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Senator MONRONEY. There would be?

Mr. YOUNGER. The grower would get a much better rate. Now he has to go through a freight forwarder and the freight forwarder gets that advantage and the difference between the individual rate and the consolidated rate.

Senator MONRONEY. What is that difference, roughly? Is it im portant?

Mr. YOUNGER. Oh, yes; it is highly important.

Senator MONRONEY. But it is based on quantity rather than individual small shipments?

Mr. YOUNGER. That is right. These cooperative farmer groups that are organized, that can ship by express or ship by freight, or that can ship any way that they want to can get the advantage of a consoli dated shipment, except by air.

Senator PAYNE. And they take the responsibility?

Mr. YOUNGER. Yes, they take their own responsibility. That is O. K. I have nothing against the freight forwarder. I am not here at all against him. The only thing that appeals to me, and I think it is fair, is that the shipper ought to have the same right to ship by air that he has to ship by express or by freight or by truck, and there should be no differential.

If the ICC wants to say, "We insist that everything that is shipped must go through a freight forwarder," that is a different question. That is up to the ICC. But I do not believe that the CAB has a right and should put in a separate regulation for cargo by air which is different from the cargo by all the surface lines. I just don't think there is any justification for it.

Senator MONRONEY. It would not affect any chartering of planes! Mr. YOUNGER. No, sir.

Senator MONRONEY. They have the right to do that now?

Mr. YOUNGER. Yes, sir.

Senator MONRONEY. It would affect your airlines and if, as, and when other scheduled or certificated freight lines with rates perhaps approved by the CAB, those two would be affected?

Mr. YOUNGER. It would not affect your schedule of rates that are approved by the CAB. Those rates would be maintained and these cooperatives would pay to the airline the regulation rate for a consolidated shipment which has been approved by the CAB.

Senator MONRONEY. Senator Payne?

Senator PAYNE. I have no questions except, Mr. Chairman, somewhere in the back of my mind is the fact that we did hold hearings on this last year.

Mr. YOUNGER. No.

Senator PAYNE. We got into a discussion on it somewhere.

Mr. YOUNGER. Last year you did get on a discussion of it because you had before you the McCarran Act which was a complete revision of the Civil Aeronautics Act.

Senator PAYNE. That is right.

Mr. YOUNGER. In that you did get into this particular discussion. Senator PAYNE. I remember we had a number of witnesses testify on it at the time.

Mr. YOUNGER. That is right.

Senator MONRONEY. This applies not only to agriculture and horticulture but to livestock and fish, which would affect your lobsters in Maine, would it not?

Senator PAYNE. Yes.

Senator MONRONEY. We get them clear out in Oklahoma.

Senator PAYNE. We hope you will eat more of them.

Mr. YOUNGER. That wording is taken out of the act that pertains to trucks because that has been a policy that has already been set and approved by Congress. That is why we used that method.

Senator MONRONEY. Do you have any further questions, Senator? Senator PAYNE. No.

Senator MONRONEY. Thank you very much, Congressman Younger, for your helpful testimony. We appreciate your coming over.

Mr. Robert H. Roland, executive secretary, Society of American Florists.

We are pleased to have you with us this morning and we are glad to have your testimony. You may proceed in your own way.

STATEMENT OF ROBERT H. ROLAND, EXECUTIVE SECRETARY OF THE SOCIETY OF AMERICAN FLORISTS

Mr. ROLAND. I am Robert H. Roland, executive secretary of the Society of American Florists, 600 South Michigan Avenue, Chicago, Ill.

The society is the national trade association of the florist industry as a whole-producers, wholesalers, retailers, and allied trades. Its membership is composed of 83 National, State and local florist associations which are directly affiliated with the society. Each of these associations names one of its members to the society's board of delegates which is its governing body. I have been specifically authorized to support all efforts for the kind of relief proposed in S. 1192.

Historically, the Federal Government through the Congress and its many administrative and regulatory agencies, has always recognized the need to assist all producers of agricultural commodities. The many reasons for this policy are so well known that they need not be detailed here.

