(2) If a freezer is operated, monthly reports showing the number of pounds of fish and shellfish frozen during the preceding month and the stocks of each, reported by individual species, held at the end of such month. (3) Monthly reports showing for each species of fish received by the Lessee at American Samoa, the name and license number of the vessel from which such fish were landed, quantities of fish, date of receipt of such fish, kind of gear employed in catching the fish and place or places of origin. (4) Annual reports stating the uumber of persons employed at the fish cannery in American Samoa during the period of peak employment, the man-years of employment, the total wages and salaries paid, and stating separately the number of foreign nationals, their nationalities and positions. (5) Annual reports shall be submitted not more than 30 days after the anniversary of the commencement of the lease term, showing the gross income from the business conducted under the lease for the preceding year, the different items of such income and the amount of these items. The Governor of American Samoa shall have the right to verify such reports by examination of the books, accounts, and records of the Lessee. The information contained in such reports shall be labeled "Confidential," shall be considered confidential, and shall not be disclosed to the public. XIV. GENERAL PROVISIONS (1) It is understood that a waiver by the Government of performance by the Lessee of any of the terms, covenants, or conditions of this lease, shall not be construed as a waiver of the future performance of any such terms, covenants, or conditions, nor shall the failure of the Government to insist upon such performance by the Lessee be construed as a waiver thereof. (2) The Lessee warrants that it has not employed any person to solicit or obtain this lease upon any agreement for commission, percentage, brokerage, or contingent fee. Breach of this warranty shall constitute a default on the part of the Lessee, the penalty for which may be the immediate cancellation of this lease. This warranty shall not apply to commissions paid by contractors upon contracts secured through bona fide established commercial agencies maintained by the Lessee for the purpose of obtaining business. (3) Except as otherwise specifically provided herein, all disputes concerning questions of fact arising under this lease, and all matters which are subject to the mutual agreement of the parties but upon which the parties may be unable to agree, shall be decided by the Governor with a right of appeal within thirty (30) days to the Secretary of the Interior whose decision shall be final and conclusive upon the parties hereto, but shall not prevent the Lessee from the exercise of any right to resort to a court of law. The existence or pendency of any dispute shall not excuse the Lessee from the continued performance of its obligations hereunder. (4) No Member of or Delegate to Congress or Resident Commissioner shall be admitted to any share or part of this lease, or to any benefit to arise therefrom, but this provision shall not be construed to extend to this agreement if made with a corporation for its general benefit. (5) Any written notice to the Lessee hereunder shall be addressed to the Lessee at its offices in Tutuila, American Samoa, and any such notice to the Government of American Samoa hereunder shall be addressed to the Governor at Pago Pago, Tutuila, American Samoa. (6) No notices, demands, determinations, consents, or approvals under this lease shall be of any effect unless in writing. XV. SURVIVAL This lease shall be binding upon the Lessee, its successors and assigns. XVI. AMENDMENT This lease may be amended without further consideration at any time during the lease term by mutual agreement of the parties hereto. XVII. IDENTITY OF LESSEE The company, corporation, or partnership signing this lease hereby certifies that seventy-five percent (75%) or more of its capital is owned by individuals who are United States citizens or nationals, and that at no time during 73588-56-pt. 1—3 the term of this lease will more than twenty-five percent (25%) of the capital be owned by individuals who are not United States citizens or nationals. XVIII. DEFINITION Wherever the term "Governor of American Samoa" is used in this agree ment, it shall also mean his duly authorized representative. IN WITNESS WHEREOF, the Government and the Lessee have caused this instrument to be duly executed by their proper officers under authority duly given, as of the day and year first above written. of on behalf of the said Corporation, was then__. said Corporation; that said lease was duly signed for and in behalf of said Corporation by authority of its governing body, and it within the scope of its corporate powers. [Seal] My commission expires. Notary Public. BINGHAM, COLLINS, PORTER & KISTLER, Hon. JAMES ROOSEVELT, House of Representatives, Washington, D. C. Dear Mr. CONGRESSMAN: In accordance with your request, Mr. William D Moore, Jr., of Van Camp Sea Food Co., Inc., and I have prepared the attached memorandum concerning the company's operations. We trust this gives you the full information you desire. If there are any further questions, we will be glad to attempt to get the answers for you. Please be assured of our deepest appreciation of your cooperation in this matter which we feel is so urgent and timely. Sincerely yours, (The information