The CHAIRMAN. There is something wrong somewhere in the industry of not coordinating this thing to supply all of that need. One of the great needs is in the grain and agricultural field. One of the great needs is in the plywood industry.

Mr. WATERMAN. Yes.

The CHAIRMAN. Also, there is a need in the lumber industry. Now I know there are many factors involved, and continue to be. But nevertheless it seems that there is a lack somewhere. Everybody admits there is a problem, and they seem to have no solution to it except, "We are doing all we can." But the problem still gets greater. I cannot, to save my life, see why it would not be advisable to give somebody the authority to bring these two groups that are as far apart as the poles, to bring them together. Perhaps the Interstate Commerce Commission could do that.

Mr. WATERMAN. I think the Association of American Railroads is conducting a study right now, and as a result of that, plus these proceedings pending before the Commission, I think something very constructive is going to come out of these two.

The CHAIRMAN. Well, I think perhaps if we give the Interstate Commerce Commission additional authority, we will get constructive action probably a little more expeditiously. We have been going along with this. We held extensive hearings several years ago. I just have a feeling there is a way to do it. I believe that when you get over all these lawsuits that are in existence and fussing and fighting over who owes who for what and how much, which is probably as much responsible for this situation as it is now as anything else and I cannot blame them for that, each one fighting for its own company-but, as I said to the broadcasting industry, let us not get so involved with our own personal feuds that we destroy the very thing that permits us to exist, so you can have these feuds.

Mr. WATERMAN. We think that we are going to make progress without more regulation, Mr. Chairman.

The CHAIRMAN. You said that 5 years ago.

Mr. WATERMAN. Yes. Well, we are still working at it. We have spent $104 million this year.

The CHAIRMAN. I know, but they are still hollering and hollering a lot more. I just had another demand that came through in our part of the country about how much grain is lying there and how many cars were needed to move it, and they cannot get them. The problem is a lot greater now than it has been. We have had it every year. It is a lot greater now than it was last year. We have heard about this in our committee since the early part of this year. I have been holding off thinking the industry would do it because of the groundswell that was coming. All we get here is testimony from you railroads who are doing the best job.

I would like to pick out some of these railroads who are responsible for some of these things and see what they have got to say about it. But that is part of the headache. That is part of the problem we have got, and we will see what we can do about it.

Thank you very much, Mr. Waterman, for your appearance here. Mr. WATERMAN. Thank you, Mr. Chairman.

The CHAIRMAN. And thank you for your contribution to this. record.

Mr. WATERMAN. Thank you, sir.

The CHAIRMAN. I think we have heard everyone that is on my list to be heard. I wonder if there is anyone else to be heard before we conclude? If not, this will conclude the formal hearings on this. Mr. Younger, I am going to see if I cannot have an executive session of the committee in the morning when we can talk about this. The committee will adjourn.

(The following information was submitted for the record :)

STATEMENT OF WILLIAM L. BUSH, DIRECTOR OF TRANSPORTATION, WEYERHAEUSER Co., TACOMA, Wash.

Weyerhaeuser Co. is a major forest products producer and marketer, with principal manufacturing and shipping facilities in the States of Oregon, Washington, and California. The long haul transportation involved in the movement of products to consuming market areas has made Weyerhaeuser a major user of rail transportation over the years. The railroad car supply situation is one of vital concern and car shortages have reached an increasing degree of intensity in recent years. Figures released by the Association of American Railroads indicate a continuing decrease in the total railroad ownership of boxcars since 1957, as well as a continuing decrease in total car ownership for that same period. Although we have been facing periodic instances of car shortage since 1906, the situation has now approached chronic stages, subject to cases of particular severity when seasonal and regional freight movements

occur.

