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The CHAIRMAN. I think if you find out the facts about what Mr. Hill is talking, you will find that the railroad companies built the markets in Denver.

Mr. Hill. What is wrong with that?
Mr. FROST. They will not allow us to do it.

The CHAIRMAN. If I understand it correctly, the railroad companies in Denver built tivo markets, and they are operating with the idea of controlling the markets.

Mr. Hill. They lease them. The CHAIRMAN. The same thing happened out in Kansas City. They got in some legal difficulties, and I think the farmers' market is still vacant. I do not think that you ought to say that the great city of Denver did so much about it; as a matter of fact, the railroads did it with a selfish interest.

Mr. Frost. They have stopped that now. You see, it was unfair, because they wanted all the cars routed by that particular route. They wanted those long freights. Detroit, Mich. has two-the Michigan Central and the other road, so they have two markets out there. It is a nuisance, and anybody knows that.

A wholesale market is a nuisance, except for New York. I mean, they could have a dozen.

If you want to see some modern markets, how about that? Do you not think they need a market? If any place on earth did need à market, they do, and they have been trying for 40 years.

Mr. Hill. They do not need a market half as much as they need brains in running the city of New York. If they can pass some ordinances, they could straighten out the thing overnight.

However, the city does not want to do it. They want us to do it.

Mr. Frost. Gentlemen, I want to sincerely say I am not personally coming up here to ask the Government to loan us money thinking they will not get it back. I do not know what you would call that. That would be borrowing money under false pretenses.

In my heart, I want the Government to be paid every cent. However, we have tried. The Richmond Galia Co., good bond and banking peope there, who cater to this kind of business, and the chamber of commerce, endorsed our plan. When we have tried every other thing on earth and we do not get the money, yes, I would be one to come up here before the committee to ask you: “Please, help us out and do something for the consumer."

The CHAIRMAN. Thank you very much, Mr. Frost. We appreciate your coming up here.

Mr. Frost. Again, gentlemen, I want to thank you for letting me appear before the committee.

The CHAIRMAN. Is there any gentleman present here now who can be accommodated if the committee calls him at this time? STATEMENT OF TRUMAN NOLD, EXECUTIVE SECRETARY OF THE

NATIONAL APPLE INSTITUTE Mr. Nold. Mr. Chairman, my name is Truman Nold; I am the executive secretary of the National Apple Institute, which is a federation of 16 State and regional organizations of apple growers across the country.

I cannot resist saying, Mr. Chairman, that one of the first produce merchants that I called upon when I left the home orchard and hit the road on behalf of the association of growers was Mr. Ed. Frost. I have seen him work just as hard selling a box of apples as he worked this afternoon. He is a prince of a merchant.

. The reason that I am here this afternoon is that Mr. Ed. Frost and all of the others like him in the country are caught in basic inefficiencies, and we have to pay for them. I do not know any subject that is

. more recurring amongst our growers than the subject of “Why doesn't somebody do something to bring down the cost of distribution, so that we can earn more of what the consumer pays and the consumer can pay less and eat more of what we grow?"

I do not know anything in which there has been more talk and less positive results. We tend to put the blame upon grabbiness and cussedness and sheer orneriness of dealers. But when we look into it and really do some thinking, we find that is not right in the vast majority of cases. The trouble is the trouble that this committee has found in its diligent investigations and that is, that the individual handler is caught along with all of his competitors doing business in a manner that he is, and these basic inefficiencies that are attached to obsolescence and antiquity in facilities.

So I come to you this afternoon to praise the committee for the long hard work it has put on this problem and to plead with it to continue the focus of its attention.

This bill is the first concrete proposal to get directly at the roots of those troubles. Over and over again we have been told the roots of the trouble are in the peculiar difficulties of financing this type of real estate operation. Now, I must confess to you that my people are somewhat apprehensive as they look at direct-loan provisions. When we look at that we begin to react like the taxpayers that we are. We are apprehensive at the thought of the Department of Agriculture having to become an operating landlord for indefinite periods.

The CHAIRMAN. You understand, of course, that that is only a clause which seeks to protect the investment.

Mr. Nold. Yes. Inevitably, you have to provide protection.