referred to is as follows:) LINTON M. COLLINS. MEMORANDUM ON OPERATIONS OF VAN CAMP SEA FOOD CO., INC., Van Camp Sea Food Co., Inc., is a California corporation with plants located' at Terminal Island, Calif., San Diego, Calif., Astoria, Oreg., and Pago Pago, American Samoa. Its chief business is processing and packing tunafish. Its products are sold under the trademark names of "Chicken of the Sea" and "White Star." Van Camp was awarded a lease to operate a fish cannery owned by the Government and located at Pago Pago, American Samoa, pursuant to invitations to bid issued by the United States Department of Interior in 1953. This invitation had national circulation. The lease granted Van Camp is not an exclusive franchise. No competitor is prohibited from operating a cannery in Samoa. This lease does not involve a subsidy by the Government. All expenses pursuant to activating this plant have been borne by the company. Van Camp commenced operations in late December 1953. There were, at this time, real uncertainties as to the commercial supply of fish. Their predecessor's operation, involving a substantial investment, failed for lack of this necessary supply of fish. (See Report of a Special Subcommittee of the Committee on Interior and Insular Affairs of the House of Representatives, pp. 12-13, made pursuant to H. Res. 89 of the 83d Congress, Committee Print No. 4, filed with the House in the 84th Cong., following hearings in November 1954, conducted by Congressman Wayne N. Aspinall.) This report gives information on the history, as well as the political and economic progress of the islands of American Samoa. When Van Camp went into Samoa, there were neither commercial fishermen nor experienced cannery workers there. One of the expressed purposes of this lease with the Government is "to provide for improvement of the economy of American Samoa by developing skills relating to fishing and fish processing among the Samoans, by providing local income through wages, and by insuring a local supply of raw, frozen, and processed fish." The past 2 years of operating the cannery at Pago Pago have been unprofitable. Van Camp, however, is sufficiently encouraged with its progress to consider continuation of its Samoa cannery because a nominal supply of fish has been found. Uncertainties as to the continuance and adequacy of this supply still exist. The Samoan has shown that he is capable of applying himself to industrial methods of fish canning and that he has an aptitude which further experience and training will develop. The prevailing wages of the American Samoa group of islands are predicated upon a survey to determine fair rates and job classifications made for the Department of Interior in 1952 by Research Associates, Inc., a consulting firm of Honolulu, Hawaii. The wages paid Van Camp's approximately 300 employees conform to the wage scale of the government of Samoa employees. They range from 27 cents per hour, for those who clean fish, to as high as $1 per hour for 1 employee, who is a technician, a weighted average of around 40 cents per hour per employee. This wage plan provides for a base scale by job classification with increments to reward service and proficiency. The company has found that it takes from 3 to 5 Samoan workers to perform what 1 continental worker in the United States will do. It is therefore felt that this justifies a lower rate for Samoans. The Samoans do not seek the minimum wages as provided by the Fair Labor Standards Act of 1938, as amended. In fact, through their fono or legislature, an elected body representing the peoples of the island, a resolution was passed in July 1954, requesting the Governor of the territory through the Department of Interior to "negotiate for exemption of American Samoa from the Wage and Hour Act by virtue of the relatively lower living costs in Samoa. Such exemption will undoubtedly prove itself a desirable measure as well as an attractive industrial incentive." The Samoan Legislature is appealing for this assistance because such legislation will aid in the promotion of a healthy economy in the islands, thereby lessening the burden of the American taxpayer. The Samoan operation is beset with logistical problems not experienced by the company's California operations. All cans, cartons, oil and the many supplies necessary to fish canning are transported 5,000 miles to the Samoan cannery site. The finished product is then returned to the United States for domestic marketing. The resultant costs are extra costs not usually experienced in normal packing operations. In addition to the extra expenses involved, as cited, is the expense of transporting skilled supervisory personnel and their families to Samoa. Experience has shown the rate of turnover in key personnel to be high, therefore costly. Van Camp's operations in American Samoa are small and unquestionably will remain so. The total production there at present is about 1 percent of the total volume produced by its plants in California. ermen. Van Camp does not contemplate making large profits from this small operation. It plans to incorporate in Samoa and to use its income derived from that plant for developing that fishery and processing plant to a higher level of efficiency. This will mean additional training of Samoans, as cannery workers and as fishermen, and the purchase and maintenance of fishing vessels for these fishThe construction of a shoreside refrigeration