Mr. WILSON. Not the way in which I meant to say it. Mr. WILSON. No, sir. What I thought I said, sir, was that we thought the Government should not make any loans unless they were sound. I did not say this in so many words but it is what I meant to imply, that the Government should not make any loans at any time unless there was a certain knowledge that they would be self liquidating. Mr. GRANGER. Then you said, as I remember it, you had some complaint about the Secretary having the authority to liquidate loans that might be made as an indication that they were considered not to be good loans. Is it not a fact that there is always a possibility that a loan is not good? Mr. WILSON. Yes, sir, what I objected to was the fact that he had 5 years to find out whether it was a good loan. Mr. GRANGER. Five years to liquidate it, and put it in a position where it could be operated. That is not an extremely long time, is it? Mr. WILSON. It is in my judgement, yes, sir. The CHAIRMAN. What is your business, warehouse business? The CHAIRMAN. Have you ever found it necessary to call on the The CHAIRMAN. Is the Manhattan Refrigerated Co., of New York a member of your organization? Mr. WILSON. Yes, sir. The CHAIRMAN. Do you speak for the organization? Mr. WILSON. Not directly, but general. The CHAIRMAN. They authorized you to speak for them generally in opposition to the bill? Mr. WILSON. No, sir. The directors of the American Warehousemen's Association authorized me to speak for them and not any individual member. The CHAIRMAN. Who are the directors who authorized you' Mr. WILSON. The vice president of the association is J. Leo Cook. The secretary is Mr. Wilson Little of Chicago. The executive vice president of the cold storage division is Mr. William Dalton of Washington. And Mr. Julius Cageny of Omaha is the president of the cold storage division and also a director of the national association. In other words, a majority of the directors of the Association requested that I appear here on behalf of the association. The CHAIRMAN. But the General Cold Storage Co. of Philadelphia is also a member of the association? Mr. WILSON. No, sir The CHAIRMAN. How about the Polar Cold Storage Co. of Nashville? Mr. WILSON. I think they are. We have nearly a thousand members and I am not sure of all of the names of the members but I think Polar is a member. The CHAIRMAN. What about the refrigerating warehouses of Dallas? Mr. WILSON. Yes. The CHAIRMAN. The Chicago Cold Storage Co.? Mr. WILSON. Yes. The CHAIRMAN. Beatrice food warehousers? Mr. WILSON. I think so. The CHAIRMAN. The Northwestern Ice & Cold Storage Co. of Portland? Mr. WILSON. I believe so. The CHAIRMAN. Well, now, if I understand what you are saying, it is that the officials of your organization, the majority of the officials, told you to come and oppose the bill, but you never had any meeting of the board of directors of the organization or a resolution, have you? Mr. WILSON. No, sir. The CHAIRMAN. Just what is your real objection to the bill? You said you object to it because you want to balance the budget, and do not want to authorize new agencies, do not want any more Federal regulation and those things. You read the bill, I suppose, did you not? Mr. WILSON. Yes, sir. The CHAIRMAN. You know that in subsection (a) of section 4 on page 4, you find this language at the end of that first paragraph, "not including public and cold storage warehouses of more than 10,000 cubic feet capacity, or facilities for handling livestock." Mr. WILSON. I made no reference to that at all. The CHAIRMAN. I know you did not, but you saw that in the bill? Mr. WILSON. I did. The CHAIRMAN. Are not most of the members of your organization now operating warehouses with greatly in excess of 10,000 cubic feet? Mr. WILSON. Yes, sir. The CHAIRMAN. It will not interfere with your business at all, will it? Mr. WILSON. The present bill will not interfere with our business if it is limited to 10,000 feet of public cold storage, but the bill says nothing about private cold storage, nor there is no reason to believe that the bill might not be amended at some later date to include more facilities. I would like to say that I prefaced my remarks with the statement that I was not objecting as a warehouseman to warehouse facilities. I was pointing out that the bill itself states that the regular lending agencies apparently were unable to make these loans. The CHAIRMAN. Who said that? Mr. WILSON. It says so right in the bill. The CHAIRMAN. Private lending agencies are unable to make them? Mr. WILSON. It says in the past have failed to bring about a satisfactory solution of the problem, that this failure has been due largely to the inability of certain people to obtain through regular financial channels the relatively large amounts of