Senator CLARK. Of course this was the problem of the sweatshops in the garment industry too.

Mr. BROMLEY. A sweat shop is a permanent place. The workers come to work at a definite time. It is a factory type operation.

Senator CLARK. A lot of them do that at home and always have on a piecework basis. Go ahead, I don't want to get into an argument with you. I want to hear your testimony.

Mr. BROMLEY. I believe we have covered many of the points that we were talking about. I think at this point, Senator, I would like to refer to some statements that were made about farmers working their own wood lots and developing wood and that the exemption did not apply to them, that they could cut wood on their own farm.

Now that is not a correct statement of fact according to the interpretation of the Wage and Hours Act that we have. If I may I would like to call on our counsel to just briefly cover that aspect.

Mr. WEIR. Senator Clark, in a series of questions and answers as to how the Federal wage and hours law applies to the lumber and pulpwood industries, which of course is not an official publication, but necessarily is couched in common everyday language; on page 3 of this report issued by the Department of Labor it is identified as QAIND-4, there it specifically indicates that where a farmer conducts a lumbering operation and intends to sell the wood for market, that he has got to comply with the conditions of the Fair Labor Standards Act and is not covered by the agricultural exemption which covers his normal types of agricultural activities.

Mr. BROMLEY. Senator, it may be asked why there is a 12-man exemption rather than some other number. The only practical answer is that a 12-man operation is close to an economic break even point. Where substantially more than 12 men are needed, a producer can afford to spend all his time on the job in the woods and hire someone else to keep records, sell his products, or follow the other alternative of hiring a foreman or woods boss. A 12-man exemption is, in fact, a bare minimum.

It has been my personal observation, however, that a 20- to 25-man exemption would actually be a more realistic exemption.

It takes that many men to get you sufficient volume, to get you sufficient turnover in money to be able to hire an extra man for purely overhead and supervisory work in the woods.

Now I mentioned at the beginning that the seasonal exemption has not been mentioned and I would like to go over that quickly.

An industrywide 14-week exemption from the overtime pay provision of the Fair Labor Standards Act is available to employers in seasonal industries. The exemption relieves employers of overtime pay liability for hours worked up to 12 daily or 56 weekly. It does not relieve them of liability for the minimum wage, the seasonal exemption. This exemption is contained in section 7(b) (3) of the act which S. 1046 and similar bills would delete.

This exemption is available to industries found by the administrator to be of a seasonal nature.

The exemption does not apply automatically. Application must first be filed and then the Administrator determines whether the industry falls within the seasonal category.

Shortly after the act was passed, the Administrator found certain activities common to northern woods operations to be within the limited seasonal exemption of the act.

These activities include ice- and snow-road hauling, sap peeling and spring freshet driving.

Briefly, ice-road hauling is the transportation of pulpwood by hauling it on sleds or trucks. I will describe those activities if you want me to but I trust you understand what they are.

Why is this exemption necessary? In these seasonal operations, because of the laws of nature, the whole year's work must be done in the space of a few weeks. The work is done in the forests far removed from workers' homes so that camps must be constructed. Loss of the exemption would mean increasing the capacity of the camps to take care of larger numbers of men on a straight time basis. This would result in higher costs and workers would each receive less pay because of the shorter hours of work.

You cannot operate two 8-hour shifts in the woods. There are only so many daylight hours. In addition this would be futile because of woods labor shortages in Northern States.

Senator CLARK. Wouldn't you be able to have more than one shift if you deal with the relatively small wood lots that you say most of the industry is concentrated in?

Mr. BROMLEY. Most of the operations that we are talking about on this seasonal exemption are larger operations.

They are confined to the northern regions where snow and ice hauling and sap peeling is done, and they are not related to the 12-man exemption. It is an entirely separate exemption dealing only with the overtime aspect. It does not involve the minimum wage.

Senator CLARK. This involves mostly the west coast and Northwest? Mr. BROMLEY. Some use is being made in the Northwest, some in the Lake States and some in the Northeast.

The producer in the areas where the seasonal exemptions apply, must have all of his wood cut, peeled and out of the forest within the few weeks in which he can operate. Already at an operating disadvantage because of nature this producer cannot survive if additional costs are imposed upon him.

Wood produced in the Northern States is directly competitive with Canadian wood. Canada has no law which arbitrarily would force higher costs in the production of wood.

