My name is Medford Raney of Fordyce, Ark. I have requested this time to appear before you in behalf of the Pulpwood Producers of Arkansas.

I am a small businessman, gainfully employed in the production of pulpwood. I feel that I represent both the desires and objections of hundreds of small business people now engaged in the production of pulpwood.

I have come before you in opposition to that part of Senate bill 1046 which will abolish the 12-man exemption law, and raise the minimum wage from $1 per hour to $1.25 per hour, and am in hopes that I may be able to convey to you some of the adverse effects that part of Senate bill 1046 would have on the small producers in this area, and also some of the benefits we have received by the existence of the 12-man exemption law.

First, one of the benefits Arkansas has received by the existence of this exemption could be described in this manner:

Only a few years ago, little or no consideration was given to the future of our timber supply in this particular location. Our timber was being harvested on a clear-cut basis which included all merchantable timber. These cutting practices would have rapidly exhausted our timber supply.

As wood products are our major source of income, we have gone through a period or readjustment, and have made great achievement in the field of forestry. We have instituted forestry programs of selective cutting to the extent that it affords ample supply of forest products to the oncoming generations. [Photograph No. 1-An exceptionally good stand of pulp and pole size timber being selectively cut for pulpwood.]

Also, under the existence of the Fair Labor Standards Act, farmers and small landowners are able to reap benefits from their timber. The farmer, small producers and other part-time operators are able to produce wood from these small tracts of privately owned lands without the added expense of keeping costly records and employing timekeepers and foremen to keep accurate time records, thus giving the farmer and small landowner great encouragement to follow planned forestry programs of selectively cutting their timber, and also planting seedlings on their unused portions of land. This is beneficial to this country, as a large percent of wood products is supplied by these men. Seventyfour percent of the timberland in the Southwestern States is owned by the small private landowner.

I would like to use my job as an example of benefits under the 12-man exemption law. My job is considered one of the medium-sized operations in this area of Arkansas. I have two caterpillars, two trucks, two powersaws, and a crew of 10 men. My timber supply comes from one of the larger landowners, known as Fordyce Lumber Co. All of their cutting is done on a selective cutting basis. First, the forestry department goes into the area to be harvested and marks the trees to be cut for logs. This timber is then cut by small independent operators, and delivered to the mill or to the concentration yard, at a preset contract price per 1,000 feet of log scale. Then the forestry department returns to this area again, and this time marks the broken topped, crooked trees, and trees to be thinned in the denser stands of pulpwood size trees, which is usually from 6 to 10 inches in diameter. Then comes my turn. My contract requires the salvaging of the treetops left from the log trees, and also the cutting and removal of small trees marked for pulpwood, which provides the approximate amount of 1 cord per acre, or less in some cases. This means a very small amount of timber to be taken from a large number of acres to provide me with each day's production of wood. These cutting practices prevent the concentration of large crews of men in any given area, thus casuing my employees to be scattered over a large area of land; at times, 2 or 3 men on each designated 40 acres of land. Many times my crew of 10 men is scattered over an area of as much as 2 or 3 miles.

The production of this wood is made possible by the 12-man exemption law. This law allows the small independent businessman to work without a foreman or timekeeper with each small group. Working in this manner affords me the time to go from one group to another, and supervise the manner in which the work is done, instead of spending all my time trying to keep excessive records and daily reports.

SOME OF THE ADVERSE EFFECTS

If the 12-man exemption law was abolished, it would mean that the greater part of these methods of production would have to be discontinued. I, along with hundreds of small operators such as myself, would be forced out of business because we could not concentrate our crew in any one given area. I would be forced to employ one or more timekeepers and additional help to supervise this production of wood, and to keep costly records, which a working employer is not qualified to do.

Also, the farmer and part-time producer from which comes a great portion of wood supplied to the pulpwood dealers, would be forced to let their timber remain standing because without the 12-man exemption law, they would be unable to harvest their timber in compliance with the law, thereby depriving them of the much-needed right to harvest their timber at their convenience, to supplement their income as farmers or part-time producers of wood. Too, this would greatly hinder the regular supply of wood so necessary to the dealers and to the mills.

