important phase of mass transportation urgently needed in the national economy.

We feel that this legislation simply does not adapt itself to our business. Boats operate by the clock. It is a highly competitive service, and these boats are small pusher type tow- and tugboats and the quarters are limited on them. It is not possible to work men on a 40-hour week or 8-hour day basis. Quarters are not available and even if they were and it were possible to use four shifts, there would still be overtime involved.

Vessel employees of the domestic water carrier industry are not underpaid by any American standards, and enjoy the very best of working conditions. Their annual earnings range from $7,800 per annum in the case of masters and master pilots, to $1,560 per annum in the case of mess boys or mess girls, who are actually waiters, waitresses, and kitchen helpers aboard towing and other commercial vessels. In addition, these employees are furnished food, lodging, and full subsistence while aboard vessels. The average cost of providing such subsistence for these vessel employees is more than $2.50 per day per employee and is continually increasing.

Much has been said about the long hours worked by vessel employees on the inland rivers and waterways. Since the inception of the industry over a hundred years ago, vessel employees have worked what is known as a square watch, that is, 6 hours on duty and 6 hours off duty around the clock, 7 days a week. This results in an 84-hour workweek, but all of these employees are granted liberal time off at full pay which fully compensates them for the long hours worked while aboard the vessels.

According to figures compiled by this association, the average time off under present working provisions for all vessel employees on the inland waterway system is 110 days per year, and in many cases is as much as 122 days per year. In other words, these employees are only engaged in earning their livelihood 255 days per year, although they are paid for 365 days or a full year's service. It is not believed that any other industry in the United States grants an average of 110 days. a year vacation with pay to any employee.

Those advocating a 40-hour week for vessel employees know full well that such a short workweek can never be brought about as a practical matter. They know it will be absolutely impossible, because of the physical construction of vessels on the inland waterways, to carry large enough crews to permit the members of such crews to work but 40 hours per week. The 40-hour week sought for these employees in S. 2062 is only to be used as a basis, a "springboard", for overtime.

The towing vessels, towboats, and tugs used on the inland rivers, waterways, and harbors of the United States are small compact units. Their crews range on the average from 10 to 26 persons, with quarters and facilities provided for such sized crews, dependent of course upon the size of the vessel, and the particular work for which it was designed and constructed. It would not be possible to increase the number or the size of these crews to enable the members thereof to work but 40 hours per week. Everybody, and I mean everbody even remotely connected with the industry, knows and recognizes this fact. These towing vessels provide a transportation service principally

for bulk commodities. Their trade routes range from a few hundred miles to possibly 2,500 miles. Thus these vessels are away from their home ports from 5 to 40 days, just like an ocean liner is away from its home port for a rather lengthy period. Like the railroads and the ocean liners, the airplanes, motortrucks, and busses, these towing vessels engaged in transportation service must necessarily operate around the clock. They could not possibly operate on a 40-hour-a-week basis, or for 8 hours, 5 days a week.

The nature of the transportation service provided by the domestic water carrier and operator industry over the 26,000 miles of improved navigable waters of the United States will not permit the changing of crews necessary to provide an 8-hour day, 5 days a week for the members of these vessel crews. Even three complete crews would not make possible a 40-hour week. It would actually require 4.2 crews for each vessel if the payment of overtime was to be avoided. No one will deny that such an arrangement is entirely impossible and impractical from every conceivable viewpoint. It is for this reason that the domestic water carriers and operators positively state that their industry does not at all yield itself to the application of the 40-hour week to their vessel employees.

Through collective bargaining and otherwise, wages and time-off allowances have been steadily increased in recent years for all vessel employees on the inland waterway system. Likewise working conditions have been greatly improved for these employees, and there is of course every reason to believe that this will continue and can be continued without making such employees subject to the Fair Labor Standards Act.

It is not my understanding that the original intent of the Congress in enacting wages and hours legislation back in 1938 was that its provisions were to increase overtime payments, but rather to provide more employment at decent wages for American citizens. The enactment of S. 2062 will not provide one additional job in the inland water carrier and operator industry.

