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The CHAIRMAN. But they have not built them in other places, and where they have built them, they are not accessible to trucks and other transportation.
Mr. MEYERS. And no market has been attempted by a railroad since the Kansas City case. And if the dealers formed a private corporation and built a modern market and developed it as it should be so it gave the service, it would not be long until the courts would put them out of business, and put them under an authority as they put the railroads out of business.
The CHAIRMAN. We thank you for your statement. Are there any further questions?
Mr. DĪVito. I was hoping that some of the questions were directed to the three of us, but Mr. Hogan asked a question that I thought should have a little more clarification in condemning some of the wholesalers, why they do not do something themselves.
I have lived with them for 14 years. I happen to know the nature of their business. I also happen to know that industry is not organized in the manner in which it should be, and not because they do not like improvements, because the nature of the business is one that they are constantly busy 14 hours a day, and most of those hours are in the early mornings when their mind is perhaps sleepy and half attentive to business, and there is a very limited time when they can concentrate on something that will improve themselves.
Consequently, I believe that the wholesalers, farmers, will be receptive to this bill and to take advantage of the law and so do something themselves.
I would like to state this, Mr. Chairman, that when necessity occurs, I believe that the Government or municipalities should do something But this is a challenge that is offered to the industry, and I strongly believe that these markets should be developed by the users or those who have direct interest in the business, and that should be the very first approach and I believe this bill does cover that phase of it.
Mr. HOEVEN. How do you account for the fact that livestock commission merchants band together to establish their own stockyard companies without any Government assistance? They establish their own facilities without Government assistance.
The CHAIRMAN. Did not the railroads build a lot of those facilities in the early days?
Mr. HOEVEN. Maybe some of them did. I am thinking of one that was not built by the railroads, the Sioux City Stockyards Co. one at Sioux City, Iowa-my congressional district. It is run by the commission merchants themselves without Government money.
Mr. MEYERS. If we have to point out many instances, I can point out many cases where these markets have been built by private capital, and it was purely the initative and courage of the few leaders. Mr. HOEVEN. Is not that a commendable trait?
Mr. MYERS. That is, and they have been very successful, very successful, sir, and I believe that this bill would encourage those who have not that courage or vision, with proper leadership and management, that will prove an asset to the community and to themselves. I am sure it will.
Mr. HOEVEN. I do not want to be misunderstood. But I do think that the industry itself should do something before appealing to the Federal Government for assistance. In other words, give free enterprise a chance. It has been demonstrated that it can be done.
Mr. DiVito. If I may elaborate on that a little more, the banks have been very skeptical in financing these markets because they termed them as a special enterprise. It is not something that is within their range, and they thought it would be too risky.
The CHAIRMAN. In relation to Mr. Hoeven's statement, actually this bill resulted not from any agitation on the part of the merchants, but it came from the House of Representatives about 6 or 7 or 8 years ago, when the House of Representatives authorized this committee to study this problem and make recommendations, and they did that. They conducted that study under Mr. Fuller, under Mr. Flanagan, and under Mr. Hope, former chairman of this committee, and during this session under the present chairman.
We have been studying this problem more than 8 years, and the investigations have been financed by the House of Representatives. The House of Representatives became aroused because the trade had not done anything about it. That is really the history of the legislation. This bill is not perfect, of course, and this committee in its wisdom will make such changes as appear to be desirable. I think that all of us have visited some of these markets, and I have not seen any opposition to doing something about it, except the little opposition which has developed in the course of these hearings, If there is other opposition, if anybody can put up any sound reason in opposition, I know this committee wants to hear them. In every one of the cities we visited, I received the impression that the people wanted us to do something about it. With reference to Mr. Hoeven's statement, if private industry will do it, all well and good. That would be fine. I have an idea that if we could by providing proper finances, construct or cause to be constructed two or three outstanding marketing facilities in the metropolitan areas on the eastern seaboard, perhaps other cities would become aroused and they would do something on their
I may be wrong, but I have that feeling. Mr. MEYERS. I do.
