Mr. LANDRUM. No questions.

I would say to the gentleman I would like to see him preach that sermon in person in every community in this country. We might have a few people thinking a little more in terms of what the small-business man means to this country. I am very grateful for your statement. Mr. TOWER. Thank you, sir.

Chairman BARDEN. Mr. McConnell?

Mr. MCCONNELL. No questions.

Chairman BARDEN. I would like you to repeat the number of stations mentioned in the beginning and the size towns that have the radio station.

Mr. TOWER. I will be happy to do that. Twenty-seven hundred radio stations, standard broadcasting stations in the United States located in 1,208 cities and towns.

Of these stations, 2,700 stations, 47 percent in towns of less than 25,000 people; 27 percent in towns of less than 10,000 people; 8 percent in towns of less than 5,000 people.

We are talking here today about the small market broadcaster. Mr. LANDRUM. Indirectly about small business.

Mr. TOWER. We are talking about small business everywhere. Chairman BARDEN. Without small business you would not have small broadcasting stations.

Mr. TOWER. That is corect.

I might say this: We have talked about the service that the broadcaster gives to the listener. It might be interesting for you to know that on a typical Sunday night between 8 and 9 o'clock, 75 million Americans are watching their favorite program on television or listening to their favorite program on the radio.

We think that figure alone shows the significance and the impact of our industry. But beyond that we are very well aware of the important role that our industry plays in the moving of goods in this economy of ours.

We are proud of the fact that we are part of the advertising business. We think the advertising business, which is often somewhat maligned in some circles, does not get half the credit that is due it for the job that it does in keeping this economy going at full tilt.

We would like to say that we think the broadcasters play a substantial part in the work that advertising does to keep the goods coming off the shelves of the retailers and the services flowing from the many service industries that are found throughout the United States.

That is just as true in Jacksonville, N. C., or in Wallace, N. C., as in Washington, D. C., or New York City.

Chairman BARDEN. Have you ever been to Wallace?

Mr. TOWER. I have never been to Wallace, but my good friend, Lester Gould, has just bought a station in Wallace.

Chairman BARDEN. Well, he is a lucky man. I think that is one of the finest small towns I have ever known.

Mr. TOWER. I must be missing the point; is this

Chairman BARDEN. No; it is not missing the point. I have never lived in Wallace. I did lose a finger in Wallace one time. Mr. TOWER. Part of your family is there?

Chairman BARDEN. No; but Jacksonville is much closer to me. While Wallace has one Big industry, a cotton mill, and they have

wonderful relations there and a wonderful community, in Jacksonville it is virtually all small business.

The town I live in is one big industry there, but I have never heard its name mentioned on your radio station because they do not sell a dollar's worth of goods in that whole section. It goes somewhere else. Thank you very much.

Are there any questions?

Mr. McCONNELL. On page 1 you say:

The administration's proposal for an increase from 75 cents to 90 cents is at least based on a recognized theory of minimum-wage determination.

I never felt that we had any really recognized theory of determination, but I presume you mean a change in the cost-of-living index of the Bureau of Labor Statistics.

Mr. TOWER. Yes; that is what we are referring to.

I would agree with you that I think there is a deplorable, if you want, lack of real analytical material as to what this whole theory is about-what is minimum wage determination about?-and assuming that such analytical material were available, what does it mean in terms of changes in the minimum?

I know of no definitive work in that area, and yet here we are dealing, as has been said before this committee, with something that does not mean much to the big stations in our industry or the big employers in the steel industry, but it means a lot to the people in the small communities in the country.

Mr. McCONNELL. I have probably struggled with this problem as long as anyone in the Congress. I said when these hearings started, and it can be repeated again, I do not know of any actual good theory you can use in setting a minimum-wage rate. I never have.

Mr. TOWER. I suppose this statement is based on the fact that if 75 made sense back in 1949, then as increase comparable to the general level of the economy is in order at this point. I agree that is hardly a detailed and definitive theory of minimum-wage legislation.

Mr. GWINN. I am just looking through your statement, Mr. Tower. I do not see whether your small stations are already above the 75 and approximately at 90 cents now, or whether they are not at that point. Mr. TOWER. That question is hard to answer in the way that it could be answered by somebody who is representing the typical small manufacturing industry. The typical small broadcaster employs from 6 to 12 people. There is a tremendous diversity in the wage structure as it affects those people.

