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Mr. Johnson. In the writing of the bill did · Mr. Crow have any hand?
The CHAIRMAN. Yes, sir. Mr. Crow came to this committee room at my request.
Mr. JOHNSON. Is Mr. Crow an officer or an employee of the Department of Agriculture?
The CHAIRMAN. He is in the processing section and probably knows more about this problem than any man in the country. He was called here to advise with members of our staff in the
preparation of this bill, which was prepared under Mr. Parker's direction.
Mr. Johnson. Possibly so.
The CHAIRMAN. All right, sir. Because it is not fair to the Department, and it is not fair to the committee, to say that the bill was prepared in the Department. This committee has been interested in this subject for 6 or 8 years to my own knowledge, and has conducted hearings, and as a result of these hearings this bill was prepared.
Mr. JOHNSON. Let me qualify that by saying “assisted by the Department of Agriculture."
The CHAIRMAN. By one of the officials.
Mr. JOHNSON. By one of the officials. Can I also add: "assisted by a real-estate promoter?” The CHAIRMAN. By Mr. Curtis? Mr. JOHNSON. By Mr. Curtis.
The CHAIRMAN. I do not know whether he is in the real-estate business or not.
Mr. Johnson. Well, an industrial real estate operator. Descriptions don't make much difference. Did he or did he not assist?
The CHAIRMAN. He has assisted, yes. But have you any evidence of that?
Mr. Johnson. Only his own statements to that effect.
The CHAIRMAN. And that he has conferred with us about the provisions of the bill?
Mr. JOHNSON. Only the letters in the paper which Mr. Custis has written.
The CHAIRMAN. In which he said what?
The CHAIRMAN. I am willing for the record to say that Mr. Custis has assisted us.
Mr. Johnson. Then I say "assisted by a real estate promoter.” I think that is in order, then.
The CHAIRMAN. If he is willing to admit that he is a real estate promoter. I do not know about that.
Mr. JOHNSON. Let him make his own description of what he does. He deals in real estate.
The CHAIRMAN. All right, sir.
Mr. Johnson. A bill to encourage the improvement and development of marketing facilities for handling perishable agricultural corrmodities. This bill differed fro.n its predecessors in that it:
(a) Carried a declaration of policy and general purpose section. (6) In describing market facilities excluded public cold storage wareover 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. ABERNETHY. Thank you very much, sir.
Mr. ABERNETHY. The committee is pleased to hear now from Mr. J. P. Johnson.
STATEMENT OF JERRY P. JOHNSON, WASHINGTON, D. C., REPRE
SENTING 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 á 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
houses of more than 10,000 cubic feet; and facilities for handling livestock.
(c) “Perishable agricultural commodities" included meats and seafood.
(d) Carried a section setting forth definitely what the Department of Agriculture should do under the Agricultural Marketing Act of 1946, as though they were not certain of their position up to this time.
(e) Established two funds; one the marketing facility mortgage insurance fund of $25,000,000; and the marketing facility loan fund of $50,000,000.
() Eliminated any mention of operation on a nonprofit basis.
Our association made no opposition whatsoever to the first bill, S. 368. It objected vigorously to S. 2091 and H. R. 5881, because:
(1) Of the interference of the Government in free competitive enterprise and the provision for operation solely on a nonprofit basis, which is contrary to American principles, and entirely socialistic in trend.
(2) It permitted the construction of public refrigerated warehouses if, when, and where the Department of Agriculture may deem it necessary in connection with one of their market projects.
(3) It placed in the hands of a cabinet member or Federal department too much power and decision over the lives, fortunes, and welfare of the American people and industry.
(4) The Federal Government should divorce itself from the business of loaning money and guaranteeing loans; or confine emergency loaning to existing agencies created for that purpose; and not delegate such functions to Cabinet members and departmental officials.
The bill now under consideration has not in any respect changed our views or opposition. True, the bill contains different terms and phraseology; but the same intent, the same purpose is noticeably present. It is obviously phrased to meet objections from all sources with the intent to carry out the wishes, desires and intent of the Department of Agriculture. Let's look at the facts.
