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out of there and bringing it to the wholesaler and having some of the small fellows come in and taking it away from there in congested areas, and they can hardly get into our section. That is why our group is definitely for the bill.
The CHAIRMAN. I thank you for your statement, and I would like to insert at the end of your testimony a letter which we have from Mr. John Chandler, commissioner, Commonwealth of Massachusetts Department of Agriculture, in support of the legislation. In the letter he explains why it is impossible for him to be here in person to testify.
Mr. COTTON. Could I request that the letter that the clerk has in her possession from the commissioner of agriculture of the State of New Hampshire representing the commissioners of the New England States be inserted at this point, sir?
The CHAIRMAN. Without objection that will be inserted—the letter from Mr. A. K. Gardner, commissioner of agriculture of the State of Maine. It reads in part:
“I have suggested that the New England commissioners and the New England marketing officials meet and perhaps take joint action with respect to this bill. Commissioner Fitts of New Hampshire is chairman of our group, and I am writing him at this time.”
We will insert the letter from Mr. Gardner and a letter from Mr. John Chandler, commissioner, depatment of agriculture, Commonwealth of Massachustets. (The letters referred to are as follows:)
STATE OF MAINE,
Augusta, May 8, 1950.
Washington, D. C. DEAR MR. COOLEY: I haven't had an opportunity to study your bill (H. R. 8320) but a casual reading would indicate that such legislation would be of material assistance in bringing about improvements in marketing facilities, particularly here in the Northeast, where resistance to changes in existing facilities is so strong,
I am suggesting that the New England commissioners and the New England marketing officials meet and perhaps take joint action with respect to this bill. Commissioner Fitts of New Hampshire is chairman of our group and I'm writing him at this time. Thanks for sending the copy of the bill. Sincerely yours,
A. K. GARDNER, Commissioner.
THE COMMONWEALTH OF MASSACHUSETTS,
DEPARTMENT OF AGRICULTURE,
Boston, Mass., May 22, 1950. Mr. Joseph O. PARKER, Counsel, Committee on Agriculture,
House of Representatives, Washington, D. C. Dear Mr. PARKER: I am in receipt of your letter of May 12 together with a copy of H. R. 8320, a bill to encourage the improvement and development of marketing facilities for handling perishable agricultural commodities.
I appreciate Congressman Cooley's invitation to testify on this bill at the hearings which are scheduled to commence on June 6. Although I would welcome the opportunity to support the principles of this measure, unfortunately it will not be possible for me to be away at that time.
The enactment of this legislation is particularly interesting to us in Massachusetts. There is pending in the Massachusetts Legislature a bill creating a market authority authorized to plan, build, and operate a large public market for the handling of perishable foods and to issue revenue bonds to finance the
enterprise. Should this legislation prevail, it is expected that such a market could be financed with preliminary money furnished by the Commonwealth together with money for advance planning through the Community Facilities Service of the General Services Administration, which would bring the undertaking to the point where a bond issue could be floated, based on anticipated revenues from signed leases. However should this legislation fail, the whole market promotion, which has been under way here for several years, might well collapse. In all probability, an attempt would be made to create a private nonprofit corporation to carry on, but undoubtedly a Government-guaranteed loan or direct loan would be necessary to carry such an enterprise to the point where it would be attractive to private investors.
There is no question about it that the consumer is paying a terrific toll in the cost of food for those perishable products which pass through the inefficient and antiquated facilities of many of our large metropolitan terminal markets. Unfortunately, the merchants doing business in such areas are not primarily concerned with promoting better facilities. Most of them have prospered where they are and are quite accustomed to passing the excessive costs on to the con
It therefore becomes a public obligation to make available to the handlers of these products modern facilities which will cut down their costs of doing business at rents sufficiently attractive to encourage them to pull up long-established roots and make a new start.
Several of these modern markets, having now been set up, have demonstrated that these public enterprises can be made sound investments. Nevertheless, such legislation as this seems very essential as encouragement to loaning institutions to step out into this new field. I personally question whether very many guaranteed loans or direct loans will actually be made, but the fact that such legislation is on the books will go far to make available to worth while major projects the capital they will need.
The enactment of H. R. 8320 should result in cutting a slice out of the enormous spread between what the farmer realizes for his produce and what the consumer pays for it at the retail store. It is undoubtedly a step in the right direction. It is discouraging for the farmer to realize that the consumer would still pay a very substantial price even if he, the farmer, gave his produce away.
