Mr. ROBINSON. You refer to which freight rates? Mr. BRADLEY. I am talking about freight rates, we will say, on lumber from the west coast to the East, in proportion, in percentages of increase.

Mr. ROBINSON. They have not gone up in proportion to the offshore earnings, and I personally think that any private steamship operator or owner of a steamship is thoroughly justified in withdrawing his vessels from domestic operation and putting them into more attractive offshore business.

Mr. BRADLEY. I appreciate that, but I understand the statement has been made that bottoms were not available for this intercoastal work, and, therefore, I assume that the freight rates have mounted quite considerably.

Mr. ROBINSON. They have not increased in proportion to the offshort rates, and, furthermore, American bottoms are not available for offshore business. If they are I would like to know about that, because I have several requests for American ships today.

The CHAIRMAN. Are there any further questions? If not, all right, stand aside. Mr. Estes, of the National Coal Association.

STATEMENT OF F. F. ESTES, TRAFFIC MANAGER OF THE NATIONAL COAL ASSOCIATION, WASHINGTON, D. C.

Mr. ESTES. Mr. Chairman and gentlemen of the committee, my name is F. F. Estes, traffic manager of the National Coal Association, Washington, D. C. By way of explanation, I might say, that the National Coal Association is a national organization of soft-coal or bituminous-coal operators located throughout the Nation with a membership, or, rather, a preponderance of the total of all of the bituminous-coal production of the coal-producing States of the Union.

In addition to the National Coal Association I also appear as more or less representing the Coal Exporters Association of the United States, because we are very closely affiliated with and tied in with that group.

It will be my purpose, with the indulgence of the committee, to make a short preliminary statement, as brief as possible, to be followed by two of the exporters, Mr. C. Wharton Brown, of the C. W. Henley Co. of Baltimore, Md., and Mr. Enney of the Consolidated Coal Co. of New York.

In addition, we have present representatives of the Norfolk & Western Railway, the Virginian Railway, the Chesapeake & Ohio, and the Baltimore & Ohio Railways, who are vitally interested in the coal movement going by water for export trade, and who will not take the committee's time to testify here today, but who will be available to answer any questions concerning their facilities to handle coal at tidewater ports or any other questions that might occur to the committee to propound.

Mr. Keitz stressed the labor element in the coal industry, and I believe made a comparison with the labor element in the lumber industry. I will not attempt to argue the relative labor element of the two industries, but I would like to say for the committee's benefit

that each ton of coal that we get in any kind of trade, whether it be foreign trade or domestic trade, furnishes 1 day's work to some man either directly in the coal industry or in related or allied industries.

We are somewhat concerned about this resolution for this reason, that some time before Congressman Buck introduced this resolution there came to my attention an article in the Chicago Journal of Commerce with large headlines to the effect that the intercoastal trade was going to be considerably helped by a resolution to be introduced by Congressman Buck. Since the resolution, which I believe was introduced by the Congressman 2 days after that article appeared, the Johnson companion bill was introduced in the Senate, and we have seen on various occasions other headlines regarding the intercoastal service, but no mention has been made of the export service. I would like to observe also that during the course of the hearing considerable mention has been made of the intercoastal service. We will not attempt to argue whether this bill would offer tonnage to the intercoastal service, or whether the intercoastal service is now overtonnaged, but we do want to say that the overseas coal service is certainly undertonnaged.

The CHAIRMAN. I hope you do not hold Mr. Buck responsible for statements made by the newspapers.

Mr. ESTES. No; I would not like to do that, Congressman. My only other statement before the other gentlemen follow me is that we want, as counsel for the association, to endorse the statement that will subsequently be made on behalf of the Coal Exporters Association, and to also endorse, in principle, the Buck resolution, H. J. Res. 519, as modified, but with the reservation that we feel, as a major industry, that we are entitled to certainly our due share of these boats that would be made available by the rescinding of section 510 (g) of the Maritime Act.

If the resolution is designed, and we cannot read that into the resolution, but if it is designed to be applied to furnish boats only for the intercoastal trade, then the coal people would certainly have to qualify any endorsement made to the resolution. Unless there are some questions that the members of the committee desire to ask I would like to introduce Mr. Brown.