In the small station in the small market there will be 2 or 3 people who will probably get some increase as a result of an increase to 90 cents, basically in the clerical group.

Announcers, technicians, are generally paid about 90 cents or

above.

The present 75-cent level, or the increase to 90 cents, in our judgment, from our investigations, will not cause a substantial dislocation, will not cause severe economic hardship to a significant number of small stations.

Beyond that, yes; you tend to get, whether it be a disemploying effect, or whether it would be just a severe economic hardship which would in some cases lead to turning in of the license, it is hard to say. But the average rate for a radio station does not have the same

meaning that the average rate does for a textile plant or for the gentleman who preceded me with his hard wood-plywood small plants. Mr. Gwinn, have I answered your question?

Mr. GWINN. Yes, you do not actually take a position except you say if you go beyond 90, then there is trouble.

Mr. TOWER. Then there is trouble, both as a matter of principle and as a matter of practice.

I do want to say, I do want to mention once again the 40-hour provision in the Fair Labor Standards Act is real tough for the small market broadcaster. It is his No. 1 problem.

May I take 1 minute and cite one case?

Chairman BARDEN. Yes.

Mr. TOWER. In the small market today, as in most businesses, selling is the big problem. The small station in the small market cannot attract the high-pressure salesman; there is not enough money in the market to attract him. Yet selling broadcasting is a specialized art.

In many small markets announcers or technicians in the last year or so have come to the station manager and said, "We would like to supplement our income by selling out of stretch." They come in, let us say at 6 in the morning and work 8 hours until they are off; they would like to sell in the afternoon to see if they can supplement their income. They are not exempt employees as announcers or technicians.

The person involved, the individual involved, would like to sell on a commission basis. If he can make a sale by putting in 2 hours of work, do it; fine. If he can't make a sale, too bad; he doesn't get anything. Well, that would seem reasonable. The broadcaster likes it himself. But, unfortunately, it is not as simple as that. When you run into the problem of trying to apply the overtime provisions and the regulations issued thereunder by the Administrator to this type of situation, it is so complex that I can hardly explain it to a small broadcaster and I am sure 99 percent of them cannot understand it once I have explained it.

Mr. GWINN. Do you think Congress could do that job?

Mr. TOWER. I think Congress cannot do that job. I think the problem is a question of whether this is the type of business that legitimately should be covered. I think it comes down to that.

Chairman BARDEN. As one who was pretty well wrapped up in the writing of this wage-hour law, I do not think there was much discussion given and that is how easy it is for a congressional committee dealing with something that affects the whole United States of America, to overlook a situation that just means the difference between getting along and not getting along.

Mr. TOWER. May I say to that, when this bill was passed, when the Fair Labor Standards Act was passed in 1937, most of the stations in the United States were in the larger markets. They were regional stations with large coverage.

Chairman BARDEN. That is right.

Mr. TOWER. Five or six hundred stations. Even after the war in 1946 there were only about 900 stations. There are now 2,700 stations. Where has the increase taken place? It has taken place in Jacksonville, N. C.; Wallace, N. C.; South Boston, Va., that sort of thing. The problems that those people have are entirely different from the problems in terms of work schedule, compensation, the problems that are faced by the big stations in the big market.

Chairman BARDEN. Have you finished?

Mr. TOWER. I have.

Chairman BARDEN. Thank you so much. I think you have rendered a real service.

Mr. TOWER. It has been a pleasure.

Chairman BARDEN. I would like to mention a little matter here. Sometime ago my very close personal friend, Frank Hancock, a former Member of Congress and a delightful fellow and a very able man, who was advocating the dollar and a quarter, and I believe he represented

Mr. KELLEY. I believe you are mistaken. It was a dollar.

Chairman BARDEN. Well, some of the big cotton mills, 12 of the bigger outfits, both mills in this country and abroad, he was a very able Member of Congress.

Having been kidded about his testimony to some extent there has been brought to my attention the extension of his remarks put in by him December 6, 1937, and I believe this letter is dated November 4. It was addressed by Mr. Hancock to one of his constituents and apparently Mr. Hancock thought so much of it that he put it in the Record as an extension of his remarks. It is rather interesting. I read from his statement:

In view of my convictions about the measureThat is the wage-hour bill

I wonder if it would not be the part of wisdom and statesmanship for Congress to confine itself at this time to legislate against the production of child labor in interstate commerce, leaving the question of minimum wages and maximum hours for adults to be dealt with by collective bargaining as provided in the Wagner Labor Relations Act.

