SUGAR 1. "The steamship lines claim that they do not have space to handle sugar in the quantities we have tendered since last September. We now have several hundred thousand bags on the Pacific coast which have been tendered and refused. The American-Hawaiian Steamship Co. are handling small amounts at various times. This service is wholly inadequate and has proved to be a great hardship to our business. I believe I can safely estimate that there are between one and a half and two million bags of beet sugar on the Pacific coast at the present time that have been sold on the Atlantic seaboard and that are being held because of lack of boat space." 2. "This corporation has a sugar refinery in California, and normally ships approximately 200,000 tons of refined sugar through the Panama Canal to Gulf and Atlantic ports. We have been experiencing considerable difficulty in securing sufficient space to accommodate our shipments. This lack of space, coupled with an increase in the intercoastal rate on sugar, has brought about a change in our distribution plans which reduces the quantity we planned to ship during 1940 from 240,000 tons to 80,000 tons. The quantity involved in the reduction will be shipped by rail from our plant in California or refined and shipped from refineries on the east coast. On the portion refined on the east coast, the raw sugar will move from the Hawaiian Islands direct to east coast refiners. As yet we have no assurance that we will be able to ship the 80,000 tons we now plan on moving. We have been unable to receive any definite assurance from the intercoastal lines that the tonnage will be handled by them. This leaves us in a very uncertain position. "The whole matter has been very costly to us. We feel that the lack of space, brought about through transfers and sales of intercoastal ships, was the primary influence in the intercoastal lines increasing the sugar rate 5 cents per 100 pounds. We further understand that the remaining intercoastal lines are now planning a general increase in all the rates. Competition among the lines because of these transfers, etc., has been considerably diminished, thus permitting such rate increases and the forcing out of certain basic cargoes, such as our sugar, that normally would move at proper rates." "We are very anxious to see that a new service is established to ease up this situation." SULFUR 1. "We have been encountering a great deal of difficulty in connection with the east-bound intercoastal movement of sulfur. We have a uniform yearly movement amounting to approximately 100 tons per month. In the past we have had a great deal of difficulty in securing this amount of space, and, on numerous occasions have had to route our tonnage via all rail. "We are still encountering difficulty in that it is almost impossible for us to secure bookings of 100-ton lots, and although we are trying to take care of our requirements by making reservations well in advance of the period during which we contemplate shipping, we have no assurances that the full amount of the tonnage will be received by the intercoastal lines." WHISKY 1. "Since Swayne & Hoyt sold their boats, we have had considerable difficulty moving our shipments of bulk whisky via New Orleans to the Pacific coast. Although we have not had any trouble getting space, practically every sailing is delayed from a week to 12 days. "It is apparent we could use additional service in this intercoastal trade.” WOOD PULP PULPBOARD BOXES 1. "We have a movement from the Puget Sound area to Norfolk and Newport News, Va., of approximately 7,000 tons of wood pulp each year. This pulp is supposed to come around in equal monthly installments of 500 to 600 tons. We have been having great difficulty in getting deliveries for lack of shipping space, and more and more pulp is moving now on the rails at heavily increased cost of freight, because of the lack of ships. "In fact the writer was told last week in New York that we might have to take our deliveries by rail because they could not get the ships, and this would make a very considerable increase in cost to us, because we would have to absorb the cost between the intercoastal steamship rate and the regular rail commodity rate. If there are as you state any vessels now laid up, whether sterilized by congressional action or not, they should certainly be put to work at this time. If congressional action is necessary to put these ships in service, some action by Congress should be taken immediately. "With shippers crying for service and seamen pacing the water fronts looking for jobs this is certainly no time to have ships tied up. They might be working for the common benefit. If this letter will help you, you are privileged to use it in any way that you see fit." 2. "As a matter of fact, the last 3 or 4 cars we have had for the Pacific coast have been shut out. These cars will average about 40,000 pounds of pulpboard boxes, other than corrugated, K. D., and pulpboard pails, nested." Mr. LACEY. The purpose of the bill under consideration, House Joint Resolution 509, which, as I understand it, now is House Joint Resolution 519, is to suspend section 510 (g) of the Merchant Marine Act, 1936, for the duration of the war so as to permit the Maritime Commission to release some of those boats which have been sterilized and removed from intercoastal service. Our members are interested in an adequate supply of ocean bottoms for