raised their rates to a point which has made it practically impossible to do business in either direction. To substantiate this statement, about August 15, 1939, we chartered space for Antwerp/Rotterdam on a Norwegian motorship for $9.30 per long ton and yesterday the same owners were asking $31 a long ton, or an increase in a matter of about 7 months of $22.30 per ton. To the Orient, at the same time last fall, we could have chartered space for $4 per short ton, whereas this last February we chartered a cargo of space for Shanghai and paid $10 a short ton; and at the present time owners are asking from $11 to $12 a short ton. As an example of how rapidly these increases have taken place, early last week owners were asking $28 to Antwerp/Rotterdam and today the same people are asking $31 for the same destinations. Due to the above high rates to the Orient and even though we have available to us a subsidy from the United States Government of 25 cents or more per bushel, we still find ourselves unable to compete on the shipments of wheat to China with Australia, and the only sales that have been made of Pacific coast wheat since the 1st of January were 2 cargoes in February, while at the same time the Chinese bought 20 cargoes of Australian wheat in the month of February alone.. An even more alarming situation is and has been developing in connection with the absolute impossibility of securing freight space on regular American liners operating between Pacific coast and Atlantic and Gulf coast ports. This is definitely due to the fact that the owners of these lines have been and are selling off these ships as fast as they can secure their price, which they are getting from foreign governments. One line operating to the Gulf recently sold their entire fleet of 11 steamers and another line, operating probably twice that number of ships to the Gulf, as well as to the Atlantic, are asking $65 a deadweight ton and they have actually been bid $56 per ton. Therefore, it would seem only a matter of a short time until they, too, will have disposed of their entire fleet. Several other intercoastal lines have sold 2 or 3 vessels each and we know they are now negotiating on further prospective sales. This can mean only one thing and that is the wheat crop of the Pacific Northwest will be bottled up to the extent that it will have to move all-rail east from interior shipping points, automatically eliminating the usage of the existing terminal elevator facilities and resulting in a loss of thousands of dollars, both to the operators as well as the employees now used in these plants. How does this affect the farmer? On August 15, 1939, the price of cash wheat at Portland was 70 cents per bushel for export varieties, while at the same time the price of the Chicago May option was 65 cents a bushel; or in other words, our wheat was bringing a premium over the Chicago option of 5 cents per bushel. Today the price of cash wheat is 84 cents a bushel, whereas the Chicago May option is $1.05 per bushel; or in other words, our wheat is now at a discount of 21 cents per bushel under the Chicago option. Therefore, the farmer has actually lost 26 cents a bushel due to the fact that his wheat is now bottled up in such a way that about the only outlet now existing is to ship it all-rail East, and if we must continue to move it in that direction, it will mean at least at the present discount of 21 cents to 22 cents under the Chicago option, with a good possibility of it going even still lower. This means a resulting loss to all lines of business on the Pacific coast because the farmer has 26 cents per bushel less to spend than he would have if conditions were normal. Even Therefore, it would seem to me that one solution to alleviate the present very serious situation would be for the United States to put into service immediately 20 or more ships that we understand they now own, which are lying idle. though these vessels may be 15 or 20 years old, there is no reason why they should continue to gather moss and barnacles when they could be transporting cargo from this coast to different ports of the world. I am also a wheat farmer and farm over 5,000 acres in Umatilla County in the State of Oregon; and it is hard to understand why our Government cannot put into service this unused tonnage, as every effort is being made otherwise to curtail production and move our surplus. For instance, we as farmers are paid to not farm a certain portion of our land, and our Government pays a subsidy to move the wheat into foreign markets. Therefore, everything considered, why not use these idle boats and help the farmer, laborer, businessman, and Uncle Sam himself? Please excuse this lengthy letter, but when I get started thinking about this matter, it is hard to stop. Yours very truly, H. W. COLLINS. GREAT WESTERN MALTING CO., INC., Mr. T. H. MACCOMBER, Port of Vancouver, Vancouver, Wash. DEAR MR. MACCOMBER: I have just returned from an extended visit to Latin and several of the South American countries on a survey of conditions relative to our extending our business into these countries. At the present moment we are shipping considerable tonnage to several large breweries in Colombia and our greatest difficulty is the lack of transportation facilities. If we, or any other American manufacturers, are to ever establish ourselves in Central and South America, it would seem that this is the one great opportunity we have. Other countries have been consistently establishing themselves for the past 20 years and are so entrenched that nothing but the present war could ever disturb them. It seems to us that this moment is the real opportune time to get American manufacturers into these countries. To accomplish this, adequate steamship service must be provided and as far as the West coast is concerned it must not only be adequate in numbers but it also must be adequate in rates. For instance, I had the opportunity of talking to a prominent merchant of Barranquilla and suggested that he at least make an effort to deal with the Pacific Northwest because, after all, this was his former home. He stated that he had made some effort but the transportation service was so bad and the rates so far out of line with similar