One of the principal reasons for this marked decline in employment in our domestic lumber industry is the importation of Canadian lumber. According to a report of the U.S. Department of Commerce imports of softwood lumber from Canada increased from 2,748 million board feet in 1954 to 3,941 million board feet in 1961. That is about 13.7 percent of our domestic production and current estimates indicate that Canadian imports exceed 17 percent of domestic production.

We find in the Northwest and particularly in southwest Washington that a decline in lumber employment is a major factor in an unemployment situation which has reached serious proportions.

I feel that these identical bills before the committee will be one step, and I emphasize it is only one step, toward solving part of this unemployment problem and removing a barrier which lumber shippers now find to be restrictive.

On the back page is a table which I would present for the committee's information, and again my appreciation for the courtesy of appearing at the hearing, Mr. Chairman.

(The table referred to follows:)

Exports of softwood to United Kingdom and Common Market

The CHAIRMAN. Do you happen to know whether any of this decline in employment is due to automation in the lumber mills?

Mrs. HANSEN. Not to a large extent, Mr. Chairman; some, but not to the extent that the competition has been and the inability to get into the world markets.

The thing that has happened in the Northwest is that we have not been able to get into as many world markets as we would like because of the competition from our northwest neighbor.

About 4 years ago, I was in Vancouver, British Columbia, and on the way there, I passed through the ports of Seattle, Everett, and Bellingham.

Ordinarily, as Congressman Tollefson knows, these are all tremendous lumber shipping areas. There were no ships in our ports loading. Yet in Vancouver the Fraser River was full of shipping, which indicated to me that a tremendous amount of commerce was going out through the Canadian port of Vancouver.

The CHAIRMAN. To what extent has the standing timber been cut out in this area?

Mrs. HANSEN. We have had a lot cut out, but, of course, the major sources of standing timber now are the State lands, which operate on a sustained-yield basis, the Federal lands, which operate under the Forest Service and they are also on a sustained-yield basis, and the private lands.

Particularly in southwest Washington, we have a sustained-yield program, so that for every tree that is cut from the land, there is a replacement of timber. I think you will remember that the national Christmas tree 2 years ago came from the first tree farm in the United States, which is in our district in Grays Harbor County, so although cutting has gone on, there is a constant replacement due to tree farming.

The CHAIRMAN. We are delighted to have you. Mr. Tollefson? Mr. TOLLEFSON. Mrs. Hansen, I have read your statement, which is a most excellent one. I have one thought in connection with it that I think the record should comment upon.

On page 3 you say that the U.S. Department of Commerce figures reveal that Canadian imports exceed 17 percent of domestic production. That includes lumber that is shipped out of Canada by both rail and ship?

Mrs. HANSEN. That is right.

Mr. TOLLEFSON. So far as the waterborne lumber cargo is concerned, isn't it true that Canadians have now captured about 70 percent of our former waterborne commerce going to the eastern seaboard of the United States?

Mrs. HANSEN. I am sure this is true, Congressman. As you well know, their waterborne commerce has grown tremendously.

Mr. TOLLEFSON. This is because they use foreign-flag ships?
Mrs. HANSEN. That is right.

Mr. TOLLEFSON. Which charge a lower rate than do American-flag ships, and our domestic lumber producers shipping lumber from the Pacific Northwest to the eastern seaboard must under the Jones Act, use American-flag ships?

Mrs. HANSEN. That is correct.

Mr. TOLLEFSON. However, this bill that we have before us today does not in any way seek to amend the Jones Act?

Mrs. HANSEN. Not at all, not at all. This is the one of the bills on which in the Northwest there is no disagreement between any groups of the lumber industry, and like any other industry, there are many segments of the industry.

There are also many portions of labor in the lumbering industry. This is one bill where I know of no antagonism or any difference of opinion on this bill or the necessity for it.

Mr. TOLLEFSON. I agree with you, Mrs. Hanson. I know of no opposition back there. This bill seeks to deal with the competition in the shipment of softwood lumber to the United Kingdom primarily.

The Canadians, as I understand it, have an open rate on lumber products to the United Kingdom. In other words, they can come to an agreement with the foreign-flag ship operator on any rate that they can agree upon.

It can fluctuate from day to day, and during the day several times as far as that is concerned. The American shipping to the United Kingdom on a foreign-flag ship must use the rate that has been approved by the Maritime Commission. Is that not right?

Mrs. HANSEN. That is right.

Mr. TOLLEFSON. And that rate is several dollars per thousand board feet higher than the Canadian producer has to pay to ship his lumber over to the United Kingdom. Isn't it true, Mrs. Hansen, that on the same foreign-flag ship it is not unusual to find Canadian lumber and American produced lumber with the American produced lumber paying a freight rate of from $8 or $9 per thousand board feet to $13 or $14 per thousand board feet?

Mrs. HANSEN. That I understand is true. I know you have a list of very distinguished and very able witnesses from many facets of industry who will testify on various phases of this thing. I might mention in passing that about a month ago the trade mission, and this was a self-financed mission by all groups of the industry in the Northwest, left for Europe and visited several nations there, and one of their major purposes-they were sponsored by the Department of Commerce and through the effort of the U.S. Government-was to get the United States into the export market, and one of their major problems encountered, they tell me, is the shipping, and they will testify on some of this later, I am sure.

I am sorry that I didn't bring the letter this morning from one of the very distinguished men who accompanied the trade mission relative to this. I think the important thing, Mr. Tollefson, that you and I in the Northwest, and I am sure the people throughout the United States, be they on the west coast, east coast, or the Southeast, are interested in is to keep America's place in the export market.

