the present emergency as it affects one of the largest operators and employers of labor in my district. The letter is as follows: Hon. MARTIN F. SMITH, Member of Congress, Washington, D. C. SIMPSON LOGGING CO., Shelton, Wash., March 7, 1940. DEAR CONGRESSMAN SMITH: The lumber industry is fast feeling the effects of a situation which has been more or less of a theory but is now realized to be a fact. It is a problem that will affect every employer and employee in the industry, to some extent. Your help in the past has always been promptly and cordially given, although my requests have been small. The problem I am putting before you now is of so great importance that I am sure you will give it your best thought and every possible assistance when the time comes. Of course you are aware of the fact that a good many steamships have been taken out of the intercoastal as well as the coastwise routes, and sold or chartered into the trans-Atlantic trade. Consequently many of our sawmills on Puget Sound and Grays Harbor are finding it difficult to move lumber, and therefore are faced with the drastic curtailment of their operations and the enforced idleness of much labor. We feel there is a possible partial solution to this problem, and our group is moving in the direction of that solution. We have a sales company on Puget Sound, owned by 18 operators who employ upwards of 4,000 men in their plants, besides the 4,000 or 5,000 men involved in producing the logs which these plants cut. This sales company has been shipping between 17 and 19 percent of all the lumber that is shipped into the Atlantic coast market by the sawmills of western Washington and Oregon. It has chartered upwards of 200,000,000 feet of steamship-carrying space per year for the past 2 years, besides using approximately 200,000,000 feet of tonnage of other carriers. After the end of March, this sales company will find itself with practically no tonnage available. This briefly is our problem. This situation affects the McCleary interests, our logging operations, and our sawmill, as well as the other operators previously mentioned. The Simpson Logging Co. is now in the process of curtailing its logging operations, which will affect both Grays Harbor and Mason counties. The solution to this problem, we feel, lies with the Maritime Commission, and the ability we may have in convincing our steamship people that they should risk taking over several surplus ships of the Maritime Commission, which now lie in the so-called Boneyard. The Maritime Commission has about 20 vessels which are less than 20 years old, and which they can dispose of in an emergency. They have, I believe, about 109 vessels which are more than 20 years old, which they cannot sell without an act of Congress or Executive order from the President. We are interested principally in 4 or 5 of the 20 vessels which are less than 20 years old and which the Maritime Commission can sell. The Commission has indicated reluctance to sell these vessels without an emergency which would warrant the placing of these vessels in the intercoastal trade. Inasmuch as our sales company and its sawmills are not in the steamship business, it will be necessary for us to convince our former steamship connection that they should risk the hazard of taking four or five of these vessels and placing them in the intercoastal trade. Mr. Robert E. Seeley, the president of the Puget Sound Associated Mills (which is the sales company of which I speak), is leaving here Monday for New York to discuss this situation with our steamship people. If the steamship people are disposed to take the risk, they will go to Washington. If they should do so, I have requested that they call upon you for whatever help you may be able to give us. In fact, it is quite possible that I might fly east to assist in their efforts before the Maritime Commission. If so, I will again have the pleasure of personally discussing our mutual problems. In case I do not have the opportunity to go east, I know that you will do everything in your power to be of assistance to Mr. Seeley. With kindest personal regards, I am, Very truly yours, C. H. KREIENBAUM, Executive Vice President. In conclusion I would like, with your permission, to also present the statement of the Puget Sound Associated Mills, Mr. R. E. Seeley, president, which contains a fair analysis of the entire shipping situation in our section of the country, which is most critical. Col. W. B. GREELEY, PUGET SOUND ASSOCIATED MILLS, Secretary-Manager, West Coast Lumbermen's Association, Stuart Building, Seattle, Wash. DEAR COLONEL GREELEY: The situation confronting us due to removal of vessels from the intercoastal trade is of such a serious nature that we urge the West Coast Lumbermen's Association to take every step possible to stave off a major catastrophe in the northeast lumber-producing region. The Puget Sound Associated Mills, Inc., is a Washington corporation, organized in June 1931 by a group of the smaller type of water-front sawmills located on Puget Sound. The duties of this concern consist of selling and transporting by vessel through the Panama Canal that portion of the product of its 18 sawmills which is suitable for the Atlantic coast market. The purpose of this cooperative grouping was to aid these small mills in the marketing of their product in the Atlantic coast market in competition with larger competitive concerns. During the 9 years of its operation, according to