be of great value to all producers, handlers, and consumers of perishables in Virginia.

The CHAIRMAN. Thank you very much, Dr. Maxton.

Are there any questions?

Mr. ABERNETHY. Dr. Maxton, my question would not necessarily indicate I oppose this legislation, but I would like to inquire why it is that local money is not available for this type of facility, particularly in view of your statement that it would save so much money in the operating costs of the market down in your State.

Dr. MAXTON. I wish I had a good answer for that, Mr. Abernethy. After 11 years of effort to try to enlist the support of municipalities, bankers, and all people concerned, there are so many groups involved in a market that it is difficult to get them all together and get them all to agree on a business proposition and carry it through to where they see it built, constructed, and operated efficiently.

Mr. ABERNETHY. Well, that would have to be done in the event a loan is granted under this bill.

Dr. MAXTON. That is true, sir; but apparently the motivating force is the loan fund.

Mr. ABERNETHY. I think the record, in order to justify the legislation, is going to have to show why the money is not available locally and, if the record discloses that during these hearings, then the legislation might be justified.

Dr. MAXTON. In that connection, I can say we now have this market authority set up by the Governor since 1946; there is a market authority board, and they are negotiating at present with a bonding company for the sale of bonds. But, as yet, after what amounts to 5 years of effort and good effort by a very efficient man, Dr. Myers, we have been unable to make any material progress whatsoever.

Mr. HOPE. Following Mr. Abernethy's question, which seems to me to be a very pertinent question, I would like to ask the witness if he can give the reason for the failure of a bill which he mentions as having been introduced in the State legislature in 1950 to make $1,000,000 available as a State revolving loan fund. Why was it defeated? Dr. MAXTON. It was defeated because it was a matter involving finances. It was actually passed by a majority but by an insufficient majority to be carried on through, because it is a finance matter.

Mr. HOPE. Well, there must have been some opposition to it, or it would have secured a sufficient number of votes.

Dr. MAXTON. Yes.

Mr. HOPE. What was the nature of the opposition?

Dr. MAXTON. As far as I can recall, the matter was brought up in the closing hours of the session. There were many other things yet to be done on this bill, and I think they had already turned the clock back three or four hours, anyway, and since there was a good chance. to defeat it, they wanted to get at something the legislators were more interested in. That would be my explanation at this time.

Mr. HOPE. In other words, the State of Virginia evidently does not now regard this as a matter that should be financed by the State, as indicated by the action of the legislature, and now you are coming here as the representative of the State extension college and urging that the Federal Government enact legislation to do what your own State has turned down.

Just how do you justify that sort of request of the Federal Government when your own municipalities and your own State legislature and your own financial people have, up to this time, anyway, rejected it either as a bad proposition or something which they feel they have no interest in?

Dr. MAXTON. Congressman Hope, I do not think the State as such, if the State could express an opinion, feels anything other than that they would prefer private interests to build it. We have that preference first, and we would have that preference if this bill passes, and we will go to private interests for financing and simply get an insurance coverage for 85 percent so as to insure the loan.

We are not afraid of the net savings that would result from such a market, because we have records which prove in three markets that the savings would pay off the loan fund within a reasonable period of time and pay interest on it to the private loan agencies.

The State of Virginia, as you know from some of its representativesI do not see any of them here this morning-is a little peculiar with respect to the use of State funds. However, some progress is being made. I think the State of Virginia also recognizes that produce comes into Virginia from many States, and they do not consider it entirely a State proposition. Neither do our municipalities, such as Roanoke, Norfolk, and Richmond, consider it a municipal proposition solely. The produce comes in from so many States and it goes out to so many States that it is of national importance and of national concern as well as of municipal and State concern.

Mr. HOPE. Well, you compared the market at this time with a public utility, and I think it does have some relation, to a public utility; but we do not ordinarily expect the Federal Government to finance the construction of public utilities in a State. Municipalities do it sometimes, but ordinarily it is done through private industry. As far as the Federal Government is concerned, the only instance I know of where the Federal Government has gotten into that field has been in the case of large power projects which, in most cases at least, could not be developed in any other way.