intercoastal and coastwise trade, and I am unauthorized to say that the National Industrial Traffic League endorses the bill under consideration and expresses the hope that it will be reported favorably by your committee so that action can be had on it before Congress adjourns. Unless some relief is afforded, the situation will be greatly intensified as time goes on. That completes my statement. The CHAIRMAN. Any additional matter you have may be filed by you. Mr. W. G. Stone. STATEMENT OF W. G. STONE, MANAGER OF THE TRANSPORTATION AND INDUSTRIAL DEPARTMENT, SACRAMENTO, CALIF., CHAMBER OF COMMERCE Mr. STONE. Mr. Chairman, and gentlemen of the committee, my name is W. G. Stone, manager of the transportation and industrial department, Sacramento, Calif., Chamber of Commerce. Intercoastal transportation is a most essential domestic trade route between the Pacific coast ports and those ports on the Atlantic coast as well as those on the Gulf of Mexico. The preponderance of cargo movements, however, is east-bound, the ratio being approximately 3 tons east-bound to 2 tons west-bound. The tonnage in long tons of 2,240 pounds each for the years 1937 and 1938 excluding petroleum products are as follows: In 1937 there were 3,575,114 tons east-bound, and west-bound there were 2,577,910 tons. In 1938 there were 3,209,526 tons east-bound, and 1,921,003 tons west-bound. The heaviest single item of east-bound tonnage is that of lumber and lumber products; in fact, it constitutes over 41 percent of the total east-bound general cargo tonnage. The next heaviest item is that of canned fruits and vegetables which accounts for over 22 percent. Tonnage figures for the years 1937 and 1938 are as follows: In 1937 there were 1,485,957 tons of lumber east-bound, or 41.6 percent of the total general cargo; in 1937 of fruits and vegetables there were 790,117 tons, or 22.1 percent; in 1938 the lumber tonnage was 1,338,124 tons, or 41.7 percent of the total general cargo, and in 1938 the fruit and vegetable tonnage was 723,996, or 22.5 percent of the total general cargo. Lumber being a heavy movement of east-bound tonnage it naturally controls the ports served on the Atlantic coast by many carriers. For example, when a vessel proceeds to a given port with lumber, it as a general rule carries with it general merchandise including canned goods. Some vessels carry lumber only, but the general practice is to carry both lumber and general cargo. A typical illustration is that of Bridgeport, Conn., when in 1938, 32,000 tons of lumber moved from the west coast to Bridgeport and along with that lumber movement was 7,600 tons of canned fruits and vegetables. The heaviest west-bound single item of tonnage is that of iron and steel articles which account for over 40 percent of the west-bound movement. The balance is in paper, fruits and vegetables, raw materials, manufactured products, and miscellaneous merchandise. For example, the west-bound movement of typical commodities for the years 1937 and 1938 are as follows: West-bound commodities moving in large volume: In 1937 there were 1,221,248 tons of iron and steel, or 47.3 percent of the total general cargo. In 1937 there were 124,762 tons of paper, or 4.8 percent of the general cargo; in 1937, of fruits and vegetables there were 169,613 tons, or 6.6 percent of the total general cargo. In 1938 for iron and steel there were 703,198 tons, or 36.6 percent of the total general cargo; in 1938 there were 125,060 tons of paper, or 6.5 percent of the total general cargo, and in 1938 of fruits and vegetables there were 90,578 tons, or 4.6 percent of the total general cargo. In normal times, shippers have little difficulty in obtaining necessary space for movement of their commodities either east-bound or west-bound. Since the beginning of the present European war, however, the picture has changed materially and in fact many ships have left the trade either through sale or charter. For example, the ships in the intercoastal trade covering services between the Pacific coast on the one hand and both the Atlantic coast and Gulf of Mexico ports on the other hand, on September 1, 1939, and up to the present time are as follows: Ships in intercoastal general cargo trade: On September 1, 1939, there was a total of 171 ships, with a deadweight tonnage of 1,627,632; on March 1, 1940, there were 136 ships, with a deadweight tonnage of 1,316,778; and on April 1, 1940, there were 118 ships with a total deadweight tonnage of 1,110,247, the loss from September 1, 1939, to April 1, 1940, being 53 ships with a deadweight tonnage of 517,385. Due to this shortage of ships which amounts to 31 percent since September 1, 1939, it takes shippers anywhere from 3 to 4 weeks 229991-40— -3 to obtain space in either direction. The intercoastal route is not sufficiently tonnaged at the present time; we need additioanl ships. An illustration of this is shown by the fact that a shipper on March 20 endeavored to secure east-bound space, and the first boat on which he could secure that space was from a period of 4 weeks to a period of 5 weeks. Another shipper on April 11 applied for space, and he could only secure space on May 4. Another one tried to get space on April 16, and he could only secure space on May 14, a period of 4 weeks. Another shipper was a little more fortunate. He applied for space on April 17, and secured space on May 7, a little over 3 weeks. Westbound the same situation exists. One