statistics compiled by the West Coast Lumbermen's Association, 16 percent of the total movement of lumber by vessel from the Pacific Northwest to this market has been accounted for by the shipments from this cooperative group of small operators. These shipments have been distributed through the various ports from Jacksonville, Fla., to Portland, Maine. An example of shipments over the various intercoastal lines taken from our records for the years 1937, 1938, and 1939 is as follows: American Foreign Steamship Corporation‒‒‒‒ American Hawaiian Steamship Co---- Calmar Line___ Luckenbach Steamship Corporation_. Morton, Lilly & Co. (Isthmian Line) Quaker Line & California & Eastern Steamship Co.. 196, 068, 000 10, 343, 000 21, 091, 000 2, 109, 000 9, 269, 000 27, 903, 000 527,000 10, 190, 000 278, 170, 000 The above movement has been on steamer space contracted direct by the Puget Sound Associated Mills. The quantity represents approximately 50 percent of the sales and shipments made by this firm during the past three years. The other 50 percent has been sold to various concerns on an f. a. s. vessel basis for movement on steamer space operated or controlled by the buyer. The reduction in the total number of vessels operating in the intercoastal route has seriously reduced the amount of steamer capacity controlled by these buyers. Some of the largest operators have been forced to discontinue entirely their purchases from our mills. The total movement, therefore, from this cooperative group of small mills during the three-year period mentioned, approximates 556 million feet, equal to 41 full cargoes per year. We have been notified by the American Foreign Steamship Corporation and the Quaker-California & Eastern Line, our two main transportation outlets over the past 3 years, that after this month their fleets would be entirely withdrawn from this service. We have canvassed each of the six other lines, operating a service from Puget Sound, for lumber space on their vessels and have been advised that they have no space available which can be used for the transportation of our lumber to the Atlantic Coast market. Every endeavor to charter steamers which were not formerly engaged in this trade, has been made. We have today been advised by the leading steamship broker and agent on the Pacific coast (General Steamship Corporation) that after combing the market thoroughly they are unable to find any vessels to offer us for charter. Today, it is not economically possible for these sawmills to ship their product all rail to this territory. With possibly three exceptions, these mills were designed for the water trade exclusively. Their properties are so located that only a few have piling space to air-dry lumber. With a few exceptions they do not have dry kilns and those are inadequate to dry lumber for the Atlantic coast market. Car loading facilities are also not adequate to permit these mills to dispose of their output for rail movement. The Atlantic-coast market would have to advance $5 to $6 per M feet before these mills could afford to ship green lumber all rail to back haul points. The Atlantic-coast market is the main outlet for most of our 18 operations. Particularly is this true in the face of the deplorable condition of our export markets. It is a fact that the physical properties of most of these mills are such that they are partly or wholly dependent on the Atlantic Coast market for their existence. The seriousness of this situation is a fact-not a theory. The effect of being denied the privilege of moving their product by vessel to the Atlantic coast, according to a current canvass of each of these 18 mills, will be as follows: Anyone familiar with operations of this kind knows that not one of these concerns can afford to operate on less than a 75 percent basis under present conditions and it is doubtful whether any one of these operations can afford to continue for a definite period with less than a 100-percent operation. The situation brought about by the removal of vessels from this trade means nothing less than a major catastrophe for these 18 lumber operations and their 3,543 employees. This is by no means the end of the damage that will ensue. Numerous other firms engaged in supplying these mills with logs will be forced to curtail or shut down completely and other associated industries will suffer. We estimate that directly and indirectly an additional 3,000 employees will likewise be affected. This acute situation is not one which is in the offing. It is to be reckoned with immediately. Figures and facts presented are on the conservative side. We urge that the necessary steps be taken immediately to prevail upon the Maritime Commission to give this matter serious consideration with a view to offering us relief by releasing idle vessels which they now have under their control. Yours very truly, PUGET SOUND ASSOCIATED MILLS, R. E. SEELEY, President. We have present a delegation from our section of the country, the members of which are perfectly familiar with this situation, and I do not want to consume any more of your time, which I think can more profitably be used by them in presenting their statements to the committee. Mr. Chairman, and gentlemen of the committee, I thank you for your courtesy, and indulge the hope you will act favorably on the pending resolution introduced by our colleague from California, Mr. Buck. The CHAIRMAN. Thank you very much, and, recognizing that time is