agricultural economist of the Marketing and Facilities Research Branch. The study undertaken is of the same nature and scope as those already conducted in other problem areas of the continental United States, such as Boston, Mass.; Indianapolis, Ind.; St. Louis, Mo.; Miami, Fla.; and so forth. The final report of the San Juan metropolitan wholesale market will be forthcoming during the month of July.

In undertaking this venture, we anticipated the conditions set forth in section 5 of H. R. 8320 to the effect that:

In order to effectuate the objectives of this act and assist in the development of proper, adequate, and efficient marketing facilities in the United States, the Secretary under the authority of, and with funds made available pursuant to the Agricultural Marketing Act of 1946, shall undertake, and disseminate the results of, research relating to design, plans, location, methods of operation, materials, use, equipment, and other similar research and analysis, consistent with the needs for the improvement and development of proper, adequate, and efficient marketing facilities for handling perishable agricultural commodities.

The study of marketing facilities now under way in Puerto Rico is being done on a most scientific basis in conformity with the conditions set forth in section 5 of H. R. 8320. The establishment of a wholesale produce terminal facility in the metropolitan area of San Juan will cater to the needs of over half the population of Puerto Rico and, to a considerable extent, to the population of neighboring territories.

In providing such a facility the economic soundness of the venture has been given full consideration and it has been determined that such a development will contribute to the economy of the territory of Puerto Rico as well as to neighboring areas, including the Virgin Islands.

Following this presentation, I must call the attention of the members of this committee to the fact that the dispositions of H. R. 8320 do not cover Puerto Rico and that this oversight, in my estimation, should be corrected. I am convinced that the honorable members of this committee are fully aware of the economic predicament which Puerto Rico faces. The island is in dire need of strengthening its economic structure. Increased agricultural production, especially along lines other than sugar cane or tobacco, is the principal line of endeavor. The improvement of the marketing facilities and distributive system is indispensable to this end. Therefore, broadening the scope of the dispositions contained in H. R. 8320 to cover Puerto Rico will very definitely help to foster the economy of the island, and ultimately contribute to the well being of 2%1⁄2 million American citizens living in this area.

May I point out and emphasize that in making this appeal we are not asking for a handout for Puerto Rico as the dispositions of H. R. 8320 clearly state that aid provided under this bill shall be in the form of loans to be made available on a strictly financial basis and, therefore, to be paid back, or for the insurance of loans made by private investors in accordance with the dispositions of the bill itself.

The CHAIRMAN. We thank you very much, sir. We are very glad you came up, and we certainly will give consideration to your suggestion that the bill be broadened so as to include the territories.

Mr. COLON-TORRES. I am very thankful for the opportunity given me to appear before this committee.

The CHAIRMAN. Mr. J. B. McDonald, Commissioner of Agriculture of the State of Texas. We will be very glad to hear you now.

STATEMENT OF J. B. McDONALD, COMMISSIONER OF AGRICULTURE, STATE OF TEXAS, AUSTIN, TEX.

Mr. McDONALD. Mr. Chairman and members of the committee, I want to be very brief. I have studied this bill, and I think it is constructive. I think its objective is timely and constructive. I want to appear for its passage. I think it will pass and the purposes of the bill realized that it will give to agriculture and our economy generally a needed service and protection.

The bill if enacted, properly administered, in my opinion would serve not only the producer but the consumer. It would provide facilities for marketing that would enable us to make the greatest use of research that has been made. It would eliminate much of the spoilage and waste in perishable products that is an expense to the producer in the way of losses, and also a loss to the consumer, because those wastes have to be paid for somewhere. So this bill, I think, is commendable because it does benefit the producer and consumer alike, and if properly administered, the objectives of the bill would largely reduce the spread, the unjustified spread between the producer and the consumer.

I think it is not necessary for me to state further that this bill will be self-liquidating. It will cost the Government nothing. It just makes possible the financing of a service that is badly needed. I want to give it my heartiest approval. I am for it. It is needed. It is constructive. I hope it will be passed without much delay. The CHAIRMAN. Thank you very much, Mr. Commissioner. Mr. McDONALD. Thank you.

The CHAIRMAN. Mr. Horace W. Wilson of Philadelphia.

STATEMENT OF HORACE W. WILSON, PRESIDENT, AMERICAN WAREHOUSEMEN'S ASSOCIATION, PHILADELPHIA, PA.

