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to obtain space in either direction. The intercoastal route is not sufficiently tonnaged at the present time; we need additioanl ships. An illustration of this is shown by the fact that a shipper on March 20 endeavored to secure east-bound space, and the first boat on which he could secure that space was from a period of 4 weeks to a period of 5 weeks.

Another shipper on April 11 applied for space, and he could only secure space on May 4.

Another one tried to get space on April 16, and he could only secure space on May 14, a period of 4 weeks.

Another shipper was a little more fortunate. He applied for space on April 17, and secured space on May 7, a little over 3 weeks. Westbound the same situation exists. One shipper applied on April 9, and was unable to get any west-bound space until April 27. Another shipper has two cars on the docks at Jacksonville, Fla., and they have been there for 2 weeks waiting their turn to be loaded. He does not know when they will be despatched.

Those are merely typical illustrations of the situation as it exists today.

There are approximately 100 ships in the present emergency fleet which is laid up, many of which we believe could be used in the intercoastal trade. We find, however, that paragraph (g), section 510, of the Merchant Marine Act of 1936 as amended and as approved on August 4, 1939, prevents release of these ships for commercial purposes. Conditions today are wholly different than they were when this amendment was passed to the Merchant Marine Act last year. Joint Resolution 509 proposes to provide relief in this emergency.

Passage of this joint resolution will restore to the United States Maritime Commission powers it held prior to August 4, 1939, and enable the Commission to exercise its discretion and bring out of lay-up such vessels at such time as in its judgment become necessary to meet reasonable demands of shippers for cargo space. Under this resolution the Commission can prescribe such terms and conditions and for such periods that in its judgment are necessary, in order that the intercoastal trade may be adequately served.

Our shippers at Sacramento, Calif., along with other Pacific-coast shippers, are vitally interested in the maintenance of an adequate intercoastal service. We use the service both east-bound and westbound and in view of the present emergency and of the shortage of ships in the intercoastal trade, we urge early passage of this joint resolution, House Joint Resolution 519.

The CHAIRMAN. Are there any questions? All right, stand aside. Mr. Foerster.

STATEMENT OF ROLAND FOERSTER, GENERAL COUNSEL,

SPRECKELS SUGAR CO., SAN FRANCISCO, CALIF.

Mr. FOERSTER. Mr. Chairman, and gentlemen of the committee, I appear on behalf of the Spreckels Sugar Co. The Spreckels Sugar Co. manufactures sugar in the State of California and ships each year in excess of 50,000 tons of this sugar through the Canal to the Gulf ports and elsewhere. We have found increased difficulty in the last 7 or 8 months in obtaining adequate bottoms to carry this sugar,

and such relief as is contemplated by the proposed resolution would be of great assistance. We even had to go so far as to get ships back from the Orient that were out of commission, lying idle there, in order to carry this sugar, and we heartily endorse the proposed resolution.

The CHAIRMAN. Are there any questions.
Mr. Underwood.

STATEMENT OF JACK UNDERWOOD, REPRESENTING THE CHAMBER OF COMMERCE, SEATTLE, WASH.

Mr. UNDERWOOD. Mr. Chairman, and gentlemen of the committee, I represent the Seattle Chamber of Commerce. The chamber has passed a resolution which endorses this legislation, but the meeting was held before this legislation was introduced. This resolution, which I will file with the committee, points out the difficulties of the situation and the serious situation that confronts us, because our mills are now taking no more orders for the reason that we cannot ship. The CHAIRMAN. I understand you do not endorse the amended resolution?

Mr. UNDERWOOD. We do, sir. We endorse the principle of the whole thing, and I would like to file this resolution with the committee.

The CHAIRMAN. All persons having statements to file with the committee may do so without special permission. That permission is now given.

(The resolution referred to is as follows:)

COPY OF RESOLUTION

ADOPTED BY BOARD OF TRUSTEES

OF

SEATTLE CHAMBER OF COMMERCE
MARCH 12, 1940

The intercoastal traffic with ports on the Atlantic and Gulf coasts is a very important part of the ocean-borne commerce of Seattle. According to the report of the United States Maritime Commission for 1937, this traffic, in-bound or out-bound, exceeded 544,000 cargo tons, and for the Puget Sound district as a whole exceeded 1,500,000 cargo tons.