of the essence, I want to say to Members of Congress and others that as many as desire to do so may supplement their statements to be incorporated as part of the original statement for the record so as to conserve time at present. Let us get right down to the meat of the proposition. Representative Shanley from Connecticut. STATEMENT OF HON. JAMES A. SHANLEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CONNECTICUT Mr. SHANLEY. Mr. Chairman, and members of the committee, I wish to speak on behalf of Congressman Ball, of New London, who is unable to be here on account of another meeting. I cannot tell you anything that has not been said by Mr. Buck or Mr. Smith. I would like to place in the record a copy of a letter from our Chamber of Commerce of New Haven, Conn. I am sure that this committee will carefully and ably handle this matter. The CHAIRMAN. We will be glad to have anything incorporated in the record that you desire. Mr. SHANLEY. I came here to make this brief statement, and I must leave. It is no reflection on the committee, because I know they will handle it ably and thoroughly. (The letter submitted by Mr. Shanley is as follows:) Congressman JAMES SHANLEY, ARTHUR L. JOHNSON CO. OF CONNECTICUT, Washington, D. C. New Haven, Conn., April 2, 1940. DEAR SIR: We are having considerable difficulty with shipments via water from the Pacific coast into Bridgeport and New London, Conn., which are the only two ports that are open to water traffic at the present time due to the fact that the steamship lines are disposing of their boats to foreign countries, and are not chartering boats to replace those sold, with the result that they are curtailing their service to these two ports resulting that the consumers in the State of Connecticut are going to be severely penalized by paying rates from New York City or Boston, Mass., for delivery of Pacific coast merchandise to points in the State of Connecticut, which will amount to an average of 25 cents a hundred on every case of foodstuffs that comes in from those ports. This will mean close to 5 cents per dozen, or half a cent a can on every can sold. Furthermore, it will give the New York wholesalers selling in this area an advantage in being able to undersell the local people, and we would appreciate it very much if you woud take this matter up with the Maritime Commission 229991-40 to ascertain if there is any relief to be had in this situation, as we understand they have the authority where boats are sold to require steamship lines to charter other boats to take care of traffic. The two principal lines that come into Bridgeport and New London at present are the American Hawaiian and the Weyerhaeuser Lines, and they have both notified the terminals that they were discontinuing service to Bridgeport, which is going to be a very serious situation; and any assistance that you may give will be greatly appreciated. As you no doubt will hear from the wholesalers, chain stores, and super markets in this territory on this subject, we thought it advisable to write you the full particulars. Very truly yours, The CHAIRMAN. Congressman Angell. A. H. GASSELIN, STATEMENT OF HON. HOMER D. ANGELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON Mr. Chairman and gentlemen of the committee, I thank you for this opportunity to appear before your committee in support of House Joint Resolution 509 and House Joint Resolution 519, introduced by Congressman Buck, of California. The district which I represent, the Third District of Oregon, has within it the port of Portland, which is the outlet for intercoastal and foreign shipping through all of the Columbia River territory. This legislation has for its purpose the suspension of section 510-g of the Merchant Marine Act of 1936 during the present European war, which section restricted the use of vessels in the laid-up fleet of the Maritime Commission. It has particular reference to intercoastal shipping from the Pacific coast. A very serious condition has arisen there by reason of the sale and charter of many vessels which formerly were used in intercoastal trade. The demand for these ships by foreign shippers, growing out of the needs of the European war, has practically robbed the west coast of its shipping facilities. At the present time it takes from 3 to 4 weeks for west-coast shippers to secure shipping space either for east-bound or west-bound cargoes. One-fifth of the lumber produced in the Northwest goes through the Panama Canal, and averages 1,500,000 tons annually. Forty-six percent of the softwoods used in lumber production originates in Oregon and Washington, for eastern consumption. Federal records show that one-third of the ships formerly used in this intercoastal industry have either been sold or chartered out of this traffic. As a result, curtailment of production on tidewater mills in the Pacific Northwest has been reduced over one-third, owing to lack of bottoms for handling the intercoastal trade. As a result, it is curtailing production. Indications are that this summer during the building period there will be a very marked advance in building operations, not only in carrying forward the Federal housing program but also in various other industrial activities which require considerable quantities of lumber products. The war trade has developed a considerable demand also for lumber. Low-cost housing requires large quantities of lumber products, as low-cost building utilizes lumber largely for |