the farmer to the sterilization of this product in hermetically sealed containersthe most careful, sanitary conditions and care in handling must be employed to prevent loss, spoilage, and deterioration of the basic product. It was obviously the purpose of Congress to exempt such contracts from the purview of the Public Contracts Act, and it is reasonable that such exemption be made. For example, in May of each year the Navy purchases its yearly supply of evaporated milk. This large contract is filled by the evaporated-milk industry during a season of the year when the cows are fresh, when milk production is at its height, when plants must, of necessity, be operated at peak capacity in order to process the tremendous flow of milk. The operation not only is highly seasonal in character, but, because of the extreme perishability of milk, there is ever present the need for prompt, skilled, sanitary handling and continuous, uninterrupted processing from the moment milk commences flowing through the plant until the day's supply is exhausted quite irrespective of the number of hours of work necessary to complete the task. The very nature of the product and the process will admit of no carry-over of 1 day's supply of milk to another for handling and processing at the whim or leisure of man-if loss, spoilage, or deterioration are to be avoided. To require, under such conditions, "That no person employed by the contractor in the manufacture" of evaporated milk used in the performance of the Navy contract "shall be permitted to work in excess of 8 hours in any 1 day or in excess of 40 hours in any 1 week" or to require that the rate of pay for any overtime work on the Navy contract "shall be not less than 11⁄2 times the basic hourly rate received by any employee affected"; or to assess "damages for any * * * breach of such contract" by reason of overtime operations during the seasonal peak when the Navy contract is being executed; was never the intention of Congress. And any ruling on the part of the Secretary of Labor that such an operation does fall within the meaning of the act merely because the end product is relatively nonperishable is unreasonable and arbitrary. Assuming for the purpose of argument that the Secretary's ruling concerning "perishables" renders the act applicable to evaporated milk, the effect of this would be so narrowly to interpret the act as to limit its application to labor conditions appertaining during the handling of the finished product, and not otherwise. This ignores completely the fundamental purpose of the act, considered as a whole-that is, to require contractors to conform to certain labor conditions in the performance of Government contracts, so as to eliminate sweatshop conditions, the evil of child labor and the exploitation of unorganized workers during the full course of the manufacturing and distributing process. Surely no one will be heard to contend that the act is concerned simply with labor conditions existing in the handling of the finished product in storage rooms or warehouses and on loading platforms. If it be admitted (and common knowledge dictates that it must) that at the outset of the evaporated milk manufacturing process a highly perishable basic product (raw milk) is utilized, at exactly what point in the process does such product become nonperishable? At what point in the process does a given batch of milk become so nonperishable as to come within the meaning of the act? When this point of nonperishability has been reached, must a manufacturer shut off the flow of all milk through his plant, except that destined to fulfill the Government contract, in order to avoid a violation of the labor stipulations? No such complications as these questions suggest can be read into the WalshHealey Act, nor should a departmental interpretation of the act be such as to bring about the absurd consequences here suggested. The act establishes no standards, fixes no tests, and contains no language which would permit of a determination of the exact moment when a perishable dairy product becomes a nonperishable dairy product. Even if this were possible, the act would then have application only to those phases of the manufacturing or distributing processes having to do with products, articles, or material in a physically nonperishable state. I could discuss with the committee the legal phase of this question as presented by the unwarranted ruling of the Secretary of Labor but I would prefer to have the committee act upon practical needs. It is my opinion that the language which Congress employed as a matter of statutory construction do not permit of the interpretation which the Secretary has placed upon it. Congress wrote "nor shall this act apply to perishables including dairy, livestock and nursery products." If Congress intended to exempt only those dairy products which were, "after delivery," perishable there would have been no need for us to include the words "dairy products." The perishable dairy products would