Mr. WAIDNER. Between 10 and 11.

Representative FITZGERALD. That would be 60 hours a week.

Mr. WAIDNER. Well, it would be that; yes, sir. I should say 60 hours a week is the correct figure.

Representative FITZGERALD. You say the industry could carry the hours if reduced to 54 without any great hardship?

Mr. WAIDNER. It would hope to; yes, sir.

Representative FITZGERALD. And it would be a hardship if it was reduced down to 40?

Mr. WAIDNER. Absolutely.

Senator LA FOLLETTE. What percentage of the cost of doing business in your particular concern is labor cost?

Mr. WAIDNER. Well, the labor cost is, I should say, anywhere from 60 to 75 percent of our total cost of doing business. I mean the labor cost is practically everything.

Senator LA FOLLETTE. You pay 17 employees 60 to 70 percent of the cost of doing business?

Mr. WAIDNER. That is it; yes, sir. I say that offhand. I do not have the figures before me.

Senator LA FOLLETTE. What was your gross profit in 1936?

Mr. WAIDNER. Our gross profit in 1936 was around $8,000. That was last year.

Senator LA FOLLETTE. And what was your total labor cost?
Mr. WAIDNER. I do not know offhand.

Senator LA FOLLETTE. Would you supply the committee with that information?

Mr. WAIDNER. I could; yes, sir.

Senator LA FOLLETTE. What was your net in 1936?

Mr. WAIDNER. Oh, you asked me for the gross before. I am not familiar with the gross, but the net was around $8,000.

Senator LA FOLLETTE. You run this on a partnership or a corporation basis?

Mr. WAIDNER. No; that is sole ownership.

Senator LA FOLLETTE. And that is after you have taken out your salaries?

Mr. WAIDNER. Yes, sir.

Senator LA FOLLETTE. Your own salary?

Mr. WAIDNER. Yes, sir.

Senator LA FOLLETTE. What was your salary in 1936?

Mr. WAIDNER. $35 a week.

The CHAIRMAN. Just one or two questions that are prompted by some of the questions that have been asked. We have figured out here that if you had 20 employees and paid them all $20 a week— Senator Ellender figured it out-that would be around $20,000 a year for your wages. Is that right?

Mr. WAIDNER. Well, I pay some of my employees more than that. The salesmen, for instance, get around $40 to $45 a week.

The CHAIRMAN. How many of them?

Mr. WAIDNER. There are three salesmen that I have.

The CHAIRMAN. How many other employees?

Mr. WAIDNER. Well, we have three employees in the office-four employees in the office.

The CHAIRMAN. What do one of those get that gets the least?

Mr. WAIDNER. The least gets $16 a week. That is the bill clerk. There are two stenographers. One stenographer gets $25 and the bookkeeper gets $25, and the man who runs the office gets $35.

The CHAIRMAN. Your weekly pay roll is not over $400, is it?
Mr. WAIDNER. It runs around $400; yes, sir.

The CHAIRMAN. That would be, for 52 weeks, $20,800. You do a half a million dollar business a year?

Mr. WAIDNER. Approximately; yes.

The CHAIRMAN. Ten percent of that would be $50,000.

Mr. WAIDNER. Yes.

The CHAIRMAN. So your labor costs would not be 55 percent.

Mr. WAIDNER. The thing is that our gross in 1936 was around $450,000, and our gross profit was based not on the figure that you used, 10 percent, but around 8 percent.

The CHAIRMAN. Now, you had a loss in 1932, did you not, and so reported it to the Government, or your company?

Mr. WAIDNER. I do not recall having a loss; no,

sir.

The CHAIRMAN. Did you make a profit and pay an income tax, or your corporation, in 1932?

Mr. WAIDNER. I did myself, personally.

The CHAIRMAN. Did your corporation?

Mr. WAIDNER. It is not a corporation. I do not know whether it was a partnership at that time or a sole ownership, but I know I personally paid my part of the business at that time. I am pretty sure I paid an income tax every year.

The CHAIRMAN. 1932, 1933, 1934, 1935, and 1936?