plant is also essential to the continued operation of the cannery. This whole program will involve the further expenditure of several hundred thousand dollars on the part of Van Camp. It has been Van Camp's hope since its initial operations there that it will be able to encourage west coast fishermen to operate in the waters surrounding Samoa and deliver their catch to its plant in Pago Pago. One San Diego fisherman experimented with the operation of two fishing vessels at Christmas Island, not far removed from American Samoa, and his operation met with moderate success. When Samoans are trained as fishermen and American fishing vessels will operate in those waters, there will not be the dependency on outside sources, such as Japanese fishermen, for the purchase of its needed supply of tuna. As reported to the Department of Interior and to the Bureau of Internal Revenue on its income tax returns, the company has suffered substantial losses in its first 2 years of operations in Samoa. However, an improvement is anticipated in the present fiscal year which ends May 31, 1956. These losses were incurred while paying the prevailing wages on the islands. If the company had paid the minimum wage of 75 cents per hour, the financial picture would have been even more unfavorable. This unfavorable condition will be further intensified by the effects of Public Law 381 of the 84th Congress, increasing the minimum wage to $1 per hour after March 1, 1956. The closing of the cannery would have a deleterious effect upon the economy of American Samoa and would be a further discouragement to other industries which might go into those islands. Van Camp is prepared to continue operations in Samoa in the face of the uncertain supply of fish, extra and unusual costs as listed herein, and in spite of operational losses experienced during the past 2 years. However, it must be relieved from the increased cost to operations that the Fair Labor Standards Act would impose. Therefore, it is seeking modifications to that act which will leave to the Secretary of Labor the promulgation of a fair minimum wage more in keeping with the economic situation presently existing in American Samoa. As Congressman Aspinall's report stated (p. 13), "The act's minimum wage of 75 cents per hour is entirely out of proportion to the local wage scale in the South Pacific, and would upset the economic balance unless American Samoa could somehow be exempted from its provisions." Mr. ELLIOTT. The next hearings on this subject will be held at 10 o'clock Friday morning, at which time the Interior Department will be available for testimony, and immediately thereafter the Navy Department will be heard. Then, it is my idea that hearings will go over until next Tuesday at 10 o'clock, at which time a representative of the Department of Labor will be heard. In the meantime, if it develops that we need other witnesses, we will be on the lookout for them, or if other people express a desire to be heard in the matter, arrangements will be made within a reasonable time to hear them. To date, has there been anyone else who has expressed a desire to be heard? Mr. HUSSEY. No. Mr. ELLIOTT. The committee will stand adjourned until 10 o'clock Friday morning. (Whereupon, at 12:30 p. m., the subcommittee recessed to reconvene at 10 a. m., on Friday, February 17, 1956.) MINIMUM WAGES IN CERTAIN TERRITORIES, POSSESSIONS, AND OVERSEA AREAS OF THE UNITED STATES FRIDAY, FEBRUARY 17, 1956 HOUSE OF REPRESENTATIVES, EDUCATION AND LABOR, The subcommittee met at 10 a. m., pursuant to recess, in room 429 of the House Office Building, Hon. Carl Elliott (chairman of the subcommittee) presiding. Present: Representatives Elliott, Landrum, Roosevelt, Coon, and Fjare. Present also: Fred G. Hussey, chief clerk; John O. Graham, minority clerk; Kennedy W. Ward, assistant general counsel; and Russell Č. Derrickson, chief investigator. Mr. ELLIOTT. The subcommittee will be in order. I notice that we have this morning Congressman Wayne Aspinall, a Member of Congress from the State of Colorado, as a witness on our bills that have their purpose an amendment to the Fair Labor Standards Act with reference of the application of the act to American Samoa. I would like to say, Mr. Aspinall, that the committee is happy to have you, and we will be glad to hear you. You may proceed in any manner that you see fit. STATEMENT OF HON. WAYNE ASPINALL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF COLORADO Mr. ASPINALL. Mr. Chairman and members of the committee, I am glad to be able to appear before this committee in response to the request which was made of me. I am not an expert on American Samoa, although I spent three of the most delightful days of my congressional experience on the island of Tutuila in American Samoa, with some of the finest people whom I have ever had the privilege to associate with, even though it was a very short time. I understand that this committee is endeavoring to determine whether or not American Samoa should be exempted from the provisions of any wage and hour act which the Federal Government may have. Personally, Mr. Chairman and members of the committee, I am of the opinion that American Samoa should not be brought under the jurisdiction of the same act that would refer to the continental United States of America or, for that matter, any other of the areas under the jurisdiction of the American flag. This is because of the peculiar |