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STATEMENT OF C. KING BENTON, HOOD RIVER, OREG., ON BEHALF
OF THE APPLE GROWERS OF THE HOOD RIVER VALLEY, FRUIT GROWERS OF THE HOOD RIVER VALLEY, YAKIMA COUNTY HORTICULTURAL UNION, AND OTHERS
The CHAIRMAX. We have kept Mr. Benton, of Hood River, waiting here for some time. I think we should now hear Mr. Benton.
Mr. Benton, we apologize for keeping you so long; but you see what we have been doing all day.
Mr. Chairman, he represents a large group of apple growers in Oregon, Washington, and surrounding sections.
Senator THOMAS of Utah. Please give your name and address to the committee reporter, and state for whom you appear, Mr. Benton, if you please.
Mr. BENTON. My name is C. King Benton. My address is Hood River, Oreg. I am here to speak in behalf of the apple growers of the Hood River Valley, the fruit growers of the Hood River Valley, who number approximately 550, with a tonnage of 2,500 carloads of fruit; the Yakima County Horticultural Union, of Yakima, Wash., representing 400 members and a tonnage of 3,000 cars; the Yakima Fruit Growers' Association, of Yakima, Wash., with 800 members and 3,000 cars shipped; the Northwest Fruit Exchange, of Wenatchee, Wash., with 500 members and a tonnage of 2,500 cars; the Skookum Packers Association, of Wenatchee, Wash., with 500 members and a tonnage of 2,500 cars; the Wenoka-Okanogan Cooperative Federation, of Wenatchee, Wash., with 450 members and a tonnage of 2,500 cars; the Apple and Pear Growers, of Hood River, Oreg., with 550 members and a tonnage of 2,500 cars.
These represent about 2,700 individual farmers, and approximately 13,500 carloads of fruit, which is approximately 90 percent or more of the cooperatively organized, farm owned and controlled groups in the Northwest. In addition to that, I have been authorized by the Northwest Canners Association to speak for them in connection with this bill, and by the Oregon Farm Bureau, as well.
The canning and fresh-fruit industry of the Northwest is interested in the problem of exports, in this mamer: The exports of apples, handled in the 1936 season, were approximately 4,000,000 boxes of apples, directly from Northwest ports, and 1,800,000 boxes, which, on account of the 1936 strike, were shipped via Canadian ports and thence exported—a total of 4.797,000 boxes of apples. The pears shipped from that section represent 596.000 boxes shipped direct and 385,000 boxes reexported through Canadian ports on account of the strike, a total of 981,000 boxes. The total export figures, combining the above, are 5.778,000 boxes. And in addition to those, we have the item of 151,000 tons of canned goods.
I came here as a farmer and a member of one of these organizations. I wish to bring to the committee the fact that this industry is an old, established industry. The bulk of these organizations are celebrating their twenty-fifth anniversary, and others are even older at the present time. The average for the industry is approximately 4,000 boxes of fruit per member. This is an economical fruit unit,
and requires additional help at harvest time, in addition to the man's work himself. The reason I mention that is because there has been an attempt in union circles to consider that anyone who employed any help beyond his own work was no longer an actual farmer.
The industry, as it exists today, begins approximately in November to spend money for fertilizer and other items of crop expenditures. During the winter and during the summer, additional items of expense are incurred, which amount to from 50 to 65 cents a box, in the loans that are granted on crop mortgages. This amounts to between $150 and $400 per acre, and is often considerably larger than the actual mortgage on the land. The market destination that this fruit will ultimately have is considerably influenced by these practices which take place several months before harvest. For example, the sizes alone of fruit make different market requirements in Washington, D. C., here, from New York, the requirements of Glasgow are different from those of Liverpool, and they are all different from London; and so on, all over the world. I mention this because there is a feeling that a box of fruit is a box of fruit. This condition does not exist ; individual sizes of fruit have to be segregated. They have to be grown for the purpose, and they have to be shipped to specific markets. We have developed these ideas in the course of our 30 years of work there and have accumulated brand preferences in the terminal markets, which are largely due to the regularity with which they are supplied and to our knowledge of the specific market requirements.
It must never be forgotten that, from the farm standpoint, farm produce is of utterly no value on the farm itself; the only value that farm produce has is in the delivery to the markets of the world. And the farm value that is considered by the farmer is the residue that exists after there is deducted from the terminal sales all the transportation, storage, and sales costs. This means to us that any rise in the transportation, storage, or selling charges is paid for in increased deductions from that gross, and the farmer receives, therefore, a smaller return for his fruit.
