exemptions related to the processing of agricultural commodities, and to the processing of fish. It does not help in any way, does not make the situation simpler, does not recognize the economic justification for coverage of these workers, and it simply continues a bad situation and makes it worse.

If this law, if the Fair Labor Standards Act is to express without any special favors, the principle of overtime being paid after 40 hours, the amendment proposed in S. 2062 should be adopted and section 7 (c), 7 (b) (3), and 13 (a) (10) should be removed from the act. We cannot agree with the Administrator's proposal that 7 (c) and 13 (a) (10) be taken out but that section 7 (b) (3) be left in the act to provide seasonal exemptions. We cannot agree with that,

because we do not think it is a principal proposal. We think that is trading. We think here an attempt is being made to trade off two exemptions and be left with one, and that it does not recognize the principle that these workers are entitled to complete overtime coverage under the law.

The fish canning and processing exemption, to which I have referred a number of times before, seems to me to be, as I have said, the most extreme example of an exemption which has been given on a special interest basis. This is particularly true since the workers are employed in processes which are just as highly mechanized, just as industrialized as any automobile, any electrical, or any other industrial plant.

Remember, this is an exemption from the minimum wage as well as overtime provisions of the act. The organized sections of industry have very high minimum wage scales as compared with other sections of the canning industry. In the Van Camp plant to which I referred before, the minimum wage provided in the F. T. A. contract is $1.40 per hour. You may say these are west coast rates, which tend to be higher. They are higher. That is true. But in Harvey, La., in an area where there is generally prevailing the present legal statutory minimum of 40 cents in a number of sea food plants, we have secured a contract with the Southern Shellfish Co. providing for a 70 cents an hour minimum and the Southern Shellfish Co. is still in business.

As a matter of fact, a United States Bureau of Labor Statistics study made in 1943 shows that a majority of the fish canneries in 10 major fishing areas paid premium rates for overtime even that long ago. We do not know on what basis the fish canning industry has an exemption. To us it appears that the Government is giving it a subsidy paid by the workers in the industry in those few areas where they are still paying low wages, in spite of the fact that, as islands within those areas, you have organized plants paying close to standard wages and above standard wages in many cases.

We join with the International Fishermen and Allied Workers of America in supporting the amendment to section 13 (a) (5) of the Fair Labor Standards Act contained in section 9 of S. 2062. This amendment provides for coverage of fish cannery and other fish processing workers.

I would like to make a few remarks about the arguments that have been made relating to farmers in connection with the matter of food processing exemptions. From the day this act was first considered. by Congress, one of the chief arguments advanced by proponents of the exemption is that the food processors would pass on the alleged increase in cost of the 40-hour week, or any coverage under the act, to the farmers in the form of lower prices. This claim was advanced as early as 1937, when the act was first under consideration, and from that day until this, I have searched the records, I have searched the statements of industry representatives who have made this allegation, and I have found not one bit of proof to substantiate it.

Just a few weeks ago, the Campbell Soup Co, announced a demand. upon the tomato growers in New Jersey and in other areas to cut the price Campbell Soup would pay them by $3 a ton this present season. During this same time the Campbell Soup Co. has been refusing F. T. A.'s demands for a wage increase.