Every endeavor to charter steamers which were not formerly engaged in this trade, has been made. We have today been advised by the leading steamship broker and agent on the Pacific coast (General Steamship Corporation) that after combing the market thoroughly they are unable to find any vessels to offer us for charter.

Today, it is not economically possible for these sawmills to ship their product all rail to this territory. With possibly three exceptions, these mills were designed for the water trade exclusively. Their properties are so located that only a few have piling space to air-dry lumber. With a few exceptions they do not have dry kilns and those are inadequate to dry lumber for the Atlantic coast market. Car loading facilities are also not adequate to permit these mills to dispose of their output for rail movement. The Atlantic-coast market would have to advance $5 to $6 per M feet before these mills could afford to ship green lumber all rail to back haul points.

The Atlantic-coast market is the main outlet for most of our 18 operations. Particularly is this true in the face of the deplorable condition of our export markets. It is a fact that the physical properties of most of these mills are such that they are partly or wholly dependent on the Atlantic Coast market for their existence.

The seriousness of this situation is a fact-not a theory. The effect of being denied the privilege of moving their product by vessel to the Atlantic coast, according to a current canvass of each of these 18 mills, will be as follows:

Anyone familiar with operations of this kind knows that not one of these concerns can afford to operate on less than a 75 percent basis under present conditions and it is doubtful whether any one of these operations can afford to continue for a definite period with less than a 100-percent operation.

The situation brought about by the removal of vessels from this trade means nothing less than a major catastrophe for these 18 lumber operations and their 3,543 employees. This is by no means the end of the damage that will ensue. Numerous other firms engaged in supplying these mills with logs will be forced to curtail or shut down completely and other associated industries will suffer. We estimate that directly and indirectly an additional 3,000 employees will likewise be affected.

This acute situation is not one which is in the offing. It is to be reckoned with immediately. Figures and facts presented are on the conservative side. We urge that the necessary steps be taken immediately to prevail upon the Maritime Commission to give this matter serious consideration with a view to offering us relief by releasing idle vessels which they now have under their control.

Yours very truly,

PUGET SOUND ASSOCIATED MILLS,

R. E. SEELEY, President.

We have present a delegation from our section of the country, the members of which are perfectly familiar with this situation, and I do not want to consume any more of your time, which I think can more profitably be used by them in presenting their statements to the committee.

Mr. Chairman, and gentlemen of the committee, I thank you for your courtesy, and indulge the hope you will act favorably on the pending resolution introduced by our colleague from California, Mr. Buck.

The CHAIRMAN. Thank you very much, and, recognizing that time is of the essence, I want to say to Members of Congress and others that as many as desire to do so may supplement their statements to be incorporated as part of the original statement for the record so as to conserve time at present. Let us get right down to the meat of the proposition.

Representative Shanley from Connecticut.

STATEMENT OF HON. JAMES A. SHANLEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CONNECTICUT

Mr. SHANLEY. Mr. Chairman, and members of the committee, I wish to speak on behalf of Congressman Ball, of New London, who is unable to be here on account of another meeting. I cannot tell you anything that has not been said by Mr. Buck or Mr. Smith. I would like to place in the record a copy of a letter from our Chamber of Commerce of New Haven, Conn. I am sure that this committee will carefully and ably handle this matter.

The CHAIRMAN. We will be glad to have anything incorporated in the record that you desire.

Mr. SHANLEY. I came here to make this brief statement, and I must leave. It is no reflection on the committee, because I know they will handle it ably and thoroughly.

(The letter submitted by Mr. Shanley is as follows:)

Congressman JAMES SHANLEY,
House of Representatives,

ARTHUR L. JOHNSON CO. OF CONNECTICUT,

Washington, D. C.

New Haven, Conn., April 2, 1940.