Its enactment will however, most substantially increase overtime payments to all vessel employees, and thus greatly increase the cost of all water transportation now burdened with serious competition from other forms of freight transport. Most naturally, those favoring S. 2062 can make their best case with the unlicensed personnel employed on vessels on inland waters. These employees are only semi-skilled, and thus are not paid as much as are the skilled or licensed employees on such vessels.

There is however, a very definite relationship between wages paid unlicensed personnel and licensed officers employed on commercial vessels. This has always been true and will always be so, for boatmen are extremely jealous of their status and will resent any attempt to change the pay relationship or differentials between the various classifications employed on towing vessels. For instance, a master or master pilot has always received more salary than a chief engineer, and a pilot more than an assistant engineer. An assistant engineer has always been paid more than a mate, and the mate has always received a higher salary than any unlicensed employees such as cooks, deck hands, or engine-room employees other than licensed. These differentials are historical and will have to be preserved, respected, and paid in all

events.

Thus if the basic wages of unlicensed employees are increased by the operation of statute law, the effect thereof will be felt all along the line among vessel employees on the inland waterways. It is almost impossible to compute the cost of wage increases that will be brought about by compelling vessel operators to pay overtime for all hours worked over 40 per week, and at the same time maintain wage differentials between all classifications of vessel employees, licensed and unlicensed. It is to be assumed that all vessel employees will continue to demand the present time-off provisions, which average 110 days per year, and which in many instances amount to 122 days a year, even if they are made subject to the Fair Labor Standards Act as provided in S. 2062.

This is particularly true because it is not possible to operate vessels on the inland waterways on the basis of 40 hours per week for the reasons I have set forth and outlined. These employees will be away from their homes just as much if they are made subject to the Fair Labor Standards Act as they are under present working conditions. They will in effect, work exactly the same hours as they are now working, except that they will be paid overtime for all time worked each week in excess of 40 hours.

There is a provision in S. 2062 that the cost of subsistence, food, and lodging shall not be considered in the computation of minimum wages of seamen, which includes employees on vessels serving the inland waterways. This would appear to be most discriminatory against the water transportation industry. This industry is the only industry thus singled out. Proponents of this provision state in the case of seamen or vessel employees, that subsistence is furnished for the sole convenience of the employer, meaning the vessel owner or operator. Why a vessel should be considered in a different category than a construction, lumber or mining camp, where subsistence is also furnished presumably for the convenience of employers, is beyond reasonable conception or understanding.

The cost of subsistence furnished employees should either be considered in the computation of minimum wages or it should not be, but there should not be any discrimination among types or classifications of employment in connection therewith. The domestic water carrier and operator industry sincerely believes that the cost of subsistence furnished employees should be considered in the computation of wages paid, as it is definitely an important cost of vessel operation.

For the reasons mentioned, and others, it is strongly urged that the provisions of S. 2062 not be favorably reported into law as amendments to the Fair Labor Standards Act of 1938. The domestic water carrier and operator industry is fundamentally a transportation industry providing important freight transport services. Inasmuch as its competitors are not subject to the Fair Labor Standards Act, the domestic water carrier and operator industry should, therefore, be left free to work out with its employees, through their recognized collective-bargaining agencies, all problems of wages, hours and working conditions in a mutually satisfactory manner necessary to provide the industry with the flexibility required for its prosperity and the affording of continued stable employment at American wages, for its employees.

It was also said when the wage and hour legislation was considered back in 1937 and 1938 these employees asked for exclusion from the wage and hour legislation and nothing has occurred in the meantime that would justify the exclusion of vessel employees as I see it.

I believe, Mr. Chairman, that concludes my remarks.
Senator BALL. Very well. Thank you, Mr. Thompson.
Our next witness is Walter E. Maloney.

STATEMENT OF WALTER E. MALONEY, SPECIAL COUNSEL, NATIONAL FEDERATION OF AMERICAN SHIPPING, INC.

Mr. MALONEY. You have been hearing in the last hour testimony in regard to the application of the Fair Labor Standards Act to seamen. I would like to concur in the testimony of the previous witnesses as to the actual and factual impossibility of applying the Fair Labor Standards Act to oceangoing vessels. The previous witnesses have talked about the smaller ships but their conclusion is nonetheless applicable to larger ships.