Substantial increases in the costs of producing American wood, such as would be caused by eliminating the seasonal exemption, would put the product of American producers at a serious competitive disadvantage.

Incidentally they would be at a competitive disadvantage with our own southern region, and create an economic hardship on the northern forest areas.

Senator CLARK. You say there is no legislation in Canada on this? Mr. BROMLEY. No, sir. Since the finding of the Administrator as to the seasonal nature of these three operations, there has been no change in the effect on the industry of the natural seasonal factors or in the manner in which our industry must meet them.

The producers in the pulpwood industry are not asking that the 12man and seasonal exemptions be continued in the law to avoid paying the minimum wage prescribed.

Employees in this industry are earning wages at least equal to and substantially above the current statutory minimum. In the Northeast, the Lake States and the West, wages in excess of the equivalent of $2 per hour are common. In the south too, virtually all logging workers earn at least the minimum.

Incidentally I would like to point out while Mr. Hartung has made the flat statement that the "industry never pays more than the statutory minimum," his own figures refute this. All 10 of the southern States pay better than the minimum wage to the logging workers according to the figures that he has just read here. He also lists wages of sawmill workers and I would like to point out that the wages of sawmill workers have no bearing upon the exemptions we are talking about.

The sawmill workers are not exempt from the Wage and Hours Act, so that any of these figures and statements involving sawmill workers frankly have no bearing upon what we are discussing.

Senator CLARK. Do you have a copy of his statement?

Mr. BROMLEY. I do now.

Senator CLARK. I wish you would look at the figures for the Southern States.

Mr. BROMLEY. Yes, sir.

Senator CLARK. With respect to logging workers. Do you challenge the validity of those figures?

Mr. BROMLEY. Not at all, sir. I was pointing out the fact that on the very right-hand column in April 1956, since the minimum wage was raised to $1 that every one of those figures show now an excess of the minimum wage of $1.

Senator CLARK. Yes. They would be under the $1.25 figure which would be called for by this bill if it were enacted.

Mr. BROMLEY. That is true, but, sir, you will see this one sentence. It says: "The data just enumerated demonstrates the industry never pays more than the statutory minimum." And the figures which follow show that that statement is not correct.

Incidentally the figures we are talking about are logging workers, and to the best of my knowledge most of the logging workers in these States are under the 12-man exemption. I would like to read one statement which has a bearing on our discussion.

It is common knowledge in our industry, and it has been substantiated by the recent report submitted to the Congress by the Secretary of Labor in accordance with the requirements of section 4(d) of the Fair Labor Standards Act. To quote from page 26 of part II of the report:

Appendix A, table 47 shows that only 2 percent of the exempt logging workers were receiving less than $1 in April 1956 and less than 1 percent in April 1957.

I am quoting from the Secretary's report and his discussion of the wages earned by the exempt logging workers. I am stressing the fact that it is well established both by the figures in Mr. Hartung's report and also by the report of the Secretry of Labor that the exempt workers are earning better than a minimum wage.

Finally, the American Pulpwood Association wishes to go on record as being opposed to any increase in the statutory minimum wage. We believe that such an increase would promptly contribute to inflation, which has become a national menace, and would result in no lasting benefit to employees in this industry.

After thorough study, Congress and the Wage and Hours Administrator have respectively seen fit to grant the forest products industries certain partial exemptions from the Fair Labor Standards Act. S. 1046 pending before this subcommittee would rescind these exemptions, apparently for the purpose of improving the wages of workers in the woods by bringing them to the minimums prescribed by law. Wages in this industry already are at or well above the minimum level, so that eliminating the exemptions would not have this intended result.

Instead, unintended effects would come about. The cost of doing business for the small producer would be increased without an offsetting increase in productivity. Small producers would become enmeshed in redtape, which has already proven unworkable.

Small producers would be forced out of business, swallowed up by larger operations, or else have to operate in violation of the law. Work opportunities would decline and American wood would be placed at a competitive disadvantage. We don't want any of these things to happen, and do not believe that you do.

We respectfully urge that no bill be reported from this subcommittee which would eliminate either sections 7(b)(3) or 13(a)(15) from the Fair Labor Standards Act.

Senator CLARK. Senator Cooper, any questions?