DEAR SIR: We are having considerable difficulty with shipments via water from the Pacific coast into Bridgeport and New London, Conn., which are the only two ports that are open to water traffic at the present time due to the fact that the steamship lines are disposing of their boats to foreign countries, and are not chartering boats to replace those sold, with the result that they are curtailing their service to these two ports resulting that the consumers in the State of Connecticut are going to be severely penalized by paying rates from New York City or Boston, Mass., for delivery of Pacific coast merchandise to points in the State of Connecticut, which will amount to an average of 25 cents a hundred on every case of foodstuffs that comes in from those ports. This will mean close to 5 cents per dozen, or half a cent a can on every can sold.

Furthermore, it will give the New York wholesalers selling in this area an advantage in being able to undersell the local people, and we would appreciate it very much if you woud take this matter up with the Maritime Commission

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to ascertain if there is any relief to be had in this situation, as we understand they have the authority where boats are sold to require steamship lines to charter other boats to take care of traffic.

The two principal lines that come into Bridgeport and New London at present are the American Hawaiian and the Weyerhaeuser Lines, and they have both notified the terminals that they were discontinuing service to Bridgeport, which is going to be a very serious situation; and any assistance that you may give will be greatly appreciated. As you no doubt will hear from the wholesalers, chain stores, and super markets in this territory on this subject, we thought it advisable to write you the full particulars.

Very truly yours,

The CHAIRMAN. Congressman Angell.

A. H. GASSELIN,

Vice President.

STATEMENT OF HON. HOMER D. ANGELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON

Mr. Chairman and gentlemen of the committee, I thank you for this opportunity to appear before your committee in support of House Joint Resolution 509 and House Joint Resolution 519, introduced by Congressman Buck, of California.

The district which I represent, the Third District of Oregon, has within it the port of Portland, which is the outlet for intercoastal and foreign shipping through all of the Columbia River territory.

This legislation has for its purpose the suspension of section 510-g of the Merchant Marine Act of 1936 during the present European war, which section restricted the use of vessels in the laid-up fleet of the Maritime Commission. It has particular reference to intercoastal shipping from the Pacific coast.

A very serious condition has arisen there by reason of the sale and charter of many vessels which formerly were used in intercoastal trade. The demand for these ships by foreign shippers, growing out of the needs of the European war, has practically robbed the west coast of its shipping facilities. At the present time it takes from 3 to 4 weeks for west-coast shippers to secure shipping space either for east-bound or west-bound cargoes.

One-fifth of the lumber produced in the Northwest goes through the Panama Canal, and averages 1,500,000 tons annually. Forty-six percent of the softwoods used in lumber production originates in Oregon and Washington, for eastern consumption. Federal records show that one-third of the ships formerly used in this intercoastal industry have either been sold or chartered out of this traffic. As a result, curtailment of production on tidewater mills in the Pacific Northwest has been reduced over one-third, owing to lack of bottoms for handling the intercoastal trade. As a result, it is curtailing production. Indications are that this summer during the building period there will be a very marked advance in building operations, not only in carrying forward the Federal housing program but also in various other industrial activities which require considerable quantities of lumber products. The war trade has developed a considerable demand also for lumber. Low-cost housing requires large quantities of lumber products, as low-cost building utilizes lumber largely for

construction. Unless shipping facilities for intercoastal trade are made available, there will be a critical shortage of lumber production, with the failure of quantities with which to carry forward these programs. As a result, not only will mills in the Pacific Northwest be shut down and large numbers of laborers thrown out of employment but various allied industries will be curtailed and building operations generally slowed up, resulting in increasing the unemployment rolls. One of the large forest-product industries in the Pacific Northwest is the chemical pulp industry, which manufactures high-grade pulp material used in various types of high-grade paper, rayon, plastics, and other similar products. This pulp is made largely from hemlock and waste material from lumber operations, much of which would be entirely lost unless devoted to this or a similar use. From sixty to seventy million dollars are invested in this industry alone in the Pacific Northwest. It manufactures some 800,000 tons per annum, requiring 780,000 man-hours alone to produce the logs. Thirty-five percent of the cargoes originating in this industry are water-borne. Twenty-five thousand tons of shipping space are needed but only 10,000 tons are available under existing conditions. These cargoes all go to the eastern seaboard.