When the time comes, I will be very happy to let our Representatives and Senators know that the passage of this bill is extremely important to every consumer in the Commonwealth of Massachusetts. Very sincerely yours,
JOHN CHANDLER, Commissioner. Mr. COTTON. I would like to ask this question. You say that you already have some of your dealers put a little money together to do something about the marketing situation in Boston?
Mr. RABINOWITZ. Yes. I am president of that little group, and it is called the Wholesale Food Terminal Co. Ten of us got together and put up a thousand dollars each just to make a study and make some preliminary investigations. We did that 3 or 4 years ago. We have expended about $7,000 of it; we still have $3,000.' We also have the assistance of this agricultural committee who sent Mr. Crow and a group of men there who made quite a study in Boston. They spent about 4 months and they made a very exhaustive study and made suggestions of sites. One of the sites which has been accepted by all of us as the finest site, because it takes in the entire industry, and that requires
Mr. COTTON. Where is that site?
Mr. RABINOWITZ. That is in south Boston. What we call the Fort Point Channel, or site 13.
Mr. COTTON. Is that down near the A & P warehouse?
Mr. RABINOWITZ. No; it is not. That has been thrown out because it is not adequate enough and not large enough. It would be against this very bill. It is a site that we are now negotiating on and thinking about, which is on the other side of South Station in Boston, and takes in all the way from, if you recall the section at all, it takes in from Dover Street, away beyond the city hospital, across the way, and takes in Southampton Street.
Mr. COTTON. You could run trains in there?
Mr. RABINOWItz. Yes; the railroad is right there now, the New Haven. It is approximately 150 acres, and it is only a whisper from city hall, practically, and it is unoccupied.
Mr. COTTON. The Boston & Maine and the railroads that serve northern New England, they cannot get into South Boston.
Mr. RABINOWITZ. That is one of the little hitches that we are up against. They cannot get in there except through Union Freight, and they will have to get together. The Boston & Maine has been objecting to it very strenuously and it is not short-sighted, so far as they are concerned, short-sighted so far as the entire group is concerned.
Mr. Cotton. You have a sharp disagreement between the railroads on the problem?
Mr. RABINOWITZ. One does agree very, very strongly. The New Haven is tickled with it.
Mr. COTTON. Do I understand that you have made some effort to get the legislature of the State of Massachusetts to take steps to back this situation?
Mr. RABINOWITZ. The bill is already in the legislature. The committee has voted favorably for it, unanimously, and it is going in at this session. The bill looks very good to all of us. What will happen in the legislature, of course, the only objection we might find in the legislature will be perhaps the fact of pledging the credit of the State, because you know in Boston we have had a very terrible experience with the Boston Elevated Railway, and everybody seems to blow hot and cold on that.
Mr. COTTON. What will the bill amount to if you do not get State credit? It will not be much of an assistance to you, will it?
Mr. RABINOWITZ. I do not know whether we would get it. That is why I come here before you, because if we do not get the credit of the State, we will definitely be leaning very heavily on the Cooley bill.
Mr. Cotton. Is it the fact that this bill which is before Congress and this committee, will have some effect in causing the Massachusetts Legislature to hold it up and say, “The Federal Government is going to take this over, we don't need to worry about it”?
Mr. RABINOWITZ. I will say this. I brought that fact up the other day in a meeting before the agricultural committee in Massachusetts and I mentioned the fact of this Cooley bill, and it was their opinion, it seems, that just as long as their legislature would pass it, the State legislature, that the fact that it had the blessing of the State, and the fact that the railroads were willing to put in facilities such as utilities and things of that sort, and foundations, that we would have no hardship getting the kind of a loan, that we would not need the assistance of the Federal Government.
Mr. Cotton. In your opinion would it be more effective and a better method to have that backed by the State of Massachusetts or the Federal Government?
Mr. RABINOWITZ. I would rather see it if it were passed the Federal Government.
The CHAIRMAN. Do you not think that if it appears that the State of Massachusetts or the city of Boston could obtain money at a cheaper interest rate than could be obtained from this Federal agency,
DEVELOPMENT OF TERMINAL MARKETING FACILITIES
they would be inclined to use local funds to finance it rather than call on this agency?
Mr. RABINOWItz. I am sure that if they could get it without coming to the Federal Government at the same rate or even a little higher, probably from local people, I think they would rather take it from the local banks. As I say, we now could probably build these
I facilities through speculators tomorrow, but I do not think it would be fair to do that, and I do not think it would help a great deal if all of us had to pay through the nose in order to get the facilities, because eventually the producer and the consumer would pay it in the long run.
