to restore the intercoastal service to adequately take care of all interested shippers."

2. "We have not actually been shut out on any bookings recently, although the present situation has caused us a considerable amount of inconvenience. In many cases our shipments were delayed as much as two or three weeks. We will certainly welcome any steps taken to relieve the existing conditions. Our competition makes it necessary to use the intercoastal lines, and unless conditions improve, it may result in the loss of future business to us."

3. "We manufacture all kinds of flat rolled steel sheets and plates and over a period of years have worked up a fairly large business on the Pacific coast which we are very desirous of retaining, but it can only be retained through sufficient service by the intercoastal lines. It is impossible for us

to ship by rail because of the transportation charges.

"In the week ending January 27 this year we had a total of 1,280 tons which we wanted to ship on the Luckenbach, sailing from New Orleans February 14, but they would only accept from us 507 tons, leaving 773 tons delayed and unshipped. The next sailing of the Luckenbach was on February 28, and by that time we had accumulated a total of 1,590 tons, but the Luckenbach would only accept from us 255 tons, leaving 1,335 tons delayed and unshipped. The next Luckenbach sailing is March 13 and between February 18 and March 13 we have accumulated an additional 559 tons, making a total of 2,667 tons, but out of this total we did manage to secure space for 500 tons on the Isthmian Line, sailing of March 9, so that our unshipped tonnage as of March 1 was 2,167 tons. We have space from the Luckenbach on their sailing of March 13 for 918 tons, which leaves us still with 1,249 tons which we have been unable to move or book up to the present time.

"The next Luckenbach sailing is on March 27, and we have been allotted 336 tons space on this vessel which will still leave approximately 900 tons unshipped at the end of this month, irrespective of what becomes available at the mill between now and the end of the month. The Isthmian Line tell us that they have no sailing in sight and cannot tell us when they will have another boat from New Orleans, although they have told us that they have so much tonnage ahead, that if and when they do have their next sailing they will very likely be unable to give us any space.

"This is a very serious situation with us, because if we expect to continue in business on the Pacific coast we must have sufficient water service. We have spent a great many years and considerable money in building up this Pacificcoast business, and if we were forced to give up now it would mean considerable loss to us. We hope that you will keep us informed of any further developments in this intercoastal trade.'

4. "We are vitally interested in the continuance of adequate intercoastal service and feel that some effort should be made by the league to obtain additional ship assignments to this trade.

"Competitive conditions on the Pacific coast on our products are so severe as to compel us to use water transportation. There are a number of competitors located in California who are in a position to purchase steel on a delivered basis in California. Such steel generally moves via the Isthmian and Calmar Lines, subsidiaries of the United States Steel Corporation and Bethlehem Steel Co., respectively. This hook-up has a tendency to place steel on the Pacific coast at the lowest possible cost and where we are unable to ship our products by steamer we are at a disadvantage upward to $10 per ton in the transportation cost."

5. "After having booked sufficient space with the McCormick Steamship Co., they asked permission to divert two cars intended for the steamship Absaroka, which sailed February 8 and after we had given permission to divert the cars to the American-Hawaiian steamship Columbian sailing February 11, the McCormick Line later advised the American-Hawaiian they would take the cars but at the last minute found that they could not, with the result that they were delivered to the American-Hawaiian too late for the Columbian and did not clear Baltimore until February 20 on the steamship American, with the result these two cars were delayed 2 weeks.

"We booked 200 tons for the Pacific coast direct line steamer Hegira sailing February 18. They asked that we discontinue shipping for this steamer after we had shipped only about 75 tons. A further instance was 3 cars shut out by Quaker Line steamer San Rafael which sailed February 22. We had booked 400 tons for this steamer but were able to ship only 280 tons. The three cars shut out were not cleared until on the steamship Vermont on March 3.

"In addition to the above specific examples of delays and shut-outs, we also experienced considerable inconveniences and annoyances in securing bookings for specific tonnage. Altogether the removal of so many ships from this intercoastal trade has produced a very unsatisfactory situation."