Mr. HOEVEN. This problem should be solved, I want to agree with the chairman. I was a member of the special subcommittee that investigated the terminal market facilities and I am interested in the matter. The chairman makes reference to the fact that this problem has been before our committee for some 8 years. It would seem to me that in view of that, the industry would have seen the handwriting on the wall and would have said, "Well, boys, let us do something for ourselves before the Government steps in," but apparently nothing has been done along that line. I am still hopeful that the industry will show a little American backbone and try to do something for themselves, instead of waiting for the Committee on Agriculture or the Congress to handle a matter which they should have handled long ago. That is the only point I want to make.
Mr. DiVito. I am thankful of the results of your investigation. I think the bill, the intent of it is excellent, and we thank you for it.
Mr. Hogan has a few personal comments to make, as you know. The CHAIRMAN. We will be glad to hear from you again, sir.
Mr. Hogan. Chairman Cooley, since additional members of the committee have come in, I would like to restate my name and position for their benefit. I am G. B. Hogan, assistant director of the
State Farmers Markets of Florida. The address of our general offices is 305 Exchange Building, in Jacksonville.
The prepared statement I read was as a member of the legislative committee of the National Association of Produce Market Managers. The statement I wish to make at present is in the capacity of assistant director of the Florida State Farmers Markets and as a private individual interested in the agricultural industry.
As all other people, I have been a consumer for a good many years. I was a producer of the commodities with which we are concerned for a period of 18 years. I served as manager of the largest market in Florida, for several years, and have served in the capacity of assistant director of the system for the past 5 years,
As a producer naturally I was concerned with the marketing of the products of my own farm and traveled considerably in an effort to find a good outlet for those products. It goes without saying that I was very much disappointed after visiting some of the principal city wholesale markets. I think it is generally recognized that the public wholesale markets such as described in the bill under discussion are an integral part of the vast distributive system through which agricultural commodities move from the farm to the consumers. It does not require much investigation to satisfy anyone that many of the markets are operating under the handicap of inadequate and obsolete facilities. It is also a well-known fact that obsolescence and inadequacies tend to increase the cost of distribution, and that that cost is a toll that is taken out of the consumer's dollar on its way back to the producers and that is the point in which my greatest interest lies.
The primary interest of the Florida system of markets is to serve the producer. We know that in serving the producer we must serve the consumer. Florida has undertaken to improve the system of markets within that system, but only that type of market that serves as a shipping point or a farmers market. Most of our products move to the States to the north of Florida. We are concerned with the facilities in every major consuming area in the country.
The CHAIRMAN. In other words, you are more vitally concerned with marketing facilities north of the eastern seaboard than you are in your own State, are you not?
Mr. Hogan. Mr. Chairman, I do not think the State of Florida would attempt to take advantage of the provisions of this bill at all, in my opinion.
The CHAIRMAN. But you are interested in providing marketing facilities where your farmers may sell and dispose of their produce.
Mr. Hogan. That is our interest. We feel that modern facilities in the major centers of distribution are more of a vital concern to us today than a further improvement of the facilities within our own State.
We also have this feeling, that since the problem is national in scope, facilities in the major consuming centers affect and serve producers in every State in the Union, they certainly serve consumers over a large area, for that reason it is somewhat of a national problem and responsibility, rather than just a problem of local municipality in which that market might be located, and for that reason I urge the adoption or passage of this bill with such minor amendments as the committee might feel wise.
Just as an illustration of that, Chairman Cooley, with your permission, I would like to make one observation which might be classified as a question. As stated a moment ago, I am not primarily concerned as to whether the type markets Florida operates would be eligible or not, but in reading under definitions the definition of the public wholesale market, I am not sure as to the intent of the law, whether it proposed, whether that would extend the benefits to shipping-point markets or whether it would be limited to a market located within the consuming area as outlined here, and it does not state that the market has to be located within the consuming area. I wonder if you would clarify that just a bit, if I have made myself clear. If not, I will try again.
The CHAIRMAN. Well, of course, that is the purpose of it, to bring about the construction of markets in the consuming areas, but that would be a matter that I do not think would have to be covered by legislation. It would depend upon the negotiations between the applicant for a loan and the agency making the loan. If they said they wanted to build a market out in the Everglades, some place far removed from any consuming center, why, of course, they would not approve the application. I think that the applicant for the loan would have to make out a case showing that it was to be centrally located in a consuming district, and could be operated profitably and in a manner which would enable the borrower to liquidate the loan on schedule. I do not think we need to spell that out in the law.