Mr. WAIDNER. Yes, sir; I am talking of me, personally.

The CHAIRMAN. When you make a report to the committee would you mind letting us know what your net profits were from your business in 1932, 1933, 1934, 1935, and 1936?

Mr. WAIDNER. Yes.

The CHAIRMAN. You know as a matter of fact that it has been going up since 1932, do you not?

Mr. WAIDNER. The profits?

The CHAIRMAN. Yes, sir.

Mr. WAIDNER. My part of the business, the profits from that increased during those years; yes, sir.

The CHAIRMAN. They have increased since 1932, have they not? Mr. WAIDNER. I do not know that offhand; no, sir.

The CHAIRMAN. Has your salary gone up or down during that time?

Mr. WAIDNER. That has remained stationary.

The CHAIRMAN. It was the same during the depression as it is now?

Mr. WAIDNER. Yes, sir. In other words, I drew $35 a week. The CHAIRMAN. And expenses? Did you draw anything else? Mr. WAIDNER. No; this $35 was all.

The CHAIRMAN. Any dividends?

Mr. WAIDNER. Of course, in a proprietorship there would be no dividends. I mean the profits that accrued during that period would be credited to the capital to me.

The CHAIRMAN. When you make your report please show what were the net profits during each of those years, during 1932 to 1936. It would be very interesting to the committee.

Mr. WAIDNER. Would you like to have 1932, 1933, 1934, and 1935? The CHAIRMAN. And 1936.

Mr. WAIDNER. 1936; yes, sir.

The CHAIRMAN. Thank you very much.

Representative GRISWOLD. The provisions of this bill providing for the Board considering the marketing facilities, do they have any tendency to remove your opposition to this bill?

Mr. WAIDNER. There is nothing in the bill that says anything about marketing, is there?

Representative GRISWOLD. The Board might consider that.

Mr. WAIDNER. It would depend upon what particular line of marketing it referred to. For instance, if there would be anything in the bill that would enable us to absorb the additional expense of being put on a 40-hour week, I would approve it.

Representative GRISWOLD. All right. Thank you.
The CHAIRMAN. Thank you.

In reference to Mr. Alldredge, I do not believe he has prepared a statement. I personally asked Mr. Alldredge to come up by reason of the fact that the question of freight rates has come up. Mr. Thomas suggested getting someone from the Interstate Commerce Commission, and we reached the conclusion that it would be better to have someone who had made some study and who was not connected with the Interstate Commerce Commission, and therefore, with the consent of the committee, I shall ask Mr. Alldredge some questions in advance, because he has no prepared statement. I think we can get along more expeditiously that way.

STATEMENT OF J. HAYDEN ALLDREDGE, TENNESSEE VALLEY AUTHORITY

The CHAIRMAN. Mr. Alldredge, are you connected with the T. V. A.?

Mr. ALLDREDGE. Yes.

The CHAIRMAN. What is your position with them?

Mr. ALLDREDGE. Transportation economist.

The CHAIRMAN. Transportation economist?

Mr. ALLDREDGE. Yes.

The CHAIRMAN. How long have you been with them?
Mr. ALLDREDGE. Nearly 3 years.

The CHAIRMAN. Have you made any study of freight rates, comparative freight rates, in different commodities for different sections of the country and for different distances during the time that you were a member of the T. V. A.?

Mr. ALLDREDGE. Yes, sir; I have.

The CHAIRMAN. You made a report, did you not, to the Tennessee Valley Authority?

Mr. ALLDREDGE. That is correct; yes.

The CHAIRMAN. That is to be printed in a public document, as I recall it, but it has not yet been printed?

Mr. ALLDREDGE. Yes, sir; it is being set up in type now. I understand a galley proof will be out in 2 or 3 days.

The CHAIRMAN. May I ask you, Mr. Alldredge, to give the committee the comparative freight rates for comparative distances to

and from different points as you have them set out in your report? Do you have those convenient, so we may get the benefit of them? Mr. ALLDREDGE. Not in the case of all rates. I can give you representative commodities.