5. "For years we have been a steady shipper of iron and steel articles, particularly pipe, to the Pacific coast ports from New Orleans, and recently we have experienced serious difficulties in booking shipments from New Orleans to the coast. On January 29 we asked Luckenbach to book 43 tons of pipe for shipment on your steamer sailing February 14 for Los Angeles. The next day, the 30th, we had 45 tons to book on the same steamer. On that day your representative advised us that you would not accept the 43-ton booking on the 14th boat, and that you had more tonnage booked for that boat than you could handle. "We were obligated under a contract to deliver at a certain specified time on the Pacific coast the tonnage to which I have referred, and I was able to get your New Orleans office to accept for shipment on the 14th boat, the 88 tons referred to. On the 30th of January we asked that 861⁄2 tons be booked on your steamer sailing from New Orleans on February 28, 32 tons for Seattle and 531⁄2 tons for Los Angeles. We were advised that we could not book on your boat of the 28th because we were too far in advance of the sailing. Since our booking of January 29 was 16 days in advance of your February 14 sailing, and our attempted booking of the 30th was 28 days in advance of the February 28 sailing, we are in the peculiar predicament of wanting to know on what day in advance of your sailings we must book tonnage. It appears that we are either too late or too early.

"I am being advised by other shippers in this district that the service out of the Gulf is becoming wholly inadequate. It appears that not only is this true, but that your method of booking shipments is also such that industries in this section cannot properly serve accounts on the Pacific coast. You, no doubt fully realize the fact that we must tell our accounts on the Pacific coast when we can ship their goods, and if it is a fact that you have a sailing every 2 weeks, I cannot understand how we can be too early in booking our shipments for any sailing. In other words, if today we signed a contract for the delivery of goods to a customer on the Pacific coast within a certain specified time limit, or for the shipment on a certain boat, when are we to know on what date bookings for such boat is open. I shall appreciate your advice in the matter."

6. "We ship annually approximately 20,000 net tons of iron and steel articles, that is nails, barb wire, galvanized and plain steel wire, steel posts, wire fencing, and wire mesh concrete reinforcement, to Los Angeles, San Francisco, Oakland, Portland, and Seattle, routing all cars via New Orleans and the steamship companies operating from New Orleans to the west coast.

"Prior to the discontinuance of Gulf-Pacific sailings from New Orleans, we had a regular booking of 500 net tons with Luckenbach for each vessel that they sailed from New Orleans to the west coast and approximately 350 net tons with Gulf-Pacific for each of their sailings, the total bookings aggregating 1,700 net tons per month.

"The discontinuance of Swayne & Hoyt's operation of the Gulf-Pacific Line and the resultant curtailment of service from New Orleans has left us in an extremely bad condition in our movement of materials from New Orleans.

"As of February 27 we had a total of 53 carloads of iron and steel in New Orleans that were shipped by us between dates January 8 and January 26, and that had been held at New Orleans for some time because of the impossibility of securing bookings. We understand that the Luckenbach sailing of February 28 cleared 25 of these cars, leaving on docks at New Orleans 28 cars. The tonnage now on hand at New Orleans is approximately 644 tons.

"We have booked 350 gross tons for Luckenbach sailing March 13 and 300 gross tons for Luckenbach sailing March 27. In spite of the tonnage on hand at New Orleans, this is all the booking that we can get of Luckenbach for these two sailings. They will not schedule a booking for their April 10 sailing and we have no assurance of what this sailing will be able to take.

"We have booked for Isthmian sailing March 23 a total of 50 net tons and it is impossible for us to get additional bookings via this vessel.

"We have orders on hand here for in excess of 100 cars (2,300 tons) and we have not made any shipments since February 9, 1940. Customers are clamoring for goods and present indications are that we will not be able to clear any additional shipments from New Orleans until at least April 10.

"The situation is extremely bad and something definite should be done promptly to correct it."

SUGAR

1. "The steamship lines claim that they do not have space to handle sugar in the quantities we have tendered since last September. We now have several hundred thousand bags on the Pacific coast which have been tendered and refused. The American-Hawaiian Steamship Co. are handling small amounts at various times. This service is wholly inadequate and has proved to be a great hardship to our business. I believe I can safely estimate that there are between one and a half and two million bags of beet sugar on the Pacific coast at the present time that have been sold on the Atlantic seaboard and that are being held because of lack of boat space."

