are not suffering. They do not appear to be suffering to me. They seem to be living a very happy life, much better than a lot of city dwellers. Mr. CHRISTOPHER. I would just suggest that the gentleman go and live on a farm for a few years, and then perhaps he would be better able to answer a question of that description. Mr. JOHNSON. Well, I was raised on a farm right up in Gaithersburg, Md. And I have worked on a farm. The CHAIRMAN. Are there any further questions? Thank you Mr. Johnson. Mr. JOHNSON. Thank you. The CHAIRMAN. I should like to inquire how many of those who are here to testify will not be able to come back in the morning? (Mr. M. Oldham Lewis responded.) The CHAIRMAN. Will you come around now, then, sir? STATEMENT OF M. OLDHAM LEWIS, SECRETARY, WHOLESALE PERISHABLE MARKET IMPROVEMENT LEAGUE OF BALTIMORE Mr. LEWIS. Yes, sir, I hope my statement will not irritate you unduly, because I have been up since 2 o'clock this morning, and I happen to be one of those racketeers that you referred to earlier, in the produce business. The CHAIRMAN. You admit that you are one of the racketeers? Mr. LEWIS. As referred to in your statement, Mr. Cooley. Not that I am a racketeer, at all, but you seem to classify them in a general sort of way. The CHAIRMAN. No, I do not think all of the people in the produce business are racketters. Mr. LEWIS. I hope not, sir. The CHAIRMAN. I think the people who are charging enormous rates, according to the information this committee has received, are in that category. But what is your name, sir? Mr. LEWIS. M. Oldham Lewis. The CHAIRMAN. You are Mr. M. O. Lewis of Baltimore? Mr. LEWIS. That is right, sir. The CHAIRMAN. Mr. Lewis, how long would it take you to make your statement? Mr. LEWIS. I shouldn't think it would take over 10 minutes. Mr. LEWIS. That is, provided you don't ask too many critical questions. You can elongate the period if you like to. The CHAIRMAN. All right. Mr. LEWIS. I represent the Wholesale Perishable Market Improvement League of Baltimore, many members of which own property which they have adapted and improved to fit their needs in the wholesale distribution of farm products, some with refrigeration, banana and tomato ripening rooms, buildings of three or more floors with elevator service, offices and storage in most instances on upper floors. It has been suggested that we abandon these facilities, centrally located, and take space in a proposed market on the outskirts of the city in a so-called model market that would only serve to consolidate services if all distributors availed themselves of space in central market, which we know they will not do. This was suggested by Department of Agriculture after a survey they made in 1949. The model and plan of market was the same as that proposed in other cities in which surveys were made. Changes, of course, were made as to size of market and population served, but plan and principles were the same that the Department of Agriculture have talked up for many years. Surveys of State of Maryland Marketing Service recommended in several instances improving market at its present central location, but United States Department in 1949 survey recommended that market be moved to area away from city. Although they, at one time a few years ago, said it would be a mistake to change location and that it had not worked satisfactorily where changes of location of previous market had been tried. We can only judge the bill, H. R. 8320, by the recommendation made for Baltimore, and using the plan as presented here, it would increase the cost of distribution rather than lower same. The theories advanced as to waste, deterioration, spoilage, losses, et cetera, as indicated in Baltimore and other reports were drawn from imagination and had no foundation in fact, because common sense would show since there was no model market for comparison; at least one market improved as suggested in earlier efforts of United States Department of Agriculture is now regarded as obsolescent or nearly so, although this improvement was made less than 25 years ago. It can readily be understood that promoters would find it difficult to secure capital for such a venture because on the surface the investment would be neither sound nor secure. It is not "obsolete facilities" that causes spread between producer and consumer; there are many factors such as transportation, packaging-frequently poor packages that have to be reconditioned to make presentable-top icing, just a few of expenses to get to wholesale distributors. The retailers have a highly perishable commodity, which frequently is packaged in a larger quantity than he can market promptly, which will result in some waste, collecting and delivery services, in some instances credit risk all out of proportion with profits. These are evils that if they cause consumer higher cost certainly the consumer is responsible for the imposition. A concentration of available supply would only serve good purpose when supply was light, we who market farm products, at a net profit of 2 percent or thereabouts, know the supply must be kept out of sight as much as possible if fair prices are to be secured for producer. In this age when large business is trying so desperately to decentralize we are asked to centralize without congestion, and while this sounds fine to the inexperienced we know that congestion is the stimulant on which activity feeds, the more evident activity the better the market. Speaking of market research, does this mean "methods of operation" would be controlled by Department of Agriculture along with design, plans, location? If so, it will result in regimentation of producer as well as distributor. This reasoning definitely is socialistic and could only result