Now, you said something about reconciling the figures, and I am now thinking of the 90,000 families, or 90,000 new farms that can be developed if the markets can be provided for our increased output. I believe in the statement of the Bureau of Reclamation, there were some 135,000 mentioned. I believe that was the figure.

Now, I don't think there is any conflict. There are many farms which are not large enough to support the families, and we have taken the figure to represent farms upon which families could live and make a good living, and in that we have added to those farms already in production sufficient acreage to bring them up to an economic unit. Our estimate is something like 90 irrigated acres per family. There is no conflict in our figures. Our figures, I think, are about the same, when you consider the factors involved.

I will not go into the developments in forestry, as I think they have been pretty well covered.

Senator WHERRY. I thank you very much, Mr. Sims.

We have eight more witnesses, and it is now 10 minutes to 4. From here on out, each witness will be given 10 minutes, and you will have to govern yourselves accordingly. I am sorry to have to cut you down; I should be glad to sit here for another week. I like this town; but we have a schedule which we have to maintain.

The next witness is Rufus P. Davis, representing the Northwest Furniture Manufacturers Association.

I might say, if anyone desires to file more extensive statements, they will go into the record and be made available.

Mr. MAGNUSON. I wonder if I could take a minute, Senator.
Senator WHERRY. Surely.

Mr. MAGNUSON. We have heard a lot about Columbia Basin. We have heard the statement of the Department of Agriculture that it will take 2 years to get it going, and that is because we have certain preliminaries that must be taken care of before we can get the project under way. I asked Mr. Straus if we could find out what the possibilities are of getting the contracts back to the irrigation districts; there must be elections, and there must be test suits, and we want to get the preliminaries attended to so that the minute the war is over we can get going.

Mr. STRAUS. As you know, the Assistant General Counsel of the Bureau of Reclamation has been out here and consulted with the districts involved. They have worked out an agreement, and the contract is now being written up, to be offered to the three districts in Washington. It will be sent to the three districts during August, next month. Also, we hope to have a confirmatory friendly test suit within 3 months, and we hope that the contract will be signed before that. We hope that it is all signed, sealed, and delivered before that time. If the manpower is available under the schedule it will be possible to raise the first crop on the Grand Coulee project land in

1947.

Mr. MAGNUSON. Thank you.

STATEMENT OF RUFUS T. DAVIS, EXECUTIVE SECRETARY, NORTHWEST FURNITURE MANUFACTURERS ASSOCIATION

Senator WHERRY. You are a furniture man?

Mr. DAVIS. Yes.

Senator WHERRY. Just state your name and your connections.

Mr. DAVIS. Rufus Davis. I represent the Northwest Furniture Manufacturers Association.

The furniture manufacturers in this area are extremely interested in post-war planning in relation to the problems of American small business. There are, of course, many points to take into consideration relative to this matter, and we are enumerating the many factors regarding the same.

While our industry has been engaged in war work, such as the manufacture of furniture for the Army, Navy, and public housing, it has not been necessary to change our plant operation in view of the fact that items produced were the same or similar to articles produced for civilian use. As a result of this, when the war is over, we will be in the position to start the manufacture of civilian goods providing orders and raw materials are available.

We are, of course, interested in all forms of taxation, and at this time we desire to offer certain proposals in connection with the many types of taxes placed against industry at this time. We wish to call your attention to the excess profit tax which places a definite burden on our industry and a continuance after the war will work to our distinct disadvantage, by limiting the profits we will not be allowed to accumulate sufficient money to carry on over the dull periods that are bound to follow. We believe some provision should be made as far as this tax is concerned, as surely without some surplus money it will be impossible for many of our factories to continue after the war, thereby leading to shut-down and unemployment.

The problem of unemployment will of course be quite severe after the war. Our industry has been faced with severe competition as far as labor is concerned, particularly from the shipbuilding and airplane industries which are doing business on the cost plus basis and whose business is more essential than ours. As a result of this, we have been obliged to employ women, a great many who are housewives, and older men, some of whom are incapacitated. This type of worker, no doubt, will return to the home after the war is over and will be replaced by men-former employees-who have been employed in the more essential industries. In addition, men who have entered the armed forces-former employees-will be given preference and have the same seniority as when they entered the service. This is not only assured by the employer but is entered into by contract with the American Federation of Labor, Furniture Workers, guaranteeing the protection of their jobs.

