the scope of that statute and rightly so, because that is a special railroad employees' insurance statute.

Now we are confronted with a radical change. This bill, in paragraph (10) of section 1-beginning in line 3 on page 5-sanctions the exemption of the steamship companies themselves from this railroadinsurance statute but inconsistently subjects the companies who perform the steamship terminal service to the heavy taxation provided in this bill to provide pensions and unemployment compensation for railroad employees.

There are no railroad employees in the service of these contractors. We are asking this committee, therefore, to strike out these objectionable new coverage paragraphs from the bill.

With your permission, Mr. Chairman, I would like to leave with the reporter for inclusion in the record the statements of the National Association of Stevedores, the Contracting Stevedores of the Port of New York, the Philadelphia Association of Stevedoring Companies, and the Steamship Trade Association of Baltimore, Inc.; the Contracting Stevedores' Committee of the Boston Conference of Steamship Owners and Contracting Stevedores, the Association of Washington Stevedores, and the Mobile Steamship Association, all in opposition to S. 293.

Senator JOHNSON of Colorado. Yes. They may be included in the record.

(The statements referred to are as follows:)

STATEMENT OF H. D. STEVENSON, SECRETARY, NATIONAL ASSOCIATION OF STEVEDORES, NEW YORK, N. Y.

The general office of the National Association of Stevedores is at 140 Cedar Street, New York, N. Y. Its members are companies or individuals who are engaged in business as stevedoring contractors at our principal Atlantic, Gulf, Pacific, and Great Lakes ports.

We oppose the enactment of this bill because:

1. Paragraphs (2), (4), (5), and (11) of section 1, pages 2 to 8 of the bill, propose to transfer our members, as employers, and all of their employees from coverage under the Social Security Act to coverage under the Railroad Retirement Act and the Railroad Unemployment Insurance Act. This means an increase of more than 10 percent in our taxation, the aggregate of employees and employees taxes, as previously stated in detail by our attorney.

2. Our members and their employees, the longshoremen, have been and are a part of the steamship industry. They definitely are not a part of the railroad industry and they strongly object to this large increase in taxation to be imposed upon them in order to finance another industry's insurance, benefit plan such as this railroad insurance plan for the benefit of railroad employees.

3. Generally, the stevedoring contractors and their employees work on steamship piers or other steamship-terminal facilities which usually are a long distance from or are in no way connected with or near to a facility or terminal operated by the railroad for freight handling.

4. The stevedoring contractor's employees, known as longshoremen, are usually paid considerably more wages per hour than is paid by the railroads for workmen handling freight at a railroad terminal.

5. The stevedoring contractor's employees for many years have belonged to closed shop unions, which have always since their inception been known as members of the steamship business or trade.

6. Sometimes these stevedoring companies transfer freight to or from railroad cars when the tseamship pier or other steamship terminal or facility is equipped with railroad tracks so that the cars can be brought down near to the ship. The very fact that a terminal or pier facility is close to deep water is proof that it is primarily a maritime facility and not a regular railroad facility. 7. We do not believe this law as written would be valid. Longshoremen working for our members often work for several different employers in a short time. The work itself is very casual depending on trade, business trends, weather, and

so forth. As a result of the sporadic nature of their employment, longshoremen are paid a much higher rate of pay per hour than freight handlers working for the railroads. As the work is so intermittant and the men work so short a time for one company, we do not believe tests could be evolved so that a longshoreman could qualify any time in the future for unemployment insurance or retirement benefits under this act as written. He would then fall in the category of a man who had to pay an insurance premium but had no hopes of receiving any of the benefits that he was forced to purchase.

8. The longshoreman will complain bitterly against deduction of 54 percent instead of 1 percent from his weekly pay envelope. He will consider it as a cut in his hourly wage. It will cause much unnecessary labor trouble.

9. The first Railroad Retirement Act was passed in the year 1935. Ever since that time Congress has confined the insurance plan which was initiated in that statute to the railroads, the Pullman Co., and the Railway Express Agency. The whole steamship and motortruck industries were left outside the application of the railroad insurance statutes. Now, paragraph 10, on pages 5 and 6 of the bill, proposes to change that plan. It grants exemption or exclusion to the steamship companies because they are common carriers, but not to the stevedoring companies who, as independent contractors, handle the steamship freight. If anyone can justify this inconsistent treatment of two parts of the steamship industry, we will be surprised.

