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Answer: Not cooperative, but buy from approximately 1,200 growers. During peak season, hire about 700 employees.
No. 7.-Has any curtailment of operation been necessary because of lack of shipping space? If so, how much in percentage of your business?
Answer: None to date as shortage of space developed after 1939 pack was put up.
No. 8.—Will you curtail employment if a shortage of space continues?
Answer: Yes, will cut down pack if cannot move it by boat in an orderly manner, when harvest is on. Our warehouses are not large enough to store our pack unless heavy shipments are made as goods are packed. Only normal deferred shipments and unsold goods can be stored in warehouse space we have. Unsuitable storage will cause goods to sweat and rust and become unmerchantable.
The above is not exactly as you asked for the date, amplifying to some degree what you asked for.
We have reported the same as above to the Northwest Canners Association, Portland, Oreg., of which we are members, and which concern will likewise be represented at the Pacific Coast Association of Port Authorities in San Francisco, Palace Hotel, 10 a. m. April 11. Yours very truly,
PACIFIC NORTH WEST CANNING Co.,
(Subsidiary of Hunt Bros. Packing Co.) By R. B. WOLFF.
EXHIBIT H-2 A STATEMENT REGARDING THE UNITED STATES AND ALASKA CANNED SALMON
INDUSTRY AND THE EFFECT UPON IT OF INADEQUATE INTERCOASTAL STEAMSHIP SERVICE
To The United States Maritime Commission:
The United States and Alaska canned-salmon industry represents an investment of over $100,000,000; the annual value of its pack is in excess of $50,000,000; 35,000 persons are directly employed in it and it is reasonable to assume that an equal number are engaged in fields directly or indirectly dependent upon it.
The taxes and license fees from fishery industries account for approximately 70 percent of the Territorial tax revenues of Alaska. Of the 60,000 residents of Alaska, 15 percent of those gainfully employed are engaged in the salmon industry.
For the past 10 years the average annual American pack of canned salmon has been in excess of 7,000,000 48 l-pound tall cases. In the past approximately 10 percent of this moved in export trade, consisting principally of red salmon shipped to the United Kingdom. Of the 90 percent of the pack which has been sold in the domestic markets approximately 60 percent has moved by water while the balance of 40 percent has been transported to the consumer by rail.
During the 4 months of July, ugust, September, and October over 45 percent of the annual pack is shipped from the Pacific coast to the distributing channels of the Nation.
Since the outbreak of the war the intercoastal steamship service has been cut to the point to where today the State of Washington has approximately only 50,000 tons of space available each month for all east-bound cargo. On an annual basis this is only half enough to handle the million and a quarter tons of all classes of goods and commodities shipped from the State in intercoastal trade.
Čanned salmon has, in the past, comprised approximately 10 percent of the total shipment from the Puget Sound area. Assuming that such a ratio is maintained there is today only 60,000 tons of space available for the annual intercoastal movement of 125,000 tons of canned salmon from this territory.
The shortage of space will be most acute during the heavy shipping months when 60,000 tons of canned salmon must have moved without delay.
In discussing the effects of inadequate intercoastal steamship service on the salmon industry, one must keep in mind the highly competitive food field in which canned salmon is sold. Barnes and Gregory state that clearly in their book, North Pacific Fisheries: "In its retail market salmon competes strongly with other foods. Its price is influenced not only by the general demand for foods and by the available supply but also by its competitive attractions for consumers. At any particular time the competitive price position of salmon will influence the volume of demand. Accordingly, it is to be expected that the retail price of salmon and other competitive foods will run a course which is broadly parallel, and that the demand for salmon will be influenced by the relative position of its price in this field.”
The chief markets for canned salmon now being served by water carriers are those found along the North and South Atlantic seaboard, the Gulf and the Mississippi River Valley. If adequate steamship service is not available at low rates the only alternative is the use of railroads. The rail rate to the North Atlantic markets is so high that it is doubtful if, after adding the increased transportation cost to the selling price of canned salmon the commodity could be sold at levels low enough to attract the consumer.