The CHAIRMAN. Are there any questions of the witness? Mr. Brown is to follow you?

Mr. ESTES. Yes, sir; Mr. Brown.

STATEMENT OF C. WHARTON BROWN, OF C. W. HENLEY CO., BALTIMORE, MD., AND REPRESENTING THE COAL EXPORTERS" ASSOCIATION OF THE UNITED STATES

Mr. BROWN. As attorney of the Coal Exporters' Association, I wish on behalf of the association to say that we have the endorsement of the National Coal Association.

The Coal Exporters' Association of the United States endorses House Joint Resolution 519 in principle, for the reason that it is. a legislative move to rescind section 510 (g) of the Maritime Act and thus releases approximately 100 vessels in the laid-up fleet. The coal industry has been endeavoring to get a release with unsuccessful results for a long period of time. We feel that the coal export trade should be given due consideration in the allocation of

these vessels, as the provisions set forth in the Maritime Act of 1936 specifically state, aid should be given to coal along with other basic commodities, as emergency now arises whereby there are insufficient vessels to take care of the growing demand for coal for foreign neutral countries. The coal exporters should be given equal consideration in the allotment of said vessels to enable them to take care of their present demand as well as the increased demand brought about by existing conditions. The number of workmen employed in the industry would be substantially increased and the number of working days likewise increased, directly and indirectly, by having a portion of these vessels allocated to the export coal trade. The release of the vessels referred to in House Joint Resolution 519 will greatly assist in the distribution of American coals to foreign countries which have in the past relied principally on coal exported from countries now engaged in war. We have assurance of sizable tonnages if there can be a guarantee as to available vessels and stability of vessel rates over a period of 2 years. For example, the Brazilian railroads in South America alone use over 600,000 tons of coal a year.

Chilean and other west coast South American markets are likewise open to us for a very large amount of business if ships could be obtained at reasonable and stabilized rates.

Mr. CULKIN. Where did they get that coal before?

Mr. BROWN. They got that coal mostly from Poland, Germany, and Great Britain. In other words, if the American coal exporter could be put in position to compete with Great Britain and other coal-producing countries, we could undoubtedly hold this foreign market not only during the present emergency but we would establish a trade relationship which would bear fruit over a number of years to come.

We have attempted in the foregoing to bring out only a few of the important facts in connection with the exportation of coal in a desire to conserve the committee's time. If, however, any additional data are required for your committee, or others, we will endeavor to supply such information upon request.

In conclusion we wish to emphasize the need for your cooperation and assistance in allowing the American coal exporters to secure foreign business with the aid of these vessels, and endorse House Joint Resolution 519 with these provisions.

Gentlemen, on behalf of my company, which has been engaged in the export coal business approximately 25 years, we likewise endorse this bill under the same conditions the Coal Exporters Association does, and we feel in chartering these vessels they should be chartered by the exporters by the Maritime Commission and not allocated to any particular line, because the vessels have to be handled in the case of individual trip or a series of trips, and therefore I have to endorse the remarks of Mr. Robinson, who spoke a few minutes ago, about controlling these vessels.

Mr. OLIVER. In other words, Mr. Witness, you believe the authority should be restricted entirely to chartering and should not include the possibility of sale?

Mr. BROWN. Yes, sir.

Mr. ESTES. Mr. Enney.

The CHAIRMAN. All right, Mr. Enney.

STATEMENT OF E. D. ENNEY, DIRECTOR OF EXPORTS, CONSOLIDATION COAL CO., NEW YORK, AND DIRECTOR OF COAL EXPORTERS' ASSOCIATION

Mr. ENNEY. Mr. Chairman, my name is E. D. Enney, and I am a director of the Coal Exporters' Association, and director of exports of the Consolidation Coal Co. of New York.

The Consolidation Coal Co. of New York is one of the largest coal exporters in the United States, and has been engaged in the coal exporting business for the past 30 years.

There is at the present time a crying need for American coal in South America and other neutral foreign countries, and we need your assistance in carrying on this business and maintaining it over a period of years.