commodities of the East coast that he finally had to give up. While at Bogota, I talked with an important official of a brewery, whom we have been supplying with malt. They are again in the market and they insist on shipment either from New Orleans or New York because they feel more certain of delivery and, in this particular case, are willing to pay a considerable premium. In fact, they are willing to pay the rail rate to New Orleans so as to be sure of better transportation service. At this time, we have on our books an order for 1,000 tons of malted wheat to go into Texas for delivery sometime in July and we do not find, at this moment, any assured way of making delivery. This all leads to the conclusion that we on the Pacific coast and particularly in the Pacific Northwest, if we are to develop our agriculture and industry, must be provided with water transportation, and it would seem with the idle ships available on the East coast some of them could be placed into service on the West coast, and we should do everything possible to accomplish this. Yours very truly, GREAT WESTERN MALTING CO., INC., WASHINGTON CANNERS COOPERATIVE, Mr. T. P. MACCOMBER, Manager, Port of Vancouver, Vancouver, Wash. DEAR MR. MACCOMBER: Relative to the shortage of steamer space that has developed in the intercoastal service time does not permit of our going very much into detail regarding the effect on our business. For several months it has been impossible to secure adequate space and shipments that should have moved a month ago are just now getting under way. Our type of shipments, canned goods, are generally preferred by the steamship companies to other commodities such as lumber and other items, so that our industry has not suffered on account of the shortage of space as much as has other industries. However, the indication is that space will become more scarce as time goes on and we are more concerned about moving the 1940 pack than we are the balance of our 1939 pack, although it is becoming increasingly difficult to secure space each day. Our cooperative serves around 700 farmers and fruit growers and our yearly tonnage approximates 7,500 tons about 85 percent of which moves by water to the East coast and a small quantity to the Gulf. Unless something is done to provide added steamer space we can foresee a condition that will affect our industry very seriously and we hope that those who are collecting data for the Government will get a true picture of the situation and recommend allotment of steamers to the intercoastal trade to relieve the situation and prevent it from becoming worse. Yours very truly, WASHINGTON CANNERS COOPERATIVE, WASHINGTON GROWERS PACKING CORPORATION, Mr. T. P. MACCOMBER, DEAR MR. MACCOMBER: Relative to the effect on our business resulting from steamer space shortage, it so happens that we have not made our usual volume of sales into New York this year or other eastern points. Consequently our business has not been greatly disturbed by the space shortage. As you may know, we handle about 3,000,000 pounds of dried prunes annually, most of which during normal times are sold into New York, Boston, Philadelphia, and the Gulf. We are not so much concerned about the balance of this year's, 1939, crop, but are concerned about the 1940 season. If space becomes more scarce as time goes on, as there is every indication, we would be facing a serious situation this coming fall. We represent several hundred growers and we hope that something can be done to see that sufficient space is available so that the continuous delivery of our dried prunes may be possible. Yours very truly, WASHINGTON GROWERS PACKING CORPORATION, A. B. & C. PACKING CORPORATION, (Attention: Mr. MACCOMBER.) DEAR SIR: In accordance with our conversation on intercoastal shipping and effects it is having on our business, present and future, I have been averaging several cars per month to New York and vicinity, up to the last 30 days which has been impossible for us to do any booking. We are anticipating an approximate pack of 150,000 cases of fresh prunes in sirup for the New York market. The way the outlook is if we cannot obtain information that we can get definite space on east-bound ships we will be forced not to pack. We have orders on hand now totaling approximately 7,000 cases for a New York buyer which we have not shipped a case to him for 30 days because of ship space. It is a very serious situation to a company such as ours whereas 95 percent of our trade is in New York. I understand that some of the larger companies that pack 400,000 to 500,000 cases have made bookings with certain steamship companies which will make it impossible for our concern to obtain space for us unless more ships are made available. If there is any other information I have omitted I will be glad to furnish you with same. We remain sincerely, A. B. & C. PACKING CORPORATION, By R. J. DELANOG, Manager. ROY M. JANIN LUMBER Co., GENTLEMEN: Referring to your inquiry as to effect that the present lack of steamship space for lumber movement to California and the Atlantic coast is having upon our business. Will state that as far as the Roy M. Janin Lumber Co. is concerned it has reduced our volume by about 50 percent. However, our situation is not nearly so serious as that confronting the sawmills for whom we are sales agents, and whose product as you know we have been shipping over your dock continuously for the past several years. We have been forced to cancel or hold up all orders we have placed with these mills for movement over your dock due to our inability to obtain any ocean space at all and no indication from the steamship companies as to when they might be able to relieve the situation. As you know, we have considerable lumber on your dock now which has been delivered there on firm orders, and we have considerable additional business booked but, as stated, we were compelled to shut the mills off on any further manufacturing because of uncertainty as to movement. Our mills being of the type commonly referred to as rough green mills are not in position to switch over to rail shipments due to the fact, as stated, their lumber is all green and most of them are rough mills and the weight on which stock is