It is the impression of these groups that adequate consideration has not been given to the tonnage involved, in these maritime discussions. We are considering primarily title 10 of this bill.
The CHAIRMAN. I realize that.
Mr. BENTON. For instance, taking the case of so-called export varieties of apples: If it turns out that shipment abroad is impossible, this fruit cannot be sold in any other market. The markets of the United States in main cases would not pay transportation costs of this fruit. This fruit has, in the meantime, over a period of approximately a year, incurred obligations on the part of the farmer-which, as I said before, equal his mortgage on his land. And this situation means, frankly, that if the total export shipments are stopped for a period of several months, through and during a fresh-fruit season, a large part of the growers, who are dependent on exports for their living, would be bankrupt in 1 year. The reason I mention this specifically is because late in the strike, during the 1936-37 strike, there was an indication that this strike might spread to the eastern coast and Canada. An effort was made by the maritime unions to accomplish that result. If that had been accomplished and the strike had spread and continued the length of time it did, it would have seriously harmed and actually bankrupt hundreds of growers on the Pacific coast.
In the middle of that strike-approximately the 18th of December—there was held in Portland, Oreg., a meeting of the organized farm groups of the State. There were approximately 40 commodities represented. This was in 1936. In a poll of the meeting it was specifically stated by each commodity group there that all had suffered losses due to the maritime strike of 1936. The fruit people specifically had incurred losses from the following angles—and let me say in passing that figures on the actual losses, as developed at that meeting, were held impossible to get, because too large a proportion of the losses was indefinite, and no catalog of figures could possibly be obtained as to the actual losses suffered by the farmers of Oregon and Washington during the 1936 crop: There were extra fruit charges amounting to 1242 cents a box, for freight to New Westminster, on approximately one-third of our crop which was shipped through New Westminster. Part of this was assumed by transportation companies, but the growers themselves paid ou of their own pockets 614 cents a box on all that fruit.
The CHAIRMAN. How much did they pay out?
Mr. BENTON. Six and one-fourth cents a box additional freight to New Westminster. The railroads billed us with 1212 cents. But a large part, amounting to about 6144 cents, was absorbed by the transportation companies or the buyers, and we actually paid out of our own pockets 61/4 cents. That does not reflect the actual cost to the industry, however, because later that year allowances were asked for and given by buyers on the other side, for future shipments, on account of this differential to New Westminster. There was a fall in the general market levels of perishable fruits so great that in January 1937, I was told by a great many fruit shippers, that inquiries from abroad had been reduced to 25 percent of their normal volume.
We must remember that the European buyers, three, four, or five thousand miles away, have no conception as to the reliability and possibility of movement if they do put in orders when there are strike conditions possible.
In addition to all this, there was a loss in our market, owing to the lost consumption of fruit which could not be moved into the markets. This was specifically reflected in the canned Bartlett pears, which were held on the docks and in the warehouses of the Northwest, and which were not shipped during the 3 months of the strike. At the end of the season there was a tremendous surplus of camed pears, and there has been a problem ever since, of getting them moved into consumption, so that they might not block the movement of the succeeding crop.
We have been disturbed by one small feature in relation to these maritime contracts between the unions and the shipping companies: Apparently the date of renewal has been set as October 1 of late. This is approximately the beginning of our shipping season; and if the renewal of maritime labor contracts is due at that time, then we will enter our harvesting and shipping season, as we have for the last 3 years, with the knowledge that at any time it will be possible that there may be a disagreement, followed by strikes on the shipping lines, and then we will have to completely change our whole shipping lay-out for the ensuing part of the season.
The CHAIRMAN. Suppose it were fixed for, let us say, July 1. Would that interfere with some other industry?
Mr. BENTON. I imagine that would interfere with some other industry. But that date in the fall is bad, from the point of view of perishable farm commodities, in relation to the termination of their contracts.
The CHAIRMAN. Can you suggest a date?
Mr. BENTON. Perhaps some time in the middle of the summer—thus giving 3 months' time for negotiations.
The CHAIRMAN. Perhaps the 1st of May or the 1st of June?
Mr. BENTON. Yes; May or June would be acceptable—May, June, or July.
