professional character of the salesman is further underlined by the fact that, akin to engineers, doctors, and dentists, the demand for promising sales talent is insatiable. (g) The appropriation of American industry, at the present juncture, for sales training is phenomenal, and even then it is generally recognized that the dearth of promising salesmen is nothing short of disturbing. I note with interest the fact that both S. 770 and S. 3310 are not essentially different in purpose or effect from the bills introduced by Senator Lehman (S. 662) and Senator Murray (S. 2748). Neither of these latter two bills deem it necessary to eliminate outside salesmen from exempted categories of work. Indeed, I find it difficult to understand why Senator Murray proposes to eliminate such outside salesmen from the exemption of law in S. 770, but proposes to include them within the exemption in the bill be introduced later in the same session of Congress. It is quite clear that the evils sought to be remedied can be equally well remedied without the arbitrary declassification of outside salesmen. To date, no information has been unearthed which would indicate that outside salesmen, as such, need the safeguards of the Fair Labor Standards Act. As the study adverted to above has shown, they are very far from being a depressed economic group. Indeed, the cry that has gone up from most industrial concerns is for more persons learned in the art of salesmanship. A good salesman is at a premium and many firms compete actively in the search for such persons. Business experience will show that no employer dictates the number of hours which his salesman employs in contacting customers. This is all the more so in the wholesale tobacco distributive trade. The function of the outside salesman is not, and cannot ever be, abridged in time. He handles, in our industry, not only cigarettes, cigars, pipes, and tobacco products, but also pens, pencils, wallets, hosiery, watch bands, toys, cosmetics, and a myriad of like commodities. Our industry's salesmen are generally compensated by a commission, or a combination of salary plus commission. The test of a salesman is his ability or willingness to sell. The training of a salesman is the function and responsibility of management, and it entails a perpetual investment of more than $36,000 for each such salesman on the road. The saleman joins with management by contributing his ability to management's investment of time and capital. This unique combination he then places before his firm's customers. He alone is largely the judge of the number of hours to spend with each customer; the type of approach most likely to yield financial results for himself and his firm. He alone chiefly determines the scope and extent of his earnings. His ability to increase his earnings is limited only by his individual ambition and industriousness. Quite obviously, therefore, to fix maximum hours and minimum wages for the outside salesman is tantamout to degenerating his professional status into that of a mere order taker. Who can measure the salesman's selling time when he is on the road and, when measured, who can check it? The time required to travel a route is always a variable. The salesman's own manner of dealing with customers has a marked influence on the time element. Should a salesman who takes 2 hours to sell a particular account be compensated eightfold better than a salesman who sells the same account in 15 minutes? Sales work is so ungovernable by any known measure of occupational time or wage standards that its inclusion under provisions of the Fair Labor Standards Act is not only impractical, but unthinkable. For all of these reasons, I must once again strenuously express the opposition of the National Association of Tobacco Distributors to the inclusion of outside salesmen within the purview of covered employees under the law. Such inclusion serves no useful purpose in that there is no evil here to be remedied. To the contrary: It would ultimately result in an overall reduction of outside salesmen's earnings and a measurable loss of sales volume to the employing firm, all to the deteriment both of employer and employee. We accordingly take our stand in undeviating opposition to S. 770 and S. 3310 insofar as these bills attempt to devaluate the status of outside salesmen by removing them from the exemption provisions of section 13 (a) of the Fair Labor Standards Act. FLORIDA STATE CHAMBER OF COMMERCE, Senators LISTER HILL, JAMES E. MURRAY, MATTHEW M. NEELY, PAUL H. DOUGLAS, HERBERT H. LEHMAN, JOHN F. KENNEDY, PAT MCNAMARA, H. ALEXANDER SMITH, IRVING M. IVES, WILLIAM A. PURTELL, BARRY GOLDWATER, GEORGE H. BENDER, and GORDON ALLOTT MINIMUM WAGE COVERAGE FOR RETAIL AND SERVICE EMPLOYEES In our declaration of policy for 1955, we expressed our opposition in principle to a minimum wage fixed by Federal law as part and parcel of a planned economy. In 1956, we also opposed any further extension of minimum wage coverage to those businesses presently exempt from minimum wage law provisions. We wish to reiterate our position in this respect. It is understood that consideration is to be given in the current session to extend coverage of the recently adjusted hourly minimum to employees of other business categories not now subject to the provisions of the law. We are unalterably opposed to including employees of retailing and servicing industries under the minimum wage law, as these operations cannot properly be construed as interstate commerce, nor in any sense competitive as between various locations