finally in disorderly, unorganized distribution at great loss to both producer and distributor, possibly consumer might benefit temporarily. Congress is asked for $50,000,000 and insurance fund of $25,000,000, also right to issue notes to Treasury Department for other moneys as needed; the interest charges to be 4 percent plus one-half percent for insurance. This indicates the doubtful character of this venture; even the proponents are leaving themselves plenty of ground to backtrack over a 40-year period. When there is need for expansion private funds have always been available. New York has properly fed about 10,000,000 people well, even with present facilities; would they do better after spending from $75,000,000 to $125,000,000 for so-called improved facilities? With this investment rentals would have to be very high for sufficient space. No plan that we have seen would be adequate, one floor 22 feet by 80 feet. Some receivers would require five such spaces with cost of at least five times present rentals. To make market definite improvement 100 percent occupancy would be necessary; this, we know, would be impossible. The loss would settle down to taxpayer who is the consumer, this would leave his saving by "improved facilities" as very questionable. Seeming low interest rates and long term to pay seem alluring, but the day of payment must come. The United States Department of Agriculture asks that loan be restricted to single market and bill introduced in Maryland and other legislatures asked monopoly of wholesale produce market. All State bills were of same general pattern. This is form of controlled or planned economy that has reduced England to its present deplorable socialized state, which except for aid of planned economist here would be definitely worse. Only 35 persons in all England have income after taxes of $24,000 a year. Our farmers here now are told what to plant or suffer consequences, and with this we will be told what to sell and where we can locate to sell it. Free enterprise that has made the United States of America the wonder of the world will be so circumscribed by rules and regulations that venture capital will not exist. In the case of bill H. R. 8320, the United States Department of Agriculture because of money aid will control the distribution of farm products if this bill passes Congress, and the marketing will be regulated by inexperienced theorists. This is not the American way of life. In view of our experience and knowing full well the pitfalls of this measure, we ask that the committee bring in an unfavorable report on H. R. bill 8320. The CHAIRMAN. Thank you very much, Mr. Lewis. We appreciate your giving us your views. Are there any questions? Mr. LEWIS. I understand, Mr. Cooley, that I will have the right to file a brief within 10 days. I think Mr. Parker telegraphed me to that effect. The CHAIRMAN. That is all right, sir. Is Mr. William L. Wilson of Jacksonville, Fla., present? Mr. Richard Wirt? I am advised that Mr. Wirt said that he could not be here and would like to file a statement later, and the same is true of Mr. Wilson. The others who have not been heard, I understand, live here in Washington. We will recess until tomorrow morning at 10 o'clock. (Whereupon, at 4:40 p. m., the committee recessed to reconvene Friday, June 9, 1950, at 10 a. m.) DEVELOPMENT AND IMPROVEMENT OF TERMINAL MARKETING FACILITIES FRIDAY, JUNE 9, 1950 HOUSE OF REPRESENTATIVES, Washington, D. C. The committee met at 10 a. m., Hon. Harold D. Cooley (chairman) presiding. The CHAIRMAN. The first witness this morning is Mr. Richard W. Wirt. Will you come around, please, sir? STATEMENT OF RICHARD W. WIRT, SOUTHERN RAILWAY SYSTEM, WASHINGTON, D. C. Mr. WIRT. Mr. Chairman, members of the committee, and gentlemen, I represent the Southern Railway in the development of the South, both agriculturally and industrially. Our vice president_in charge of traffic, Mr. Oliver, was very cordially invited to appear before the committee. Unfortunately, Mr. Oliver is away, has been away ever since the invitation came, and is in New York today. I happen to be assistant vice president in charge of agricultural and industrial development; so it is really my baby to come here and talk about this, because we are greatly interested in these markets. I am glad to be here, and I just want to touch on one item in this bill, and that is on page 17, eligibility requirements, section 12, paragraph (b), which reads: That the proposed market will be so located and designed as to make possible the direct loading and unloading of rail and truck receipts into or from the buildings of handlers receiving substantial quantities of perishable agricultural commodities by such methods of transportation, and that no restrictions will be imposed which will prevent access to the facility of supplies handled by any rail or truck transportation company. I think that clause is all right; it is fine; I think it is highly important that the railroads be allowed and facilities be furnished for the railroads to serve these markets and also the trucks. There is a lot of business the trucks are going to bring in there, but particularly the railroads. For instance, take apples coming out of the State of New York, going down in the South to the Louisville market, only to mention one along the Southern, or to Richmond, Va.; mostly those carloads of apples come by rail. Or take the California fruits and vegetables or Florida fruits and vegetables: If they come up to a point, say, in Richmond and cannot get to the market because it is poorly located, they have to be trucked over there, to be carted; they have to be unloaded from the train or the cars, put on a truck, carried over to 71578-50-ser. qq- -15 |