have been exempt under the word "perishables." I believe the lawyers on the committee will agree that a reasonable construction of the exemption now contained in section 9 would lead to the opinion that all dairy products were intended by Congress to be exempt, and that the Secretary's ruling is erroneous as a matter of statutory construction, as well as contrary to the intent of Congress. In view of the consideration now being given the pending bill (S. 1032) it is also an appropriate time to clarify and reaffirm the original intention of Congress, and therefore it is earnestly hoped that this committee will give favorable consideration to the amendment which I have proposed to be offered to Senator Walsh's bill. STATEMENT OF GEORGE O. TIFFANY, COUNSEL, EVAPORATED MILK ASSOCIATION, CHICAGO, ILL. Senator WALSH. You are attorney for the Evaporated Milk Association? Mr. TIFFANY. Yes, sir; Chicago, Ill. We represent 30 evaporatedmilk manufacturers in the United States. Senator WALSH. Have you a brief which you would like to submit to the committee? Mr. TIFFANY. Yes, sir; I have a brief in support of the Wiley amendment to the Walsh bill which in substance has the same effect as the amendment offered by Senator Miller just now. Senator WALSH. I have just introduced into the record a telegram to Senator Wiley and also a memorandum in support thereof. Would you like to have your memorandum introduced? Mr. TIFFANY. Yes, sir; that may be introduced into the record. This is submitted on behalf of the Evaporated Milk Association in support of this proposal which would amend section 9 to place the term "dairy products" preceding the word "perishables," so that it would read "nor shall this act apply to dairy products, or to perishables," et cetera. (The memorandum offered by Mr. Tiffany is as follows:) Senator Alexander Wiley, of Wisconsin, has filed a proposed amendment to the Walsh bill (S. 1032) which, if adopted by the Senate Committee on Education and Labor to whom it has been referred, would make the Walsh bill amend the Public Contracts Act so as to provide that: "SEC. 9. * * * nor shall this Act apply to dairy products, or to perishables, including livestock and nursery products.' The Public Contracts Act now provides "SEC. 9. * * * nor shall this Act apply to perishables, including dairy, livestock, and nursery products * * The Secretary of Labor under regulation No. 504, dated September 14, 1936, interpreted this section of the act as follows: "(b) Where the contract relates to perishables, including dairy, livestock and nursery products; ('perishables' cover products subject to decay or spoilage and not products canned, salted, smoked, or otherwise preserved)." We respectfully submit that when Congress passed the measures it intended that section 9 of the Public Contracts Act should exempt all dairy products. Not one scintilla of evidence can be found anywhere in the legislative record of this measure which warrants the conclusion reached by the Secretary of Labor that section 9 of the act provides an exemption only for “perishable dairy products," or that it was the intention of Congress so to provide. The circumstances under which Congress acted, the reports of committees having the measure in hand, and the testimony before the committees of Congress, interpret the effect and scope of the act and make it appear, beyond all doubt, that Congress intended to exempt from operation of the act all dairy products, without limitation as to kind, quantity, or quality. The House Judiciary Committee report on the Walsh-Healey bill (S. 3055), which was transmitted to Congress by Representative Healey, contains the following pertinent statement: "Section 9 excludes from the operation of the act articles usually bought in open market-farm, dairy, and nursery products, and transportation and communications contracts." Any dairy product, be it butter, cheese, whole milk, buttermilk, dry milk, condensed milk, ice cream, or evaporated milk, is, according to the interpretation of the act by the House Judiciary Committee, wholly and completely excluded from operation of the act. During the debate on this measure in the Senate, Senator Austin took occasion to make the following remarks with regard to the work of the committee having the bill in charge: "A. M. Loomis, representing the American Association of Creamery Butter Manufacturers, testified: * When the milk and cream reach the creamery or cheese factory they must be promptly taken care of. They cannot be carried over until the next day, because at this stage deterioration is rapid. ** "That argument applies to the making of all kinds of food products which are perishable in their nature, and show beyond any question, how utterly futile it is to limit the hours and days in a manufactory of that kind, and undertake to move shifts out of a process such as that and move new shifts into it. (Congressional Record, Senate, August 12, 1935, pp. 12878–12879.) ** Obviously it was in the the Senatemind of Committee