This intercoastal traffic represents a vital channel of trade, through the port of Seattle and other ports on Puget Sound, for all of the important products of this region; and hence, for the industries and labor engaged in their production. The largest items in the intercoastal traffic from Seattle are wheat, flour, fish and other canned goods, lumber, pulp and paper, and fruit and vegetables. This traffic affects all of the basis industries and natural resources of the State of Washington.

Information furnished by intercoastal carriers shows that the number of ships engaged in intercoastal trade with the Atlantic seaboard was 118 in March 1939; 105 in January 1940; and 91 in March 1940. Ten additional boats of small capacity, formerly engaged in Pacific coastwise service, are in process of transfer to the intercoastal route. Furthermore, the ships engaged in service from the Pacific Northwest to Gulf ports were 19 in March 1939; but 7 in March 1940. These transfers represent a very serious reduction in the space and facilities available for intercoastal shippers.

Further reduction in the intercoastal and Gulf fleets must be expected because of the present exceptional demand for shipping, for many highly profitable offshore routes.

The shortage of intercoastal space has already brought to the lumber industry of western Washington a congestion of unshipped orders for the Atlantic and Gulf coasts; enforced curtailment of production; and unemployment.

All of these adverse conditions are becoming more serious. A group of the smaller sawmills on Puget Sound, which heretofore have supplied 16 percent of the entire lumber tonnage moving through the Panama Canal, is now unable to obtain space from the the intercoastal carriers which have transported the great bulk of their production in the past; and can obtain no shipping space to replace this loss from any other private source. This group of sawmills is faced with drastic curtailment of production and employment, or complete suspension of operations, unless additional ocean tonnage is provided.

Similar conditions are extending to the other basic industries of Washington, which-like the lumber industry-have been established largely to serve waterborne markets reached through the Panama Canal and which cannot economically sustain the cost of transportation by rail. The growing shortage of intercoastal space is becoming a form of economic paralysis, extending over the Pacific Northwest.

The United States Maritime Commission has under its control a number of Government ships, under 20 years of age, which it now has authority to make available for purchase or charter; together with a large reserve fleet which may be made available by emergency proclamation of the President.

Information has been received that a number of established intercoastal carriers desire to acquire Government ships for operation in this route: Now, therefore, be it

Resolved, That we earnestly petition the United States Maritime Commission immediately to ascertain what responsible intercoastal steamship carriers will purchase or charter Government ships under control of the Commission, for use exclusively in the intercoastal service; and that the Commission take the necessary steps to make such ships available to intercoastal carriers, by sale or charter to the highest bidder or such other means as it may determine; provision being made in the conditions under which such boats are obtained for their use exclusively in the intercoastal service.

The CHAIRMAN. Mr. Greeley.

STATEMENT OF W. B. GREELEY, SECRETARY, WEST COAST LUMBERMEN'S ASSOCIATION, SEATTLE, WASH.

Mr. GREELEY. Mr. Chairman, and gentlemen of the committee, I am manager of the West Coast Lumbermen's Association. I am here to give you, in a nutshell, the lumber angle of this situation.

Our association covers practically all of the major production in the Douglas fir district of western Oregon and western Washington. For the past 12 to 14 years that has averaged one-fifth of our entire lumber production, and it has moved through the Panama Canal to markets on the Atlantic and Gulf coasts, and that lumber traffic has represented from 1,500,000 tons annually upward, and as Mr. Stone has given you the figures, it has represented from one-third to onehalf of the entire east-bound traffic through the Canal, not including the tonnage of petroleum.

Now, from the consuming standpoint, taking the cities supplied from the Atlantic coast that the ordinary construction items of lumber, the last census of the United States shows that 46 percent of the entire consumption of softwood lumber originates in Oregon and Washington, so that, from the standpoint of consumption, there is a very vital interest in maintaining this traffic undisturbed, and it is a matter of common trade knowledge that for a wide belt in the Eastern States reaching from the Atlantic seaboard this construction lumber manufactured in the far Northwest has become the mainstay of every-day building. It is today the mainstay of the cheap housing that is becoming the major construction activity of this country.

Now, there will be another witness here, Mr. Buckley, who has prepared a very exact record of the effect of the withdrawals of boats from the intercoastal trade upon the lumber movement.

I just wish to round out my statement by saying that, as far as we can ascertain, the ships that have already been sold or chartered out of this movement carried at least one-third of the total lumber which moved intercoastally in 1939, and today there is a great demand for lumber. There is an increased program for housing, and naturally the consumption of lumber in the Atlantic States will be greater than last year. We are entering that active construction period with apparently a much smaller carrying capacity through the Panama Canal than we had last yaer.

