to a reasonable amount and that transportation regulations be equalized so that one section of the country may compete on an equal basis with another.

Thank you, sir.

Senator THURMOND. Glad to have you with us.

Counsel has a question here.

Mr. STILWELL. I would like to ask you one question, please, Mr. Murphy.

Both you and Mr. Pope mentioned the fact that approximately 70 percent of the land in your area of the State is forest land.

Mr. MURPHY. That is correct, sir.

Mr. STILWELL. Is that all privately held, or do you have some publicly owned, Government-owned land?

Mr. MURPHY. We have a small amount of publicly owned land, and I think the figure would be less than 10 percent in our area. Mr. STILWELL. Are they successful in selling stumpage off that land?

Mr. MURPHY. Yes, sir. They have been. Yes, sir.

Mr. STILWELL. That is all. Thank you.
Senator THURMOND. Any questions?

Mr. HORTON. No questions.

Senator THURMOND. Any questions, Mr. Mason?
Mr. MASON. No, sir.

Senator THURMOND. That is all. Thank you.

Mr. Pope, do you have any other witnesses?

Mr. POPE. Mr. Gordon I believe would like to testify, Mose Gordon of Mose Gordon Lumber Co.

STATEMENT OF MOSE GORDON, MOSE GORDON LUMBER CO.,

COMMERCE, GA.

Mr. GORDON. My name is Mose Gordon from Commerce, Ga., Mose Gordon Lumber Co.

Senator THURMOND. Go right ahead.

Mr. GORDON. I do not have a prepared statement other than what these present depressing conditions have prepared for me in the last 5 years. It has been most depressing.

We have been in the location we are now for 36 years, and up until 5 years ago we averaged a production of 12 million feet of lumber a year.

For the past 5 years that has been reduced to 7 million feet per year.

We employed approximately 150 to 165 employees in this production of logging, kiln-drying and manufacturing, principally—at least 90 percent-pine timber and a little hardwood.

We are located in northeast Georgia where there is quite a holding of the U.S. Forestry Service. And the question has arisen as to the price of stumpage. Those people have reduced it considerably, but in the midterm of Eisenhower's administration they put in the practices of the west coast logging conditions imposed on other conditions, which is practically impossible.

For instance, we have to build roads comparable to the west coast roads that they put in there.

And the difference in the yield per acre is staggering. We average about 3,500 feet per acre of harvesting that timber, where the average is around 75,000 feet per acre on the west coast.

These roads have reduced the cost of the timber, but the hidden cost in preparing the roads and the soil erosion and the regrassing and seeding of the roads and different things to prevent erosion have prohibited us getting into the Government timber.

Since then we have been out of the market with the U.S. Forest Service.

Of course, the Canadian timber has come in and taken most of our markets. That is the chief thing. We had learned to live with our competition with the west coast, but the last few years it seems like it is a losing proposition with us.

And unless we can get some aid from that, we have got to make some arrangements to make our living otherwise.

Now, the capital gain is a most essential thing for the survival of the lumber industry. Without that I think we need to worry about nothing else.

You asked a while ago, Senator, the name of an auditor a fellow had. We are not concerned with paying income tax to the Government the last few years.

One of the fellows came the other day and said that he had paid the Federal Government his income tax in an adverse condition. He said the wolf had been coming to his door periodically for the last few years but she gave birth to a litter of pups and he sold them and he sent the money to the Government. [Laughter.]

So we have got to get our money somewhere to help to support the Federal Government other than what we are doing now, unless we can get some relief from the importation of Canadian products and some relief in a modification of the wage and hour from a seasonal standpoint, as Mr. Pope brought out.

We have 3 to 5 months beginning along about November, until spring, where with the present wage and hour we could not make the 40 hours a week due to weather conditions.

If that could be accumulated over a quarterly period or allow us, say, 50 hours per week without paying the overtime, it would be a great relief for us.

I believe September coming it will be increased from $1.15 to $1.25 an hour, sir.