(1) In the Declaration of Policy it is stated: that the marketing of perishable agricultural commodities affects the public welfare and is a matter of grave national concern.
There is no evidence that the public welfare is being affected adversely or otherwise by the existing private enterprise system of wholesale or retail marketing of perishable agricultural commodities.
Much has been said here that this is a national problem because the perishables sold on these wholesale markets come from the farms of the Nation; and therefore the Federal Government should step in and take a hand toward providing the facilities. In other words, that it is an interstate matter, not a local, municipal, or State situation. We contend that it is the problem of the States and their municipalitiesthat the wholesale perishable markets are there to sell the products for the use of the community. It is for the benefit of the people in those cities served by the markets, and any intervention by the Federal Government is an infringement on State rights.
(2) The declaration states: that the handling of perishable agricultural commodities in such facilities is attendant with many uneconomic practices, greatly increasing costs and causing undue losses, excessive waste, spoilage, and deterioration, which result in producers receiving prices far below the reasonable value of their products, in unduly and arbitrarily enhancing costs of operations in such markets, and increasing the price of food to consumers; that the prices of all perishable farm commodities
are directly affected by the prices made on these public markets and are adversely affected by the unduly burdensome costs resulting from obsolescent and inadequate facilities.
Evidence submitted by the Department of Agriculture in its reports does not in any manner support this statement. In fact some of their figures lead us to believe that they have been produced out of thin air. Plain common sense and logic makes them questionable. For example, a recapitulation of some existing reports with respect to figures submitted, after investigation, covering potential savings on losses, waste, spoilage, and deterioration doesn't make sense.
In a report dated June 1949, St. Louis, Mo., with a population of 816,048, gives this total figure as $864,700.
The report shows that St. Louis, with 139 dealers, shows a loss of $600,900, or $4,323 per dealer. Your report also says, however, that there will be savings of $864,700, which is even more than the loss being experienced from waste, spoilage, and deterioration. That doesn't make sense.
In August of 1947, a report on Atlanta, Ga., gives a potential saving of $236,633. I am only quoting the waste and spoilage figures. The report shows that Atlanta, with 69 dealers showed a loss of $331,725, or $4,807 per dealer.
In January of 1949, Columbia, S. C., with a population of 62,396, gives the total figure of potential savings for that city of $306,282, more than the Atlanta report. And with 52 dealers they show a loss of $656,800, or $12,630 per dealer. It doesn't make sense.
Obviously, the figures are only estimates, or I may call them guesstimates," and the declaration has doubtless been based on these reports.
Then again, Department of Labor statistics with respect to consumers' price index and retail food prices, do not show that the cost of living insofar as the cities mentioned by the Department of Agriculture as particularly needing new markets is concerned, have been unduly affected. They are served today by the same markets as served them in 1935–39, the period accepted by the Labor Department as 100. These figures show:
Percent of increase over 1935–39
Percent Atlanta, Ga68. 3 Chicago, Ill.
72. 9 Baltimore, Md.. 70. 1 Cleveland, Ohio.
68. 7 Boston, Mass.
62. 3 You will recall Mr. Crow said Cleveland was a good market if the railroad served the houses. Percent
Percent Detroit, Mich. 69. 5 Norfolk, Va.
67. 1 Houston, Tex 72. 9 Philadelphia, Pa.
66. 0 Indianapolis, Ind.. 70. 9 Richmond, Va
61. 9 Kansas City, Mo. 61. 1 St. Louis, Mo.
67. 4 Los Angeles, Calif. 66. 9 San Francisco, Calif.
72. 3 Milwaukee, Wis. 67. 6 Seattle, Wash..
71. 6 New York, N. Y
64. 5 Mr. Crow said that Denver he would give his blessing; with 169.9 percent. He gave his blessing to Buffalo with 168.3 percent.
The increases in food costs described above since 1935–39, the basis of 100, are entirely in line with increases in wages, and so