The CHAIRMAN. I think that is a very good point, and we thank you very much.
Any further questions? If not, we thank you for your appearance.
The CHAIRMAN. We will be glad to hear from Mr. Russell Smith now.
STATEMENT OF RUSSELL SMITH, LEGISLATIVE SECRETARY,
NATIONAL FARMERS UNION, WASHINGTON, D. C. Mr. Smith. My name is Russell Smith. I am legislative secretary of the National Farmers Union. The National Farmers Union strongly endorses H. R. 8320, the bill to encourage the improvement and development of marketing facilities for handling perishable agricultural commodities. We feel that such action as is contemplated in this bill is long overdue, and we regard H. R. 8320 as essentially the sequel and complement of the Research and Marketing Act of 1946. We heartily approve the continuation of existing research to means of narrowing the spread between prices received by farmers and prices paid by consumers as well as into all other aspects involved in the building of a truly efficient system of distribution for farm commodities. Indeed, we are inclined to believe that there is some need for the expansion of such research.
On the other hand, really effective research cannot be conducted forever in the ivory tower of the laboratory or the economist's office. If it is to meet human needs practically and realistically, a research program must be related somehow to a program of action. There is a long history of energetic and expensive research into the problems of marketing and the actual results of all of this research have been somewhat comparable to the mouse that was brought forth by the mountain after it had labored.
During the period 1938-42 when I was Director of Economic Information in the Department of Agriculture, the Bureau of Agricultural Economics conducted an extended and competent survey of marketing needs, of wastes in the marketing system, and of ways of rendering the system more efficient. This job of research was but one of many that had preceded it and it has been succeeded by others since. Many members of this committee will recall that the committee itself, under the chairmanship of former Congressman John Flanagan at one time made elaborate preparations for digging into these problems, getting at the root evils and coming up with legislative proposals. Somehow, this project, which the National Farmers Union also strongly endorsed at the time, bogged down so far as
legislation for action was concerned. The only tangible result was the enactment of the Research and Marketing Act of 1946, which however praiseworthy, still called only for more research.
On the other hand, we do not regard H. R. 8320 as a panacea or as a substitute for a price or income support program for perishable agricultural commodities. Its adoption will not remove the need for equitable treatment of the producers of perishables as compared with the producers of stora bles, nor will it solve the very difficult problems connected with effective coverage by support programs for such producers. We look upon it as being exactly what the title of the bill states, a measure that will improve the facilities for getting these products from farmer to consumer.
As to the content of the bill, we do not pretend that we know exactly what its provisions should be as to the term and length of loans, the precise interest rate to be charged, whether all of the technical and fiscal provisions should stand without change, or just how large the revolving funds established in the bill should be. So far as we are able to determine, the bill is well drawn in these and other respects. But in any case our position is that the bill or one very similar to it should be enacted as a first step toward action in this field. Plenty of precedence exists in the activities of the Federal Government both for the insurance of loans and for the making of direct loans, and it is to be presumed that the application of this experience in the field of agricultural marketing facilities would be successful. We believe, in any event, that the bill should be adopted, the job undertaken, and revisions in the law made later if they are found to be necessary.
We are glad to see that section V on page 6 of the bill explicitly relates the loan program and the research program called for under the Research and Marketing Act of 1946, and believe that the close coordination of this research program with a program for action will render the research job far more fruitful than it would otherwise be.
Our only specific suggestion for a change in the language of the bill is for an insertion in section III on page 3. We would suggest that the committee consider in line 20 after the word “enterprise” the insertion of the phrase "including cooperative associations of farmers or of consumers, or of both,” so that section III would read: It is the purpose of this act to facilitate, encourage, and assist municipalities
and private enterprise, including cooperative associations of farmers or of consumers, or of both, in the creation and development of modern and efficient public wholesale markets
The CHAIRMAN. Thank you very much, Mr. Smith.
The CHAIRMAN. Mr. Don Baker, of Huntington, W. Va., we will be glad to hear you now. STATEMENT OF DON BAKER, MANAGER, HUNTINGTON CHAMBER
OF COMMERCE, HUNTINGTON, W. VA. Mr. BAKER. I am manager of the Huntington Chamber of Commerce. Huntington lies in the Tri-State area. It is a town of 86,000 people. We have a consuming area of a little over half a million people who live in three different States. We have surveyed our market problem time and again.