when a man that we have never known or have never seen, or to whom we have never paid wages, might be declared to be one of our employees.

At present, the social-security and withholding taxes are collected and paid by the producer who actually knows each man that works for him and to whom he pays wages. Under the proposed law, it would appear that dealers like our company, or even the paper companies to whom we sell the pulpwood, might be expected to collect taxes from these men with whom we have no contact. If these men were determined to be employees for tax-collection purposes, we feel that they could easily be considered to be our employees subject to other Federal and State legislation. Also, it might be determined that we were liable for the actions of these many men and their equipment operating in a remote and widespread area and over whom we have no control.

We are also concerned that such a bill could be passed by the House of Representatives which contains a definition of "employee" that would make the destinies of millions of American people dependent upon the interpretation that an administrator could give. An administrator could decide that every man who has anything to do with a load of pulpwood, from the time that it is cut until it is loaded on a car for shipment or delivered directly to a paper mill, is an employee of the dealer who buys the wood or of the paper companies themselves. If such a decision were made, thousands of small-business men who are now known as contractors, vendors, producers, or subcontractors, would be forced out of business and lose their status as independent small-business men.

In trying to determine who might be declared an employee of our company under the proposed law, we are confused by the definition as it now stands. Under the following sections:

(A) Control over the individual: Would we be exercising control by telling a producer how many cords of wood we can buy from him in a given week as determined by our orders from the paper companies, or by telling him what size to cut the wood and whether it should be gum or pine wood?

(B) Permanency of the relationship: Would a man who has produced pulpwood for me or my company for a number of years, even though he is free to sell his pulpwood to other dealers, be considered our employee?

(C) Regularity and frequency of performance of service: What would be the status of the men who are full-time pulpwood producers?

(D) Integration of the individual's work in the business to which he renders service: It would certainly be determined that the production of pulpwood is essential to the manufacture of paper.

(E) Lack of skill required of the individual: We cannot see what this would have to do with determining who is or is not an employee, nor tend to show whose employee he is.

(F) Lack of investment by the individual in facilities for work: Would the individual be our employee if we lend him money to buy timber, or a tire for his truck, or to have his truck motor overhauled? The Administrator could say he was.

(G) Lack of oportunities of the individual for profit or loss: It would appear that the Administrator could interpret this in whatever manner he desired and thus make him an employee.

There is one additional question I would like to ask. 1 stated in my opening paragraph that my company sells pulpwood to two paper companies. Let us assume that the Administrator should decide in the future that I am not an independent businessman, but for purposes of social-security taxation, am really the employee of the paper mills to whom I sell pulpwood. Since I am, in fact, serving two paper companies in selling them pulpwood; which paper company would be responsible for the collection of my employee's share of the socialsecurity taxes and which one would be responsible for the employer's portion of the tax?

In recent years we have become convinced of the value of the forestconservation practices advanced by the various Federal, State, and private organizations.

One of the chief aims of these conservation programs has been the development of interest in the small landowner and the farmer to prac tice good forestry and to conserve and grow timber in ever-increasing amounts on the small timber tracts owned by these individuals; to treat their timber as a crop in the same manner as they treat their cotton, corn, or similar crops. There are thousands of these small timber tracts in widely scattered areas of the South, and the results of this concentration of good conservation teachings has been to raise and enlarge upon our total supply of forest growth.

If the production of pulpwod had to be controlled by large operators or the paper mills, the economic necessity of operating large-scale cutting jobs on large tracts of timber would give little opportunity to the small farmer or timber owner to sell the few cords that might be selectively cut for the benefit of his timber..

It would not be economically sound for these large-scale operators to fool with the small, widely scattered forest plots above referred to. Instead they would have to concentrate their cutting operations on the large tracts of tir ber, just as is done in the Pacific Northwest. This, then, would eliminate the small timber owner from consideration; it would not permit a small farmer in practicing good forestry to thin and sell his own timber in his off season and would thus deny to the fast-growing conservation program here in the South the fruitful field of development presently shown in the small landowner and the farmer.

