Mr. ELLIOTT. Yes, this is my statement in full, here,

Mr. ROOSEVELT. Fine. So ordered.

(The statement referred to above follows:)

STATEMENT OF JOHN M. ELLIOTT, INTERNATIONAL PRESIDENT, AMALGAMATED ASSOCIATION OF STREET, ELECTRIC RAILWAY & MOTOR COACH EMPLOYES OF AMERICA, AFL-CIO

The Amalgamated Association of Street, Electric Railway & Motor Coach Employes of America is the dominant union in the field of transportation of We passengers by motorbus, streetcar, trolley coach, and electric railway. support the general position of the AFL-CIO concerning proposals to amend the Fair Labor Standards Act. We support H.R. 4488, the Roosevelt bill. We are here today, however, for a discussion limited to matters of particular concern to the employees this union represents.

The Fair Labor Standards Act unjustly denies protection to a substantial and important group of workers; namely, the employees in the transit industry. These employees have been unwarrantedly penalized because the Fair Labor Standards Act excludes them from its coverage although that act does afford protection to employees in American industry in general. We are asking for the removal of the exemption for the local transit industry in section 13(a) (9) and the limited exemption for the over-the-road transit industry in section 13(b)(1) of the act. H.R. 4488 would eliminate those exemptions and would end the unjust discrimination against transit employees at once. We support that proposal.

Employees in the transit industry have made important contributions to the national welfare. They have served the public and the country well in time of peace and in time of war. Their fellow workers in American industry, their friends and neighbors are on a 5-day, 40-hour week. It is more than 20 years ago now that many American industries went to the 40-hour week. This is a measure of the lag in progress which transit employees have had to endure. I say again, as President Spradling, our retired international president has said on other occasions in this connection, that the transit worker should be afforded the same opportunity for leisure-time enjoyment, for participation in family and social life and for the exercise of his responsibilities as a citizen and a member of the community that other workers in American industry are granted. The principle of the 40-hour week has a long history of endorsement and support by those who have a sincere interest in the promotion of the interests of America's working men and women. The Fair Labor Standards Act has brought important benefits to American workers but not to transit workers. Indeed, some American industries such as the printing industry and the ladies' garment industry have already established a workweek of less than 40 hours. The burden is, or should be, upon those who oppose the extension of the benefits of the act to transit employees. That burden cannot be met, and it seems to us that the time is long overdue for the Congress to remedy the inequities that were established at the time the law was passed.

When the act was being considered by Congress more than 20 years ago, the transit industry argued that the application of the law to the local transit industry presented difficulties because of the need to meet demands of service which are continuous and are heavily concentrated during rush-hour periods. Some employers took the position that the matter could be left to collective bargaining. These arguments as to the practicability of a 40-hour week in the transit industry are without merit. A 40-hour week has been established in a substantial portion of the industry. Transit systems in many cities of varying sizes, large, medium, and small are presently operating successfully under union agreements providing for a 40-hour week.

When the representatives of the American Transit Association appeared before you on May 5, they themselves presented to you a partial list of unionized companies on a 40-hour week, and listed 118 transit companies as having such provsions. Some examples of cities which have gone to a 40-hour week while maintaining compensation for employees are Newark, N.J.; Boston, Mass.; Minneapolis, Minn.; and Springfield, Mass. The experience of these cities as well as that of many others has been one of successful operation under the 40-hour week. Nevertheless, in many cities employers continue to stubbornly and unreasonably oppose efforts by the employees to achieve the 40-hour week through collective bargaining.