capital necessary for the construction of modern facilities. The CHAIRMAN. That says inability to obtain but not inability to make. This bill contemplates loans by private banks and insurance companies, and other lending agencies, insured by the Federal Govern ment. Mr. WILSON. That is right, and the point I make is that I do not think the banks and private companies would make the loans if the Federal Government did not insure them. In other words, up to date, I am only taking the wording of the bill, sir, up to date the bill apparently states that they have been unable to secure loans through the regular channels. The CHAIRMAN. That is right. Mr. WILSON. Therefore, I assume, that being the case, that the regular channels are not satisfied that they are good loans. The CHAIRMAN. Your objections to this bill are just exactly like they would be to the rural electrification program, you would object to that on the same basis, would you not? Mr. WILSON. I am not familiar with it. The CHAIRMAN. You are not familiar with that? Mr. WILSON. I do not know enough to talk about it. The CHAIRMAN. You oppose that on the same basis? Mr. WILSON. No, I would like if I may to confine my remarks to the subject under discussion. The CHAIRMAN. That is only warehousing, that is your own business. Mr. WILSON. That is the expenditure of public funds for the moving of the markets, that is the expenditure of public funds for the moving or building or whatever you may want to say of the markets. The CHAIRMAN. Of a public market to be operated in the interest of the producers and the consumers, that is what the bill intends to do. Mr. WILSON. The markets, sir, in my estimation, are no more public than a department store or anything else as listed in the bill. Mr. WILSON. Certainly the department store is for the service of the public and finances itself with its own money or money it borrows, it does not get money from the Federal Government. The CHAIRMAN. What does not? Mr. WILSON. The department stores. The CHAIRMAN. Many department stores resort to the Federal Government for loans. Mr. WILSON. They may have through the RFC. The CHAIRMAN. RFC is an agency which might be used to make these loans. I am considering your suggestion to amend this bill so as to authorize the making of the loans by an established agency of the Government, to wit, the RFC. Mr. WILSON. I think it would be very helpful. The CHAIRMAN. We will take your suggestion under consideration. We thank you very much. Mr. WILSON. Thank you for your time. Thank you very much. The CHAIRMAN. Mr. Philip G. Kuehn, vice president of the Wisconsin Cold Storage Co. of Milwaukee, Wis. STATEMENT OF PHILIP G. KUEHN, VICE PRESIDENT, WISCONSIN COLD STORAGE CO., MILWAUKEE, WIS. Mr. KUEHN. The views that I am about to present are those of the Milwaukee Mercantile Exchange, which consists of 26 wholesale poultry and egg dealers in the city of Milwaukee, the Wisconsin Warehousemen's Association, which represents most of the public merchandising and cold storage firms in the State of Wisconsin, the Milwaukee Warehousemen's Association, which represents eight of the nine principal merchandise and cold storage firms in Milwaukee. In addition I am representing Roundy, Peckham & Dexter Co., one of the principal wholesale grocery firms in the State of Wisconsin. Furthermore, I represent my own company, the Wisconsin Cold Storage Co., doing business in Milwaukee and Marshfield, Wis. In addition, I am representing the H. Leshinsky & Co., wholesale fresh fruit and vegetable dealers, James Gagliano, fresh fruit and vegetable wholesalers, Charles F. Johnson & Son, Inc., also wholesale dealers in fresh fruits and vegetables, and Ted Hellenga, a fresh fruit and vegetable wholesaler. We are unconditionally opposed to the passage of H. R. 8320. We do not believe that this bill is necessary in any way, shape, or manner, and we believe there is no more reason to promote with Government funds the construction of huge marketing facilities than there is to promote construction of milk pasteurizing plants, food canneries, meat-packing houses, or any of the other many phases of American food industries. We oppose the principle of Government interference with any phase of American industry, and particularly with an industry as basic to America's economy as the food industry. We oppose the philosophy that Government must make loans, grants, or subsidies. We are dedicated to the philosophy that a free and competitive economy will bring to the producers and consumers of America the best that the world can produce in the most economical way possible. We are convinced that whatever obsolescence may be present in the markets of this country can and will be rectified by private interests, and through the forces of competition. To substantiate