MINIMUM WAGE INCREASE

Gentlemen, I would at this point like to view some of the adverse effects of a minimum wage raise. As the law now stands, we are able to set our pay rate to each employee according to his ability to perform his daily required duties. Much of the labor force available to us in this location consists of older men, and handicapped men who find it impossible to find employment in factories, mills and other types of employment where a daily routine of work is demanded. [Photograph No. 2-Arthur Daniels, age between 70 and 80 years.]

I have on my job two aged men. [Photograph No. 3-Arthur Jimmerson.] One of these men is between 70 and 80 years of age, and the other is between 60 and 70. The duties of these two men are as shown in the picture. They merely measure the length of wood to be cut. At the present rate of $1 per hour, which I am now paying these two men, I am able to give them employment. It is very true that these two men in particular, along with hundreds of others in this type of work, would be unable to perform with maximum efficiency in any type of woods work. [Photograph No. 4-Arthur Daniels, resting.]

If the minimum wage should be increased 25 percent, it would certainly make it impossible for me, and the others like me, to employ these men. This would automatically throw them on the mercy of the welfare department.

The other members of my crew consist of younger and more able-bodied men. These men are able to perform with maximum efficiency. Therefore, they receive pay on a per-cord basis, which allows them to earn wages according to their abilities. The powersaw operators, as shown in pictures Nos. 5 and 6, perform duties of felling, limbing, and bucking the timber. These men are able to perform duties that far exceed that of the older and handicapped; therefore, they earn an average wage of about $1.50 per hour. This gives them the incentive to use their physical ability and added skill in the performance of each day's work. The men who perform the task of loading, as shown in the picture No. 7, receive pay rates on a per-cord or piecework basis. Thus, they are allowed to earn wages according to their skill and ability. Their duties are to take the caterpillars and pull the pallets through the wooded areas, and to pick up the wood in the manner shown in picture No. 8. Such duties require men of skill and physical strength, and therefore, they are worthy of a higher rate of pay than the man who is only able to measure the wood lengths. These men would certainly not be willing to work at the same rate of pay as that of the common labor class.

If the minimum wage should be raised to $1.25 per hour, this skilled man would be just as worthy of a raise, percentagewise, as would the lower class of labor, and would seek other employment unless he was recognized in a like manner. This would create for the small businessman two major problems.

1. There would certainly be a shortage of skilled laborers, and many of the older and handicapped men would be on the unemployment rolls.

2. It would be impossible for the small businessman to withstand this 25 percent wage increase, due to the fact that we now operate on a bare minimum of profit. As you well know, no business can be operated without showing at least a small margin of profit. Therefore, the added round of wage increase to all our employees, along with the additional timekeepers and supervisory help, we would be forced to employ if the 12-man exemption law is abolished, would completely wipe out our small margin of profit. This would force many of the small businessmen, such as myself, out of business. We do not believe that a raise in wood prices would be a solution to this problem. During the last few years, we have had a few increases in the price of wood. Each time we received an increase, the cost of our equipment, such as powersaws, trucks, and maintenance, ate up the increase.

Shown in pictures Nos. 9 and 10 are two trucks used to move my production from the woods.

As an independent small businessman, I urge that amendments be injected into the proposed bill, S. 1046, to provide for the continuation of the 12-man exemption, and the retention of the $1 per hour minimum wage.

Thank you.

Mr. WALKER. I am J. A. Walker, from Camden, Ark. I own and operate a small sawmill which is commonly known as a groundhog mill. Mr. Raney here is a pulpwood producer from Fordyce, Ark.

There were some statements made at the first part of the hearings by one of the witnesses, Mr. Hartung. He was supposed to be from Arkansas and he stated that the biggest percentage of stumping was done by big companies. I buy 90 percent of my stumping from small operators, small landowners.