However, if a minimum wage and maximum workweek must be established on a national basis the standards should be determined by law and not by decrease of a bureaucracy as now permitted in both mills.

Furthermore, the standards should be set at such a point as not unduly to unbalance economically those areas in which money wages are, because of peculiar circumstances, below average level.

Mr. KELLEY. He is a wise man. He is changing his mind.

Chairman BARDEN. He is still a gentleman and a very wise man, but in my point of view he was much wiser before the cotton mills hired him.

Mr. HUSSEY (chief clerk). Mr. Chairman, the staff of the committee, and a number of the members, have received communications pertaining to the issue we have under consideration. I now submit them to you for inclusion in the printed record.

Chairman BARDEN. Providing there are no objections, they will be included in the proceedings.

(The statements and letters referred to are as follows:)

Hon. GRAHAM BARDEN,

Chairman, Labor Committee,

KNOXVILLE TENN., June 27, 1955.

House of Representatives, Washington, D. C.:

We understand you are considering minimum-wage legislation in the interest of our 750 employees. We respectfully request that any minimum-wage legislation be made to apply to Puerto Rico and any other provinces outside the United States as same as on the mainland, otherwise unfair competition will result.

L. W. DUGAN, Secretary and Treasurer, Appalachian Mills Co.

Chairman GRAHAM BARDEN,

NEW YORK, N. Y., June 27, 1955.

House Labor Committee, Washington, D. C.:

Please do not endeavor to remove Puerto Rican minimum wage. Our minimum wage should apply equally to Puerto Rico otherwise mainland industries will have unfair competition.

PORTRAIT FROCKS, INC.

SAN JUAN, P. R., June 28, 1955.

Hon. GRAHAM BARDEN,

Chairman, Education and Labor Committee,

House Office Building, Washington, D. C.:

We wholeheartedly agree with the testimony of Gov. Muñoz Marín last week that the question of minimum wage for Puerto Rico should be studied and analyzed thoroughly by your committee before final action. If committee decides to discuss minimum-wage legislation for Puerto Rico we request an opportunity to testify. PUERTO RICO STEAMSHIP ASSOCIATION.

Hon. GRAHAM A. BARDEN,

CLUB ROTARIO DE RIO PIEDRAS,

Rio Piedras, P. R., June 21, 1955.

Chairman, Education and Labor Committee,

House of Representatives, Washington, D. C.

DEAR MR. BARDEN: Fully aware of its disastrous effect on Puerto Rican economy, the Rio Piedras Rotary Club wants to go on record by expressing its most energetic opposition to Senate bill 2168 amending the Fair Labor Standards Act, now under the consideration of the Education and Labor Committee over which you preside.

Puerto Rico, as you know, is an underdeveloped area with many very difficult problems to overcome. Our island unfortunately possesses almost no natural resources. There is a high cost of living, a dense population, and considerable chronic unemployment.

In an effort to improve the standard of living of our people we are vigorously pressing forward with a comprehensive industrialization program. Our objective is to create jobs.

We are in favor of decent wages for our workers but wages that can be paid by our young but growing industry.

Puerto Rico now has 125,000 unemployed; people who want to work and to use their God-given talents. These people, citizens of the United States of America, are frustrated and pessimistic about the future in view of such legislation. There will be many more if Senate bill 2168 passes. This is a big responsibility for Congress: to legislate these people out of their livelihood.

We respectfully request that the members of the honorable committee of which you are chairman visit Puerto Rico and study the special conditions here before making any recommendations to the House of Representatives.

Cordially yours,

NATHANIEL SOLTERO, Secretary.

NATIONAL KNITTED OUTERWEAR ASSOCIATION,
New York 16, N. Y., June 24, 1955.

Congressman GRAHAM BARDEN,

House of Representatives, Washington, D. C.

MY DEAR CONGRESSMAN: Many manufacturers in the knitted outwear industry, including some in the Southern States, are concerned about the possible aggravation of unfair competition from Puerto Rico through increase in the national minimum.

Regardless of whether there be an increase, or what the increase may be, it is important for Congress to recognize that the Administrator of the Fair Labor Standards Act has favored Puerto Rican employers with lower wage orders in some instances where no such authority was granted him under the law. The