Senator THURMOND. Yes, thank you very much. We are glad to have you. Mr. TILFORD. Thank you. It's a pleasure to be here, and I appreciate your courtesy. Senator THURMOND. Yes, sir. Thank you. What is your home town in Texas? Mr. TILFORD. Nacogdoches. Senator THURMOND. The same as the lumber comany? Mr. TILFORD. Yes, sir. Senator THURMOND. Mr. Roy O. Martin, Jr. Is Mr. Martin here? Come around, Mr. Martin, and have a seat. STATEMENT OF ROY O. MARTIN, JR. Senator THURMOND. Where is your home town, Mr. Martin? I apologize for not having copies of the statement prepared. I'll get this reprinted and mail copies for the record if you like. Senator THURMOND. All right, unless you just want to, a statement can be taken down here, and that can constitute the statement. Mr. MARTIN. I am Roy Martin, Jr., president of the Roy Martin Lumber Co. of Alexandria. My family has operated a sawmill in Alexandria for 40 years. My father originally came from Indiana and came to Louisiana in 1923 from Memphis, Tenn., where he was manager of Niffy (sic) Bros. Lumber Co. We started out in hardwood and continued cutting hardwood until 1933 at which time we started buying land with pine on it and were forced to go into the pine business to satisfactorily use the stumpage on the land we purchased. Since that time our pine production has grown to a very substantial part of our business. Prior to the early 1940's when we started purchasing land in earnest, we had depended on outside purchases for logs and still we purchase from 55 to 60 percent of our logs from outside woodlot owners. One of the embarrassing things in the lumber industry today is going back to the woodlot owners from whom we have purchased logs all along and telling them that we can only pay half of what we used to pay for the pine timber because of the decline in lumber prices. We pride ourselves on being forest farmers, but yet as our return keeps narrowing down, our sales on pine continue to decrease. We are faced with the situation that just a few years ago we were urging the woodlot owners to reforest and today we are reducing the prices to them on the stumpage we urged them to plant. In addition to the other problems presented here today, I wish to point out the problem of the continuing pressure of Congress or on Congress for the rise in unemployment taxes. It is a threat to accelerate our rising costs. At this time our unemployment taxes are costing us more than our workmen's compensation due to a very effective safety program we have put in. Another point, we protest the Labor Department domination in the unemployment field. The imports of lumber are not restricted to softwood only. Here I have an example of a little bench that is made out of beech lumber, and it's stamped on the back, “Made in Yugo slavia." Here we have American labor trying to compete with slave labor products from behind the Iron Curtain. With rising wages and decreasing sales averages, we are going to find more dollars going abroad for products such as this. I wish to thank the Senator and his committee for our being allowed to testify at this hearing and for listening to our problems. I certainly hope Congress will look favorably on (1) the 3-year 6-percent quota, (2) the country of origin marking, and (3) the use of domestic lumber in the FHA and VA and PHA housing. Thank you. Senator THURMOND. Well, I am of the opinion-maybe I am in the minority in Washington who feel that we should not allow goods from Communist countries to come into this country at all. I don't see why an item like that, as attractive as it is, should be allowed to come in here from Yugoslavia. Yugoslavia is a Communist country, and when we buy from Communist countries we are merely building up the economy of that country; and if we should ever have a showdown. with them in a war or any type of emergency, with what we are doing now to trade with them and purchase from them, just builds up their economy and makes them stronger and would enable them to give us more trouble if we did have a war with them. Let me ask you this. You spoke about this employment tax. There has been an effort in Washington to try to federalize the entire system Mr. MARTIN. Yes, sir. Senator THURMOND. Even though in Southern States you may have a little or certain States you may have a little unemployment and then in other States-like Michigan, you have a lot of strikes and unemployment at times. And the same thing occurs in some of the other large cities in the North, and consequently there are a lot of people that at times do nothing but draw unemployment pay. If you federalize it, then it would all be in one fund, and then the States that do not suffer from these difficulties, would have their tax raised the same amount, but