Section 8, page 9, item 5 under C, lines 18 to 20, inclusive, which reads: (5) the mortgage shall have a maturity satisfactory to the Secretary but not to exceed 40 years from the date the mortgage is insured; should read: (5) the mortgage shall have a maturity satisfactory to the Secretary, but not to exceed 30 years from the date the mortgage is insured. Regarding this exception, we submit the following reasons: We feel that whereas many market facilities become outdated in a period of 20 years and whereas the purpose of this act is to promote efficient marketing methods, it is, therefore, recommended that a limit of 30 years would be wholly adequate for the purposes of this act and would further guide the planning of facilities to be in keeping with the trend of change and the spirit of this bill. We further recommend that, whereas in this bill, certain sums of money are appropriated as stipulated amounts, and whereas the related balance of moneys to goods is subject to economic change, and whereas the type of aid herein provided is by necessity, continued over an extended period of time, that, therefore, provision be made in the bill for review and study pursuant to adjustments of such stipulated sums in keeping with economic change. Further, that such periods of study be made in periods of not less than 5 years apart during the continuing life of this act. In conclusion, we submit this statement as the considered opinion of the Vegetable Growers Association of America through its various officers and members who have had extended experience in marketing and marketing facilities. We believe this to be a good bill. Our suggested changes are made with intent to further, complement, strengthen, and make effective the good intentions of the act, and we humbly place ourselves at the further service of this committee to aid in the promotion of this bill through the Congress. I would like to thank the committee for the privilege of presenting these comments and this statement. Mr. ABERNETHY (presiding). Thank you, Mr. Pretzer. Mr. ABERNETHY. All right, Mr. Alt. We will hear from you now. STATEMENT OF FRED ALT, MERCHANTS REFRIGERATING CO., NEW YORK, N. Y. Mr. ALT. Mr. Chairman, there was some question, I think, as was brought out before, as to whether I represent the Cold Storage Warehousemen's Association of New York. I have here a telegram which instructs me to speak for them. Mr. ABERNETHY. Well, you can just state whom you are speaking for, and you can, if you like, make that telegram a part of your testimony. You may proceed, sir. Mr. ALT. I would like to speak for the Merchants Refrigerating Co. of New York City. My address is 17 Varick Street, that city. I am also authorized to speak for the Cold Storage Warehousemen's Association of New York. It was suggested by my boss that I come to Washington and take advantage of the opportunity of appearing before this committee be cause for many years I have been close to the market picture in the New York City area. Considerable discussion has been heard in this room about the New York City market-even though I understood from the remarks made by one of the witnesses that the Department of Agriculture has made about 60 requests for this type of Federal promotion from the same number of cities. Why the New York market situation should have so much volume of attention when the bill in question involves a national problem is not entirely understandable. However, as long as there has been so much emphasis on the New York area, I would like to visit with you about that area for a few minutes. It is significant that similar efforts to revamp, do away with, move, or rebuild a New York market have been occurring for the last 40 or 50 years. I believe I heard someone say that these efforts began in 1913. That fact alone emphasizes my own belief that it is unwise for our Federal Government to insist on forcing this change when for over 40 years many improvements have been made, but relocation or complete rebuilding have been impossible because it is not a sound financial venture and financial institutions of reputable judgment could not sensibly invest in such change. The reason for this failure of interest of New York financial institutions is certainly not because of a lack of interest in progress. As has been stated previously in this room, marketing of fresh fruits, vegetables, and other fresh commodities in concentrated locations is a thing of the past. It is true there is still considerable volume of business done in these market areas. However, it is my understanding that only approximately 25 percent of the fresh produce reaching the consumer in the New York area touches the market in question. I have heard here the difficulties of this New York market as it pertained to the traffic problem. It is true that peak periods of market traffic bring about congestion-just as it is true that peak periods in front of this building or around your Washington circles are elating and sometimes exasperating. In my contacts with the