While the rail rate to the Southern States is not so high as to the North Atlantic territory, it is still above that obtainable by water. It is felt that if higher transportation charges must be added to the price of salmon in this area of low purchasing power the use of substitute foods will prevail and there will be very little canned salmon used. This same condition would undoubtedly exist in the northern markets as well.
As an alternative to increasing its selling price by adding the increased freight charges, the industry could, it is true, lower the original price of the commodity enough to allow an absorption of the high freight rates. This could scarcely be possible though, in view of the fact that as reported by the Territorial treasurer of Alaska for the period 1930 to 1937, the industry as a whole reported a net loss of over $2,000,000, or an average of slightly under $300,000 a year. While the figures for 1938 and 1939 are not yet available it is doubtful if they will show any improvement.
Îo add to the packers' marketing problem it is quite probable that for some time, at least, the domestic trade will have to absorb the 700,000 cases of red salmon formerly sold in the United Kingdom, as the British Government is prohibiting any purchases which will deplete its exchange balances.
Literally the salmon packer is today hanging on to the “skin of his teeth.” It is obvious that if he has to further reduce his selling price he cannot stay in business. On the other hand, by reason of the rapidity with which the consumer turns to substitute foods, he must keep his price competitive or he will not be able to sell his pack. In short, it appears possible that if adequate water transportation is not available to move this commodity at reasonably low rates an industry of vital importance to the economy and welfare of the Pacific coast and the Territory of Alaska will be seriously crippled if not completely wrecked.
This would mean the loss of the livelihood of thousands of wage earners, the loss of the principal source of revenue of the Territory of Alaska, and the investment and savings of many classes of citizens.
For these reasons the salmon industry is vitally concerned with the effort being made to secure additional ships for the intercoastal trade and to stop the further sale of ships now operating unless provision is made for their replacement. It feels that if the Maritime Commission is acquainted with the seriousness of the situation not only from its standpoint but as it affects all of the basic industries of the Pacific coast they will take immediate steps to provide the requisite service. Respectfully submitted.
PACIFIC CANNED SALMON DISTRIBUTORS ASSOCIATION.
COLUMBIA FRUIT GROWERS,
The Dalles, Oreg., April 8, 1940. Hon. EMORY S. LAND, Chairman, United States Maritime Commission,
Washington, D. C. DEAR SIR: As shippers of brined cherries to the Atlantic seaboard we have encountered serious difficulty in securing sufficient space on the intercoastal lines. We understand there is a possibility that the Maritime Commission will put additional boats on the intercoastal runs.
We feel that some action to relieve the shortage of bottoms is imperative in the interest of the producers of this region. Our whole fruit industry has been built up on the basis of water shipment of canned and barreled fruits. The returns to our fruit growers during the past several years have been very low and all rail shipments to the Atlantic seaboard, the cost of which would have to be borne by us, would be ruinous to our industry.
We urge in the name of the great fruit industry of the Northwest that serious consideration be given to the problem of providing additional tonnage. Very respectfully,
COLUMBIA FRUIT GROWERS,
W. R. BAILEY, Manager. 229991-40—7
The Dalles, Oreg., April 9, 1940. Hon. EMORY S. LAND,
Chairman, United States Maritime Commission, Washington, D. C. DEAR SIR: We note with a great deal of concern that the ships in intercoastal trade between the Pacific and Atlantic coasts are rapidly being depleted through sales to various interests both domestic and foreign.
The reason for our concern in this matter is that we are having considerable difficulty in securing space for shipments of cherries in brine from the Pacific coast to the Atlantic markets. The Atlantic markets, especially those in Baltimore, New York, Philadelphia, and Boston, use about 90 percent of the cherries in brine produced on the Pacific coast and failure of transportation facilities by ocean-going vessels is going to work a hardship upon the industry which has been built up over a period of years upon a basis of marine transportation.
Should the decrease in bottoms available for transporting cherries in brine and other commodities from the Pacific coast to the eastern markets be further curtailed the securing of space will be constantly more difficult.
It has been predicted that it will soon be impossible for the cherry in brine industry and wool growers to get space to carry their products to market, and of course this means that the products will, of necessity, stay at the point of origin and will be piling up storage and insurance and interest expenses.