that this act could not be applied to industries dealing with perishable commodities or products subject to rapid spoilage and deterioration. Nor is there the slightest indication of intention to penalize any branch of the dairy industry because its product may reach the ultimate consumer in somewhat more stable form than that of some other branch of the industry. During the debate on the measure in the House of Representatives, Congressman Greenwood, while explaining some of the salient features of the pending measure, stated: "It makes certain exemptions. For instance, supplies of material that should be purchased in the open market, or stock merchandise, in other words, as I understand it, and that nothing to be purchased under $10,000 in amount shall be considered; that agricultural, nursery, dairy, and perishable products, shall not be considered subject to the law" (Congressional Record, House, June 18, 1936, p. 10077). Congressman Boileau, whose constituents, largely, are persons engaged in earning their livelihood from the production, processing, and distribution of dairy products, clearly stated what was in the mind of Congress when this act was being debated. Mr. Boileau stated: "I do not presume the United States buys any farm products that are not processed, except perishables. Perishables are definitely exempted. So are dairy products, livestock, and nursery products. I cannot think of any other farm products that the United States Government buys" (Congressional Record, House, June 18, 1936, p. 10101). The statements of these gentlemen were not challenged, but, on the contrary, were permitted to stand as clear expressions of the undoubted intent of Congress to exempt not only perishable products, in whatever form, but to extend this exemption to include all dairy products, as well. AN EXTREMELY PERISHABLE PRODUCT IS USED IN MANUFACTURING EVAPORATED MILK FOR A GOVERNMENT CONTRACT When a manufacturer contracts to supply evaporated milk to the Government, he is able to fulfill his contract only by handling and processing a most perishable basic product-milk. To this extent, the evaporated-milk industry differs in no respect from the fluid milk, ice cream, cheese, or butter industries, the products of which are recognized by the Secretary of Labor as exempt under the Walsh-Healey Act. Throughout the entire processing of evaporated milk-from the delivery of the raw milk by the farmer to the sterilization of this product in hermetically sealed containers-the most careful, sanitary conditions and care in handling must be employed to prevent loss, spoilage, and deterioration of the basic product. It was obviously the purpose of Congress to exempt such contracts from the purview of the Public Contracts Act, and it is reasonable that such exemption be made. For example: In May of each year the Navy purchases its yearly supply of evaporated milk. This large contract is filled by the evaporated-milk industry during a season of the year when the cows are fresh, when milk production is at its height, when plants must, of necessity, be operated at peak capacity in order to process the tremendous flow of milk. The operation not only is highly seasonal in character but, because of the extreme perishability of milk, there is ever present the need for prompt, skilled, sanitary handling and continuous, uninterrupted processing from the moment milk commences flowing through the plant until the day's supply is exhausted quite irrespective of the number of hours of work necessary to complete the task. The very nature of the product and the process will admit of no carry-over of 1 day's supply of milk to another for handling and processing at the whim or leisure of man-if loss, spoilage, or deterioration are to be avoided. To require, under such conditions, "That no person employed by the contractor in the manufacture" of evaporated milk used in the performance of the Navy contract "shall be permitted to work in excess of 8 hours in any 1 day or in excess of 40 hours in any 1 week"; or, to require that the rate of pay for any overtime work on the Navy contract "shall be not less than one and one-half times the basic hourly rate received by any employee affected"; or, to assess "damages for any * * * breach of such contract" by reason of overtime operations during the seasonal peak when the Navy contract is being executed; was never the intention of Congress. And any ruling on the part of the Secretary of Labor that such an operation does fall within the meaning of the act merely because the end product is relatively nonperishable is unreasonable and arbitrary. CONCLUSION We contend that the processing of milk in the manufacture of evaporated milk under Government contract was clearly intended by Congress to be exempt from the Walsh-Healey Act, as is shown by a review of the statements made in Congress and in committee hearings and reports on this measure. We contend that the operation of processing raw milk in the manufacture of evaporated milk cannot