Page images
PDF
EPUB

what the other arm is doing. One arm is compelling us to contribute to a plan and maintain a plan solely by employer contributions, which entirely disregards the social-security contribution which we have made; and on the other hand, Congress is requiring us to contribute to the social security program through these taxes, and that is substantially for the same purpose for which the miners' fund is created. These costs, as I endeavored to point out earlier, are a substantial feature of the production of coal, because of the high labor cost in coal production, which is higher I believe than in any other industry.

Senator MILLIKIN. Has the productivity per man increased in the coal-mining business?

Mr. LYON. I say this without any complete knowledge, and it amounts to little more than a guess on my part, but I don't believe it has.

Senator MARTIN. Any statement of that kind would also have to be based on the greatly improved machinery and also the improved safety methods.

Mr. LYON. That is correct. But then, of course, I might say this: that any increase in the productivity of the miner has been offset by contracts for which the operators pay for nonproductive time, such as lunch hours and travel time.

Senator MARTIN. Under portal-to-portal, I am not very familiar, Mr. Chairman, with the operations in southern West Virginia. I am familiar with that in northwest Virginia and southwestern Pennsylvania. Sometimes the man travels underground 2 or 3 miles to his work.

Mr. LYON. That is correct. And I might say that probably the natural reaction of the committee to my comments would be, "Well, that was voluntary on the part of the operators. They entered into that voluntarily." But it wasn't. In the first instance, it was put on us by the Government, and we had the opportunity to agree to it in principle or have the Government keep our mines.

Senator MILLIKIN. What I was really wondering was whether the productivity per man had kept pace with the increased wages and other benefits which are paid to the coal miner.

Mr. LYON. I am really not qualified to answer that, Senator, but it is my guess that it has not. I would be glad, when I return home, if that information is available, as I know it is, to submit a letter. Senator MILLIKIN. It has no direct bearing on this inquiry but I was just curious about it.

Senator MARTIN. Mr. Chairman, that is pretty important, though, in the consideration of the general economy underlying this. We have got to keep these things economically sound. They must not be permitted to break down of their own weight, or it will not do the job that we hope that it will perform.

What we are trying to do is to give security to the people of our country, but if we burden the thing so that it will break down in the future, we have just destroyed what we are trying to do.

So I think that it really has some bearing.

The CHAIRMAN. We shall appreciate your supplying the answer to the question asked. You may mail it to the committee later. Mr. LYON. I will be very glad to do so.

(The material requested follows:)

SUPPLEMENTAL STATEMENT OF FRANK R. LYON, JR.

The following table is offered in reply to Senator Millikin's question of whether productivity per man has kept pace with increased wages and other benefits which are paid to miners:

[blocks in formation]

1 Calendar year.

Average weekly wages for all bituminous-coal production in United States Authority: Bureau of Labor Statistics, U. S. Department of Labor. Tons mined per day per man-West Virginia deep mines. Authority: West Virginia State Department of Mines.

That table confirms my answer to Senator Millikin's question which I made at the hearing. Furthermore, it would seem obvious that advance in mechanization during the foregoing 10-year period would account for more than the 5.8-percent increase in the tons mined per day per man, and that, therefore, the efficiency of the miner has decreased during this period while his wages have increased. The CHAIRMAN. Thank you very much for your appearance. That finishes the schedule of witnesses for the week, I believe. (Whereupon, at 1:05 p. m., the committee recessed to reconvene Monday, March 6, 1950, at 10 a. m.)

SOCIAL SECURITY REVISION

MONDAY, MARCH 6, 1950

UNITED STATES SENATE,
COMMITTEE ON FINANCE,
Washington, D. C.

The committee met at 10 a. m., pursuant to recess, in room 312, Senate Office Building, Senator Walter F. George (chairman) presiding. Present: Senators George, Kerr, and Taft.

Also present: Mrs. Elizabeth B. Springer, chief clerk, and F. F. Fauri, Legislative Reference Service, Library of Congress.

The CHAIRMAN. The committee will come to order.

I believe that Mr. Osherman wishes to appear first.

You may come around, Mr. Osherman. Mr. Barron, you may come around, too, if you wish, at this time. Is there anyone else to appear on this particular matter?