And he also quoted prices of powersaws at around $500, and I have never paid over $350 for one. I don't know what his purpose was of quoting excessive prices on equipment.

He was as far wrong on powersaw chains as he was on the price of powersaws. He quoted $12 and they cost around $20. So I don't know where they got their figures, but they are absolutely not right in my vicinity.

In my statement I have some comparative figures of crossties in 1955 and 1959 that are there with the pictures, and I would like you to compare them. Since we don't have too much time, I won't try to read my statement, but I would like to have both of them in the record, and if there are any questions we can both answer, why we will be glad to. Senator CLARK. The statements are already in the record. Let me explain to you—it may not have been entirely clear to you--I am here pinch hitting because various other Senators were unable to be here. I am not a member of the subcommittee.

While I am very much interested in this legislation and will pass on it when it comes to the full committee, Senator Cooper is not on the subcommittee either, we just did not want you gentlemen to be under the illusion that you were talking to the gentlemen who had the primary responsibility here. We are happy to get your statements in the record.

Senator COOPER. We are on the full committee though.

Senator CLARK. We are on the committee and we are happy to hear If you have anything more to say, we will be glad to hear you, but if not, thank you very much. We are pleased to have had you

you.

with us.

Mr. WALKER. Thank you.

Senator CLARK. The next witness is Mr. Harvey R. Brown, executive director of the Georgia Forestry Association, Inc.

STATEMENT OF HARVEY R. BROWN, EXECUTIVE DIRECTOR, GEORGIA FORESTRY ASSOCIATION, INC.; ACCOMPANIED BY JAMES A. WILLIAMSON, DARIEN, GA., JEFF T. STRAHAN, PORT WENTWORTH, GA., AND PAUL L. HARWELL, CLAXTON, GA.

Mr. BROWN. I have three other gentlemen with me whom I would like to have up here.

Senator CLARK. I would like to say for the record our good friend, Senator Talmadge, is very sorry he could not be here to introduce you, but he had another engagement that makes it impossible for him to be here and asks that his good wishes be conveyed to all of you.

Mr. BROWN. We are very proud of our junior Senator as well as our senior Senator. Our junior Senator is a little more of a forester. I have a printed statement.

Senator CLARK. That will be introduced in the record.

Mr. BROWN. I have three statements from these gentlemen.

Senator CLARK. They will also appear in the record at this part of the hearing.

(The statements referred to follow :)

STATEMENT OF HARVEY R. BROWN, EXECUTIVE DIRECTOR, GEORGIA FORESTRY ASSOCIATION, INC.

Thank you for the opportunity of appearing in behalf of the small independent forestry operators of Georgia. For over a half century the Georgia Forestry Association has been actively engaged in promoting the betterment of forestry in our State. It has been a rough road, but one of progress and great economic importance to our State.

We, in Georgia, under the provisions of this proposed bill. S. 1046, will again be fighting for survival in our small independent forestry operations. Our Georgia history has been one of fighting for survival. We have been through war, fire, pestilence, and practically every other conceivable natural and manmade hindrance to progress over the past century. But each time the rugged determination of a people of the soil has enabled us to climb back after a long and arduous fight.

A State founded and built on agrarian principles of an individual being independent and possessing the right to pursue his own way of life in harmony and peace has gone through an industrial revolution in the last 30 years. This has brought many problems as well as great economic progress to our State. From the cotton hoe to machines of industry, from mule and ax to truck and powersaw is a great step.

Forestry in our State has changed much since the virgin forests were home to the Indians. The cut-out and move-off tactics of early lumber operations has given way to an annual crop production from our forestland that leads the Nation, just as we have been getting annual harvests from row-crop agriculture in the past.

Today we have thousand of people dependent upon forestry for a living. If the producer of raw materials in the woods falls short, the worker in the mill and factory become idle. If expanding markets cease and demand of wood products, paper and cellulose fall off, the man in the woods becomes idle. are dependent on each other.