For instance, prior to the beginning of the war, a normal vessel freight rate to Brazil and the Argentine Republic was approximately $2.75 a ton, but immediately after the war started rates began to increase and in September 1939 they were $5 and in October as high as $8, and recently as much as $10 has been paid. The rates to Italy have been as high as $17.25.

Of a list of something like 112 steamers which have taken coal to South America since the beginning of the war, not one Americanflag ship has been employed.

The CHAIRMAN. Are there any questions?

Mr. CULKIN. They are paying $17 a ton to the Mediterranean?

Mr. ENNEY. That is correct, to west Italy. It has been that, but it is about $15 now.

Mr. CULKIN. It has been $17 a ton?

Mr. ENNEY. That is right.

Mr. CULKIN. That was rather profitable, was it not?

Mr. ENNEY. I should think so, very profitable.

Mr. CULKIN. Do the foreign-flag ships carry that?

Mr. ENNEY. Yes, except in one or two instances.

Mr. CULKIN. Do your outfits have access to those companies?
Mr. ENNEY. What companies?

Mr. CULKIN. Those foreign-flag ships?

Mr. ENNEY. Yes, anybody can charter them, but there are not enough of them to do business. We are restricted to the ports where vessels are available. Any part of these laid up vessels would increase our possibilities of getting business.

Mr. CULKIN. If it is $17 a ton to Italy, what is it to South America? Mr. ENNEY. It is about $9.50 today, but it has been as high as $11. Mr. CULKIN. What was the normal price?

Mr. ENNEY. $2.75.

Mr. CULKIN. That is the peacetime rate?

Mr. ENNEY. The ordinary rate.

Mr. CULKIN. $2.75?

Mr. ENNEY. We actually chartered vessels in August at that rate. The CHAIRMAN. Are there any further questions? Mr. Ingebretsen.

STATEMENT OF JAMES C. INGEBRETSEN, REPRESENTING LOS ANGELES CHAMBER OF COMMERCE

Mr. INGEBRETSEN. Mr. Chairman, my name is James C. Ingebretsen, representing the Los Angeles Chamber of Commerce, which comprises in its membership some 10,000 firms and individuals who are engaged in business in Los Angeles.

The Los Angeles Chamber of Commerce favors the enactment of the Buck resolution as the most feasible method of making it possible for the Maritime Commission to charter to intercoastal carriers vessels of the laid-up merchant fleet of the United States. A recent survey of intercoastal shipping made by the Los Angeles Chamber of Commerce indicates that we have less than two-thirds as many ships eastbound as we had 8 months ago, and that number is steadily decreasing.

Lack of cargo space is proving costly to shippers and may destroy numerous industries if relief is not found. As an instance, one California company, which has 65,000 tons of low-grade cargo (heavy chemicals) to move eastbound intercoastal this year, is now compelled to ship by rail to Galveston and thence by water to New York, at a cost of 61 cents a hundred pounds, or $12.20 a short ton. A very few years ago this sort of cargo would have moved on a rate a little more than half that amount by the intercoastal route. The additional $6 a ton penalizes this one company-or its customersmore than $350,000 in a single year. Many lines of business are unable to stand such an increase. The result is cancelation of orders, the slowing down of industry, and the increase of unemployment.

We do not wish to protest the disposal of obsolete ships owned by intercoastal operators, provided due provision is made for other tonnage so that cargo depending on intercoastal ships may not suffer, but other tonnage may be obtained only by putting into service the laid-up fleet of the Maritime Commission.

We, therefore, favor the enactment of the Buck resolution.

If the information can be assembled this afternoon I will file a supplemental statement in the morning. Thank you very much. The CHAIRMAN. I will be glad to have a supplemental statement in the morning but my limitation as to the amendments did not necessarily apply to supplemental statements which would go into the record. So, if you want to prepare a supplemental statement and take a little more time than until tomorrow morning in order to get your statement in you may do so. I only wanted the amendments in by tomorrow so that if we met in executive session we would have them before us.

Mr. INGEBRETSEN. I should like a little more time in which to prepare my supplemental statement, Mr. Chairman.

The CHAIRMAN. We would like to have the record as complete as possible for such information as it may be to the Senate if they desire to use it and also to the Maritime Commission.

Mr. BRADLEY. Does your organization support 509 and 519?

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