trade-and my business is knowing my customers, their desires, their whims and sometimes anticipating those desires, I have observed there are some of these produce customers who would like a new market. By and large, however, these men like ourselves who realize that federally sponsored loans and Federal promotion-no matter who borrows the money-lead to Federal control, whether that control involves merely "advice" or directives and complete domination. Our people in New York are "free enterprises." They like the freedom that this Government has given them so far. Many of our people have become successful by the use of sound business tactics and without the type of direction and paternalism involved in this bill. There have been other statements made before this committee regarding the lack of labor saving equipment in this market, the lack of efficiency, the enormous rents, and the tremendous spoilage. As an example, the city of New York has just completed a square block of wholesale market buildings known as the Gansevoot Market Meat Center. It is my understanding that rents are $8 per square foot for small units. That isn't cheap. We consider $3 per square foot per year a fair and reasonable rent for warehouse freezer space. As to spoilage, my company operates a refrigeration line that services over 500 individual refrigerator boxes in the premises of these market people. Almost 200 of these boxes-and they are not small-were in service on May 1. Naturally, more have been turned on and are being turned on each day. This service costs a little over 1 cent per cubic foot per month. The use of these boxes definitely reduces spoilage. Personally, I can't see how even a new market is going to prevent spoilage and low prices when produce arrives in larger volume than consumers can absorb. It is true the New York market area could stand improvements. It is congested. There are sections where the buildings and surrounding area could be cleaned up, but please let me remind you that there are interested parties who are willing to make the improvements necessary and will go ahead willingly and gladly-if there comes a time when they are assured that additional investment will not be lost because of the unceasing turmoil brought about by uncertainty as to what the Department of Agriculture and the Federal Government are going to do to us-and in our area. We have recently gone through a tremendous war period. During that time improvements such as you're talking about were out of the question. During that time, also, many of our produce people and financial institutions were thinking about the day when the conditions you speak of would be improved-even though the volume of produce being handled in this manner today is cut materially with the growth of both frozen foods and new distributive methods, but we are all questioning whether such planning, investment, and action are sensible as long as we are continually stirred up by the threat of Federal paternalism as it exists in this bill. At present, there is a committee in New York now endeavoring to have the city widen streets and improve dock facilities to ease this congestion. My own company is spending over $50,000 to renovate and reinsulate an old building at 31-33 North Moore Street, which is within two blocks of the market area. Mr. ABERNETHY. Thank you, Mr. Alt. You mentioned a telegram. Did you want to include that? Mr. ALT. Yes, I would like to put that in. It is addressed to Fred Alt, assistant vice president, Merchants Refrigerating Co., care of William Dalton, National Association of Refrigerated Warehouses, Tower Building, Washington: You are authorized at today's meeting Cold Storage Association New York to represent the industry in presenting opposition and information in connection with H. R. 8320. It is signed by L. J. Fisher, secretary. That was sent to Mr. Dalton's office, because I don't think Mr. Fisher knew where I was down here. Mr. ABERNE THY. Thank you very much, sir. Mr. ALT. Thank you. Mr. ABERNETHY. The committee is pleased to hear now from Mr. J. P. Johnson. STATEMENT OF JERRY P. JOHNSON, WASHINGTON, D. C., REPRESENTING THE NATIONAL ASSOCIATION OF REFRIGERATED WAREHOUSES, WASHINGTON, D. C. Mr. JOHNSON. Mr. Chairman, I am Jerry P. Johnson, vice president and general manager of the Terminal Refrigerating & Warehousing Corp. of Washington, D. C. I represent the National Association of Refrigerated Warehouses, an organization representing approximately 450 public refrigerated storage warehouses throughout the United States, with a total capacity of 350,000,000 cubic feet of space, involving an investment of more than a billion dollars. In case there is any question as to my authority for appearing here, I wish to assure you that I have a unanimous resolution of the executive committee of the association to appear here in opposition to H. R. 8320. As a preamble to this statement in opposition to H. R. 8320, a bill to encourage the improvement and development of marketing facilities for handling perishable agricultural commodities; we would like to relate the chronology of events leading to the introduction of the bill, as recorded by us. It has been stated here that this is the first measure submitted dealing with this problem. 