The purpose of this legislation is to lodge in the Maritime Commission sufficient power to make available vessels which under existing law are now tied up. They are old, outmoded ships, but could be utilized in this emergency to prevent serious interruption of an essential industry in the Pacific Northwest. Shippers have entire confidence in the effectiveness of the Maritime Commission to meet and solve this situation, if power is given them under proper legislation. The situation is so critical that it is most essential that immediate action be had so that the House may pass the necessary legislation without delay so it may go to the Senate for action before Congress adjourns.

The CHAIRMAN. Mr. Geyer.

STATEMENT OF HON. LEE E. GEYER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. GEYER. Mr. Chairman and gentlemen of the committee, as a representative of the great Los Angeles Harbor district, very naturally both my people and myself are very much concerned with this legislation. I am in agreement with the objectives of the bill as propounded to this group by Mr. Buck and Mr. Welch. We are particularly anxious to have the resolution passed in its amended form in order that there will really be a supply of ships not merely to be a matter of speculation for someone and then to leave our industries without facilities for carrying on their trade, and our workmen. out there without jobs.

We have a harbor commissioner who lives within my district, Mr. Moore, and he will have something to say in a few moments, I hope.

I want to say that it seems to me that this legislation is correctly drawn, and we have every reason to believe that the Maritime Commission will be honest and efficient in its administration.

The CHAIRMAN. If there are any witnesses who desire to be heard or if any of the Members have witnesses whose names are not included in the statement given me, they will please hand their names in to the clerk so that we will not overlook anybody.

Are there any other Members of Congress who desire to be heard at this time?

STATEMENT OF HON. JOHN M. COFFEE, REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON

Mr. COFFEE. Mr. Chairman, allow me to take this opportunity to thank the members of this committee for their courteous cooperation in expediting this hearing on House Joint Resolution 509, introduced by the gentleman from California, Mr. Buck.

All of us from the Pacific coast, including the many representatives of shippers' groups and commercial organizations, are very grateful for the manifest concern of this committee over the acute waterborne shipping problem which confronts Pacific coast and Northwest industry. I know the committee is anxious to hear as many of those present as they possibly can before the day is over; consequently, there is on need for me to reiterate at length much of the testimony, data, evidence, and supporting facts which have been given you during the course of this hearing.

During the past 2 months, I have received scores of letters from manufacturers, producers, and shippers in my congressional district complaining bitterly of the difficulties they are experiencing in attempting to ship products through the port of Tacoma and other Puget Sound cities to other ports on the Pacific coast and on the Atlantic seaboard. Many of them are refusing to accept orders for lumber products, processed grain commodities, and many other items of merchandise commonly exported from the Northwest. These refusals are based on the fact that it is impossible to secure cargo space on coastwide and intercoastal freighters and thus guarantee delivery within a reasonable date. Some firms anticipate it will become necessary to cease operations as a result of this tragic situation. Mr. Chairman, it is regrettable indeed that so many operators of domestic shipping lines have seen fit to sell their boats to foreign powers or to transfer their registry to other countries in order to escape the operations of the Neutrality Act, as a means of profiting tremendously from the foreign conflict that has given rise to the highest transoceanic shipping rates since the World War, while, at the same time, our own domestic intercoastal and coastwise trade is made to suffer. Many ships have been taken from domestic runs and placed in the off-shore service.

I wholeheartedly endorse House Joint Resolution 509. I trust this committee will see fit to favorably report thereon to the House at a very early date. With your permission, I request that a few of the telegrams which I have received from representative citizens and business firms in Tacoma, who are concerned with this problem, be made a part of the record of this hearing.