With that situation eliminated or relieved, with the Canadian products slowed down on us, I think we could make a go of the situation providing our capital gain on our timbergrowing company lands would be retained.

I wish to thank you for your courtesy in being with us today on this occasion. We need help. We need it desperately.

Senator THURMOND. Mr. Gordon, we are glad to have you here. You know, it is primarily because of Government entry into various fields of activity which were never envisioned by those who wrote the Constitution that we are having this trouble today.

Mr. GORDON. That is right, sir.

Senator THURMOND. And not only in the lumber business but other businesses too.

Mr. GORDON. Various other businesses.

Senator THURMOND. If we could get the Federal Government to keep its hands off a lot of things, we would get along a lot better. Mr. GORDON. I agree with you, sir.

Senator THURMOND. Counsel, do you have any questions?

Mr. STILWELL. I want to ask you just one question, please, Mr. Gordon.

Mr. GORDON. Yes, sir.

Mr. STILWELL. On the wage and hour proposals, as I understand it, they also have daily overtime that you have to pay even though you do not make 40 hours. Is that right or not?

Mr. GORDON. On the Walsh-Healy only after 40 hours.

Mr. STILWELL. Forty hours a week. But it is not overtime for over 8 hours a day if you do not make the 40 hours in the whole week? Mr. GORDON. That is right.

Mr. STILWELL. I wanted to get that cleared up.

Mr. HORTON. Mr. Gordon, is there a seasonal exemption applied to lumbering in the South? I know there is in New England.

Mr. GORDON. There has never been a seasonal exemption.

Mr. HORTON. On spruce pulpwood they give us 14 weeks up there I think.

Mr. GORDON. Yes, sir.

Mr. HORTON. How much does it add to your logging cost for these improvements like brush disposal and roads which you mentioned on the forestry lands as against private stumpage?

Mr. GORDON. That depends on the volume of the stand of timber. If it is a million feet it would not be as much as it would be on a quarter of a million feet.

See, we have to put the road in there, and the road is what we call a secondary road. It is just unreasonable. They are put in on the same pattern that the west coast have to do it.

Mr. HORTON. What about brush disposal? that?

Mr. GORDON. Yes, sir.

Senator THURMOND. Mr. Mason.

Do you take care of

Mr. MASON. Mr. Gordon, I understood you to say that up until 5 years ago you were milling about 12 million feet a year, and now for the last 5 years you have milled around 7 million feet a year.

Mr. GORDON. That is correct, sir.

Mr. MASON. Would you like to estimate what percentage of your selling price today is represented by stumpage as compared to what was represented by it when you were milling 12 million feet?

Mr. GORDON. Well, the stumpage runs from about 36 years ago around $2 per thousand feet

Mr. MASON. I am talking in terms of 5 years ago when you were doing 12 million feet.

Mr. GORDON. Oh; 5 years ago?

Mr. MASON. Yes; when you were doing 12 million feet.

Mr. GORDON. We had an average stumpage around $35 then.

Mr. MASON. On your selling price, what percent would you say this was?

Mr. GORDON. You mean the net selling price? What we were getting for it?

Mr. MASON. Yes; for your lumber.

Mr. GORDON. We were getting around $85 average.

Mr. MASON. And now what does it run on your 7 million feet?
Mr. GORDON. You mean the selling price?

Mr. MASON. Yes; your stumpage in relation to your selling price. Mr. GORDON. Well, our stumpage is averaging about $25 now, but our average sales price is considerably lower in proportion, around $68. Senator THURMOND. Any more questions?

Mr. MASON. That is all.

Senator THURMOND. Thank you very much, sir.

Mr. GORDON. Thank you, sir.

Senator THURMOND. Now, that is all the witnesses I have listed here. I am sure there must be some other people here today who did not notify me that they wanted to testify, and we will be glad to hear from them now.

Mr. H. F. Easterling, the manager of transportation legislation for Olin Mathieson Chemical Corp.

Mr. Easterling, come around.