so excessive that it cannot be shipped by rail in competition. Because of this, if relief, so far as steamship space is concerned, is not afforded at a very early date, all of these mills will be compelled to close down. For your information we quote below list of mills for whom we sell with the number of men employed shown opposite each mill: Harold Erickson Lumber Co., Cornelius, Oreg. Olson Bros. Lumber Co., Camas, Wash M. H. Miller Lumber Co., Molalla, Oreg Wallace Peterson Lumber Co., North Plains, Oreg.. S. & S. Shingle Co., Sandy, Oreg... 18 50 30 18 14 10 140 The list above shows the regularly employed men only, and does not include men directly affected by the closing down of the mill such as lumber truckers, wood and sawdust haulers, and other contract workers which would increase the number of men shown by approximately 25 percent. We urge upon you the necessity of exerting every effort within your power to relieve the situation so far as ocean space from your dock both to California and the Atlantic coast points in order that these mills may be kept operating and business flow in a normal way. Yours very truly, ROY M. JANIN LUMBER CO., DUBOIS LUMBER CO., Vancouver, Wash., April 3, 1940. PORT OF VANCOUVER, Vancouver, Wash. (Attention Mr. T. P. MacCumber.) GENTLEMEN: We desire to call your attention to the seriousness of the shortage of boat space for the Atlantic coast to the lumber industry in this area, and to urge you to put forth every effort, directly and through your association, to obtain more space for the intercoastal service from the Columbia River. Our West Coast Lumbermen's Association is also striving to find some solution to this dilemma. Our production has been curtailed more than 20 percent ever since the first of the year and, of course, our pay rolls are reduced in proportion to production. If it were not for a very unusual demand in our local market which we have enjoyed during the past 3 months, it would have been necessary for us to reduce our production from 50 to 60 percent below normal. This local consumption has been due to a few very large projects and it now appears that we will soon be back down to normal locally. This shortage of space has also had an ill effect on lumber prices here. Because space is scarce and closely held, those who control it are demanding a premium and the disparity between mill and delivered prices is much greater than normal; much to the disadvantage of smaller manufacturers. If space were plentiful for intercoastal and coastwise service, we feel sure we could market our products at a profit, whereas we are taking a loss at present. This letter seems lengthy, but we wish to impress upon you the importance of this situation to the tidewater mills. Very truly yours, THOS. MACCOMBER, DUBOIS LUMBER CO., CLARK COUNTY LUMBER Co. Manager, Port of Vancouver, Vancouver, Wash. DEAR SIR: You will probably note that we have not made any use of your port facilities for the past 2 months. Strangely this is not due to lack of business but due to our inability to secure vessel space to carry our shipments. This is not only curtailing our business but is closing down the small mills in this territory who have been depending on us to surface, grade, trim, and market their output. Something should be done to correct this situation immediately. Anything you can do will be appreciated. Yours truly, CLARK COUNTY LUMBER Co., PORT OF VANCOUVER, Vancouver, Wash. MORRILL & STURGEON LUMBER Co., GENTLEMEN: We have been assembling some millions of feet of lumber per year on your dock for steamer shipment to our customers. This lumber has come in mostly by truck from the smaller operators within a radius of approximately 50 miles of Vancouver. Due to the extreme shortage of steamer space we are now very hesitant about quoting on or accepting orders for steamer delivery, unless we can sell the output of these mills for rail shipment, they will be forced to cease operations with a consequent increase in the ranks of the unemployed. This loss of business will also work considerable hardship on this company. We hope, therefore, that through the combined efforts of the interested associations, some method will be found to provide an adequate amount of steamer space for the movement of our west coast forest products. Very truly yours, MORRILL & STURGEON LUMBER CO., Manager Railroad and Cargo Departments. Mr. JOHN L. KELLY' EXHIBIT 0-5 HARBOR DEPARTMENT, CITY OF SAN DIEGO, San Diego, Calif., April 8, 1940. Secretary-Treasurer, Pacific Coast Association of Port Authorities, c/o Palace Hotel, San Francisco, Calif. DEAR MR. KELLY: Pursuant to your letter of April 4 we are attaching copies of resolution and communications circulated recently in San Diego in regard to the shrinkage of registered vessel tonnage in the intercoastal trade. On March 26 we were advised that the American-Hawaiian South Atlantic service would discontinue west-bound calls at San Diego, effective with the sailing of the S. S. Kansan from Baltimore, April 19. Fortunately, however, we received subsequent advice from the American-Hawaiian people that it had been decided to continue San Diego as a port of call in this trade, which relieved the situation at least for the time being. We have not developed any specific instances where San Diego tonnage has been actually shut out due to shortage of vessels in this trade, and we are sending the enclosed information to you for your advance information, as it is quite possible that we will be unable to be represented at the special meeting of the Pacific Association of Port Authorities in San Francisco on April 11. In case we are not represented, we will be glad to concur with the membership in any program that is adopted at that meeting. Sincerely yours, Admiral EMORY S. LAND, PORT OF SAN DIEGO, J. W. BRENNAN, Port Director. SAN DIEGO JUNIOR CHAMBER OF COMMERCE, DEAR SIR: Your immediate consideration of the intercoastal shipping needs of the port of San Diego is urgently asked. Reduction of registered steamship tonnage in the United States intercoastal trade by charter transfer to other trades and by sale of vessels to foreign Governments or their transfer to foreign flags is threatening drastic curtailment in steam |