Up to the present writing, no one has attempted to justify this unjust discrimination. If the steamship company itself employs the longshoremen to load or unload the steamships, then Railroad Retirement Act taxation will not be imposed; but when the stevedoring companies perform the work, and they now handle more than 90 percent of the tonnage, they will encounter an extra taxation of approximately 10 percent of their pay rolls to provide pensions for retired railroad employees who never worked for any stevedoring company.

10. Also, think of the longshoreman, one day he works at loading a ship by a steamship company and pays 1 percent social-security taxes; the next day he works for a stevedoring company at the same work on the same or an adjoining pier and pays 54 percent railroad retirement tax.

After a while, is he going to apply to both the State unemployment insurance fund under social security and also to the Railroad Unemployment Insurance Act fund should he at some time decide that he was unemployed?

We must appreciate in this connection that he probably becomes unemployed two or more times a week due to the casual nature of his employment. There is no possible way that this unjust discrimination can be explained.

11. This bill proposes a very burdensome and discriminatory new tax that should not have been proposed without notice to and discussion of the matter with the employers and employees on whom this large tax is to be imposed. The proponents of this bill did not give us any notice of their proposals. Without consulting us, they drafted two bills and had them introduced in Congress with indiffrence to the rights of the prospective taxpayers, including more than 100,000 longshoremen.

The employees of the stevedoring companies, the longshoremen, as previously indicated, are not members of any railroad union. They are members of the International Longshoremen's Association (AFL) or the International Longshoremen's and Warehousemen's Union (CIO). Each of these unions have maintained collective bargaining agreements for many years with the stevedoring companies and the steamship companies in the various ports.

The president of the International Longshoremen's Association, in his brief of March 26, 1945, to the House committee on H. R. 1362 opposed the inclusion of longshoremen in the coverage paragraphs of these bills. (House committee hearings on H. R. 1362, pp. 930-931.)

The proponents of this bill, therefore, have no authority to speak for our employees. This heavy taxation is being arbitrarily imposed on us by outsiders who have no right to speak for any part of our industry. Verily, it proposes taxation without representation.

Our many members, speaking through this association, unanimously request this Senate committee to strike out paragraphs (2), (4), (5), and (11) of section 1, pages 2 to 8, of this bill, and thereby relieve the stevedoring companies and their officers and employees from the unwarranted heavy taxation proposed in the bill.

STATEMENT OF FRANK W. NOLAN, REPRESENTING THE CONTRACTING STEVEDORES OF THE PORT OF NEW YORK

Mr. Chairman and members of the committee, my name is Frank W. Nolan. I have been engaged in the stevedoring contracting business for nearly 25 years in all the principal North Atlantic ports and three of the Great Lakes ports. I am chairman of the stevedoring committee of the Maritime Association of the Port of New York, located in the Maritime Exchange Building at 80 Broad Street in the city of New York.

The membership of the Maritime Association includes all the stevedoring contractors of the port of New York who are engaged primarily in loading cargoes on and unloading cargoes from steamships engaged in deep-sea and domestic intercoastal and coastwise trade. These contractors have performed practically all the work of stevedoring the great volume of cargo tonnage that has flowed through the port of New York prior to and during the war.

The stevedoring contractors are required at times to handle cargo to or from motortrucks, railroad lighters, and railroad cars for which the contractors are compensated by the carriers but that work is incidental to the main task of loading and unloading steamships at steamship piers. Essentially, the stevedor ing contractors are engaged in maritime work. They are either the first or the last link in the chain of railroad transportation when part of the freight movement is by water.

Workers employed by stevedoring contractors are known as longshoremen who are hired each day and are paid on an hourly basis. Admittedly, they are not the steady, long-term service employee who is conspicuous in railroad service and for whom the special railroad insurance plan was designed some years ago. At a general rule, these langshoremen work on steamship premises and not on railroad premises and they have no service record of railroad employment. It is common knowledge that they are an integral part of the steamship industry and they certainly cannot be classified as railroad employees. They should not be included in the railroad industry, and, they do not belong in and will not fit into this special plan of insurance for railroad employees.

No one to my knowledge has asserted that stevedoring contractors should be made employees under the Railroad Retirement Act or the Railroad Unemploy ment Insurance Act. The proponents of these amendments apparently desire to expand the statutory coverage so that railroads cannot through contracts remove railroad services and railroad employees beyond the scope of the railroad insurance acts.