2. "This corporation has a sugar refinery in California, and normally ships approximately 200,000 tons of refined sugar through the Panama Canal to Gulf and Atlantic ports. We have been experiencing considerable difficulty in securing sufficient space to accommodate our shipments. This lack of space, coupled with an increase in the intercoastal rate on sugar, has brought about a change in our distribution plans which reduces the quantity we planned to ship during 1940 from 240,000 tons to 80,000 tons. The quantity involved in the reduction will be shipped by rail from our plant in California or refined and shipped from refineries on the east coast. On the portion refined on the east coast, the raw sugar will move from the Hawaiian Islands direct to east coast refiners. As yet we have no assurance that we will be able to ship the 80,000 tons we now plan on moving. We have been unable to receive any definite assurance from the intercoastal lines that the tonnage will be handled by them. This leaves us in a very uncertain position.

"The whole matter has been very costly to us. We feel that the lack of space, brought about through transfers and sales of intercoastal ships, was the primary influence in the intercoastal lines increasing the sugar rate 5 cents per 100 pounds. We further understand that the remaining intercoastal lines are now planning a general increase in all the rates. Competition among the lines because of these transfers, etc., has been considerably diminished, thus permitting such rate increases and the forcing out of certain basic cargoes, such as our sugar, that normally would move at proper rates."

"We are very anxious to see that a new service is established to ease up this situation."

SULFUR

1. "We have been encountering a great deal of difficulty in connection with the east-bound intercoastal movement of sulfur. We have a uniform yearly movement amounting to approximately 100 tons per month. In the past we have had a great deal of difficulty in securing this amount of space, and, on numerous occasions have had to route our tonnage via all rail.

"We are still encountering difficulty in that it is almost impossible for us to secure bookings of 100-ton lots, and although we are trying to take care of our requirements by making reservations well in advance of the period during which we contemplate shipping, we have no assurances that the full amount of the tonnage will be received by the intercoastal lines."

WHISKY

1. "Since Swayne & Hoyt sold their boats, we have had considerable difficulty moving our shipments of bulk whisky via New Orleans to the Pacific coast. Although we have not had any trouble getting space, practically every sailing is delayed from a week to 12 days.

"It is apparent we could use additional service in this intercoastal trade."

WOOD PULP-PULPBOARD BOXES

1. "We have a movement from the Puget Sound area to Norfolk and Newport News, Va., of approximately 7,000 tons of wood pulp each year. This pulp is supposed to come around in equal monthly installments of 500 to 600 tons. We have been having great difficulty in getting deliveries for lack of shipping space, and more and more pulp is moving now on the rails at heavily increased cost of freight, because of the lack of ships.

"In fact the writer was told last week in New York that we might have to take our deliveries by rail because they could not get the ships, and this would make a very considerable increase in cost to us, because we would have to absorb the cost between the intercoastal steamship rate and the regular rail commodity rate. If there are as you state any vessels now laid up, whether sterilized by congressional action or not, they should certainly be put to work at this time. If congressional action is necessary to put these ships in service, some action by Congress should be taken immediately.

"With shippers crying for service and seamen pacing the water fronts looking for jobs this is certainly no time to have ships tied up. They might be working for the common benefit. If this letter will help you, you are privileged to use it in any way that you see fit."

2. "As a matter of fact, the last 3 or 4 cars we have had for the Pacific coast have been shut out. These cars will average about 40,000 pounds of pulpboard boxes, other than corrugated, K. D., and pulpboard pails, nested."

Mr. LACEY. The purpose of the bill under consideration, House Joint Resolution 509, which, as I understand it, now is House Joint Resolution 519, is to suspend section 510 (g) of the Merchant Marine Act, 1936, for the duration of the war so as to permit the Maritime Commission to release some of those boats which have been sterilized and removed from intercoastal service. Our members are interested in an adequate supply of ocean bottoms for intercoastal and coastwise trade, and I am unauthorized to say that the National Industrial Traffic League endorses the bill under consideration and expresses the hope that it will be reported favorably by your committee so that action can be had on it before Congress adjourns. before Congress adjourns. Unless some relief

is afforded, the situation will be greatly intensified as time goes on. That completes my statement.