We

Our forestry operations in Georgia and the South are vastly different from other sections of the country. You who are acquainted with large forestry camp operations of the West cannot conceive the small portable operations of our region, and realize how dependent we are on our many independent logging operations in lumber, pulpwood, and other wood products. Our whole raw material supply is dependent upon thousands of small forest holdings. Small portable operations and independent contractors make up the raw material production units. You cannot imagine the impact that passage of Senate bill 1046 will have on our independent forestry operators of Georgia and the South. Passage of this legislation will mean tremendous hardships and eliminate many of these small operators.

Our small independent contractors have no facilities to keep the many confusing records that will be required of them. They cannot afford to hire the accountants and bookkeepers necessary for all the records required of larger operations. These small independent operators work with a small outlay of capital, and cannot meet the demands you suggest in S. 1046, changing the present small forestry exemption. You will be depriving them of their right to work and earn a living unencumbered by government edict and control. When government tells an individual what he can do, when he can do it, how he can do it, and how much he shall get for doing it, it becomes the rankest form of socialism. That is what you will be doing to the small independent forest operators of this Nation under S. 1046.

We believe that our system of piecework production in the woods of the South, of so much per thousand board feet of sawlogs and per cord of pulpwood affords a man of honest intent to make more than the present minimum wage. He has an incentive to produce. A man making less than the minimum wage now in the woods cannot be legislated into a good worker by requiring his employer by law to pay him a minimum of $1, or the proposed $1.25 minimum wage. His personal requirements and initiative just will not elevate him above his desires for anything more than the bare necessities. While, on the other hand, a man of initiative can do well if uninhibited by laws that restrict and demand unnecessarily. You cannot legislate good workers. You cannot plan time clock, 8-hour-day operations in the woods. Factory type regimented workdays have no place in our southern woods, and can contribute nothing except the elimination of the small independent forestry operation from our forest scene. conservatively estimate that well over 15,000 independent free-enterprise workers in Georgia will be dealt a serious blow, and become victims if this legislation is passed. They will fall by the way, and our forestry operations will of necessity have to become highly mechanized and costly operations. The small independent operator will be a victim of Government redtape and reports.

Our changing economy, from row cropping to industry and forestry, has been a big step of progress, for many of our forestry woods workers were former agricultural workers working on shares, but who are now independent businessmen. The transition has produced a new industrial revolution for prospertiy in the South, and by this one legislative act, you will virtually destroy 30 prosperous years of progress.

Our Georgia naval stores production, once the world's greatest, has begun to decline because of changing markets, high production costs, and competitive demands for the same basic raw forestry product, the tree.

Our lumber production in Georgia, once the pride of the State, has declined due to competitive markets, inequitable freight rates, the rapidly rising cost of production, small margin of profit, and the competitive demands for the same trees. Once there were thousands of sawmills in Georgia, meeting the need of national defense in the time of emergency. Now this has dwindled down to just a few hundred. Increased minimum wage, raising the cost of operations has been a contributing factor to this decline. Costly machine installations, competition of other building materials, lack of large sawtimber trees, competition from other areas, high labor costs, increased taxation, all have taken a heavy toll from our lumber industry. Further increases of labor costs and production cost will close down more lumber mills.

The pulpwood industry has been the salvation of forest economy in our State. The construction of 10 pulp and paper mills has fostered an economic growth second to none in the country. This has produced thousands of jobs in the factory. thousands of jobs in the woods, and millions of dollars into the trade channels of our State. You would choke off the life blood of our forest enterprise, the small producers, by legislating an unworkable, detrimental law to remove the forestry exemption from the present wage and hour law. The passage of S. 1046 in its present form cannot produce anything but chaotic confusion and ruin in our southern forestry operations. We urgently and respectfully request that the present 12-man forestry exemption be left as it now stands, untampered with, and that the minimum wage remain at $1 per hour. Any change will produce nothing but trouble for our southern forestry. A change in the minimum wage will produce only another inflationary trend. Why more take-home money when you are only fooling yourself into a false, inflated economy, and have to pay out more for the goods and services you require for livelihood. There will be no end to the inflationary spiral.