The claim by management that the further extension of the 40-hour week in this industry is impracticable is unsound. Whenever there are attempts made to improve the conditions of the workers in this industry, management normally makes a similar contention. History shows that such a claim was made when the employees suggested that they were entitled to vacations with pay. Many managements similarly found that suggestion impracticable. The fact is, however, that workers who a quarter of a century ago never received a paid vacation have progressed to the point that in many instances they receive 4 weeks paid vacation. Industrial history shows that many improvements that management alleged were impossible are now established and recognized working conditions. The contention that scheduling problems in the transit industry makes a 40hour week provision impracticable has been disproved by the history of the development of the 8-hour day in the local transit industry. Basically, scheduling in the transit industry is a daily problem, not a weekly problem. The 8-hour day with overtime after 8 hours was strongly opposed by management when it was introduced in the same way that the introduction and the extension of the 40-hour week is opposed by management today. Similar arguments were made to the effect that scheduling problems would make it impossible to establish an 8-hour day without increases in costs so great as to render the conduct of the business unprofitable. Despite such claims, the 8-hour day was instituted through collective bargaining or arbitration in many cities and with a history of successful operation under such provisions. Management has resisted limitations on the spread of hours over which an employee may work with the same stale claim of impracticability. Nevertheless, the spread of hours has been progressively and successfully shortened. Industrial history demonstrates that management's claim of impracticability should be viewed with skepticism. The requirement of pay of time and one-half for all work in excess of 40 hours is now virtually a standard working condition in American industry. It is the practice in communications and public utilities. It is the practice in continuous processing industries. It is a practice which is followed in many transportation industries such as airlines. The nonoperating employees on the railroads have such a provision. We think it inequitable that so many employees in the transit industry do not enjoy a 40-hour week while so many railroad and public utility employees do.

I wish to turn now to some of the contentions made by the industry representatives when they appeared before you last week. The representatives of the American Transit Association sought to leave with you the impression that the local divisions affiliated with this international union do not want a provision for overtime after 40 hours per week. We think we know something about what our local divisions and our membership want. We are advised that most of our local divisions which do not presently have a provision for overtime after 40 hours per week are eager to obtain such provisions. We know no way of resolving this conflict wherein the employers assert they know more about our divisions than we do except perhaps to conduct a poll of such local divisions by bringing them down here to testify before this committee. If this committee deems it important, we are prepared to ask our local division representatives to come before the committee.

Mr. Malmer testified that the employees at Baton Rouge, La., refused to reduce their workweek when the employer desired a reduction in hours. Our union does not represent the employees at Baton Rouge, La. Mention was also made by Mr. Malmer of a reluctance on the part of the local division at Richmond to reduce their hours of work. It should be noted in that situation that, in fact, a reduction in the hours of work was agreed upon. Moreover, we are advised that if the management had been willing to offer a wage increase sufficient to maintain take-home pay while reducing the hours to 40, our local division officials would have been more than willing to recommend a reduction to 40 hours per week. It is, of course, a basic trade union principle that take-home pay be maintained when hours of work are reduced. Over the years the hours of work in the transit industry have been reduced, and it is the union which has normally been the moving party in obtaining those reductions in hours.

We have shown that many transit employers have successfully gone to the 40hour week. The American Transit Association says that such employers oppose being brought under the act because there are some allowances such as report and turn-in time that are not presently included in the base for overtime compensation, and that it would be unduly burdensome from a cost viewpoint if statutory overtime were required as to these elements of compensation. We dispute that contention. In the first place, other industries presently covered by the act

often have similar activities such as certain periods of waiting time which are included in the base for overtime compensation. In the second place, we do have employers who do include work time or allowance time in the base for overtime compensation and for a 40-hour week and operate successfully thereunder. We are thinking of, for example, the D.C. Transit System here in Washington. Section 25 (e) (1) of their current contract provides:

"(e) Overtime at the rate of time and one-half shall be paid: "(1) For all platform time plus report time, turn-in time, and travel time in excess of eight (8) hours on any one work day and in excess of forty (40) hours per week, provided that overtime worked in any one day shall not be counted again in computing overtime on the weekly basis; Provided, however, that lateins of less than fifteen (15) minutes shall not be included for the purpose of this overtime computation."

The D.C. Transit System has certainly been a financial success for its owners. Another argument made by the American Transit Association is the poverty argument. We believe the argument of inability to pay has no relevance where a public utility is involved. Certainly, such an argument should have no relevance where the issue is a substandard working condition. Surely in America today employees who are not paid overtime after 40 hours may fairly be said to work under a substandard working condition in that respect. Payment of overtime in accordance with accepted standards should be regarded as a cost of doing business just as much as is the purchase of buses, materials, or supplies.

But our employers make the poverty argument in good times and in bad, and without relation to the facts. It is probably true that in all industries which are subject to the Fair Labor Standards Act some employers make substantial profits, others make small profits, and some make no profits at all. We take it that this is normal in the American business community. It is equally normal in the dead transit industry which has many examples of lively profits.