The CHAIRMAN. Any additional matter you have may be filed by you.

Mr. W. G. Stone.

STATEMENT OF W. G. STONE, MANAGER OF THE TRANSPORTATION AND INDUSTRIAL DEPARTMENT, SACRAMENTO, CALIF., CHAMBER OF COMMERCE

Mr. STONE. Mr. Chairman, and gentlemen of the committee, my name is W. G. Stone, manager of the transportation and industrial department, Sacramento, Calif., Chamber of Commerce.

Intercoastal transportation is a most essential domestic trade route between the Pacific coast ports and those ports on the Atlantic coast as well as those on the Gulf of Mexico.

The preponderance of cargo movements, however, is east-bound, the ratio being approximately 3 tons east-bound to 2 tons west-bound. The tonnage in long tons of 2,240 pounds each for the years 1937 and 1938 excluding petroleum products are as follows:

In 1937 there were 3,575,114 tons east-bound, and west-bound there were 2,577,910 tons.

In 1938 there were 3,209,526 tons east-bound, and 1,921,003 tons west-bound.

The heaviest single item of east-bound tonnage is that of lumber and lumber products; in fact, it constitutes over 41 percent of the total east-bound general cargo tonnage. The next heaviest item is that of canned fruits and vegetables which accounts for over 22 percent. Tonnage figures for the years 1937 and 1938 are as follows: In 1937 there were 1,485,957 tons of lumber east-bound, or 41.6 percent of the total general cargo; in 1937 of fruits and vegetables there were 790,117 tons, or 22.1 percent; in 1938 the lumber tonnage was 1,338,124 tons, or 41.7 percent of the total general cargo, and in 1938 the fruit and vegetable tonnage was 723,996, or 22.5 percent of the total general cargo.

Lumber being a heavy movement of east-bound tonnage it naturally controls the ports served on the Atlantic coast by many carriers. For example, when a vessel proceeds to a given port with lumber, it as a general rule carries with it general merchandise including canned goods. Some vessels carry lumber only, but the general practice is to carry both lumber and general cargo. A typical illustration is that of Bridgeport, Conn., when in 1938, 32,000 tons of lumber moved from the west coast to Bridgeport and along with that lumber movement was 7,600 tons of canned fruits and vegetables.

The heaviest west-bound single item of tonnage is that of iron and steel articles which account for over 40 percent of the west-bound movement. The balance is in paper, fruits and vegetables, raw materials, manufactured products, and miscellaneous merchandise. For example, the west-bound movement of typical commodities for the years 1937 and 1938 are as follows:

West-bound commodities moving in large volume: In 1937 there were 1,221,248 tons of iron and steel, or 47.3 percent of the total general cargo. In 1937 there were 124,762 tons of paper, or 4.8 percent of the general cargo; in 1937, of fruits and vegetables there were 169,613 tons, or 6.6 percent of the total general cargo.

In 1938 for iron and steel there were 703,198 tons, or 36.6 percent of the total general cargo; in 1938 there were 125,060 tons of paper, or 6.5 percent of the total general cargo, and in 1938 of fruits and vegetables there were 90,578 tons, or 4.6 percent of the total general cargo.

In normal times, shippers have little difficulty in obtaining necessary space for movement of their commodities either east-bound or west-bound. Since the beginning of the present European war, however, the picture has changed materially and in fact many ships have left the trade either through sale or charter. For example, the ships in the intercoastal trade covering services between the Pacific coast on the one hand and both the Atlantic coast and Gulf of Mexico ports on the other hand, on September 1, 1939, and up to the present time are as follows:

Ships in intercoastal general cargo trade: On September 1, 1939, there was a total of 171 ships, with a deadweight tonnage of 1,627,632; on March 1, 1940, there were 136 ships, with a deadweight tonnage of 1,316,778; and on April 1, 1940, there were 118 ships with a total deadweight tonnage of 1,110,247, the loss from September 1, 1939, to April 1, 1940, being 53 ships with a deadweight tonnage of 517,385.

Due to this shortage of ships which amounts to 31 percent since September 1, 1939, it takes shippers anywhere from 3 to 4 weeks

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