that assets subject to the payment of the certificates are being neglected. Thus it is not shown that the claim against the guarantee company is not being pursued or that its collection could better be handled in proceedings under Ch. X. There is no showing that the machinery employed or available in the state foreclosure proceeding to safeguard and protect the interests of those creditors after the sale is not comparable to that contained in Ch. X for the consummation of plans which are not only fair but feasible. § 221 (2). In view of the burden on a petitioner to make the showing required by § 130 (7) and § 146 (4), the bankruptcy court is not warranted in assuming, without more, that a state foreclosure proceeding, instituted for and on behalf of the first mortgage creditors exclusively, is inadequate, measured by Ch. X standards, to protect their interests. The contrary course would result in Ch. X making greater inroads on prior proceedings than § 130 (7) and § 146 (4) indicate was the purpose.

Affirmed.

WARREN-BRADSHAW DRILLING CO. v. HALL, AGENT, ET AL.

CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE FIFTH CIRCUIT.

No. 21. Argued October 16, 1942.-Decided November 9, 1942.

1. The application of the Fair Labor Standards Act depends upon the character of the activities of the employee. P. 90.

2. Employees seeking to recover overtime compensation and liquidated damages under § 16 (b) of the Fair Labor Standards Act, held to have sustained the burden of proving that they were engaged in the production of goods for interstate commerce within the meaning of the Act. P. 90.

3. Members of a rotary drilling crew, engaged within a State, as employees of an independent contractor, in partially drilling oil wells

(to a depth short of the oil sand stratum)-which wells were later "brought in" by other workmen; and some of the oil and gas from which, in crude form or as refined products, moved in interstate commerce-were engaged in a "process or occupation necessary to the production" of oil for interstate commerce, and were covered by the Fair Labor Standards Act. P. 91.

4. Assuming that this is prerequisite to the application of the Act in this case, there were reasonable grounds for the employer to anticipate, at the time of drilling, that oil when produced by the wells would move into other States. P. 92.

5. In the case of an employee who is employed on the basis of an eight hour day at a fixed daily wage, and regularly works seven days a week, the fact that he is paid, and accepts, wages which are in excess of the statutory minimum, including the minimum for overtime, does not constitute compliance with the overtime compensation requirements of the Fair Labor Standards Act. Overnight Transportation Co. v. Missel, 316 U. S. 572. P. 93. 124 F.2d 42, affirmed.

CERTIORARI, 316 U. S. 660, to review the affirmance of a judgment, 40 F. Supp. 272, against an employer in an action on behalf of certain of its employees for unpaid overtime compensation and liquidated damages under § 16 (b) of the Fair Labor Standards Act.

Mr. Frank Settle, with whom Mr. Sam Clammer was on the brief, for petitioner.

Mr. Dallas Scarborough, with whom Mr. Ellis Douthit was on the brief, for respondents.

Solicitor General Fahy and Messrs. Irving J. Levy, Mortimer B. Wolf, and Peter Seitz filed a brief on behalf of the Administrator of the Wage and Hour Division, U. S. Department of Labor, as amicus curiae, urging affirmance.

MR. JUSTICE MURPHY delivered the opinion of the Court.

We are concerned here, as in Kirschbaum Co. v. Walling, 316 U. S. 517, with a problem of statutory delineation, not

Opinion of the Court.

317 U.S.

constitutional power, in the application of the Fair Labor Standards Act1 to a particular situation. This is an action to recover unpaid overtime compensation and an equal amount as liquidated damages, brought by respondent employees under § 16 (b). We must decide whether respondents are engaged "in the production of goods for commerce," within the meaning of § 7 (a) of the Act. The district court held that they were so engaged, and, since petitioner had failed to compensate them for overtime hours as required by § 7 (a), accordingly rendered judgment for each respondent in the appropriate amount.2 The Circuit Court of Appeals affirmed with an immaterial modification, and the case comes here on certiorari.