On the subject of the 40-hour week for seamen, I am referring to two bills before your committee-S. 1552 and S. 2062.

I may say that I appear here as a representative of the National Federation of American Shipping which represents three steamship company associations. Through these associations I appear for the great majority of oceangoing steamship companies, American-flag companies entirely.

I do not intend to read the statements but I ask they be included in the record following my presentation.

Senator JENNER. That will be done.

Mr. MALONEY. With regard to S. 2062 I would like to rebut testimony given to you and to rely on the amendment incorporated in the record. I would like to call your attention to a statement made a while ago by Mr. Levine on behalf of the CIO maritime committee.

Mr. Levine, in truth, does not deny at all the difficulty and, as I say, the impossibility of applying the 40-hour week. It is in effect and has been in effect for about 2 years. It was 44 hours up until June 1946, and in 1946, the 40-hour week was made standard by the collectivebargaining agreements.

The only problem there arises-see Mr. Levine's testimony-as he says [reading]:

Now how can the 40-hour week be worked out in practice? In either of two ways. The practice being followed on the Great Lakes is to continue with the same size crews working 56 hours per week and to compensate seamen for all work over 40 hours.

That is not working out a 40-hour week. It is a 56-hour week and the result of such legislation would mean 16 hours overtime for each man on board.

The ships carry three shifts and they work 4 hours on and 8 hours off. It is physically impossible to cut that down if you only carry three crews. So, the first solution or the first way of working out a 40-hour week is only a guise for 16 hours overtime.

The second solution is the four-watch system. I was endeavoring to pick up the language here. There is nothing to prevent an alternate course, viz, the four-watch system.

I have just been advised by Mr. Rodgers that S. 1552 is not before this committee. I am sorry. Excuse my reference to it.

The four-watch system is the alternate system.

Under the four-watch system, the watch standard would stand two 3-hour watches daily. The day workers and the stewards' department would be reduced to 40 hours per week. Approximately 25 percent more crew would be needed.

If a man works two 3-hour watches daily, 7 days a week-the ship cannot stop on Saturday and Sunday-he will work 42 hours. So, we are not down to a 40-hour week.

The

I would like to give you a practical illustration of what these men on an American-flag ship-the steamship America will do. crews would have to be increased from 687 to 997. Where would quarters be found for these men? Only by converting to their use personal passenger accommodations. That would result in reducing the passenger-carrying capacity of the ship from 1,050 to 792 and would result in the altogether ridiculous situation of carrying 20 percent more crew that passengers.

Let us compare the British passenger ship Queen Elizabeth. That requires a crew of 1,280 for 2,314 passengers. The Queen Elizabeth with only 283 more men is able to attend to the wants of 1,522.

That, of course, is the biggest ship in the American merchant marine, but on a smaller ship, it is true, on every other cargo ship. Basic wages for the additional men would be about $2,765 a month for the additional 14 men. Board and lodging computed at $75 per man per month would cost another $1,050, making a total increase of $3,815 per ship per month. That does not include a cent of overtime which under present agreements runs about one-third of the man's base pay.

In other words, the American-flag freighter-and I can assure you it is in competition-would be saddled with this additional obligation for these 14 men if the four-watch system were to be put into effect. The only alternative would be the payment of 16 hours overtime to each man in the crew who currently stands on watch.

Now, one other point. I was very interested in Mr. Levine's estimate. I think he said subsistence ran about 1 percent of costs. I do not know whether he referred to operating costs as a whole or labor costs, but I can tell him that a survey of a number of American-flag companies in 1945, taking into account that this is mass feeding on board ship, showed the cost in 1945 to be approximately $75 per month per man. We have not been in a position to make such a broad survey since that time but on spot check in January this year it was indicated that current costs for feeding a man on board ship runs between $110 and $115 per month. That is the figure which would be excluded by this language in S. 2062. Who would single out the maritime industry from all other industries and refuse the high subsistence costs?

Senator JENNER. What percentage of the men employed in the flag ship service are single men ?

Mr. MALONEY. I cannot answer that. Maybe Mr. Levine can give you facts on that. We find the figures vary with the purpose the advocates are trying to follow. If they are to support a seaman's claim for increase they are all married men with two children. I think there is a large percentage.