1. The Department of Agriculture under the Research and Marketing Act of 1946 instituted and made many investigations with respect to wholesale market conditions in many cities. In some instances written reports have been submitted, dating from June 1946 to August 1949, covering cities ranging in population from 16,000 to 800,000. In one instance, Baltimore, they allegedly only assisted in making the report. All of these reports follow the same pattern, the same cuts, the same plan, tailored according to the locality; but ending with the same recommendation-a new wholesale market is necessary. It appears no existing market met the exacting requirements of the Department of Agriculture for an efficient, up to date, well managed and conducted market, to insure economical distribution of perishable food products. 2. On January 13, 1949, there was introduced in the Senate, S. 368, a bill providing for grants to aid in establishing farmers' markets, which authorized the sum of $20,000,000 to be allotted by the Secretary of Agriculture on the basis of relative need, to be matched in such proportion as he may determine, to assist States, counties, municipalities and other political subdivisions in establishing markets at which farmers may sell the products of their farms. This bill had no companion measure in the House of Representatives. However, it apparently did not meet the requirements of its sponsors and died in committee. 3. On June 16, 1949, there was introduced in the Senate, S. 2091, a bill to provide financing for the construction and improvement of facilities for the marketing of farm products, and for other purposes; with a money authorization never completed as to amount, insofar as we have been able to determine. Its companion measure in the House of Representatives, H. R. 5881, was introduced in the House 71578-50-ser. qq- -14 on August 4, 1949. These bills, doubtless prepared by the Department of Agriculture, were extensive in their provisions and described a "market facility" in these all-embracing terms: Means the land, building, fixtures, equipment, and other appurtenances necessary or incidental to the operation of a terminal market or an assembly market constituting a single integrated unit located in a substantially contiguous land area. The "farm products" definition was described: means agricultural commodities and products thereof constituted principally of any of the following, whether in their natural or a processed state: Fruits, vegetables, poultry, eggs, dairy products, and livestock and edible livestock products. "Eligible borrowers" as in the predecessor bill, S. 368, were the various political divisions, with the addition of— A nonprofit cooperative association or a private nonprofit corporation organized for the sole purpose of operating a single market facility. and the bill further stressed that: In any case the institution, to be eligible for such loans, shall be so organized that (1) the market facility financed will be operated on a nonprofit basis. This bill met with opposition on account of its all-embracing terms and the nonprofit provisions. 4. On May 2, 1950, there was introduced, H. R. 8320, the bill now under consideration, prepared by the Department of AgricultureThe CHAIRMAN. Wait a minute. Let me interrupt you there. Who told you it was prepared by the Department of Agriculture? Mr. JOHNSON. All of the newspaper accounts. The CHAIRMAN. What newspaper has made the statement that this bill was so prepared? Mr. JOHNSON. The Philadelphia papers carried an article by Mr. Custis to the effect that he had assisted the committee in preparing a bill which would soon be prepared and out. Mr. Parker, at the meeting of the National Association of Produce Market Managers, mentioned that he was preparing a bill, aided and assisted by Mr. Crow. The CHAIRMAN. But you made the statement that this bill was prepared in the Department of Agriculture. Mr. JOHNSON. By the Department of Agriculture The CHAIRMAN. Where is your authority for that statement? Mr. JOHNSON. The accounts up to date. The CHAIRMAN. What accounts up to date? Mr. JOHNSON. The newspaper accounts up to date. The CHAIRMAN. What newspaper has said that this bill was prepared by the Department of Agriculture? Mr. JOHNSON. I have the clippings and can produce them for you any time you want. The CHAIRMAN. I would be very glad for you to put them in the record, and I will find out where the authors of those articles got their information. The Department of Agriculture has not even reported on the bill. I sent a copy of the bill down to the Secretary and requested a report. They have not even reported yet. I asked them about it yesterday. This bill was written right here in this committee room. Mr. JOHNSON. Is it in order for me to ask a question? |