The cherry grower, wheat grower, and wool producer of the Pacific coast has received such a small return for his product during the past several years that he can no longer afford to pay highly increased transportation charges such as shipping overland by rail or truck.
We therefore urge that the Maritime Commission take notice of the situation as outlined and afford some measure of relief to the farmers of the Pacific coast in their hour of need. Stagnation of the three above-mentioned industries would mean more unemployment because the industries would not have the means for employing people to do the work necessary for preparing the products for market. Inability to ship the products after they have been prepared for market would also jeopardize the ability of cooperative organizations and the individual corporations in the financing of their products, and would mean a very serious loss to all concerned. Very sincerely yours,
THE DALLES COOPERATIVE GROWERS,
APRIL 6, 1940. EASTERN OREGON WHEAT LEAGUE The Eastern Oregon Wheat League, whose duly elected and qualified officers are named herein above, desires to offer for consideration at the meeting to be sponsored by the Pacific Coast Association of Port Authorities and to be held in San Francisco, Calif., on 11th April 1940, this brief of bearing facts that are of vital interest to its members:
The membership of the Wheat League consists of the principal grain growers of the counties of Baker, Gilliam, Jefferson, Morrow, Sherman, Umatilla, Union, Wallowa, and Wasco in the Oregon Columbia River Basin. In this area there formerly were 900,000 acres sown to wheat annually, but under the reduced acreage farm program of late years, an average of 823,747 acres only has been sown, from which the average annual yields have been 15,214,923 bushels. The yield in 1938 was 18,530,000 bushels and in 1939, when the acreage had been severely reduced and the season was a poor one, the yield was 12,495,000 bushels. With a carryover of 3,000,000 bushels from the 1938 crop, there had been a supply on hand at the end of the 1939 harvest of 15,495,000 bushels, of which there was on hand on April 1st 5,395,000 bushels unsold.
In past years our members had enjoyed, with other producers of the Pacific Northwest, a sizable intercoastal markets outlet for their wheat and/or flour, but local grain dealers and millers advise us now that certain of these intercoastal markets are cut off from them, on account of a lack of available maritime intercoastal shipping facilities. Among the pertinent reasons why these shipping facilities should be restored at once are the following:
1. It is quite necessary that our producers maintain the intercoastal markets that had required many years and patient efforts to establish. These are required as a material part of their annual marketing outlet. The employment of workers in various lines and general local business activities, as well as the occupational employment and livelihood of the growers, must depend upon this. We must continue to serve our established customers located on the coastwise shipping routes, else we might lose them and if so, local producers, employees and business would suffer severely.
2. Certain consumers, among which are those of the South and certain portions of the Atlantic coastal area, who desire and depend upon our soft white wheat or the flour milled therefrom locally. In turn, those consumers ship to the Pacific ports, on the return trips of the ships that had transported our grain or flour, certain of their products or manufactured articles that are required here. If a continued lack of maritime shipping facilities should cause a disruption of this mutual benefit exchange of produce and goods, that would result doubly in a very serious upset and loss at both ends.
3. Our handling and storage facilities are geared and capacitated for taking care of one crop only at a time. Therefore, we are under pressure to dispose of each crop within each 12-month period of time. Even with some newly constructed bulk-handling and storage facilities constructed lately, mostly on the banks of the Columbia River and its tributaries, our carrying capacity is but little more than equal to the volume of an average crop, so we are under severe pressure to move out practically all of the previous year's crop before the new crop is harvested. Unless immediate and rather drastic changes in our maritime shipping facilities and accommodations shall be arranged, a very much larger than usual carry-over will remain on hand when the now-promising new crop will be upon us. If a lack of shipping facilities should continue and this should occur, our storage facilities most likely would be insufficient. There is great uneasiness over that just now.
Local millers advise us that New York brokers are now warning them of the cancelation of sizable flour orders previously arranged, if intercoastal shipping should continue for very much longer to fail making the scheduled deliveries, and these contract buyers are holding back from signing any new contracts for flour from this area, because of the uncertainty of delivery at future dates. Therefore, it is of extreme urgency that the needed maritime forwarding facilities be provided at once.