One of the major examples of this policy has been in the field of transportation. However, this has been evident only with respect to ground transportation.

The Interstate Commerce Act provides for rather broad exemptions for agricultural commodities from many of its regulatory provisions. It also permits groups or associations of producers to perform a consolidating and distributing service for their respective members.

S.1192 proposes to provide similar relief in air transportation. In the florist industry this is particularly pertinent because it is composed mostly of very small operators who would be at an economic disadvantage if each of them had to do his own shipping independently.

Another significant factor is that the production of flowers, which supplies the 25,000 retail florists in the country as a whole, is confined to a rather limited number of areas. Actually, 72 percent of all flower production occurs in 12 States.

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There is the further fact that, because of climatic conditions, some areas can produce certain flower crops better and more efficiently than any others. The result is that a substantial portion of the production in many of these areas must be shipped out. Therefore the most efficient and economical transportation facilities to get their crops to distant markets has a vital importance to those producers as well as to their customers.

Outstanding examples of this are in the areas around San Francisco, Los Angeles, Denver, Boston and several points in Florida. California flowers are shipped to every part of the country with a normal everyday shipping radius of 2,000 miles. Denver carnations go to the Southwest and Southeast States. Boston flowers are shipped extensively to the Southeastern States. Florida flowers go to about three-fourths of the States.

Furthermore, the future potential of new production areas now developing in the Northwest, the Southwest and North Carolina will be dependent to a large degree on fast and economical transportation for the distribution of their crops.

Excellent progress has been made by Federal and State research stations in the development of new varieties of flowers and new methods of production particularly adapted to these areas. Every possible encouragement should be given to bring about the widest possible distribution so that the public, in every part of the country, can enjoy the complete variety of flowers.

The 1950 Census of Agriculture shows that of the 12,427 flower growers in the United States, 86 percent did a volume of less than $25,000, and only 3 percent did a gross volume of $100,000 and over. This dramatizes the need for the relief now sought in this bill.

There would be a very obvious economic waste if each of these small producers had to handle all the details of shipping his flowers and pay the higher rates of small individual shipments instead of having those details consolidated and thereby gain the advantages of bulk rates. With prices on a continuous and drastic downward slide since 1946, the need for every possible saving is vital to the flower producer.

The Civil Aeronautics Act made no provision for freight forwarders in air transportation. However, the Civil Aeronautics Board, 5 years ago, set up a 5-year trial provision for freight forwarders. The results of this trial period are now being reviewed.

During this period a few nonprofit associations of flower producers were organized to perform a consolidating service for their members. CAB issued a cease and desist order against one of them and an appeal was taken to the Ninth Circuit Court of Appeals.

Last year the court affirmed the cease and desist order and I would like to call your attention to the following three paragraphs from its decision:

There seems to be little dispute as to factual character of the plaintiff's operation. But is it inside or outside the ambit of regulation by the Civil Aeronautics Board?

In many places in the law, cooperatives, especially agricultural cooperatives, have been given special consideration. It is not for us to decide here, but it seems that if the petitioner (the cooperative) were operating in the field of rail or motor transportation, it would be exempt from regulation by the Interstate Commerce Act (49 U. S. C. A. No. 1102; see U. S. v. CT. 411, 94 L. Ed. 474) But no special exception for cooperatives or agricultural freight forwarders appears in the Civil Aeronautics Act.

It is the function of this court to read the Civil Aeronautics Act as it is. The Congress can make exceptions.

This makes the legislation proposed in S. 1192 a matter of extreme urgency for the protection of an important segment of the flower producers. Unless they are granted the relief which for many years has been provided for them by Congress in surface transportation, they will be subject to additional expenses on a business operation which is already near a critical point.

Mr. Chairman, I would like to add one comment there. At the hearings last year in the bill that Mr. Younger referred to, his original bill, the CAB called attention to the fact that they were considering this matter and expected to possibly come up with some relief such as we are seeking.

However, the Civil Aeronautics Board also said at that hearing that they expected a decision by December. This is now the end of March and the decision has not come about.