Senator COOPER. I have just come in. I missed the testimony that has been given to date. May I say I am interested in this because logging and lumber work is a very important industry in my own State of Kentucky.

This minimum, as I understand it, if the exemptions were removed from the Fair Labor Standards Act, would apply to all logging operations without regard to the number of men that might be employed? Mr. BROMLEY. Yes, that is our concern, Senator.

Senator COOPER. I suppose you have developed the fact that a great part of the logging operations are conducted by farmers and woodlot owners, timber owners on a part-time basis?

Mr. BROMLEY. We have gone to great pains to do that and have the figures showing that, sir.

Senator COOPER. I think I am rather familiar with this, having lived in such a section for a long period of time.

Senator CLARK. Thank you very much, sir.

Mr. BROMLEY. Thank you, sir.

Senator CLARK. The next witness is Mr. Randle J. Dedeaux of Mississippi, and Mr. David Jackson of South Carolina, representing the Forest Farmers Association.

Gentlemen, we are happy to have you before the committee. Do you have a prepared statement?

STATEMENT OF RANDLE J. DEDEAUX, SMALL LANDOWNER AND TIMBER DEALER, PERKINSTON, MISS.; ACCOMPANIED BY J. WALTER MYERS, JR., EXECUTIVE DIRECTOR, FOREST FARMERS ASSOCIATION, ATLANTA, GA.; DAVID JACKSON, SUMMERVILLE, S.C.; W. C. POWELL, STARKE, FLA.; AND ADAM KERR, CANDLER, N.C.

Mr. MYERS. Mr. Chairman, I am Walter Myers, the executive secretary, and I would like to introduce Mr. Dedeaux and Mr. Jackson,

and we have several others who are very interested in this. None of them will testify but they just want to sit in and express their interest. Senator CLARK. We are very happy to have all of you gentlemen here. Mr. Dedeaux, you may proceed.

Mr. MYERS. If I may, I would like to introduce these folks. This is Mr. Dedeaux to my right, and Mr. Jackson, to my left. Mr. Dedeaux is from Perkinston, Miss., and Mr. Jackson from Summerville, S.C. He will not testify. This is Mr. Powell from Starke, Fla., Mr. W. C. Powell; and this is Mr. Adam Kerr from Candler, N.C.

We are an association predominantly of small timerland owners in 15 Southern States and small businessmen in the forests. We are not an industry group. Without further ado, sir, I would like to introduce Mr. Dedeaux.

Senator CLARK. Thank you, Mr. Myers. Will you proceed, Mr. Dedeaux.

Mr. DEDEAUX. Mr. Chairman, my name is Randle J. Dedeaux. My home is Perkinston, Miss. I am a small landowner, forest farmer, timber producer, and dealer. As one of the 3,600 owners and operators affiliated with the Forest Farmers Association, which covers 15 Southern States, I find my situation and problems are similar to those of other small owners and operators over the entire South from Virginia to Texas.

We small owners and operators, like myself, are all tremendously interested in certain amendments proposed to the Fair Labor Standards Act. We are particularly concerned about the proposals to eliminate the 12-man and seasonal logging exemptions, and to raise the minimum wage to $1.25 per hour. It appears to us that these proposals would hurt the small owner and operator more than anyone else, which seems diametically opposed to our American way of thinking. Before I finish, however, I believe that you will understand why we feel this way.

Let us consider for a moment the 12-man exemption as it affects small woods operators. This exemption is of great help to small operators like myself, who are forced to do all of their office work themselves. I cannot afford to hire a bookkeeper, and my office setup is limited at best. Even as it stands now, a good many of my nights and weekends are taken up with keeping necessary records, reports, etc. Removal of this 12-man exemption would merely add to the many problems already faced by small timberland producers and operators like myself.

Perhaps you can understand our situation better if I mention that our second growth Southern forests are such that it is seldom possible. to use large logging crews under the supervision of individual foremen to harvest the timber. Usually we have isolated individuals and small crews working without immediate close supervision. To attempt to put such scattered individuals and small crews on a factory-type, clockpunching basis is just about impossible. To require small operators like myself to assume additional record keeping problems by eliminating the 12-man exemption would create undue, if not impossible, hardships on us small producers-and would likely force many of us out of business.

I would like now, if I may, to discuss the proposed increase in the minimum wage from $1 per hour to $1.25 per hour. This is important