We believe that the present Public Law 642 gives an adequate and clear definition of an employee which protects both employers and employees, and we feel that there is no need for changing this definition under the proposed law. As the law is now written, every intelligent person has a fairly clear conception of who is and who is not an employee. We believe that if you will carefully consider this matter, you will find that the definition of employee now embodied in Public Law 642 is fair, equitable, and just. We beg you not to inflict upon us the burdens which would be imposed by the fourth paragraph in the presently proposed definition of employee. It would leave us at the mercy of an administrator and so confuse our status that we would not know who our employees were nor whose taxes we would be required to pay.

The CHAIRMAN. Are there any questions by any member of the committee?

If not, we thank you very much, Mr. Clippert, for your appearance. Mr. CLIPPERT. Thank you, sir.

The CHAIRMAN. Mr. Wilcox, will you identify yourself for the record, please, sir?

STATEMENT OF R. D. WILCOX, HARRIS-WILCOX TIMBER CO.,

LAUREL, MISS.

Mr. WILCOX. Mr. Chairman and gentlemen of the committee, my name is R. D. Wilcox, of the Harris-Wilcox Timber Co., Laurel, Miss., pulpwood dealer.

The CHAIRMAN. You are a dealer?

Mr. WILCOX. Yes, sir.

Mr. Chairman, my statement is a little bit lengthy. You gentlemen have been very kind and patient, and a number of my points will have been covered very thoroughly, I think. I would like to file my entire statement for the record and then forego reading part of it and take up some points that I might enlarge upon a little.

The CHAIRMAN. You may do so. Your statement will be entered in the record as a whole, and you can discuss whatever features of it if you wish.

Mr. WILCOX. On page 2 of my statement, I state there: "If the proposed definition should be retained as it now appears in the House bill, it is our conviction that the following results would prevail, and I enumerate by number there."

I would like to turn, then, to the bottom of page 6, point No. 8: "If the definition of employee now appearing in H. R. 6000 is retained, it will greatly retard the growing and conservation of timber in the South by small landowners in that they will have less opportunity to dispose of their timber growth at a reasonable profit."

To enlarge upon this conclusion, I direct your attention to the fact that about three-fourths of the timberland acreage in the South is owned by small-land owners. This small-land ownership is scattered to the extent that every farm owner has some type of wood lot on his ownership. As an illustration, in Mississippi there are 16,500,000 acres of timberland; of this amount about 11,700,000 acres are owned by small-land owners, about 3,000,000 are owned by what is termed large owners or companies, and about 1,800,000 acres are owned by the public (Federal and State).

The public lands are well handled from the standpoint of good forestry practices and the acreage is fast being brought back to full production under the conservation program initiated by the Federal and State agencies in charge. The acreage owned by the large-land owners is about the same as the acreage owned by the State and Federal Governments. These large owners have put into operation their own forestry programs under skilled leadership and are bringing their lands back to full production in a sound and orderly manner.

The CHAIRMAN. Mr. Wilcox, you refer to 1,800,000 acres owned by the public; that is, Federal and State. Is that a forest reservation? Mr. WILCOX. Yes, sir.

The CHAIRMAN. Yes, I supposed it was.

Senator MARTIN. Has that land been cut over one time, and is this now what we might term second growth?

Mr. WILCOX. All of our timberland in the State of Mississippi is second growth. The acreage that was acquired by both the Federal and State Governments was

The CHAIRMAN. Cut-over lands?

Mr. WILCOX. Yes, sir; and completely denuded in many instances. Senator MARTIN. How long does it take to regrow those forests! Mr. WILCOX. That depends, to a very large extent, of course, upon the type of management, Senator. Under the Federal and State program, where they do have good management, they can bring that timber back to merchantable pulpwood timber in a period of from 10 to 15 years. Of course, larger timber and sawlog timber takes longer.

Senator MARTIN. With respect to these large owners that you refer to, the 3,000,000 acres, who owns that!

Mr. WILCOX. That is large individuals and mostly companies; that is, wood-using and log-using companies.

Senator MARTIN. Are they developing it into what you call sawlog timber?

Mr. WILCOX. Yes. The pulpwood interest, of course, is in developing pulpwood. But in growing pulpwood, you have to grow some saw timber. It just develops into saw timber. The sawman has to raise some pulp to raise saw timber, and the pulp man has to raise some saw timber to raise pulpwood.