in several States. Furthermore, the minimum wage law was primarily designed for hourly wage workers, based on a straight 40-hour week; whereas, this would be the exception rather than the rule in retail and service establishments, where their pay is often based on bonuses, commissions, or in profit sharing. Work hours in such establishments also are irregular and subject to customer service needs, and cannot be adjusted to the 40-hour week provision. To attempt to cover these varying conditions by a minimum wage law would be virtually impossible. It is respectfully requested, therefore, that you oppose legislation that would propose to extend provisions of the minimum wage law to employees of retail and service establishments. Sincerely yours, HAROLD COLEE, Executive Vice President. STATEMENT ON BEHALF OF THE NATIONAL TIRE DEALERS AND RETREADERS ASSOCIATION, INC., WITH RESPECT TO AMENDMENTS TO THE FAIR LABOR STANDARDS ACT This statement is submitted by the National Tire Dealers and Retreaders Association, Inc., the only national trade association representing independent tire dealers and tire retreaders in this country. The association has approximately 2,500 members, all of whom are independent merchants, being in no way connected with tire manufacturers, chain stores, oil companies or other large distributors of tires or accessories. There are members in each of the 48 States, the District of Columbia, and the Territories of the United States. There are before the committee a number of bills seeking to amend various provisions of the Fair Labor Standards Act. A number of the bills would amend section 13 (29 U. S. C. sec. 213) which sets forth those activities and industries which are exempt from the provisions of the act. The independent tire dealers of this country are small businessmen. They are engaged in a highly competitive industry at the retail level, an industry which has reached an acute stage of competition for the current market. The share of the market serviced by independent tire dealers has been sharply diminished by a number of circumstances including the handling of large accounts by tire manufacturers direct, distribution of tires through major oil company service station outlets (this practice is now the subject of a complaint by the Federal Trade Commission) and competition from large interstate chain organizations. Independent tire dealers for the most part sell to individual customers as well as through some gasoline service stations, and a number of the dealers perform retreading services on customer's tires and in some cases on used tires for resale. Administration spokesmen who testified before this committee last year stated that it was not the intent of the amendments to the retail exemption to expand the coverage of the Fair Labor Standards Act to include small local merchants. Secretary Mitchell said, "The Federal Government should not reg ulate those enterprises which are essentially local in character. should be left to the States." This field Since the labor situation varies in each region of the country and since small-business men are faced with what has been a serious struggle for existence, Secretary Mitchell's comments should be a guide to the committee in considering this new legislation. The demise of small business has been predicted by economists and business experts and recently in the March 4 issue of the St. Louis Post-Dispatch, James R. Hoffa of the Teamsters union said, "The future of labor management relations is big labor and big business, for there is no room for the small business or the small union." He continued, "The small guy is going out of businessunion or no union." We take sharp issue with Mr. Hoffa on this statement. However, we earnestly request that this committee do nothing to aid other forces in smothering small business. Since the inception of the Fair Labor Standards Act, it has been clearly the intent of Congress to exempt certain categories of employees which were defined in the original act as employees in a local retailing capacity, outside salesmen, and employees engaged in retail or service establishments, the greater part of whose selling or servicing is in intrastate commerce. In the years following the enactment of this law in 1938, the administrator issued a series of sweeping interpretations, many of which were upheld by the courts which had the effect of negating the exemption for employees in local retail establishments. Therefore, in 1949, section 13 of the act was amended for the primary purpose of reestablishing the intended exemption for employees in local retail establishments and to define the conditions under which the exemption would apply. The clarification through these amendments was necessary, the Congress stated, to obviate the sweeping rulings of the administrator which were not consistent with the congressional intent in framing the original section 13 (H. Rept. 1543, 81st Cong., 1st sess.). The 1949 amendments spelled out the conditions under which the retail exemption was to be applicable. These amendments were based upon 11 years of experience under the act and were the result of careful inquiry by the Congress. A retail establishment was defined as one, 75 percent of whose annual dollar volume of sale was not for resale. This permitted the independent tire dealer to occasionally supply a local service station with tires and to service small commercial customers which sales have been universally regarded in the tire industry as retail sales. Subdivision 4 of section 13 as amended in 1949 also