Our basic concern lies in the supply of double door boxcars and flatcars. We find increasing instances of our inability to ship orders on time, causing additional storage and handling costs at our sihpping points and a deterioration in long-established customer relationships. Although considerable emphasis has been placed on distribution of cars rather than car shortage, and conscientious efforts have been made through the medium of Interstate Commerce Commission service orders to improve this distribution, these measures do not increase the total boxcar availability and provide only temporary adjustments. The basic objective of the proposed legislation is to have the Interstate Commerce Commission prescribe freight car rental charges paid by the railroads using cars to the railroads owning cars upon a basis which will encourage the acquisition and maintenance by the railroads of an adequate car supply. We must recognize that passage of the proposed legislation will have no immediate effect, but we do feel that it provides a detailed background for study and a mechanism which will produce tangible benefits for the future car situation.

Weyerhaeuser Co. urges favorable consideration of the proposed legislation and the company's position is further embraced in the statements being submitted by the Western Wood Products Association and the American Plywood Association.

STATEMENT OF MARVIN D. HOHENSEE, TRAFFIC MANAGER, EQUITY UNION GRAIN Co., LINCOLN, NEBR.

My name is Marvin D. Hohensee and I am traffic manager of the Equity Union Grain Co., of Lincoln, Nebr. We operate a grain terminal on the Chicago, Burlington & Quincy Railroad.

During recent months we have experienced an acute boxcar shortage, affecting both our receiving and shipping of grain. We have of necessity been forced to acquire and ship grain by truck, not because of better price, but from our inability to secure cars from the railroads.

According to our merchandising department, numerous sales could not be made because cars were unavailable with which to make delivery. Commodity Credit Corporation loading orders could not be met because cars were unavailable. Volume handled by the terminal declined some 1,375,000 bushels compared to the same period 1 year ago.

We

Between December 1, 1964, and March 31, 1965, we ordered 2,280 cars. received 968 cars, but 352 were unfit for loading grain (bad order). Net usable cars received during this period were 616 or 27 percent of the number ordered. On March 31, 1965, we were still short 610 cars; 410 needed for CCC shipments; 200 for company grain sales contracts.

During the period under review, our terminal received a total of 2,347,920 bushels of grain, and we shipped out 2,959,712 bushels. With only 616 cars delivered out of orders for 2,280, the question is raised as to how this volume could be handled and have only 610 cars still on order on March 31. Exhibit A attached should provide some explanation.

Grain received came 25 percent by truck, or the equivalent of 301 cars. Eightytwo carloads arrived in company-owned hopper cars. The balance came in 791 railroad-owned cars.

Grain shipped out went 8 percent by truck, or equivalent to 120 cars. There were 1,360 cars shipped, which is 744 more cars than the 616 received, out of the 2,280 ordered. This was accomplished by reloading cars received and using them for outbound shipment.

The number remaining undelivered on March 31 was therefore actually 920, of which 610 remained on order, leaving a difference of 310 cars no longer needed. This discrepancy is the result of ordering more cars than needed, because experience shows there is a ratio of "bad order cars" in cars delivered.

In conclusion, exhibit B demonstrates the worsening of the boxcar storage during this period with respect to wheat receipts at the terminal.

The Eqpity Union Grain Co. feels very strongly that an increase in per diem on cars would discourage some railroads in holding cars for long periods or until a time when loaded for return shipment to the owning railroad.

We thank you for the opportunity to present our testimony. Any action that can be taken to relieve this boxcar shortage will be greatly appreciated.

EXHIBIT A

CAR ORDERS, RECEIPTS AND SHIPMENTS, RECAPITULATION PERIOD, DEC. 1, 1964, THROUGH MAR. 31, 1965

STATEMENT BY GOOCH MILLING & ELEVATOR CO., OF LINCOLN, NEBR.

Mr. Chairman, members of the committee, my name is Buddy L. Burke. I am traffic manager of Gooch Milling & Elevator Co., located at 540 South Street, Lincoln, Nebr.

While we have experienced car shortages at various times in years past, the days are now gone when a boxcar shortage occurs only at harvesttime. We are now confronted with a boxcar shortage the year around and each succeeding year becomes more difficult.

While everyone here is well aware of the shortage of boxcars for the last half of 1964, we would like to enumerate very briefly some of the correspondence between ourselves and various agencies and individuals concerned with the boxcar shortage.