But the proponents' desires should have no bearing on the functions of stevedoring contractors who work for the steamship lines and handle steamship freight generally on steamship premises. In the instances where longshoremen work on railroad premises, such premises are in general devoted to coordinated railroad and steamship freight traffic.

A large volume of cargo is interchanged between steamships and railroads in the port of New York over the premises of about 200 steamship piers, many of which are owned by the city of New York, some by the Federal Government, and some are privately owned. These piers are located on both sides of the Hudson River and the East River and on the Brooklyn and Staten Island shores of New York Bay. Some of these piers are many miles from the rail terminals of the nine trunkline railroad systems, that use tugs, barges, lighters, and carfloats to bridge the gap between their railheads and the steamship terminals. It is interesting to consider the movement of export cargo loaded into a trans-Atlantic liner at one of the large steamship terminals on the west side of Manhattan. The freight comes from several sources, (1) motortrucks from shippers in the city of New York; (2), long-haul motortrucks from points as far as 800 miles from New York City; (3), railroad barges and lighters; (4), coastwise and intercoastal transshipment steamship lines; (5), tramp steamships; (6), canal boats; (7), local lighters and barges; (8), motortrucks from the railroad freight stations and contract terminals in New York City; (9), Railway Express Agency; (10), United States parcel post; (11), railroad carfloats in the case of perishable and refrigerated merchandise; (12), baggage from various sources; (13), grain elevators, and (14), ship supplies from various sources. Import cargo presents an equally diversified distribution upon delivery from the steamship.

To effect dispatch of fast cargo vessels, it is imperative that their cargoes be discharged and loaded simultaneously to and from the dock, as well as overside to and from canal boats, barges, lighters, and carfloats. The turn-around sched

ule of the vessel may require working day and night for an entire week or 10 days of work under pressure.

The dock space cannot accommodate all the cargo that a vessel may have on board, especially if part of this cargo is ore of various kinds. General cargo can be tierd high on the dock, but it is impractical to discharge and pile on the dock large quantities of ore, or bulk cargo of similar nature. If this were done it would be but a matter of hours before congestion would tie up the dock operation and delay the vessel.

Continuous and prompt movement of a large part of the vessels' cargo by railroad car, railroad lighters, and other floating equipment is primarily for the convenience of the vessel's turn-around, however beneficial it may be for the railroad to obtain delivery or receipt of its freight to or from the vessel, in no sense is the railroad contracting out any of its functions; on the contrary, its tie-in functions are indispensable to the vessel.

Hence, a large proportion of the vessel's freight is either "being transported" or is "to be transported" within the terms of paragraph 11 of section 1 of the proposed amendments, and therefore the contractor presumably would be an "employer" as defined by the amendments.

It is obvious that the labor used for the handling of this ocean-borne freight at steamship terminals is not railroal employment and no one engaged in this work should be subject to the Railroad Retirement and Unemployment Acts. Now, turning to the direct transfer piers where the railroad cars are run over railroad tracks on to the pier alongside the steamship, such as at the Claremont terminal of the Lehigh Valley Railroad in Jersey City, or the Erie Railroad and the West Shore Railroad docks at Weehawken, or the Jersey Central and Pennsylvania Railroad piers at Jersey City, or at the Newark Tidewater terminals at Port Newark.

At the first four terminals-Lehigh, Erie, West Shore, and Pennsylvania-the berths used by the steamships are dredged and maintained to a safe depth by these railroads which naturally seek to effect a minimum cost transfer of their freight between open cars and the steamships without having to incur the heavy cost of lighterage which they would otherwise be compelled to assume.

The stevedoring contractors employed by the steamship companies load or discharge the freight into or from the railroad cars as a related part of the stevedoring work of dispatching the ships. Certainly the railroads would not perform the function of such carloading or unloading alongside the ships and if they attempted to do so, the vessels would undoubtedly refrain from making return calls at those berths.

Now, let's take the operations at Port Newark. The steamship berths and warehouses are at quayside, constructed by the United States Government during World War I, and, excepting for war periods, have been leased to a terminal company or contractor by the city of Newark. Under contracts or arrangements with the lessee terminal operator, several steamship lines have used this facility as their cargo terminal and motortrucks have obtained the accommodations they needed to deliver or receive freight. The three railroad systems reaching this terminal likewise obtained the interchange of their freight traffic with the steamships. The lessee-operator performed most of the freight-handling services of loading and unloading the railroad cars on the premises. The various origins and dispositions of freight handled over the terminal were mostly motortruck and railroad cars plus a substantial volume of cargo stored or processed in the immediately adjacent warehouses which are an important part of the Government. property.