Usually wheat and/or flour can be worked from Pacific ports to Gulf and/or Atlantic ports when the differential of Portland market under Chicago market reaches 13 cents per bushel, but now with that differential ranging between 17 cents and 20 cents per bushel, hardly any of said business can be worked, because of the shortage or utter lack of the necessary intercoastal maritime shipping facilities.
The Wheat League would urge that the Maritime Commission shall do everything within its sphere and power to promote and encourage our intercoastal maritime shipping activities at this time. Our members very much question the advisability of the disposal by sale of United States owned maritime shipping units. Especially while the present war shall continue, accompanied, as it is, by the loss to our producers of their peacetime overseas markets, we believe that Government owned maritime shipping units should be supplied to shippers upon terms that will enable them to move promptly our now stagnant maritime com
The failure of the usual and seasonal movement out to market of our wheat, this year, is causing considerable unemployment locally and about our coastal terminal markets, in that the handling and loading workers about our warehouses and elevators have but little to do, the railroads and/or river boats that should be transporting the grain in due season are partially idle and the water-front grain and flour handlers have less than their usual employment the while.
Local banking and credit merchandizing facilities are geared for financing only one crop at a time. They must require of their patrons and customers a settlement in full once each year and, in order that this may be accomplished, it is necessary that all the producers who are financed by the banks and/or carried by local merchants should sell their current year's crop before the following year's crop matures. The very backward movement out to market of the 1939 crop is causing concern and inconvenience along these lines. Most respectfully submitted by
JAMES B. ADAMS,
Moro, Sherman County, Oreg.
Portland, Oreg., March 28, 1940. (The) North Pacific Grain Growers, Inc., an association representing approximately 8,000 farmer members of the Pacific Northwest, hereby designates Mr. A. M. Scott as its representative by proxy at a meeting of shippers, manufacturers, millers, and producers, called for early April in San Francisco.
The intercoastal movement of grain has been disastrously impeded by the increasing lack of tonnage due to diversion of vessels and outright sales of ships heretofore available. The Pacific Northwest is absolutely dependent on the usual off-shore movement as an outlet for its grain and milling products. A continuation of the existing extremely narrow distribution will definitely lead to a depressing accumulation of stocks at terminals and interior storage points, which will stagnate the oncoming harvest of the 1940 crop. This will result in very serious financial losses to farmers in this section, who are unable to market their 1939 crop, either as wheat or flour.
The distressing seriousness of this situation calls for immediate action. We therefore, through Mr. A. M. Scott, subscribe our support under the sponsorship of the said meeting to the representations which it may find desirable to make to the Maritime Commission, and if necessary, to the President and Congress.
North PaciFIC GRAIN GROWERS, INC.,
General Manager and Treasurer.
CONTINENTAL GRAIN Co.,
April 6, 1940. Mr. PHIL THURMOND,
Portland Chamber of Commerce, Portland, Oreg. DEAR PHIL: I wrote to you at some length yesterday about wheat shipments to the Atlantic coast. I went into considerably more detail than you have done in your general statement, but I am of the opinion that what you have written is sufficient and states the case quite well. Further details, such as were embodied in my letter, may give you sufficient background for use in case there is any oral discussion at the meeting.
My only objection to your report is in the second paragraph of the "Wheat" section. I do not believe any volume of business could be done on an $8 rateat least, so far as sale to domestic mills is concerned. Figures in my letter showed that wheat could move to seaboard mills on a $7 rate; and I believe this is about the maximum, based on the present spread in the markets. Your statement regarding a $10 rate is entirely out of line. Wheat can move to the Atlantic coast by rail and Great Lakes and compete with a $10 rate. It seems to me ill-advised to mention such a possibility; and, in fact, the attempt should be made on the basis of the present conference rates. Yours truly,
CONTINENTAL GRAIN Co.,
Mitchell, Oreg., April 4, 1940.
Washington, D. C. GENTLEMEN: It has come to the attention of this organization that certain circumstances have brought about a reduction in the numbers of intercoastal steamships and a resulting shortage of available shipping space.
This situation is having a depressing effect on the price of wool on the Pacific coast, as this commodity is dependent on cheaper water transportation to eastern markets.