There has been a large fund accumulated in connection with this form of insurance, which is entirely absorbed by the employer. There is bound to be a considerable drain on this fund when the war is over. In our industry, particularly where housewives and older men return to their homes and are replaced by skilled workersformer employees-a demand will be made by these employees for unemployment insurance. This will of course lead to the depletion of this fund. We feel that if any increase in the unemployment insurance is contemplated, a portion of the expense should be absorbed by the employee, the same as social security.

At the present time social security funds are not being earmarked, and the use of this money for other purposes may result in additional taxes being levied to cover moneys necessary to pay old age compensation. We urgently request that this practice be discontinued

and that social-security taxes be placed in a separate fund where they rightfully belong.

At this time many commodities are restricted in the manufacture of furniture. Some of these restrictions are necessary. However, in the case of lumber used in the manufacture of furniture, we feel that in some cases it is entirely unnecessary. For example, alder and maple lumber have been put on a quota which has resulted in the curtailment of furniture manufacture. These types of woods have no earthly value except for the manufacture of furniture or for fuel.

We are also extremely interested in metal springs and furniture hardware purchased from eastern markets. These items have been severely restricted and we ask that prior to the closing of the war, some effort should be made to allow the manufacture of these articles in order that furniture may be manufactured to supply civilian needs. In the reconversion of this type of industry, we support Donald Nelson's plan to start the reconversion immediately, because if we wait until the war is over many industries will not be in the position to take care of civilian requirements for a long period of time.

At the present time the furniture industry in this area is confining their distribution to Washington, Oregon, Idaho, Montana, Utah, and California. In some cases the larger factories will ship to the more distant points such as Texas, Colorado, and other points west of the Mississippi River. We of course are anxious to expand our market; however, there is some question just how far afield we may go. The war no doubt will bring about many changes and there may be a potential market in the Orient and the islands of the Pacific. Just how trade will be carried on in that area is more or less of a moot question. However, if it develops that some form of lend-lease arrangement is entered into whereby goods will be purchased through Government agencies, we believe that the northwestern furniture manufacturers should be given due consideration in that we are geographically located to advantage, and for that reason can offer quicker delivery.

In conclusion, we might state that we, as an industry, desire to cooperate in any way possible to bring about a prosperous post-war America.

Senator WHERRY. Thank you, Mr. Davis. Your report is very interesting.

The next witness is William Strain, of the Strain Coal Co.

STATEMENT OF WILLIAM STRAIN, STRAIN COAL CO., SEATTLE Senator WHERRY. Will you give your name, address, and qualifications.

Mr. STRAIN. William Strain, commercial coal man in Seattle.

I want to thank the committee for an opportunity in letting an industry as small as ours appear and make suggestions at a meeting like this. We are interested in doing what we can to solve the postwar employment problem which we are facing.

To understand the status of the coal industry it might be well to review a little the history of the last 25 years. The State of Washington has abundant coal resources, but due to competition from other fields the production has gradually dropped from about 4%1⁄2 million tons in the last 25 years to a million and a half tons at the present

time. There is no question but that the industry is capable of tremendous expansion. Whether or not anything can be done by way of assistance from Government agencies, we do not know, but we are glad to submit the problem.

The first factor that has entered into the disorganization of our industry here was the importation of cheap fuel oil by water transportation. The results has been that most industries in the area, including all publicly owned plants and institutions, burn oil instead of coal, as well as many homes.

The only thing we can offer to offset the situation is that oil is a natural resource that should be conserved. We feel the use of oil, as it has been used, is just like putting mahogany in the fire. That may be a prejudiced opinion, but that is the way we feel about it. Naturally, we cannot be expected to say much about it. The same is true of wood, which is a great natural resource which must be protected. However, in any program, anything that you can do in the conservation of wood for various products will be of great benefit, we believe. Another thing is the competition with hydroelectric plants. We cannot argue about hydro, but we feel that the disadvantage might be turned to our advantage by the combination of cheap hydroelectricity, if research can be made for the uses of wood and coal.

Senator WHERRY. You mean that you should manufacture electricity by steam?

Mr. STRAIN. I mean that we could use our hydroelectricity together with coal to build up various byproducts.

Senator WHERRY. I understand.

Mr. STRAIN. Now, the few things I should like to suggest, which would help in the employment situation when the war is over, are these: Just now, we are importing about 50,000 tons of coal a week to take care of the demands.

Senator WHERRY. Where from?