shipper applied on April 9, and was unable to get any west-bound space until April 27. Another shipper has two cars on the docks at Jacksonville, Fla., and they have been there for 2 weeks waiting their turn to be loaded. He does not know when they will be despatched. Those are merely typical illustrations of the situation as it exists today. There are approximately 100 ships in the present emergency fleet which is laid up, many of which we believe could be used in the intercoastal trade. We find, however, that paragraph (g), section 510, of the Merchant Marine Act of 1936 as amended and as approved on August 4, 1939, prevents release of these ships for commercial purposes. Conditions today are wholly different than they were when this amendment was passed to the Merchant Marine Act last year. Joint Resolution 509 proposes to provide relief in this emergency. Passage of this joint resolution will restore to the United States Maritime Commission powers it held prior to August 4, 1939, and enable the Commission to exercise its discretion and bring out of lay-up such vessels at such time as in its judgment become necessary to meet reasonable demands of shippers for cargo space. Under this resolution the Commission can prescribe such terms and conditions and for such periods that in its judgment are necessary, in order that the intercoastal trade may be adequately served. Our shippers at Sacramento, Calif., along with other Pacific-coast shippers, are vitally interested in the maintenance of an adequate intercoastal service. We use the service both east-bound and westbound and in view of the present emergency and of the shortage of ships in the intercoastal trade, we urge early passage of this joint resolution, House Joint Resolution 519. The CHAIRMAN. Are there any questions? All right, stand aside. Mr. Foerster. STATEMENT OF ROLAND FOERSTER, GENERAL COUNSEL, Mr. FOERSTER. Mr. Chairman, and gentlemen of the committee, I appear on behalf of the Spreckels Sugar Co. The Spreckels Sugar Co. manufactures sugar in the State of California and ships each year in excess of 50,000 tons of this sugar through the Canal to the Gulf ports and elsewhere. We have found increased difficulty in the last 7 or 8 months in obtaining adequate bottoms to carry this sugar, and such relief as is contemplated by the proposed resolution would be of great assistance. We even had to go so far as to get ships back from the Orient that were out of commission, lying idle there, in order to carry this sugar, and we heartily endorse the proposed resolution. The CHAIRMAN. Are there any questions. Mr. Underwood. STATEMENT OF JACK UNDERWOOD, REPRESENTING THE CHAMBER OF COMMERCE, SEATTLE, WASH. Mr. UNDERWOOD. Mr. Chairman, and gentlemen of the committee, I represent the Seattle Chamber of Commerce. The chamber has passed a resolution which endorses this legislation, but the meeting was held before this legislation was introduced. This resolution, which I will file with the committee, points out the difficulties of the situation and the serious situation that confronts us, because our mills are now taking no more orders for the reason that we cannot ship. The CHAIRMAN. I understand you do not endorse the amended resolution? Mr. UNDERWOOD. We do, sir. We endorse the principle of the whole thing, and I would like to file this resolution with the committee. The CHAIRMAN. All persons having statements to file with the committee may do so without special permission. That permission is now given. (The resolution referred to is as follows:) COPY OF RESOLUTION ADOPTED BY BOARD OF TRUSTEES OF SEATTLE CHAMBER OF COMMERCE The intercoastal traffic with ports on the Atlantic and Gulf coasts is a very important part of the ocean-borne commerce of Seattle. According to the report of the United States Maritime Commission for 1937, this traffic, in-bound or out-bound, exceeded 544,000 cargo tons, and for the Puget Sound district as a whole exceeded 1,500,000 cargo tons. This intercoastal traffic represents a vital channel of trade, through the port of Seattle and other ports on Puget Sound, for all of the important products of this region; and hence, for the industries and labor engaged in their production. The largest items in the intercoastal traffic from Seattle are wheat, flour, fish and other canned goods, lumber, pulp and paper, and fruit and vegetables. This traffic affects all of the basis industries and natural resources of the State of Washington. Information furnished by intercoastal carriers shows that the number of ships engaged in intercoastal trade with the Atlantic seaboard was 118 in March 1939; 105 in January 1940; and 91 in March 1940. Ten additional boats of small capacity, formerly engaged in Pacific coastwise service, are in process of transfer to the intercoastal route. Furthermore, the ships engaged in service from the Pacific Northwest to Gulf ports were 19 in March 1939; but 7 in March 1940. These transfers represent a very serious reduction in the space and facilities available for intercoastal shippers. Further reduction in the intercoastal and Gulf fleets must be expected because of the present exceptional demand for shipping, for many highly profitable offshore routes. The shortage of intercoastal space has already brought to the lumber industry of western Washington a congestion of unshipped orders for the Atlantic and Gulf coasts; enforced curtailment of production; and unemployment. |