The National City Lines operates same 38 transit properties in the United States which are wholly owned subsidiaries, a list of which is attached as an exhibit. In addition, it has a controlling interest in the transit systems in Baltimore and St. Louis and an important financial interest in the Philadelphia transit system. The transit operations in which National City Lines is interested, therefore, form a reasonably representative cross section of the American local transit industry. The record of National City is one of financial success. There is attached hereto a summary of the financial statistics for National City Lines for the period January 1, 1937, to December 31, 1958. During that period the earnings per share ranged from a low of $1.01 in 1938 to $5.49 in 1958; 1959 continued this record of success. Net earnings per common share amounted to $4.57 according to Passenger Transport for April 8, 1960.

The success of Mr. Chalk in his investment in the D.C. Transit System is well known. This financial success came on top of the phenomenal financial gains made by Mr. Louis Wolfson, with the predecessor company, the Capital Transit Co. A summary of the Wolfson investment is attached as an exhibit hereto as well as the summary of the Chalk investment through 1959. Excerpts from Passenger Transport, the organ of the American Transit Association, showing the 1959 results in Baltimore, Kansas City, and St. Louis, are also attached. There is also attached an excerpt from Passenger Transport of March 13, 1959, which refers to articles by Joseph M. Bell indicating that public transportation is rebounding.

The Greyhound Corp. is probably the largest carrier in the over-the-road industry. That corporation appears to be very much alive. In 1959, according to Passenger Transport for March 4, 1960, a preliminary statement issued by D. W. Ackerman, president of the Greyhound Corp., stated that consolidated income amounted to $21.353,196 compared with $13,976,117 the previous year. It was stated that the 1959 profit is equal after preferred dividend requirements to $1.81 a share on an average of 11,582,174 outstanding shares of common stock compared with 1958 earnings equal to $1.19 a share on an average of 11,359.181 common shares outstanding restated for the 5-percent stock dividend paid by Greyhound in August 1959.

We do not say that the transit financial picture is fully represented by the illustrations we have given. They do suffice, however, to indicate that the transit industry is far from dead, that its future is encouraging, and that there is no sound basis for excluding transit from the coverage of the act. We point out also that Washington, Kansas City, St. Louis, and Baltimore all have a 40-hour week rule. You can see that the 40-hour week is not fatal to financial success.

A good deal was said here by representatives of the transit management to the effect that the requirement of payment of overtime after 40 hours would drive small transit companies out of business. This argument is defeated by the very evidence which the American Transit Association itself presented to you. We suggest that the committee consider exhibit III which was attached to the statement filed by the American Transit Association with you. You will find in their own exhibit illustrations of small transit companies which have a 40-hour week. That exhibit lists among such small companies Bristol Traction Co. in Connecticut which employs 16 operators and has an annual revenue of $138,000. It lists the Rome, Ga., transit system of Georgia Power Co. which has an annual revenue of $147,000 and 15 operating employees. The exhibit lists Chapin's Transportation Service, Lewiston, Idaho, with annual revenue of $18,000, 2 operators and 1 nonoperating employee; Rapid Transit, Inc., of Winthrop, Mass., with annual revenue, according to the American Transit Association, of $250,000 and with 23 operators and 7 nonoperating employees; Wichita City Lines, Inc., Wichita Falls, Tex., with annual revenue of $190,000 and 20 operating employees; Wausau Transit Lines, Wausau, Wis., with annual revenue of $130,000 and 12 operators and 4 nonoperating employees.

Employer representatives have expressed fears concerning the difficulties involved in the computation of the regular rate of pay under the act in the event the industry was brought under the act. We think these difficulties are exaggerated. Perhaps their fears arise from some misconceptions as to how the act would apply. For example, in the statement of Mr. Walsh of the National Association of Motor Bus Owners on page 10, the following example is given:

** * * A driver assigned to this route makes five round trips per week, putting in a total of 35 hours. During a particular week this driver is offered extra work amounting to 10 hours or a total of 45 hours for the week. Under the typical contract the entire 10 hours of work over and above his regular assignment would be paid for at 11⁄2 times the regular rate; that is, a total of 15 hours pay. Under the overtime provisions of the Fair Labor Standards Act this driver would be entitled to the penalty rate for only 5 hours. But the statutory overtime rate would have to be computed on the basis of the driver's total earnings which have already been increased by the more liberal overtime provisions of the contract. This pyramiding of premium payments would not only be unjustified but would be financially ruinous to the carriers."