If you give in to the principle of insurance, you have to provide protection in case of default.

The CHAIRMAN. As we said this morning, in talking to Mr. Goss, the Master of the National Grange, if that is not perfectly clear in the bill we can certainly make it clear in the report.

It is not the purpose of this legislation to permit the Secretary of Agriculture to operate as landlord in these marketing facilities, but only for such length of time as is necessary to protect the Government's investment.

I can assure you that in the event that the bill is reported, that will certainly be made perfectly clear.

Mr. Nold. That is excellent assurance.
Mr. CHAIRMAN, that is all I have to say.

The CHAIRMAN. I just want to ask you one question. With your knowledge of the situation, you feel that the terminal markets in the larger cities are impressed with the country's interest?

Mr. NOLD. Yes, sir.
The CHAIRMAN. Thank you very much.
Mr. Nold. Thank you, Mr. Chairman.

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The CHAIRMAN. Is there any other gentleman that we can call now?
Mr. JOHNSTON. Yes, sir.
The CHAIRMAN. Will you come around, sir; please?
Please state your name for the record, sir.

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STATEMENT OF ROLLA JOHNSTON, PARKERSBURG, W. VA.

Mr. Johnston. Mr. Chairman, my name is Rolla Johnston, of Parkersburg, W. Va.

The CHAIRMAN. Are you appearing on behalf of some organization or are you appearing for yourself?

Mr. Johnston. Not strictly for myself. I own some farmland, but more or less I appear for the county court and city of Parkersburg.

The CHAIRMAN. The city of Parkersburg, W. Va.?

Mr. JOHNSTON. Yes, and the county court of Wood County. We do not have any market except stock markets in the Ohio Valley, between Pittsburgh and Huntington. There is one little private market at Huntington. It is very unsatisfactory, although I understand it has showed some profit. We have tried to find a method by which we could obtain some kind of marketing facilities.

The Ohio Valley is a very rich farm country in there and quite a bit of produce is raised. One product which I will mention is tomatoes. Sometimes there is a very large waste. After a certain date they cannot ship to Pittsburgh, and the big markets, because of carload lot conditions, and uncertainty of the markets.

We do not have, I do not imagine, exactly the same problems that they do in Philadelphia and New York, but we do have a problem there.

Our city, under its charter, cannot sell bonds or borrow money beyond a certain amount. At the present time we cannot even enlarge our hospital because of the restriction. It is impossible. We have money borrowed in the city of Parkersburg up to the amount that it is possible to borrow. Therefore, the city cannot handle the problem.

The county is also limited to a great extent. We are working with the Department of Agriculture of West Virginia, and I think they will appear before you tomorrow. We want to cooperate in this, and we believe that this bill will be of benefit to us.

There is one point in this bill that I like. That is, the Secretary cannot make loans under this unless he feels that it will make money. In other words, unless he has reason to believe that the facility will make money. Therefore, if it can make money there is no reason why it should be a losing proposition to the Government. It would give the people ways of producing, that is, these people who have quit raising tomatoes because of the tough marketing facilities. The only thing they can do is to get together in a small cooperative of some kind and try to ship carloads. If they cannot ship carloads, they are out of luck; they cannot afford to ship at all.

Much produce in the Kingdom Valley and the area below on the Ohio River on both sides has run into that problem. Some of them have gone to potatoes. We have an eight-county area called Little Kanawha Valley, which has no marketing facilities at all except the Little Kanawha Regional Council, which has been organized by the local people of those eight counties.

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We have during the past few years had a little better chance, because of branding our potatoes, that is, putting the name on the sack. We have tried to keep up with the changed times in the marketing situation, but we have been limited by funds, and we cannot establish a market unless we have some means of getting help to do it.

If you were to raise private capital, as it has been suggested, it is strictly a profit angle. This bill requires that it be done as cheaply as possible. The charges and rentals will be as cheap as possible, in order to make it a financial success. It limits those things so that the consumer and the producer both are benefited. To my mind, with respect to a great deal of the produce raised, the big expense is the handling of it. I think we must have in the future better facilities for handling

I believe that that is all, Mr. Chairman.