This large Port Newark facility, so essential for the city of Newark and its suburbs, is primarily a steamship terminal and secondarily a warehouse, railroad, and motortruck freight outlet. The transfer of cargo between vessels and railroad cars is not an instance of "contracting out" of railroad service because no one or all of the three railroads could satisfactorily perform the services which are performed by this lessee-contractor.

First, no railroad company owns the property or has any right to use it excepting by permission of the lessee.

Second, no railroad company has any interest whatever in the major part of the freight traffic that passes over the premises.

Third, the owner of the property and the lessee are entitled to the greater revenues accruing from the diversified utilization of the premises by an inde pendent contractor. Much smaller revenue would undoubtedly arise from its confinement to railroad use.

Fourth, when three competing railroad companies desire to use a certain common facility for the handling of their freight at the same time an independent contractor-operator is the only proper solution of the problem.

I can safely make that statement because three separate gangs of railroad workers, operating on the premises at the same time, would produce inevitable conflict and confusion, and two of the competitors would not consistently select the third competitor to be their contractor.

Steamships and railroad companies of the port of New York usually engage, as and when required, a floating derrick contractor who specializes in the handling of heavy lift freight, meaning packages of quite large dimensions or exceeding 10,000 pounds in weight. Derrick contractors have acquired many units of costly floating equipment, which have varied hoisting capacities up to 150 tons weight in a single piece as well as special tackle and other equipment.

Most important, they have specially trained crews of workmen to operate the derricks and assume the full responsibilities involved in handling the heavy lifts, including the slinging and hoisting of such cargo upon discharge from or loading on board a steamer.

This work is a specialty which could not derive from sufficient financial support from the relatively small amount of railroad heavy lift freight which is available. Therefore these contractors augment their revenues from business other than railroad traffic.

Their nonrailroad business includes the heavy lift freight of steamships, construction companies, the Army, Navy, steel companies, and many others. They also perform salvaging operations, including diving work and raising sunken floating equipment and ships. These operations, which are not confined to any one port, may be many miles from land.

The

This is obviously not an instance of contracting out by the railroads. railroads in the port of New York are not equipped to handle such heavy lift freight. The cost to any one railroad company, if it handled all of its leavy lift freight, would be excessive, and to the small railroad which has but a few heavy lift shipments in any year the cost would be prohibitive, and would probably exceed the gross rail revenue on the shipments.

Much that I have said in respect to the heavy lift contractors applies with like force to the contractors who specialize in the handling of explosives and highly inflammable cargo and who conform with the Federal, State, and city laws and regulations applicable thereto.

Shippers and most general contractors allocate that hazardous transfer work to the specialists who are specially prepared to reduce the dangers to the minimum. Certainly the merit of this contracting cannot be assailed.

Other contractors specialize in pumping bulk vegetable oil (import) cargoes out of the steamships into their own tank barges or direct into railroad tank ears or car floats. The reverse operation also occurs. These contractors usually are employed by the consignees or the shippers, rather than the steamship companies. They have specialized equipment of substantial value and specially trained crews which the railroads could not with economy individually or collectively duplicate. In the port of New York, there are several stevedoring contractors who specialize in the handling of bulk cargoes by means of floating cranes of a type known as "diggers." These machines are very efficient in the handling of cargoes of sulfur, phosphate rock, pig iron, scrap iron, coke, coal, fertilizers, soda ash, ores, and similar commodities which are transferred between steamships, oceangoing barges, canal boats, scows, lighters, and railroad cars. Diggers are also employed by other stevedoring contractors to assist in the loading and discharge of various types of general cargo to and from lighters or carfloats alongside liners and tramps berthed at steamship piers. The operators and firemen employed on these "diggers" are members of the International Union of Operating Engineers and the other labor engaged in handling the cargoes are longshoremen, members of the International Longshoremen's association. The bulk cargo stevedoring work conducted by these contractors is performed at various locations in the port, including the railroad piers where no crane facilities are available, at plants where the cargoes are processed, at the barge canal terminals, at steamship piers and at anchorages.

The railroads would only be able to perform a small fraction of this work with their own facilities and there is no reason whatever why these specialists contractors, employed by railroads, steamship companies, consignees, and other nonrailroad interests should be included in the railroad retirement coverage.