Mr. Hogan. I raise the question for this reason, Mr. Chairman: There are no doubt a number of State officials, perhaps some municipal officials, even some private enterprises, interested in the development of what I call a "shipping-point market," and to me it is not clear under this definition whether that type of market would be eligible. Shipping-point markets are not located with respect to consumption but with respect to production.
The CHAIRMAN. This bill, I think, probably and primarily deals exclusively with the distribution centers, and not the shipping points.
Mr. Hogan. That would be my interpretation of the intent of the law, although I felt that it might leave some question or there might be some question in the minds of some who were particularly interested; for instance, it reads, "Public wholesale market means a place which serves as a major source of supply of perishable agricultural commodities consumed in a large consuming area and which is operated primarily for the purpose of selling or otherwise disposing of perishable agricultural commodities as wholesale for resale to others.”
As a specific example, our market at Pompano, Fla., is a major source of supply of certain commodities for most of the country during particular months of the year. Then would it be eligible or would it not? That was the point I was trying to bring out. I had the feeling that some who were interested in shipping-point markets might possibly think that they would be eligible under this bill, and they may find they are not. That was my only point in raising the question. I say again I do not think that Florida would take advantage, if it is eligible.
The CHAIRMAN. We will consider your suggestion in that regard.
The CHAIRMAN. Any further questions? If not, we thank you very much.
We have a very distinguished visitor this morning from the great State of California, Mr. John Phillips, of the Second District of California, who is coauthor of the bill now under consideration. We will be glad to have him come up and sit with us, a former distinguished member of this committee.
The next witness is Mr. Sidney Rabinowitz, Colonial Provision Co., Boston, Mass., Wholesale Food Terminal, Boston, Mass.
STATEMENT OF SIDNEY RABINOWITZ, COLONIAL PROVISION CO.,
Mr. Rabinowitz. Mr. Chairman and gentlemen of this committee, I am a businessman from Boston, and also a member of the marketing authority established by the Governor of our State to study the very thing that you gentlemen are studying now. For 15 years we have found, and were very active in discovering that our facilities in Boston were thoroughly inadequate as a wholesale food terminal. It is scattered. It is away from the railroad facilities. It is in a congested area, and we and our small group have put a little money together to study some of these facilities. The fact that we have not gone in, and we happen to be interested in this bill and for this bill is not particularly to look for a hand-out from Uncle Sam. We are interested because the bill is already here, and we appear in favor of it because many investment bankers and others do not find it in their portfolio to see to it that they would give adequate funds for a socalled one-purpose building.
The reason that many of us do not go in and build the facilities in combination is because most of us are businessmen interested in dealing in food and not real estate men. If we were real estate men, in fact, we have many real estate speculators who would gladly build the facilities at a return to them or probably 20 or 30 or 40 percent, and they would probably fleece the others that would come in there as tenants or buyers as the facilities improved. We have had them before, and it has also been a very hard thing for any individual, and some of us have moved to certain locations, because of that, those who have had ample money, moved into certain locations and received very poor financial assistance from banks. They did not need them, perhaps, and they were all right. But those that are going to build these facilities and only are able to get mortgages somewhere around 35 or 40 percent of the cost feel that they are afraid to take those chances
In Massachusetts, we find that then at the various meetings we have had with farmers and wholesale meat dealers and wholesale fruit and produce dealers, everyone is for this wholesale market. No one in the letter has objected to any of the new facilities except that some objection has been raised to the method of financing or pledging the State's credit to the bonds, and if these facilities were made available by the very fact that it is like a mutual company and if it were made available, I think it would be very helpful and of course indirectly then of benefit, or directly so, to the consumer and to the producer, by the very fact that the facilities would be made to handle produce in such a manner and to avoid waste and to avoid overhandling, that is rehandling as we do in Boston by first taking it off the railroads and bringing it into the terminal and then taking it