these other States, would get the major benefit of it. Now in this--in Louisiana-how is your tax down here, is it reason able tax? You don't have much labor trouble down here especially? Mr. MARTIN. No; we don't have much labor trouble, but we have a very serious domination of Labor Department, of the Department of Employment Security. There is practically no enforcement, and the Department-the situation is quite bad. Senator THURMOND. In this State? Mr. MARTIN. Yes. Senator THURMOND. Of course, that might have to be remedied within the State. That's something Mr. MARTIN. It is through the urging of the regional office in Dallas that this situation is allowed to exist. Senator THURMOND. Will you have anything specific on that? Mr. MARTIN. Well, take the problem of enforcement? We havethere we have many cases in Louisiana-we can document them. I'm not an expert in this field, but I feel very strongly about it. We have cases where people are drawing workmen's compensation, unemploy ment, and working at the same time. We don't think that this is a good healthy situation. Senator THURMOND. It doesn't sound so to me. Have those been reported? Have any steps been taken to remedy that? Mr. MARTIN. Well, the Dallas office allows twice as many attorneys for enforcement against employers as they do for enforcement against employees. In our own local area the enforcement officer is too old to get out of the office, and he is not encouraged to do so. The decisions of the local agencies-in other words a man can be fired for drunkenness or be fired for theft, and he only has to file a statement with the local board that he has earned 10 times his weekly benefit and he can be reemployed and draw $1,800 against his employer, the previous employer in other words. If he has worked the allotted time, he could draw $1,800 against that employer; and the employer can do absolutely nothing but rehire him to stop that over about a period of a year and a half. Senator THURMOND. What law is that? Senator THURMOND. What law is that? Mr. MARTIN. We are having laws made by the departments; it's law by agency. Senator THURMOND. You say that's in Texas or in Louisiana? Senator THURMOND. There may be some certain areas yet, as I pointed out, that some correction might need to be taken within the State Mr. MARTIN. Yes. Senator THURMOND. We are glad to have you bring it out. I presume the government of the State would be interested and the State officials so that they would be acquainted with the situation and could take action in those fields. Mr. MARTIN. The whole root of the evil is the Labor Department domination of employment agency. The Department of Employment Security should be divorced out of the Labor Department. Senator THURMOND. You are speaking about Washington? Mr. MARTIN. Yes. Senator THURMOND. I have great sympathy in what you are saying. Thank you very much. We are glad to have you with us, Mr. Martin, and we appreciate your contribution. Mr. Watson S. Frick, Kirby Lumber Corp. STATEMENT OF WATSON S. FRICK Senator THURMOND. Where are you from, sir? Mr. FRICK. I'm from Houston, Tex. I have a statement here. Senator THURMOND. All right, you may go ahead, Mr. Frick. Glad to have you with us. Mr. FRICK. My name is Watson S. Frick. I am sales manager of Kirby Lumber Corp. of Houston, Tex. This company has manufactured southern yellow pine lumber continuously for over 62 years and presently operates a mill in Silsbee, Tex. It being the largest yellow pine sawmill in the South with an annual production of 75 million board feet. My company and I and our industry are deeply grateful to the Commerce Committee of the U.S. Senate for scheduling this hearing since it indicates to us that the committee and you, Senator Thurmond, are seriously interested in the economic problems with which we are confronted. The softwood lumber producing industry of the South finds itself today in a seriously depressed state and the following statistics will, I believe, clearly indicate the seriousness of our one major problem, it being that of the importation of softwood lumber. In 1958 there was consumed in the United States approximately 31 billion board feet of softwood lumber, of which 3,154 million feet, or approximately 10 percent, was imported. It now appears that in 1962 the consumption of softwood lumber remained at 31 billion feet, whereas imports rose to 4,500 million feet, or 14.2 percent of the Nation's consumption. This represents an increase of 43 percent in the importation of softwood lumber in 5 years, and it is estimated that during the first quarter of 1963 imports continued to increase to the point where they represented approximately 22 percent of the Nation's total consumption of softwood lumber. Canada is the