this belief, we will cite the city of Milwaukee as an example. We will also show that with the changing methods in the distribution of perishable foods, that the need for huge central markets is declinnig. It is our contention that the old line wholesale produce jobber, as we have known him for many years, is shrinking in number due to the tremendous growth of chain, voluntary chain, local chain, and individual supermarket organizations throughout most of the cities of the United States. It follows, therefore, that any old and antiquated facilities are the signposts of a declining industry. We will now center our story around the city of Milwaukee to prove our contentions. Some 20 or 30 years ago there may have been need for a large central market in Milwaukee because at that time a large number of jobbers of fresh produce were doing the principal volume of business. Today, however, approximately 90 percent of the wholesale fresh fruit and vegetable volume done in the Milwaukee trading area is done by only eight concerns. Following is the record obtained of the unloading and handling in 1947 of railroad carloads by these eight distributors: Jobber No. 1, 1,355 cars; jobber No. 2, 1,000 cars; jobber No. 3, 500 cars; jobber No. 4, 456 cars; jobber No. 5, 310 cars; chain No. 1, 2,836 cars; chain No. 2, 1,480 cars; chain No. 3, 463 cars. The above figures were given us voluntarily by the eight concerns in confidence, and to be used only for the purposes of actually showing the record. The We then obtained the total car receipts of fresh produce in Milwaukee from the railroads for 1947, or a total of 9,423 cars. total number of cars handled by the above eight concerns is 89.2 percent of the entire Milwaukee produce tonnage received by rail. It further shows that the three chains and voluntary chains handled approximately 51.9 percent of the total. We grant that this does not take into consideration truckload receipts, but we feel that it is logical to assume that if a jobber handled 13 percent of the railroad receipts, he handled 13 percent of the truckload receipts. We do not have figures available for 1948 or 1949, but it is our conviction based on observation that these eight concerns are doing a greater share of the total now than in 1947. To further substantiate our survey made on 1947 figures that the three chains did approximately 51.9 percent of the total fresh produce volume, the Milwaukee Journal Consumer Analysis Survey indicates that in 1949 the three chains did 54.2 percent of the total grocery volume to the consumer in the Milwaukee area. The Milwaukee Journal survey has been made for many years, and is widely accepted as being very authentic and accurate. Thus the volume done by the above eight concerns leaves only a very small percentage of the business left for the balance of the remaining wholesale produce distributors. We sincerely ask this question: How can anyone justify a huge wholesale market under these conditions? We presented these figures to the United States Department of Agriculture investigators when they were in Milwaukee making their survey. They apparently elected to ignore our information. They seem only bent on recommending a huge market. Furthermore, the market that the USDA recommends contains 61 store units for produce distributors. We simply do not know how they can hope to rent 61 units that they recommend when only eight firms are doing about 90 percent of the total produce volume. The CHAIRMAN. Will you yield right there for a question? The CHAIRMAN. Do you think that is a very wholesome situation you are bragging about now, when eight firms are doing 90 percent of the business? Mr. KUEHN. I am not in any way trying to argue the methods of distribution. I am only trying to portray the facts as they are. The CHAIRMAN. It looks like a sad situation in Milwaukee if eight big firms control 90 percent of the business. Where do you think that will ultimately lead to? It will ultimately lead to monopoly, which will prey upon the people of Milwaukee, including both the consumers and producers. Mr. KUEHN. I might say to answer your question that I am representing here four independent wholesale jobbers, two of whom belong to the eight and two of whom do not. They recognize the situation as it is today, and I think I am correct in saying that the competition in Milwaukee between these eight concerns is exceedingly keen. May I continue? The CHAIRMAN. Yes; go right ahead. Mr. KUEHN. As I said before, we are not in any way trying to argue the methods of distribution. We are trying to graphically portray the real hard facts. The proponents of this bill might say that there are many other wholesalers in the food line who are interested in going into this market. The USDA's own survey shows, however, that |