Mr. STRAIN. From Wyoming and Montana. That is at a tremendous cost of manpower in transportation, over facilities that are overcrowded now with transporting war materials. There is nothing we can do about it, because of the lack of manpower, lack of mine development, and lack of adequate plants which have been allowed to go to pieces in the last 25 years. But we feel, that if we can reach in to the market at all, and if we can fit up the industry to 5,000,000 tons a year, which will be approximately the present consumption, it will be very instrumental in increasing the employment by at least 10,000 men in the mines and in the related activities.

Now, the situation could be greatly improved by the utilization of coal by our local, Federal, and State agencies. Those fellows generally are opposed to the use of coal, because oil is less trouble. Nevertheless, if we are interested in employment during this period, we think coal has to be considered, even though we will eventually lose out.

Senator WHERRY. How do you account for the importation of that coal, 50,000 tons a week?

Mr. STRAIN. 50 tons to a car, with 1,000 carloads.

Senator WHERRY. You mean they can ship it in here and sell it more cheaply that you can mine it in this area?

Mr. STRAIN. The competition of oil and other sources of energy has caused the facilities here to deteriorate, and when the war came on, they froze our men and equipment.

Senator WHERRY. If the manpower was available, would the coal operations start up immediately?

Mr. STRAIN. Yes; there would be a lot of coal mined. We have taken that up with the Manpower Commission.

Senator WHERRY. And what did they say?

Mr. STRAIN. The manpower is not available.

Senator WHERRY. It takes manpower to get the coal in here? Mr. STRAIN. That is our argument exactly, Senator.

Senator WHERRY. I think that is something that should be questioned. I can't understand that.

Mr. STRAIN. The only other thing I have to say is that, generally speaking, coal producers are in favor of the Bituminous Coal Act, or the Guffey Act. We feel that the act was beneficial and should be reenacted, and may be a little bit more efficiently administered. Senator WHERRY. I should like to have you file your statement if you have one.

Mr. STRAIN. I have a statement here that I wrote out.
Senator WHERRY. You may file it.

(By direction of the chairman, the statement referred to by the witness is inserted in the record, as follows:)

Although the State of Washington is known to contain great reserves of coal ranging in quality from lignite to anthracite, production has fallen from 4,500,000 to 1,500,000 tons per year during the last quarter century. To determine what might most help to stimulate the industry, it might be best to review briefly the causes of the diminishing production in the face of the potential resources of the

area.

Petroleum.-The greatest single factor in the decline of coal production is the importation into the Pacific Northwest of low-cost fuel oil by water transportation. Nearly all major industries and an ever-increasing number of domestic plants are turning to oil as a source of heat or power.

The only remedy for this condition would be legislation curtailing the use of oil where coal or other fuels could be used. This would be in the nature of continued conservation of oil as a diminishing natural resource.

Wood.-Probably the greatest source of heat in the area is forest wood and the byproducts of the sawmills. Recently the utilization of mill waste for the manufacture of pulp has had the effect of limiting the supply of this material and thus has stimulated the use of coal. To what extent this situation will continue after the war is difficult to determine; however, the increased utilization of forest products for other purposes than fuel would have an increasingly beneficial effect on the coal industry.

It

Hydroelectricity.-The tremendous development of hydroelectric power in this area has badly crippled the efforts of the coal industry to better its situation. is useless to talk of limiting the development of hydro, but this condition might prove a blessing in disguise if the availability of cheap power can be harnessed up with the development of a coal byproducts industry, or with a program of research which would include a combination of hydro, coal, and forest products. Some big steps have already been taken in this direction, and the National Government could be of tremendous assistance for this purpose in this area.

Outside coals. Our neglect of the local coal industry has been costly to us during the present emergency. It is necessary at the moment to bring 50,000 tons of coal per week into the area with its consequent tie-up of transportation facilities which could well be used for more essential things. Lack of manpower, neglect of mine development, and modern plant construction will probably prevent the local industry from improving this situation during the war, but any success in maintaining some of our recent industrial gains will have a very beneficial effect on the industry in the long run.

Bituminous Coal Act.-I think it can be safely said that the majority of local coal producers and coal-mine labor is in favor of the reenactment of a law similar to the recently expired Bituminous Coal Act. It is true that there was considerable opposition to this law in the beginning, but as the workings of it were smoothed out it became evident, especially to the commercial producers, that it had the effect of remedying a great number of things which were wrong within the industry.