Mr. WILSON. Mr. Chairman and gentlemen, I want to thank you for giving me this opportunity to appear here today. As I wired you, I am appearing in opposition to the bill. I am president of the Warehousemen's Association. This is a national organization composed of approximately 1,000 public warehouses located in all sections of the country, and representing at replacement value an investment in excess of $2,000,000,000. Personally, I am president of the Camden Refrigerating & Terminals Co. of Camden, N. J., and of the Quaker City Cold Storage Co. of Philadelphia. I have requested to appear before this committee and to oppose the bill H. R. 8320.

It is requested that my statement at this hearing be considered as a preliminary one, and I further request the opportunity to file a brief in support of the position which warehousemen take in opposition to this proposed legislation.

The reason the bill is opposed by our industry is not because of the possibility of the construction of additional warehouse facilities in the United States with the use of Government funds or Government credit, which in itself in our judgment would have a serious adverse effect upon the whole industry, but such opposition is fundamental and for the following reasons:

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In the judgment of this association the authority of and the number of Government loaning agencies should be drastically curtailed at this time and not expanded.

In its declaration of policy, the bill states, and I quote

that undue loss, excessive waste, the spoilage and deterioration are due to the fact that in most instances the public marketing facilities are inadequate or obsolete.

I have been a warehouseman for over 40 years, gentlemen, and of this I have spent 23 years in the cold-storage industry. During this time I have had many opportunities to observe the operation of the marketing facilities in Philadelphia and other cities. As a member of and in some cases an officer and director of various national associations, I have studied reports which have been issued from time to time, and I do not believe all the waste, the alleged waste, is due to the lack of facilities, but rather to the manner in which the goods are shipped, held pending sale and reshipped. And gentlemen, you cannot legislate efficiency.

Some loss may be due to the methods for loading and unloading, that is, physically handling, but I do not believe this is the major item.

The bill states farmers and others have been unable to obtain the relatively large amounts of capital necessary for the construction of so-called modern facilities through the regular channels, and this in itself would indicate to us that this is not a good credit risk.

Congress, due to the above, is requested to provide funds for the questionable financing. It does not seem to us that there exists any national emergency and we feel such being the case that any such loans are not to the public interest.

Revolving funds are proposed, and when the maturity on loans up to 40 years, there it is questionable whether the markets as we now know them will be needed even 10 years hence. New methods of merchandising, such as the growth of chain stores, the farmers cooperatives, the farmer markets themselves, and road stands, to say nothing of the increase in popularity of frozen foods, will tend to reduce the volume as also will the decentralization of business in the larger cities.

The bill even seems to express doubt as to the successful operation of the markets in that it sets up a procedure to be followed in case of failure and even provides a 5-year trial period, even after such failure may occur.

The bill invests full authority in one man or in one employee. It would seem that this is contrary to good business practices, and no one individual should have so much power.

I have read the brief to be presented by Mr. J. P. Johnson on behalf of the National Association of Refrigerated Warehouses, and I am fully in accord with it.

1 particularly wish to state that we as an association or I as an individual are not opposed to progress, nor the relocation, improvement or construction of wholesale markets, but we are utterly opposed to the participation of the Federal Government either from a financial or regulatory standpoint.

In conclusion may I point out and state that the warehouse industry is represented by the American Warehousemen's Association, of which as stated above, I am president. It is fundamentally a private enterprise, and as a broad general principle, it is our position that the Government should not compete with either directly or indirectly presently or in the future, and the provisions of the pending bill if it is passed,

in our judgment, are broad enough to eventually create a situation adverse to our industry.

We recommend that the committee render an unfavorable report on this and all similar legislation.

Now, Mr. Chairman, if I am permitted, I am sorry Mr. Phillips is not in the room, I would like to reply to a few of the questions Mr. Phillips raised this morning, to get them on the record. May I do so? The CHAIRMAN. Yes, sir.

Mr. WILSON. Thank you, sir.