recognized that some independent tire dealers who maintained retreading equipment would be entitled to an exemption if 85 percent of their sales of retreaded tires were made within the State. The logic of these two provisions was obvious. The burden upon the small independent tire dealer of compliance with the Fair Labor Standards Act goes far beyond payment of the minimum wage. The time consuming and costly burden of record keeping required by the act is beyond the facilities of a small tire dealer. Outside salesmen who work on straight commission, in many cases on a part-time basis, could not be maintained if a minimum hourly wage was required. If the present exemption for outside salesmen is eliminated, most outside salesmen for independent tire dealers will have their employment terminated. It would, therefore, be no service to persons engaged as outside salesmen to include them within the scope of the act. If the subcommittee should recommend the modification of section 13 as proposed in some of the bills by eliminating the present provisions of subdivisions 2 and 4 of the act and in lieu thereof limiting the exemption to employers having less than 5 retail establishments and having a total annual volume of sales of less than $500,000, every tire dealer, no matter how small and no matter how local in character, would be subject to the act. This is so because a single sale to a gasoline station for resale to a customer of the station would probably result in the loss of that establishment's classification as a retail establishment. In addition, a small dealer who retreaded a used tire would undoubtedly lose his identification as a retail establishment if present subdivision 4 of section 13 (a) is eliminated. Certainly, this is not the intent of the Congress. Such a result would only hasten the prediction made by Mr. Hoffa that the small-business man will be leaving the American scene. We submit, therefore, that the present provisions of section 13 be maintained or in the alternative that the definitions of section 13 (a) (2) and (4) be retained along with any limitation that the committee may place on the number of establishments or dollar value of gross sales. We also submit that any artificial classification by number of establishments or dollar value of gross sales is unrealistic and many small-business men will not know until the end of the calendar year whether they qualify for the exemption or not. The 1949 amendments have had only a limited opportunity to function. The administrator has not even issued regulations defining and interpreting the effect of section 13 in the retail tire industry. Amendments to this section are, therefore, premature until the administrator and the Congress have had an opportunity to observe the success or failure of the 1949 amendments after a reasonable period of operation. We earnestly submit, therefore, that the committee maintain the present provisions of section 13 of the act or recommend only such amendment as will maintain the present provisions of section 13 (a) (2) and (4) to prevent an inadvertently broader expansion of the act than the Congress intends. STATEMENT OF ELI A. WESTON, COUNSEL FOR IDAHO GROWER-SHIPPERS ASSOCIATION, INC., BOISE, IDAHO My name is Eli A. Weston, of Boise, Idaho, attorney for the Idaho GrowerShippers Association, Inc., an association composed of grower-shippers representing 90 to 95 percent of all of the shippers in the State of Idaho. The membership of the Idaho Grower-Shippers Association is composed of growers and shippers of fresh fruits and vegetables, including potatoes, onions, lettuce, carrots, apples, prunes, peaches, pears, and other fruits and vegetables. My office is 518 Idaho Building, Boise, Idaho. Geographically our members live in the southern half of Idaho with most of the fruit, such as prunes, peaches, apricots, etc., raised in the western and south central part of the State, with onions, carrots, lettuce, peas and beans raised mostly in the western and south central section, and potatoes, early variety, grown in western Idaho and the later varieties grown in south central and eastern Idaho. The principal crop is, of course, potatoes, with the State of Idaho shipping between 50,000 to 60,000 cars per year. Because of the seasonal nature of the harvesting and packing of potatoes, and because of the limited labor supply in the State of Idaho, it is essential that the industry have exemptions from the strict requirements of the Fair Labor Standards Act. Appreciating this necessity, schools are let out and sometimes businesses declare holidays for the purpose of getting the crop in, particularly in the fall where frosts and other dangers are imminent. The handling of the potato crop in Idaho varies with the different growing sections, but in general follows two well-established methods. In eastern Idaho the prevailing method is to purchase the crop from the grower on a pack-out basis. Under this method the grower, and sometimes the grower and the shipper together, assume the responsibility of harvesting the crop, placing it either in the grower's warehouse on his farm or in the shipper's warehouse in the town, with the agreement and understanding that when the potatoes are finally packed and shipped the grower will be paid on the basis of so much per hundredweight for No. 1's or No. 2's, with the culls belonging in most instances to the grower to be disposed of as he sees fit. The second method, and one most commonly adopted, is to purchase the potatoes from the grower, U. S. Grade No. 1 made. Under this method