We are also faced, I think, with the thought that even though CAB does provide the relief requested here, if it is done in that manner, it is still subject to changing opinion and changing policies of any future Boards in the Civil Aeronautics Board.

Senator MONRONEY. In other words, what you are asking is the same treatment that a shipment of flowers going by rail now receives. You would like that extended to air.

Mr. ROLAND. Exactly.

Senator MONRONEY. And the present act, while it is silent as to freight forwarders, has been assumed by regulation by the CAB, therefore they must either change that regulation or legislative exemption must be given.

Mr. ROLAND. Right.

Senator MONRONEY. Does the Rail Act exempt only cooperatives or does it exempt any person? The way I read this act it doesn't apply only to cooperatives or associations, or groups. But any person could engage in this.

Mr. ROLAND. That is the way the present bill reads, that is correct. Senator MONRONEY. Is that on all fours with the surface transportation?

Mr. ROLAND. I cannot answer that. I am not legally familiar with that.

Senator MONRONEY. I would like to have the staff check that. I am wondering if there is any provision for responsibility to the shippers provided for in this act, a bond or something for performance of the service. You envision a reputable organization, association, or trade cooperative being engaged in this. I was wondering if there were any provision or any right of the CAB to write in provisions for responsibility.

Mr. ROLAND. I am not familiar with that possibility.

Senator MONRONEY. If it follows rail transportation on freight forwarders, if perishables, for example, shipped from San Francisco to New York were not met by the forwarder, and were allowed to spoil, the claim would rest against the forwarder and not against the air carrier. That is the case in freight forwarder claims, you see. What would be your feeling on that?

Mr. ROLAND. Actually, Mr. Chairman, at Senator Magnuson's suggestion there have been efforts to have a meeting of minds of various

groups interested in this legislation in one way or another. It hasn't been possible to come up with a final meeting of the minds but it looks like we are close to it.

Senator MONRONEY. You have no suggestions to make to this committee today for that provision for responsibility, a bond or some other performance requirement?

Mr. ROLAND. I certainly believe that they should be held responsible. There certainly could be no exception taken to any such suggestion.

Senator MONRONEY. Should they be approved by the CAB as to their responsibility or the ICC, or by whom?

Mr. ROLAND. I think the CAB should determine in the first place if it is going to be a cooperative group or cooperative association, certainly they should have the power to determine that it is a bona fide nonprofit group.

Senator MONRONEY. You wouldn't want to limit it to just nonprofit groups, would you?

Mr. ROLAND. That would satisfy us.

Senator MONRONEY. The way the bill is written now anyone can engage in it as they see fit without any restrictions or approval or being held responsible or accountable.

Mr. ROLAND. It will satisfy our group, representing the industry, as I have pointed out, if it were limited to nonprofit associations. Senator MONRONEY. Regularly chartered groups under State law? Mr. ROLAND. Yes.

Senator MONRONEY. You would want that provision in there though so it couldn't be just an informal association which had no recognition in law or otherwise?

Mr. ROLAND. No. It should be definitely set up under some definite standards which are accepted standards.

Senator MONRONEY. Senator Payne?
Senator PAYNE. I have no questions.

Senator MONRONEY. Thank you very much for your helpful testimony on this, Roland. We appreciate your coming.

Mr. Mike M. Masaoka, representing the Japanese American Citizens League. Mr. Masaoka, we are glad to have you before our committee to give us the benefit of your testimony.

STATEMENT OF MIKE M. MASAOKA, WASHINGTON REPRESENTATIVE OF THE JAPANESE AMERICAN CITIZENS LEAGUE

Mr. MASAOKA. Mr. Chairman, members of the subcommittee, my name is Mike M. Masaoka, Washington representative of the Japanese American Citizens League, with offices at 1737 H Street NW., Washington, D. C. I have a rather lengthy statement which I will not read. I would like to summarize it with your permission. I might also add, with your permission, that I have been requested by Mr. James Bonaccorsi, president of the Consolidated Flower Shipments, Inc., bay area, to submit a statement in behalf of his group inasmuch as their counsel is not present this morning.

Senator MONRONEY. We will accept his statement and have it incorporated in the hearing.

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