Mr. Phillips asked Mr. Williams, of Philadelphia Chamber of Commerce, why the chamber would approve RFC loans and presumably were opposed to loans throught he Department of Agriculture. Mr. Williams, of course, is not in the Department that is conversant with these facts, and in this case I would like to state that the RFC was set up specifically to make loans, and it is or should be staffed by experts on this subject, and I cannot speak for the members of the Chamber of Commerce of Philadelphia, of which I am a member, but I feel confident that the members of the chamber have enough confidence in the RFC that if these loans were handled by the RFC and through the RFC and approved by the RFC, that we would have no objection to them.

The CHAIRMAN. To the bill?

Mr. WILSON. Yes, sir.

The CHAIRMAN. In other words, if we amend this bill so as to authorize the making of the loans through the RFC you and your associates and the chamber of commerce and its members, you think, would favor the enactment of the bill?

Mr. WILSON. I do not think we would be in favor of the enactment of the bill because at the present time we are very much opposed to the Congress appropriating any more funds when we do not have them. If we could balance the budget

The CHAIRMAN. What did you mean by the statement? I thought you made the statement to which I referred.

Mr. WILSON. What I meant to say was that if the RFC as now constituted, but not as a part of this bill, if the RFC as now constituted with the authority that it has, would handle these loans, then we would not object.

The CHAIRMAN. Do you think the RFC as now constituted is authorized to make these loans?

Mr. WILSON. I do not think so.

The CHAIRMAN. Well, then, you do object to this.

Mr. WILSON. That is questionable.

The CHAIRMAN. All right, sir.

Mr. ANDRESEN. As I understand it, the RFC can now make loans to business. I recollect the Lustron Corp., a new organization set up, $35,000,000, RFC just bought it back for $6,500,000. That is on default of the loan. I do not think there is any question but if you over in Philadelphia want to get together a group, that you can make an application to the RFC and they will consider the application. I do not know whether you will get a loan or not, but if it is big enough, you probably will.

Mr. WILSON. I understand, but I do not have any data to support the statement that the RFC have already turned down some requests for loans for similar projects.

The CHAIRMAN. What did you mean, Mr. Wilson, when you brought out in your testimony, I understood you to say that if the RFC were authorized to make these loans, you would have no objection to it. Now you said you do not think the RFC will make the loans and you do not want us by special legislation or additional legislation to authorize RFC to make the loans.

Mr. WILSON. Mr. Chairman, I am afraid we are talking about two different matters. As president of the American Warehousemen's Association we are entirely opposed to the loans in any guise. As a member of the Chamber of Commerce of Philadelphia, I was trying to explain the question which Mr. Phillips raised that the chamber has been willing to go along with the RFC but they question a new agency. The CHAIRMAN. What difference does it make to the Chamber of Commerce of Philadelphia which agency of Government Congress authorizes to make the loans?

Mr. WILSON. I can not answer that. That is a matter for the chamber. I am just one member.

The CHAIRMAN. Are you speaking for an organization or as an individual?

Mr. WILSON. What I read is on 'account of or for the American Warehousemen's Association.

The CHAIRMAN. Who authorized you to present that on behalf of the American Warehousemen's Association?

Mr. WILSON. The directors of the association.

The CHAIRMAN. They authorized you to appear here in opposition to the bill.

Mr. WILSON. That is right.

The CHAIRMAN. Well, now, in your opening statement you said that the different agencies of Government, their spending activities should be curtailed and not expanded; which agency do you want abolished? Mr. WILSON. I would not say that I wanted any of them abolished. The CHAIRMAN. Which ones do you want curtailed?

Mr. WILSON. That is a hard question to answer.

The CHAIRMAN. I thought it was. That is the reason I asked it. You want them curtailed.

Mr. WILSON. I have asked permission to file a brief.

The CHAIRMAN. We will be very glad to have you submit a brief. We will grant you that permission.

Mr. WILSON. Thank you.

Mr. ANDRESEN. Is it not a fact that you think the Government ought to spend less money so they will have a balanced budget and get on their feet again?

Mr. WILSON. Yes, sir; I am very strongly of the opinion that the Government must balance its budget and get on its feet or that we will run as a Nation into bankruptcy.

The CHAIRMAN. Are you representing the organization in any official capacity or were you just selected for this one special appearance?

Mr. WILSON. I am president of the association. I was requested to appear before this committee as president of the association. The CHAIRMAN. Any further questions?

Mr. GRANGER. As I understood you Mr. Wilson, you did not want the Government to loan any money and you did not want any regulation. Is that what you said?