Senator BUTLER. The small farmers grow mostly pulpwood?

Mr. WILCOX. Yes, sir, it is mostly the second growth. They usually market that primarily for pulpwood.

With the examples set by the Federal and State Governments and the large owners of timberlands, plus the leadership furnished by them, the small timberland owner is fast coming into his own as a tree farmer. Many States have discontinued ad valorem tax on standing timber and have passed severance tax laws where a tax is paid at the time of severance. This has encouraged all types of timberland owners, especially the small owners, to raise more timber. Some States have passed harvesting laws which require that certain timber be left on areas at the time of cutting. Skilled personnel, free of cost to the small owner, is furnished him to help solve his growing and harvesting problems. This service is available from both Federal and State agencies, various forestry organizations and associations, and from the larger consumers of forest products. Forestry courses and textbooks have been introduced in many of the schools, free conservation schools for boys and girls are arranged each year, and many forestry demonstrations are held each year. All of this has brought conservation to the attention of both young and old throughout the South, and utilization as well as conservation of all our resources, together with our timberland resources, is far ahead of what it has ever been before.

Senator MILLIKIN. Down in your country, are you bothered with the fire hazard with respect to your trees?

Mr. WILCOX. That is our No. 1 problem in the South.

If the proposed definition of an employee is enacted into law, there seems to be little doubt but that an administration could and would put into effect a chain reaction whereby each person in the process will be linked to the next one up the ladder as an employee, which would in the final analysis link the ultimate consumer to the tree farmer or the cutter in an employer-employee relationship.

As to whether the ultimate consumer, large or small, can live in such a position with the exposure involved, I am unable to say. But with

such a development that certainly would be no place for the independent dealer as producer in the industry. The consumer would be forced to produce his own pulpwood on such a mechanized basis he would, through necessity, operate on only the larger timberland holdings as such, and operation could not thrive on the small wood lots and fence corner areas.

Senator MARTIN. What do you mean by "fence corner areas"?

Mr. WILCOX. That is strictly an expression that is adapted to our area, Senator. That is the small land holdings around the field termed a "fence corner" operation. Maybe a man would have timber in a small area at the edge of his field that would not exceed 1 or 3 acres. It is a very small operation.

The CHAIRMAN. Around the branches?

Mr. WILCOX. Yes, sir. That terminology issued in our area.
Senator MARTIN. I had never heard it before. Thank you.

Mr. WILCOX. The consumer-type operation could not give each landowner or a farmer a job, therefore the market for the small timberland owner's timber would be greatly reduced and the prospect of selling his own labor with his own timber would be greatly impaired. Without a good competitive market for his timber, the incentive to carry out a good conservation program is greatly weakened.

The thousands of pulpwood dealers and producers in the South have substantial investments in equipment and timber which they have acquired in contemplation of continuing in business as independent contractors, dealers, and producers. If this definition is retained, we will be forced to liquidate our businesses at a serious sacrifice as we could not hope to continue under the proposed definition.

In conclusion, we respectfully direct your attention to Public Law 642, which is now in effect, and which defines "employee" under existing social security law. This definition follows the common law concept and is ample to protect the interest of employers and employees alike. The attempt to depart from Public Law 642, as manifested by the proposed definition now appearing in the House version of H. R. 6000, would result in a confusing situation and in grave injustices to the small-business men of the country who are, and hope to continue to be, classified as independent contractors or vendors. The present law was passed in order to prevent the Treasury Department from promulgating and enforcing a rule or regulation which contained in it the same measure of injustice which is contained in the presently proposed definition. We, therefore, urge your honorable committee to reject the definition of "employee" now appearing in the House version of this bill and substitute therefor the definition as set forth in Public Law 642, which carries forward the common law concepts of the master and servant relationship.

If the committee is not convinced of the sensibility and fairness of our position, then we do urge that you strike from the presently proposed definition the fourth paragraph thereof and spell out, in understandable language, those who you believe should be employees and thus avoid a complete and unjustifiable surrender of the prerogatives of the Congress to an administrator.

Mr. Chairman, may I close with this further statement of just a few words. I am just as much out of place here in Washington and before this committee as a person could possibly be, and I realize it.