The CHAIRMAN. Well, give it to us on representative commodities. Mr. ALLDREDGE. I wonder if you would allow me to state, just in a few words, what the real problem is and what it grows out of? The CHAIRMAN. What we are interested in here is the freight rates, as far as your evidence is concerned.

Mr. ALLDREDGE. Yes, sir; we have no national freight-rate structure. What we have is a composite of regional structures, and those regional structures are not made on the same levels, nor according to the same schemes, so that they do not fit together at the borders very well, and a difficulty frequently arises when freight undertakes to move from one region to another. I have here some illustrations that are in this report.

The CHAIRMAN. We will be very glad to have them here.

Mr. ALLDREDGE. You can follow them perhaps better if I give you a copy.

The CHAIRMAN. Do you have copies of them there?

Mr. ALLDREDGE. Yes; I have copies.

The CHAIRMAN. Enough for the members of the committee to see? Mr. ALLDREDGE. I have several. I do not know whether I have a complete set or not.

The CHAIRMAN. This is a map of railroad freight-rate territories. Does that mean regions?

Mr. ALLDREDGE. That is right. They are called territories in rate parlance.

The CHAIRMAN. Yes, sir.

(The map referred to is as follows:)

Mr. ALLDREDGE. The committee will notice there the geographic outlines of those regions. Now, in some cases there are subdivisions within the regions where there are differences in the levels of the

rates. There is a subregion or subterritory in Florida, what they call the peninsula of Florida. There is one up in Michigan,

By the way, there has been some recent change in Michigan that I have not been able to check up. There are subregions or zones, as they are called, in this western trunk-line territory, and also in the southwestern territory.

Representative THOMAS. In Texas?

Mr. ALLDREDGE. Texas; yes.

The CHAIRMAN. What I would like to get is for you to give us some illustrations on the commodities, first, from a special study in connection with the southern territory in which the T. V. A. is located. Mr. ALLDREDGE. Yes, sir; I have some more illustrations and I will build right up to what you are talking about.

The CHAIRMAN. That is fine.

Mr. ALLDREDGE. Here is one that shows the relative levels of the basic-rate scale in these territories, which will enable you to get some idea of the differences.

The CHAIRMAN. Before you leave this, and in order to get it explained, this shows seven lines?

Mr. ALLDREDGE. Yes, sir.

The CHAIRMAN. And it shows the rate in cents per 100 pounds? Mr. ALLDREDGE. It shows the relative levels and progressions of railroad intraterritorial first-class rate scales in the United States? Mr. ALLDREDGE. Yes; that is correct.

The CHAIRMAN. What is the lowest rate shown on that chart? Mr. ALLDREDGE. That is in eastern or official territory.

The CHAIRMAN. Where is the eastern or official?

Mr. ALLDREDGE. Roughly, that is north of the Ohio River and the Virginian Railway which runs across the southern part of Virginia, east of the western boundary of Illinois and south of the Canadian border.

The CHAIRMAN. Where is the next lowest?

Mr. ALLDREDGE. That is the western trunk-line zone 1. You see it outlined on the first map that I gave you there. It is right next to official territory, on the west.

The CHAIRMAN. What States does that take in?

Mr. ALLDREDGE. Iowa, part of Minnesota, part of Wisconsin, part of Missouri, and I believe the Upper Peninsula of Michigan. The CHAIRMAN. What is the next rate?

Mr. ALLDREDGE. That is the southern.

The CHAIRMAN. And what territory does that include?

Mr. ALLDREDGE. It includes what is generally known as the Southeast. It is south of the official territory and east of the Mississippi River.

The CHAIRMAN. Now, Mr. Alldredge, the next rate? That is, each one of these going up are the freight rates?

Mr. ALLDREDGE. Yes, sir; western trunk-line zone II. That is just west of the western trunk-line zone I.

The CHAIRMAN. And what is the next one?

Mr. ALLDREDGE. Southwestern and trunk-line zone III is the next one. That takes in part of Louisiana, Arkansas, Oklahoma, the eastern part of Texas, on up through the Western States to the Canadian border.

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