I want to say here that, so far as I know, there is no disposition on the part of the farmers in the Northwest to blame either side in these controversies; our only plea is for ourselves. We feel that some method of mediation should be set up that does not handicap as seriously as these strike conditions do, a perishable-commodity enterprise such as we are engaged in out there. We believe that the reason the Pacific coast has been picked out as a special field for this conflict is because of our distance from markets and the fact that comparatively a small part of our products is marketed for consumption in our own district. The Department of Agriculture, I believe, estimates 20 percent of our apple crop goes into consumption locally, which means that 80 percent has to be moved. And the same situation applies in California.
That factor means that the Pacific coast is susceptible to pressure, more easily than any other group in the United States, and further, that there is a higher percentage of perishable products raised there, which require long freight movement.
The CHAIRMAN. Do your products go safely in the refrigerator vessels? Do you have sufficient refrigeration space to take care of your products?
Mr. BENTON. We have the refrigeration space for our products. But there is this factor that comes into the market situation, as it has existed since the twenties: Earlier than the twenties there was a disposition on the part of speculative buyers to buy in quantity and to store—especially in the East—for later on in the season. After the war and during the twenties that situation has greatly changed, until today almost the entire buying is hand-to-mouth buying. There are a number of trade practices that have come into this buying situation, such as what they call ex-cold-storage deliveries. It is a peculiar condition of the English buyer's state of mind; that the English buyers will pay more for fruit that is delivered "fresh," as they call it, from a ship than they will pay for that fruit if it is put into cold storage and then later sold from cold storage. This means that it is necessary to ship in small quantities to each port, shipping to each port the amount that that port can consume until the next shipment arrives— which is a matter of days and not of weeks. Thus you can see the impossibility of operating with hand-to-mouth buyers unless there is a constant and free flow of tonnage from our ports to all these ports of the world.
Our own local situation in the Hood River Valley is somewhat accentuated, and more so than it is in the other groups, because our tonnage is more largely export. An average of 10 to 50 percent of our tonnage is exported, and the figure has been as high as 80 percent of the entire crop. However, on the whole, about 60 percent of the crop
is consumed within the United States. Consequently we feel the pressure of these export difficulties more keenly than does the average farming and marketing group of this country.
The CHAIRMAN. Have you recently found less demand for American apples in England than formerly?
Mr. Benton. The demand for United States apples in England is now less than it was before they placed tariff restrictions. The tariff restrictions in England amount to 48 cents a box on our fruit, and that is often 50 percent of the f. o. b. value of the fruit. The Canadian shippers are selling, in other words, on a 48-cents-per-box differential.
The CHAIRMAN. I happened to be on the east coast of England immediately after the war, and I was surprised to find that they had filled in great areas of land, there, in the same way that Holland was redeemed, across the North Sea. And they were planting it to apples. The purpose
of my inquiry was to find out if those apples now have come into bearing, so that they have taken a material part of the English market.
Mr. BENTON. The apples that are grown in that kind of climate that exists in England--and the same situation applies regarding a similar climate in this country and in the rest of the world-are not the kind of apples that will keep. This kind of apples supplies the early market, in September, October, and November, before our apples can reach there. There is a very small amount of such apples marketed.
The CHAIRMAN. They were using the German prisoners to fill in that land. But, of course, from my standpoint there is no comparison between an American apple and an English apple; I would think they would also feature an American apple as much better.
Mr. BENTON. They do—and particularly in England, which is the largest importer of American fruits, anyway. There is more of an inclination to eat apples in their particular diet, in relation to citrus and other fruits, than there is any other place in the world. The American apple has a larger proportion of savor on the English tongue.
There are three or four basic thoughts in connection with legislation such as this which we feel should be clarified. Out there in the Northwest, now, for over a year we have been considering this problem of labor disputes in relation to transportation. And with that in mind, we believe the matter of responsibility on the part of the labor unions—responsibility which has to be placed on any group which becomes powerful enough to exercise its power without restraint-presents this situation: It is our judgment that this matter of responsibility should not be made financial. That method of defining responsibility was tried in England years ago and found not to work. In 1900, under the Taft. Vale decision, in connection with a strike on an English railroad, it was found necessary within a few years after that decision to abrogate that responsibility from the labor unions, in justice to their operations, on the whole. We feel that is good business; but we do feel that, in lieu of financial responsibility, some other type of responsibility must ultimately be placed on any group having the control which we anticipate the maritime and other labor unions will have in this country.