principal exporter of softwoods into the United States. It is estimated that in Texas alone Canada's carload shipments of softwood lumber increased from 2,400 cars in 1953 to 4,600 in 1961. While I have not seen estimated figures for the year 1962, all indications are that the increase continues up until today. The heavy importations of Canadian lumber to northern, eastern and southeastern sections of the United States, both by water and by rail, adversely affect the U.S. producers of western softwoods by causing dislocations in their normal markets which, in turn, of necessity forces them to seek out other markets that traditionally have been served by southern producers, the final result being that all softwood consuming markets are in a highly demoralized state, and the producers of softwood lumber in all sections of the United States are finding the burden too great to bear. I know many solutions to the problem have been offered to your committee and to other governmental agencies, and my knowledge of the overall problem is so limited that I would not presume to suggest the full extent of the actions that possibly will be required in order to alleviate the conditions. I do believe, however, that some type of import control is a necessity if the U.S. softwood industry is to survive and that the solution does not lie in amending further the Jones Act, since any such action would result in further dislocations of markets and deprive southern pine producers of some portion of their present markets. Furthermore, the amendment to the Jones Act permitting foreign ships to transport lumber to Puerto Rico for 1 year only, caused further dislocations in the southern pine market, therefore the amendment should not be extended. In summary, it is my feeling that some type of rigid control on the importation of softwood lumber is an absolute necessity and that any changes in the Jones Act would tend to create added confusion to an already confusing transportation problem. Any change in the Jones Act would not only affect water shipments but would, in all proba 99-563-63-13 bility, cause inland western producers to seek lower rail rates to Southwestern, Midwestern, Eastern, and Southern destinations, thereby resulting in further dislocations in the normal markets of the producers of southern pine. Senator THURMOND. I wish to thank you for the statement, and we appreciate your contribution. Mr. FRICK. Thank you. Mr. STILWELL. I'd like to ask him one question. I note on the bottom of page 2 you mentioned a 1-year amendment for shipments to Puerto Rico displacing the southern pine there. Did your company ship any to Puerto Rico? Mr. FRICK. Yes. Mr. STILWELL. Did you notice the effect of this amendment yourself? Mr. FRICK. We just don't ship any now. Mr. STILWELL. Since this amendment went through, you are completely finished? Mr. FRICK. Yes. Senator THURMOND. The amendment of the Jones Act caused that? Mr. FRICK. Yes. Mr. STILWELL. Did you look at all into the possibility of applying for the exemption yourself so as to ship to Puerto Rico? Of course, that probably wouldn't be feasible to you since you are an inland producer; but if you were on the coast Mr. FRICK. It's not feasible for us, and we have been handling our exports to Puerto Rico through brokers; and therefore it goes in a kind of roundabout way, but our shipments have ceased. Mr. STILWELL. Thank you very much. Senator THURMOND. Our next witness is H. F. Easterling, Olin Mathieson Chemical Corp. Come around, Mr. Easterling. STATEMENT OF H. F. EASTERLING Mr. EASTERLING. Thank you for the opportunity of appearing again Senator THURMOND. Have a seat, if you will. Mr. EASTERLING. I have a prepared statement. I appreciate the opportunity of presenting to you this prepared statement that I have. I will stick with the statement. My name is H. F. Easterling. I am manager of transportation legislation for Olin Mathieson Chemical Corp., 745 Fifth Avenue, New York, N.Y. Inasmuch as our firm has lumber operations located in the Southwestern part of the United States, we have an interest in the subjects covered by the hearings, particularly with regard to what has been placed on the record concerning freight rates. The difficulties of the southern lumber industry stem in part from the rail blanket rate applicable in-I marked "Official Territory." I have an explanation of what the basis of the "Official Territory" is. There is a footnote at the end of the statement-covering lumber and related articles originating at Canadian and Pacific Northwest origins. This blanket rate was established by majority rather than unanimous decision of the Interstate Commerce Commission back in 1935, despite strenuous opposition before that body by the southern lumber interests |