Now, to show you just what the effect of this situation is upon the west coast lumber industry and its employees, we recently made a very careful survey of 62 tidewater mills in Oregon and Washington, mills which have depended upon the intercoastal markets for a major part of their outlet. Those 62 mills, on the average, in the months of April and May, have shipped through the Panama Canal upward of 230,000,000 board feet. That is the normal April and May delivery by that route. This year the best delivery that they can estimate is less than 120,000,000 board feet, or less than 60 percent of their normal amount through the intercoastal route. That means simply that the shortage of space, through the withdrawal of ships, has cut down the marketing prospects of that group of sawmills by some 45 percent. Now, these mills, Mr. Chairman, employ 13,663 men, and right today, as a result of this structure in the intercoastal movement they are curtailing their employment and production by one-third by various devices, cutting down the number of hours per week, and shutting down completely for 1 or 2 weeks, and so forth. The tidewater sections of Oregon and Washington are experiencing a serious curtailment in employment from this cause, notwithstanding the fact that our market on the Atlantic coast is a more favorable market than it was last year.

Now, there has been a good deal of discussion about, and you will doubtless hear from it, whether there is a surplus of lumber on the Atlantic coast today. The lumber stocks have been adequate during the severe winter weather when very little building is going on. Now, just how long those present lumber stocks may last is to me a question. We are running definitely into a shortage of lumber on the Atlantic coast, and the only question is whether that shortage is going to come in May or in June. With one-third of the carrying capacity out of business, and a larger demand for it, a shortage of lumber on the Atlantic coast is just a question of time, and that shortage will mean, Mr. Chairman, a higher cost of lumber and a higher cost of residential construction, and unless some means of relief is provided it is going to mean a very serious setback in the residential building which, today, is the most promising single thing on our economic horizon. Now, our industry wishes to thoroughly endorse the resolution before you, H. J. Res. 519. We believe that this is a situation where the Government is justified in resorting to any relief available from the standpoint both of the consumer and of the producer. We do not wish to see the intercoastal route overtonnaged. We have not the slightest desire to see a return of the low rates and the destruc

tive kind of competition that the steamship lines on that route experienced for many years, and we do not wonder at all that the carriers fear the possibility of a return of that situation. We do not want that any more than they do, but we do feel that power must be given to the Maritime Commission to deal with this situation. soundly and reasonably, and from my contacts with Admiral Land, and his associates, I expect to see them lean over backward to maintain the stability of the present shipping companies and their business, which is proper.

We are in an economic emergency and the only solution I can see is to put the authority in the hands of the Maritime Commission with broad powers to allow the Commission to work it out reasonably and soundly, and we believe they will.

The CHAIRMAN. In my opinion that is a sound proposition. Are there any questions?

All right, Mr. Seeley.

STATEMENT OF R. E. SEELEY, PRESIDENT, PUGET SOUND

ASSOCIATED MILLS

The CHAIRMAN. Let us avoid repetition as much as possible and supplement your statements later if you desire.

Mr. SEELEY. My name is R. E. Seeley, President of the Puget Sound Associated Mills, Seattle, Wash. This organization is a sales organization owned and controlled by 22 sawmills on Puget Sound. Their shipments during the past 9 years in the Atlantic coast markets have represented 16 percent of the total shipments into this market. They employ 3,500 men, with a monthly pay roll, roughly, of $500,000. Due to the inability to procure steamer space in this market, these mills on the threshold being shut down, creating a situation of unemployment which is very serious. In addition to the 3,500 men which these mills employ there will probably be an almost equal number affected indirectly.

This situation has been brought about by the removal from the trade of steamers by charter or sale. We have attempted to charter vessels from every possible source. Charters are not available today at workable rates for domestic trade, and if this resolution can be passed we think that this situation can be relieved without injury to the orderly process of the intercoastal steamship operations and with economy to the Government.

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STATEMENT OF C. B. MORGAN, VICE PRESIDENT, RAYONIER CO.,

INC., NEW YORK CITY

Mr. MORGAN. My name is C. B. Morgan, representing not just the Pacific coast pulpwood industry, but the industry of the United States. I just want to make it clear that in speaking of the pulp industry we must bear in mind that there are several divisions of that industry, just as in the textile industry we have the woolen industry

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