We do not believe that the observation that the statutory overtime rate must be computed on the basis of the driver's total earnings including the overtime payments under the contract is accurate. Section 7(d)(5) seems to us to make this clear. Section 7(d) lists certain exclusions from renumeration for purposes of defining the regular rate and there is excluded:

(5) "Extra compensation provided by a premium rate paid for certain hours worked by the employee in any day or workweek because such hours are hours worked in excess of 8 in a day or 40 in a workweek in excess of the employee's normal working hours, or regular working hours, as the case may be;" Moreover, subsection (g) of section 7 provides:

"Extra compensation paid as described in paragraphs (5), (6), and (7) of subsection (d) shall be creditable toward overtime compensation payable pursuant to this section."

We suggest that your subcommittee obtain from the Administrator of the Wage and Hour Division of the U.S. Department of Labor a report on how the act is applied in similar situations in the industries which are covered by the act. Your subcommittee will then be able to determine how valid are the claims made by the employers in this connection.

The elimination of the exemption from the overtime provisions of the act found in section 13 (b) (1) concerns the employees of the over-the-road portion of the transit industry. These employees are now covered by the minimum wage provisions of the act but not by the overtime provisions.

The original basis for the exemption was the power of the Interstate Commerce Commission to regulate hours for purposes of safety. That consideration has long since become irrelevant. The point at which overtime payments should begin and the point at which it is no longer safe for an employee to work do not coincide. The logical thing to do is to prohibit work beyond the point of safety. Payment of overtime has, in the main, somewhat different considerations. One of the major factors is the payment of fair compensation to an employee whose work does exceed the normal span of work hours. Over-the-road employees are entitled to overtime if working beyond the accepted standard of a 40-hour week

prevalent in American industry. Overtime payments likewise have a deterrent factor. They tend to offer an incentive to management not to schedule work beyond the overtime point. Over-the-road employees likewise are entitled to more leisure time, more opportunities for family, social, and community life. A 40hour overtime rule will help them to get said opportunities.

It is also argued that H.R. 4488 does not eliminate the exemption from the act's overtime pay requirement to employees on the Nation's railroads. The argument goes, apparently, that if the railroad employees do not get statutory overtime the transit employees shouldn't. The difference is that railroad employees, by and large, do have a 40-hour week. Approximately three-quarters of the railroad employees, the so-called nonoperating employees, have for about 10 years been on a 40-hour week, with time and one-half after 40 hours, as the result of a collective-bargaining agreement. Yard service employees of the Nation's rail carriers who constitute about one-half of the operating employees achieved the 40-hour week in separate bargaining agreements signed after the years 1951-55. Under these agreements, the 40-hour week became available to all yard service employees at their option to be exercised on an individual railroad basis. The option has now been exercised so that a large majority of these employees enjoy a 40-hour week, with time and one-half after 40 hours. The remaining employees, the operating employees, are compensated on a dual system of pay under which overtime is determined on a daily basis depending on the speed of operations. Over the years, speed has increased substantially. As a result, in 1958, for example, these employees averaged not more than 371⁄2 hours of work at straight time per week. There is no justification in the employers' arguments in this connection which would justify continuing to deprive transit employees of the overtime pay protection enjoyed by the American workers generally.

So far as the trucking industry is concerned, it has been urged before you that the Teamsters Union does not seek coverage under the act, and, apparently, the argument runs that transit workers should take the same position. The Teamsters Union may hardly be said to speak for transit employees. It represents very few such employees. If the trucking industry and the Teamsters Union do not want to be covered by the act that is their prerogative. We see no reason, however, why their desires should govern our industry.

The National Association of Motor Bus Owners also suggested that the predominance of mileage rate payments in the over-the-road industry makes the application of the act objectionable. In the first place, the act is already applicable as to the minimum wage so far as the over-the-road industry is concerned. Second, in fact, large numbers of employees in American industry are paid on other than an hourly basis. There are salaried workers, incentive workers, piece workers, and commission workers, as well as employees whose compensation consists in part of hourly wages and in part of one or more of these