It just occurs to me that we are going one step further in this legislation than we have gone before. I am not expressing any opinion on the merits of the legislation at this time. I want to consider all of the testimony that may be presented. I know the situation is bad, and I would like to see it remedied, but I am somewhat reluctant to see the Federal Government set up a new agency here to make loans to build facilities that, to me, seem to be more properly something that should be handled by private capital in the first place and, if not handled in that way, then by the municipalities or the States. Unless some very good reasons can be advanced as to why we should take this additional step, I think I would be rather reluctant to go along with this legislation.

I want to ask you one more question. Do you think it is desirable to use this method of financing operations of this kind when it means, if you do, for the life of the loan at least, the market is going to be under the control and regulation of the Federal Government rather than being locally controlled and managed? Is that a matter that should be given some consideration in your opinion?

Dr. MAXTON. By all means. I want as little Federal control as we can get, but Federal control is neither all good nor all bad, and I am

hoping that in the case of this market the bad features of it will be far overshadowed by the good.

When I first read this bill, the first thing that came to my mind was the farm land loan source of funds, and I immediately saw a parallelism in it, and that has worked so well that I would think there are possibilities for a bill such as this to work out in a similar manner.

Mr. HOPE. You are referring to the Federal land-bank system? Dr. MAXTON. Yes; as a source of loan funds to farmers, for instance, and the fact that they now largely own the system due to payments. Mr. HOPE. Of course, that is a different set-up than you have here in that it is a cooperative, whereby the Government advanced the original capital but with the hope and thought that eventually the borrowers themselves would be able to take it over as a cooperative operation. That has been done in the case of the Federal land banks. It has not been done in the case of all of the other lending agencies under the Farm Credit Administration, but all of them are moving in that direction, which I think is the right direction and the commendable thing for them to be doing. Under this bill, however, there is no provision whereby you will ever have anything except a direct loan from the Federal Government or a guaranteed loan, if you take that road.

Dr. MAXTON. Yes.

Mr. HOPE. They would still have the Federal control in there as long as the loan was in existence.

Dr. MAXTON. Congressman, on some of our markets with the facilities built at the right places and properly built for the efficiencies and savings that are possible, it would not take 40 years, but more likely would take 15 or 20 years to entirely liquidate the Government's interest, after which time, in all likelihood, the market would be operated by a committee or group similar to our present market authority set-up whereby the users of the market are given the responsibility for operating the market. It would be my hope in this matter as quickly as possible to liquidate the Government's interest and then to take over fully the operation by the users.

Mr. HILL. On page 6, Dr. Maxton, at the top of the page, you make this statement, which I just want to get clear in my mind:

In my work in marketing as a member of the VPI faculty I have come to consider marketing facilities in the light of public utilities such as waterworks, power sources, transportation agencies, etc.

Now, this bill on pages 6 and 7 has section 6, which is headed "Revolving funds," which is an insurance fund on loans, and then on page 7 it takes up the market facilities loan funds, as a direct loan to purchase or contract.

Now, from your statement, I cannot understand what you mean. Would you say that railroads or truckers could come under this revolving fund, the insurance fund, or would you support a measure like that to allow the railroads to have an insurance fund and also the truckers to have an insurance fund and let them have that market facility loan fund to borrow from when they get in trouble? That is what is in my mind when I read it.

Dr. MAXTON. Of course, Congressman, my answer is "No." What I have in mind there is simply this: To me, food is just as important as water, transportation, or anything else. Now, you have some

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Government control and regulation of many of those things already, and you also have certain Government control and regulation of food, and I see nothing in this bill as proposed which will be harmful in any way to anyone concerned or which is going beyond what has already been done by the Congress and the Senate.

Mr. HILL. But you would not extend it to the railroads and truckers?

Dr. MAXTON. Oh, no.

Mr. HILL. On that same page, you start the second paragraph out by saying "I," meaning yourself, and then you wind up by saying "we." Just tell me who the "we" are in favor of this bill. Whom do you really represent in that paragraph? It is a little bit confusing to You start with "I" and wind up by saying "we."

me.

Dr. MAXTON. It is probably an error in English. I had a little trouble when I was in high school with them.