be carried on effectively when such operations are bound by conditions such as are set forth in the Public Contracts Act. We contend that so to bind milkprocessing operations would not be in the interest of (1) the Government, which is the purchaser of such milk, (2) the employee, who is in no small degree responsible for the quality of the finished product, and most certainly (3) the dairy farmer, who may suffer from losses of milk occurring from such restriction of operations in evaporated-milk plants. We, therefore, respectfully urge the Senate Committee on Education and Labor favorably to report to the Senate the Walsh bill (S. 1032) with the Wiley amendment incorporated therein-to the end that the declared intention of Congress when it enacted the Public Contracts Act may thereby be effectuated. Respectfully submitted. EVAPORATED MILK ASSOCIATION, Executive Secretary. Senator TAFT. Mr. Tiffany, what is the objection to the application of the Walsh-Healey Act to your industry? Mr. TIFFANY. The objection is that we are dealing with a very perishable product, a basic product which is milk, and if we are to be bound by the provisions as to hours, in the handling of milk, it would mean that we would have to put new shifts into the plant or else pay time and a half for overtime, and it would increase the basic cost of the manufacture of the product and would reflect itself in the cost back on the consumers and also lower the return to the farmers that produce milk. Senator WALSH. If you will pardon me, I have a very important meeting to attend, and Senator Taft will conduct the hearing. I shall try to return if possible. However, you may be assured that I will read the record very carefully. Senator TAFT. It is the hours' provision of the law that affects you? Mr. TIFFANY. Yes, sir. Senator TAFT. How do you work ordinarily? Mr. TIFFANY. Well, when the milk comes in, we process it until that day's supply of milk is exhausted; in other words, we cannot shut down our operations until the day's supply of milk has been processed. That may take 8 hours or it may take 16 hours. It all depends on the amount of milk. The cows freshen in the spring, and they give approximately twice as much milk or sometimes 3 times as much milk as they do in the winter months. Senator TAFT. How are you affected by the operation of the wageand-hour law? Mr. TIFFANY. Most of our plants are paying above the minimum wage provided by the wage-and-hour law, but the hours' provision we are exempt from under the provisions of that act, therefore we are taken care of in that regard. Senator TAFT. Will you be affected by the wage-and-hour law if the rates go up from 25 to 35 or 40 cents an hour? Mr. TIFFANY. Yes, sir; we probably will be affected when it progresses upward; but in the present bracket, at the present moment, all of our plants are paying at least that wage. Senator TAFT. Would your industry be able to take advantage of the provisions in this law that permit exemption or some extension of hours during the day if they do not extend them beyond the total number of hours during the year or per 6 months? Mr. TIFFANY. No, sir; it would be a great hardship. The cow regulates us and we cannot do very much about that. Senator TAFT. Very well, sir. Thank you. STATEMENT OF GEORGE DOUGHERTY, ASSISTANT SECRETARY, MANUFACTURERS Senator TAFT. Whom do you represent, Mr. Dougherty? OF Mr. DOUGHERTY. The National Association of Manufacturers of Pressed & Blown Glassware. Senator TAFT. Do you desire to submit a brief, or do you desire to be heard? Mr. DOUGHERTY. The thoughts I wish to convey I have reduced to the form of a communication. I see that this hearing is rather informal. If you do not want me to read it, I would like to comment on some things. Senator TAFT. I suggest that you put it in the record and then comment on such parts as you see fit. The statement of the witness may be placed in the record, and his comments received. That will shorten our time and help us, because we have not very many members of the committee here and they will all have to read the record anyway and study it. (The statement of Mr. Dougherty is as follows:) The National Association of Manufacturers of Pressed and Blown Glassware, Pittsburgh, Pa., is made up of manufacturers who employ members of the American Flint Glass Workers' Union of North America, with headquarters at Toledo, Ohio. Agreements covering wages, rules, conditions of employment, and other forms of cooperation are renewed annually. The activities of our associatoin have to do with these matters chiefly. Agreements are made between the two organizations on a national basis, local arrangements being confined to minor factory rules and regulations. Collective bargaining has been carried on continuously since 1888 and at the present time involves about 25,000 workers, male and female. Our association is opposed to reducing the amount involved in contracts with the Federal Government agencies; (now applying to contracts where more than |