The application of the Act depends upon the character of the employees' activities. Kirschbaum Co. v. Walling, supra, p. 524. The burden was therefore upon respondents to prove that, in the course of performing their services for petitioner and without regard to the nature of its business, they were, as its employees, engaged in the production of goods, within the meaning of the Act, and that such production was for interstate commerce. We agree with both courts below that respondents have sustained that burden.

Petitioner is the owner and operator of rotary drilling equipment and machinery, who contracts with the owners or lessees of oil lands to drill holes to an agreed-upon depth short of the oil sand stratum. When that depth is reached, the rotary rig is removed, and the machinery and crew move on to other locations. For reasons peculiar to the oil industry, a cable drilling crew then undertakes with cable tools to "bring in" the well, or else demonstrate that it is a dry hole. Respondents were employed by peti

1 52 Stat. 1060, 29 U. S. C. § 201 et seq.

240 F. Supp. 272.

124 F.2d 42.

tioner as members of its rotary drilling crew and worked on approximately thirty-two wells in the Panhandle Oil Field of Texas; thirty-one of those wells produced oil, and the other one produced gas. Petitioner was not the owner or lessee of any of the lands on which respondents drilled, and was not shown to have any interest therein or in the oil produced.

In 3 (j) Congress has broadly defined the term "produced," and has provided that "an employee shall be deemed to have been engaged in the production of goods if such employee was employed in producing, manufacturing, mining, handling, transporting, or in any other manner working on such goods, or in any process or occupation necessary to the production thereof, in any State." Whether or not respondents, in drilling to a specified depth short of oil, may be regarded as engaged in producing or mining and we certainly are not to be understood as intimating that they may not-recognition of the obvious requires us to hold that, at the very least, they were engaged in a "process or occupation necessary to the production" of oil. Oil is obtained only by piercing the earth's surface; drilling a well is a necessary part of the productive process to which it is intimately related. The connection between respondents' activities in partially drilling wells and the capture of oil is quite substantial, and those activities certainly bear as "close and immediate tie" to production as did the services of the building maintenance workers held within the Act in Kirschbaum Co. v. Walling, supra, pp. 525-526.

The evidence supports the finding that some of the oil produced ultimately found its way into interstate commerce. All the wells had pipeline connections, some of them being with petroleum companies operating on a

"'Produced' means produced, manufactured, mined, handled, or in any other manner worked on in any State; ...

Opinion of the Court.

317 U.S.

national scale, wherein the oil was commingled with the production of other wells. Officials of the State of Texas testified that some crude oil is shipped out of the State by these pipelines, and that a large percentage of crude oil sent to refineries in Texas thereafter passes out of the State in the form of refined products.

Petitioner contests the applicability of the Act on the ground that it, as an independent contractor not financially interested in the wells, had no intention, expectation or belief that any oil produced would be shipped in interstate commerce, and cites as support United States v. Darby, 312 U. S. 100, 118, where it was said that the "production for commerce" intended by Congress includes "at least production of goods, which, at the time of production, the employer, according to the normal course of his business, intends or expects to move in interstate commerce although, through the exigencies of the business, all of the goods may not thereafter actually enter interstate commerce." Respondents counter with the proposition that it is enough that the owners of the oil wells expected the oil produced to move across state lines, but the Government does not ask, and there is no need for, us to pass upon that proposition. The Act extends at least to the employer who expects goods to move in interstate commerce. United States v. Darby, supra. Assuming that such expectation, or a reasonable basis therefor, was necessary on petitioner's part before the application of the Act to petitioner, it is here present. The record contains ample indication that there were reasonable grounds for petitioner to anticipate, at the time of drilling, that oil produced by the wells drilled, would move into other states. Petitioner, closely identified as it is with

5 The Solicitor General submitted a brief on behalf of the Administrator of the Wage and Hour Division, United States Department of Labor, as amicus curiae.