the grower retains control of the packing of the potatoes and ownership in them until the grade is made and approved by the inspector from the Department of Agriculture. Under this method the farmer sometimes recruits his own crew and sometimes specifies the crew he wants. The farmers at times pay for the labor of packing. A great deal of the packing is done in the farmers' cellars, perhaps 90 percent of the first run, or roughing operation. The ownership of the potatoes remains with the grower at all times, even after shipment and up to the time of sale. Under this method of handling, very often employees working on the farms assist the crews in sorting and sacking potatoes and very often the same employees that planted, cultivated, and dug the potatoes assist in sorting the same. Under this system the farmer has control over the method or manner in which the potatoes are sorted and sacked, even though they may in some instances be sorted and sacked in the packer's warehouse. We believe the following incidents are pertinent to the issue showing how we operate in Idaho, 1. A good percent of the packers and growers own and operate their own farms upon which they grow potatoes that are packed along with potatoes purchased from other growers. 2. Most of the potatoes are subjected to a preliminary "roughing" operation in the growers' cellars and on the farms. 3. A large number of the employees engaged in sorting and packing the potatoes are farmboys living in the community, returning to the farms when the packing season is over. 4. The potatoes are not changed in form and the operation of sacking and sorting is the usual simple operation performed by the farmer in preparing his product for market. 5. Control over the method of packing the potatoes remains with the growers. 6. Ownership in the potatoes remains with the grower until the grade is made. 7. In some instances the cost of labor in packing is borne by the grower and sometimes the crew sorting and sacking the potatoes may move from farm to farm without working in the potato shed in town. 8. All of the packing is done within a very small agricultural area of production adjacent to the farms. Any attempt to deprive the growers and shippers in the Idaho area of their exemption under 7 (c) and 7 (b) (3) of the act or 13 (a) (10) “area of production" would have a serious impact on the industry itself, first because of the high transportation costs now threatening the industry, second because of the limited supply of seasonal labor, and third because of the threatened and actual increase in the cost of living which would result if there were any further increases in the costs of handling and packing fresh fruits and vegetables. The arguments advanced at the time the Fair Labor Standards Act was passed still apply to operations closely related to the farmer. Any increased cost of packing, processing, or preparing the agricultural commodity for market, especially in the rural areas, would result in reducing the price returns to the farmer. This was the most important reason for the exemptions although there was the added difficulty of applying the minimum and regular hourly rate of wages to the processing and handling of seasonal and perishable products. The farmer and grower must compete with industry in obtaining labor. The grower of fresh fruits and vegetables, like the rest of the farmers, is caught in a cost-price squeeze. Costs are already too high and as laudable as the social and other advantages of this law are, if these exemptions are taken from the growers and shippers of fresh fruits and vegetables, the impact on the farmer and automatically on food costs would be terrific. While we feel that the agricultural industry in Idaho may be a small segment of the total economy of the United States, we believe that Congress should protect the farmers, growers, and shippers of these essential farm products. AREA OF PRODUCTION In addition to the exemptions afforded the growers and shippers of fresh fruits and vegetables, we have section 13 (a) (10), commonly referred to as the "area of production" exemption. Up to the time of the recent Supreme Court decision (Budd v. Mitchell) the Supreme Court has never passed on the validity of the definition promulgated by the administrator, and even though the Supreme Court has ruled that the present definition is legal, it is not constructive and is not a proper definition or suitable for the industry. Our association has on numerous occasions suggested that the definition of the "area of production" should follow the plain and clear intent of the act and define the "area of production" as being an area customarily and ordinarily considered by the growers and shippers of the particular product in mind. We feel that this area is susceptible to regularly defined confines and in each case is well known and established by the industry growing and shipping the product in question. Various agricultural groups have discussed and are favorable to an amendment which we understand was prepared but not considered before adjournment and which we feel has considerable merit and should receive your consideration. It reads as follows: "Any individual employed within the area of production (defined for any agricultural or horticultural commodity, including livestock and poultry, as all of every county in which such commodity is produced) engaged in, about or in connection with the preparation for market or handling of any agricultural or horticultural commodity, including but not limited to the handling, packing, stor |