The CHAIRMAN. We thank you very much, sir. We appreciate your coming bere.

Mr. JOHNSTON. Thank you, sir.

The CHAIRMAN. Now, is there anyone else we can accommodate today?

Mr. LEONARD. Yes, sir.

The CHAIRMAN. Will you come around, sir, and give us your name for the record, please?

STATEMENT OF JOHN C. LEONARD, JOBBER AND PROPERTY

OWNER, PHILADELPHIA, PA.
Mr. LEONARD. Mr. Chairman, my name is John C. Leonard.

The CHAIRMAN. I understand that you are a jobber and property owner in Philadelphia, Pa.?

Mr. LEONARD. That is right.

The main reason that I appear here as a property owner is not what you would call a jealous reason, because I have an investment in property, because, after all, I am young in the produce business, and what developments and trends in this business prove that they will help the business is a benefit to me more so than these older folks.

The thing that I do not like about the bill is the fact that to me it is just another graft-I will not say “graft”—but hand-out to people in private business.

If they have their own guts and gumption and initiative and gettogether, they could do this job, either on the basis of a marketing set-up as a company, or through city and State facilities, without the help of the Federal Government.

We feel that some of the clauses in your bill, giving the Secretary of Agriculture the authority that he does have, is playing with a gamble. Everybody ahead of me has gotten up here and stated that it looks like a good thing and that it is going to go through. If it does not pan out, the Secretary is going to have something on his hands, just like these Lustron homes, for these other Departments of the Government.

Those are the main reasons why the owners on the street do not like this set-up:

There is another position that Mr. Custis' office stated in the promotion of this bill that I should like to refer to. I know he is very close to this bill and had a lot to do in writing it.

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up there.

He states that the owners of Dock Street are against improvement. I think if the committee will look into the effort that was put forth by a lot of good businessmen in that industry, especially in Philadelphia, they would find they have tried many times without success to get the people within the business to support this, but they were defeated because of different cliques, or whatever you call it--tonnage receivers, and things like that-who were trying to run against them and get a better deal because they could better their own position and facilities without spending their own private capital. That is, in my way of speaking, trying to put forth some of the ideas why we feel that you have been presented with an unfair picture of some of us merchants

My particular business was established in 1890, which will clear up some of the record here about how long the business has been established. My grandfather established it. He started in Philadelphia at the same place where we are at the present time.

We admit our conditions up there are inadequate, but is this new market that you are trying to give the funds to develop going to correct all those inadequacies? You have to contend in this prodụce business, among other things, with communication taxes, a subject now in hearing in Congress, and they want to reduce it from 25 percent to 20 percent. Yet you hear here in the committee that the purpose of this is to reduce the cost to the ultimate consumer and get a little more money to the farmer. But you do not try to keep the overhead of the distributors of the merchandise down. You have the ICC regulations on trucking, and things like that. You have State and Federal laws on trucking weights, which hurt the shipper.

We have the State of Virginia, which is very close at hand, which limits trucking weights to the point where it makes it inadequate for different shippers in Florida, growers and ultimate growers--and other States, to get through to big terminal markets in Philadelphia and New York with payloads. To do it and stay within the State law, as in Virginia, for example, they have to either pay graft and get away with it, or pay extra cartage, because, in the trucking business, if they do not have a full load, they cannot afford to give you a cheaper rate.

Those may seem little items to you, but they are the little items that adď to the cost and expense of distributing this merchandise.

I feel that the committee here knows the bill as it is written, but I also feel that the way the bill has been formulated and promoted, a little more study by all the committee, of some of the actual operational set-up of the terminal markets, would be helpful.

For example, you can use even the plans of Mr. Custis, and take the problems of everyday people in business, and go through them.

Now, you hear of this traffic jam. If you do not have a traffic jam at a new market, there must be one reason; there are not enough buyers there to make a new market profitable, and so you do not need new wide streets.

I think the committee is on the right track. I am not saying I am fully against the idea behind this bill, but I am not in favor of the way this bill is written here. I think there should be more study.

I admit that Mr. Crow has done a wonderful job. He has done good work, and has found a lot of things, and has been helpful to the

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