STATEMENTS OF J. A. OSHERMAN, OF GALLAGHER, OSHERMAN, CONNOR & BUTLER, BOWEN BUILDING, WASHINGTON, D. C.; AND THOMAS B. ROBERTS, DES MOINES, IOWA, REPRESENTING NATIONAL BALLROOM OPERATORS' ASSOCIATION

Mr. OSHERMAN. Mr. Roberts is accompanying me, sir.

Mr. BARRON. And I have with me Mr. Owens and Mr. Halliday and Mr. Scher.

The CHAIRMAN. You gentleman may all be seated. All right, Mr. Osherman, you may proceed.

Mr. OSHERMAN. This is a statement concerning the definition of "employee" in H. R. 6000.

My name is J. A. Osherman. I am a member of the law firm of Gallagher, Osherman, Connor & Butler, Bowen Building, Washington, D. C. We are the Washington counsel for the National Ballroom Operators' Association, with its principal office in Des Moines, Iowa. The National Ballroom Operators' Association is an organization composed of owners of ballrooms operating in 25 States, and the number of ballrooms so represented is approximately 200, comprising 90 percent of the important ballrooms of the entire country. The music for dancing in these ballrooms is provided mainly by “name bands."

I have with me this morning Mr. Thomas B. Roberts of Des Moines, Iowa, who has assisted me in the preparation of this statement. Mr. Roberts is the legal counsel for the association and was the principal attorney representing the plaintiff ballroom operators in the case of Bartels v. Birmingham ((1947) 332 U. S. 126).

60805-50-pt. 3--26

We are appearing in opposition to section 206 (a) of H. R. 6000, which would amend section 1426 (d) of the Internal Revenue Code so as to change the definition of "employee" to read as follows:

Employee. The term "employee" means—

(2) Any individual who, under the usual rules applicable in determining the employer-employee relationship, has the status of an employee. For purposes of this paragraph, if an individual (either alone or as a member of a group) performs service for any other person under a written contract expressly reciting that such person shall have complete control over the performance of such service and that such individual is an employee, such individual with respect to such service shall, regardless of any modification not in writing, be deemed an employee of such person (or, if such person is an agent or employee with respect to the execution of such contract, the employee of the principal or employer of such person).

The report of the Committee on Ways and Means of the House of Representatives specifically states that the second sentence of paragraph 2, quoted about—

is designed to change the effect of the United States Supreme Court's holding in Bartels v. Birmingham (1947) 332 U. S. 126 *

The National Ballroom Operators' Association is vigorously opposed to the provision in question and respectfully submits that it should be eliminated from H. R. 6000 for the following reasons:

1. Provision is grossly discriminatory because it relieves one class of employers from all responsibility of paying the taxes and keeping the records required by the Federal Insurance Contributions Act.

The Supreme Court of the United States in Bartels v. Birmingham, supra, said this concerning leaders of orchestras known in the amusement world as "name bands":

The trial court found that there is no real dispute; that the leader exercises complete control over the orchestra. He fixes the salaries of the musicians; pays them and tells them what and how to play. He provides the sheet music and arrangements, the public-address system, and uniforms. He employs and discharges the musicians, and he pays the agents' commissions, transportation, and other expenses out of the sum received from the dance-hall operators. Any excess is his profit and any deficit his personal loss.

On these facts the Supreme Court held the leader of an orchestra, and not the ballroom operators for whom the orchestra performed dance engagements, was the employer of the members of such orchestra, notwithstanding that the Form B contract of the American Federation of Musicians referred to the establishment owner using the orchestra's services as the "employer" and the orchestra members, including leader, as the "employees" and expressly recited that—

the employer shall at all times have complete control of the services which the employees will render under the specifications of this contract.

Section 206 (a), if enacted into law, would relieve orchestra leaders such as those which the Supreme Court held were employers from all responsibility as employers for the payment of social-security taxes and keeping of the pay-roll records required by the enactment imposing such taxes.

Conclusive proof of the correctness of the foregoing assertion is to be found in a statement of James C. Petrillo, president of the American Federation of Musicians, made in a letter dated October 21, 1949, to V. Dahlstrand, president, local 8, 1714 North Twelfth Street, Milwaukee 5, Wis., as follows:

While the House of Representatives and the Senate have adjourned, it is quite hopeful that the Senate will adopt this measure from the House, possibly

« PreviousContinue »