Mr. HILL. I have that trouble, too, of saying "I" when sometimes I mean "we."

Whom do you mean by "we"? I just want to know. I do not want to embarrass you, but who are "we"?

Dr. MAXTON. I have been delegated to speak for the Virginia Extension Service, and this statement has been approved. The director has read it and approved it, and this is the opinion of the extension service.

Mr. HILL. You would rather get a loan from the United States. than the State of Virginia. I do not blame you.

The CHAIRMAN. It is a fact, Doctor, that in the markets of Virginia, just as in the markets of other States, distributors draw produce from many States in a wide area to those market areas?

Dr. MAXTON. That is right.

The CHAIRMAN. Particularly in the case of the market in Richmond. A lot of produce is brought up from North Carolina and sold in the market in Richmond, and certainly in some degree the Richmond market is impressed with a public interest in the sense that its operations extend beyond the State line.

Dr. MAXTON. Oh, yes. We have no State lines when it comes to produce markets.

The CHAIRMAN. That is what I mean. So that, in providing this facility in the city of Richmond, you are providing a facility not only to serve the people of the city of Richmond but likewise all of the people who trade in that market place.

Dr. MAXTON. That is correct.

The CHAIRMAN. And the fact that you have not been able to promote the building of market facilities is all the more reason why the Federal Government should step in and make loan funds and insurance funds available, and you have every reason to believe, I presume, if the loan fund is made available and the insurance feature is contained in the bill, that you will be able to obtain local capital to finance the facilities, if the bonds are guaranteed by the Federal Government. Dr. MAXTON. That is correct.

The CHAIRMAN. And the building of the market facility would benefit not only the city of Richmond, but the producers of North Carolina and other areas will likewise benefit?

Dr. MAXTON. That is correct.

Mr. HILL. That is true in every case. That applies to San Francisco; that applies to Cleveland; it applies to Denver.

The CHAIRMAN. That is right.

Mr. HILL. So your problem down in Virginia is no different from our problem in Denver?

The CHAIRMAN. That is the reason I take the position that this should be handled at the Federal level. For instance, your markets at Philadelphia, Baltimore, New York, and Boston likewise extend beyond State lines.

Mr. HILL. But you would not favor that the Federal Government should control all of the elements of marketing.

The CHAIRMAN. There is nothing like that in this bill. This bill only provides that the market facility itself, the physical property, shall be in such shape as to meet the reasonable requirements of the Department of Agriculture.

Mr. HILL. Let me ask this: Does not this bill provide, if I read it correctly, that the Secretary of Agriculture can make all of the rules and regulations in regard to the operation of the market, if they put this loan on it?

The CHAIRMAN. Rules and regulations for the operation of the market?

Mr. HILL. Sure. He can direct everything concerning the market, if he puts a loan on there.

The CHAIRMAN. What provision is that?

Mr. HILL. There are some references made on pages 9 and 10.

Dr. MAXTON. I would say that once the Federal Government sets up the sound fiscal policy to see the funds it has loaned are properly spent, and that the chances for revenue are good, that the Federal Government is liable to remain.

The CHAIRMAN. Section 10 on page 14 provides that the Secretary may make a loan from the loan fund if he finds that a borrower cannot obtain funds from a source other than the Federal Government.

The answer, of course, is that there is no purpose to try to regulate the operation of markets.

We thank you very much, Dr. Maxton.

The committee will now take a recess until 2 o'clock.

(At 12:01 p. m. a recess was taken until 2 p. m. of the same day.)

AFTERNOON SESSION

The CHAIRMAN. The committee will come to order.

I understand Mr. K. R. Slamp, representing the National Association of Marketing Officials, is scheduled to leave the city pretty early this afternoon.

We would be glad to hear from you now, Mr. Slamp.

STATEMENT OF K. R. SLAMP, REPRESENTING NATIONAL ASSOCIATION OF MARKETING OFFICIALS

Mr. SLAMP. Thank you, sir.

The CHAIRMAN. I want to explain that the House has just had a roll call, and that is the reason that the Members are not present at the moment. I am sure, however, that some of them will come in in a few minutes.