On October 5, 1964, we sent a telegram to Mr. Charles W. Taylor, Jr., of the Interstate Commerce Commission, which reads as follows:

"Critical shortage of boxcars on Burlington Railroad affects our operations and causes an inability to properly take care of animal and poultry producers desperately in need of feed. Urgently request that service order 945 be reinstated to assist Burlington Railroad in augmenting their boxcar supply insisting surplus carriers release cars in excess of ownership to western lines and that such releases are in good condition, not merely culls incapable of protecting grain and grain products ladings."

On October 6, we received a telegram back from Mr. Taylor and a letter on October 8, which is shown below.

"I received both your telegram and letter dated October 5, 1964, concerning the critical shortage of boxcars. Your interest in this situation is understood and appreciated and your telegram was promptly answered.

"As I attempted to convey in my telegram, we feel that the Commission's service order No. 947 is a more flexible order and is designed to accomplish everything that an order similar to order 945 would accomplish, and more, without causing the cross hauling of empties and additional expense to the carriers. The aim of service order 947 is to improve railroad operations by limiting the time allotted for placement and movement of equipment, prohibiting the holding of equipment excessively for prospective loading, and generally adjusting inequities in distribution and supply through relocation of cars to home territory. The Association of American Railroads has in effect boxcar directives to eastern and southern carriers to assist granger roads by supplying cars in addition to those moving in home route. All special orders of the AAR are covered Under our service order No. 947."

However, individual service orders were issued on November 1 after the shortage became so acute, and it was found that service orders presently in effect did not prove to be satisfactory. The orders were to expire on November 15, but were extended to November 25. Because our shortage was so great the orders were further extended to December 8. Thus, it took over a month for the service orders to relieve our boxcar shortage.

The shortage started the first half of September and until the 1st of December, we did not know from one day to the next if we would have enough cars so that we could run our mill the next day.

Normally our operations are required to operate on a 6-day week beginning about the middle of October and lasting through the winter. However, we were forced to curtail our operations because of the car shortage, and some weeks we were lucky if we could run our plant on a 5-day week.

The present boxcar shortage began the last week of February and at the present time there is no indication of any relief in sight. In fact, we have not had enough empties on the east side of our plant for so long that I am afraid the rails will begin to rust from lack of use.

While some of class 1 railroads have a very intensive car-building program, we believe that the special equipment receives priority over the workhorse of the railroads which is the 40-foot plain boxcar as the following figures show:

For a 2-year period the covered hopper ownership has increased by 13,638, the flatcar by 4,639, the refrigerator car by 8,771. The hopper car has decreased by 5,229 and the boxcar has decreased by 38,085 cars. In addition, 35,476 boxcars were awaiting repairs for the month of March.

One of the large eastern carriers has just announced a car-building program of an additional 1,550 cars or a total of 5,250 cars to be added to its ownership. A breakdown of the cars is as follows: 3,000 coal-hopper cars, 700 boxcars for hauling auto parts, 450 covered gondolas, and 1,100 cushion underframe 70-ton boxcars.

Of the 1,100 boxcars, 300 will be insulated to protect foodstuffs and other freight subject to damage by weather, and the other cars will have special equipment inside the car. A building program for the 40-foot plain boxcar— none.

Another eastern carrier has announced plans to acquire 111 boxcars for transporting automobile parts, 325 gondola cars, 25 covered hoppers, 80 insulated boxcars, and 100 boxcars of 70-ton capacity. But to purchase a 40-foot plain boxcar-none.

Still another eastern carrier will build 730 boxcars to haul automobile parts, and 70 covered hoppers to haul cement. A building program for the plain 40foot boxcar-none.

A southern carrier will purchase 52 additional boxcars to haul automobile parts. But to purchase a 40-foot plain boxcar-none.

We believe that we have made our point in that carriers today are building more and more specialized equipment, and not enough plain 40- or 50-foot boxcars that are capable of hauling grain and grain products.