STATEMENT OF H. F. EASTERLING, MANAGER, TRANSPORTATION LEGISLATION, OLIN MATHIESON CHEMICAL CORP., NEW YORK

Mr. EASTERLING. Mr. Chairman and gentlemen, I did not prepare a statement. I did not intend to make an appearance here. I was giving consideration to appearing in your Shreveport hearing.

I have listened to the testimony today, and I would like to talk to only one point that has been raised. That is the inequity in the freight rates, the Far West versus the southern industry.

I know that those conditions do exist. I know that many inequities are favoring the west coast lumber shippers compared to the southern industry today.

Our mills are located in the States of Arkansas and Louisiana. But I have heard testimony here today that leads me to believe that you might prompt a general investigation of rail freight rates. And in my years of experience in transportation I have never felt that that is the proper solution. I know that it is a long-drawn-out process that requires several years before any decisions are ever reached.

I think there is a much better solution insofar as the freight rates are concerned if your record reads that the testimony does reveal these inequities that favor the west coast lumber industry without prompting a general investigation of the freight rates.

I have found that in negotiations we have always been able to bring about a better situation than we do through a general investigation of freight rates.

I would prefer that if any action is taken insofar as freight rates are concerned that it would be to remove some of the advantages that have been granted throughout the past several years to the west coast industry rather than a general investigation of the freight rates nationwide, because it just tends to freeze our freight rates to the point that it is hardly possible to effect through negotiations any change whatsoever.

Historically, investigations bring about a level of rates that is not exactly suited to the market conditions of an industry.

So I am trying to get into your record the thought that I do not think a general investigation of all the freight rates on lumber by rail in the United States is the proper solution to the freight rate situation.

I do think that the Interstate Commerce Commission should give consideration to removing some of the advantages that have been given the west coast shippers rather than a general investigation. I just wanted to make that point.

Senator THURMOND. Thank you very much.

You are from Atlanta, Mr. Easterling?

Mr. EASTERLING. From the New York office.

Mr. JOHN B. SMITH. I would like to make a statement.
Senator THURMOND. Come around.

STATEMENT OF JOHN B. SMITH, JACK SMITH WHOLESALE LUMBER CO., ATHENS, GA.

Mr. SMITH. My name is John B. Smith, trading as Jack Smith Wholesale Lumber Co., Athens, Ga. I serve the hardwood interests of 12 or 15 small mills.

I have been in the lumber business in some form since 1917. There is nothing about a sawmill that I have not done a bit of from one time to the other, and the statement I want to make is this, very briefly :

I serve approximately 12 mills-150 families-and furnish inspection and sales force for their hardwood products. We are all hardworking citizens, both white and Negro.

We vote from the Appalachians to the sea. Just ordinary working people who ask no special favors, only a fair and square shake on freight rates, sizes, moisture content, and so forth.

We are not afraid of honest competition. But we do feel that we have been discriminated against.

Thank you, sir.

Senator THURMOND. Do you have any questions?

Mr. STILWELL. Mr. Smith, in your operation are you primarily a retailer?

Mr. SMITH. Primarily a wholesaler.

Mr. STILWELL. A wholesaler?

Mr. SMITH. Of hardwoods only.

Mr. STILWELL. You do not handle any softwoods at all?

Mr. SMITH. No, no softwoods. It consists of approximately 10 percent of the cut of the mills in this area. They have to buy the hardwood to get the pine stumpage.

They do not have enough to have a skilled lumber inspector, nor do they have money to train a man or know how to process it, how to stack it and dry it properly. I furnish the technical information and advice for the hardwoods only of the pine operation.

If they cannot produce pine, then there will be no hardwood for me. Then my wife will get hungry.

And getting back to a statement from one of the men the other day when he was talking about how hard it was, he said, "Well, I am not going to see my wife and children go hungry as long they grind corn meal and the creek runs back of my house.

Thank you.

Senator THURMOND. Do you have any questions, Mr. Horton?