We have always been a Nation of trade and we continue to be a Nation of trade, and this is important to the economy of the United States. I think it has a deeper meaning, too. For every board foot of timber that we sell in the markets of the world, certainly that will be one less board foot that the Soviet countries will sell in the markets of the world, and I think this is of great importance now as we try to move into an export situation.

Mr. TOLLEFSON. I have no more questions, Mr. Chairman.
The CHAIRMAN. Thank you.

In connection with the questions I was asking you as to why this employment had decreased, you state, Mrs. Hansen, on page 2, after you give the figures showing the decline:

One of the principal reasons for this marked decline in employment in our domestic lumber industry is the importation of Canadian lumber.

Mrs. HANSEN. That is right. I thought I might as well state it. The CHAIRMAN. That is a matter of tariff, or is it a free product? Mrs. HANSEN. They are shipping on their boats out of Vancouver, British Columbia, to points on the east coast.

The CHAIRMAN. That is what has caused the decline in employment, the Canadian lumber?

Mrs. HANSEN. It is just one of the facets, Mr. Chairman. There are many facets to the unemployment situation. This is one. But the importation of the lumber from Canada is a major factor, and I am sure that southern mills and eastern industry have found this same situation because they have shared many meetings that we have attended together where this subject has been of major importance and has been a subject for discussion.

The CHAIRMAN. You say:

According to a report of the U.S. Department of Commerce, imports of softwood lumber from Canada increased from 2,748 million board feet in 1954 to 3,941 million board feet in 1961.

One from this might believe that the major trouble there is the import of lumber.

Mrs. HANSEN. It is one of the major troubles.

The CHAIRMAN. Instead of the rate problem?

Mrs. HANSEN. It is all of the problems together combined.

The CHAIRMAN. Which is the major problem?

Mrs. HANSEN. The major problem, as far as the mills that ship by water, is the tariff, the rate filing. Also, and you can't ignore it, the imports from Canada are of major importance. You can't discuss it without mentioning that.

The CHAIRMAN. It is a little difficult to understand, Mrs. Hansen, if Canadians can ship lumber into a lumber-producing area at this rate, how a lower tariff rate on export freight would cure the situation. Mr. TOLLEFSON. Would the gentleman yield?

The CHAIRMAN. Yes. I just wanted to clear that in the light of this statement.

Mr. TOLLEFSON. In Mrs. Hansen's statement she mentions in the first paragraph that there are several factors and we have endeavored to deal with the several factors separately by introducing different kinds of bills.

Mrs. HANSEN. That is right.

Mr. TOLLEFSON. And this is one of the bills that we have introduced which has had almost unanimous support and this is one that we think has the best chance of receiving favorable action, as it did on the Senate side, and I think Mrs. Hansen would agree with me that, while the importation of Canadian plywood into this country is a factor, nonetheless, it is important that our producers be permitted to compete with the Canadians in the United Kingdom market, and this is primarily what this bill attempts to do.

Mrs. HANSEN. That is right.

The CHAIRMAN. Mr. Casey?

Mr. CASEY. I don't believe I have any questions.
The CHAIRMAN. Mr. Glenn?

Mr. GLENN. I have no questions, Mr. Chairman.

The CHAIRMAN. Thank you very much.

Mrs. HANSEN. Thank you again, Mr. Chairman.

The CHAIRMAN. Thank you very much.

The next witness is Mr. Stakem, the Chairman of the Federal Maritime Commission.

STATEMENT OF THOMAS E. STAKEM, CHAIRMAN, FEDERAL MARI-
TIME COMMISSION; ACCOMPANIED BY JAMES L. PIMPER, GEN-
ERAL COUNSEL

Mr. STAKEM. Good morning, Mr. Chairman.
The CHAIRMAN. Good morning.

Mr. STAKEM. Mr. Chairman, I am happy to appear before your committee this morning on H.R. 1157, a bill to amend the Shipping Act, 1916, so as to exclude lumber from the tariff-filing requirements contained in section 18(b) (1) of that act. It is the Commission's opinion that the proposed amendment is unnecessary.

Under section 18(b) all common carriers and conferences of such carriers are required to file their tariffs with the Commission, and increases in rates must be filed 30 days in advance of their effective date while decreases in rates become effective when filed.

Section 18(b) authorizes the Commission to permit rate increases to become effective on less than 30 days' notice when good cause is shown. Under section 18(b) conferences and carriers may only charge the filed rate.

As the Commission understands it, the purpose of the proposed bill is to enable shippers of lumber from the west coast to compete more effectively with their competitors shipping lumber out of Canada. It is urged that the requirements of section 18 (b) (1) prevent the common carries and conferences serving our west coast shippers of lumber from meeting the rate competition of "tramp" operators and unregulated carriers serving Canada, and the resulting disparity of rates in favor of Canadian shippers places our shippers at a competitive disadvantage.

The Commission believes that the objective sought by the bill can be achieved under the present statute and the procedures which the Commission has adopted for the administration of its requirements. Under the Commission's present rules governing the filing of rates, any decrease in rates may be filed by telegram or cable and the rate becomes effective when received by the Commission.

Thus, any decreases in rates put into effect by "tramps" or Canadian operators can be immediately met by the carriers or conferences serving our west coast trades.

In addition, the Commission under section 18 (b) (2) is authorized upon a showing of good cause to permit increases in rates to become effective on less than 30 days' advance filing notice.

Here, again, these requests for increases on less than 30 days' notice may be filed by telegram or cable, and the Commission has delegated the authority to grant special permission to a staff committee.

Past experience has shown that this committee can and does handle these rate requests most expeditiously. Our records indicate that only one request to increase rates on lumber on less than 30 days' notice has been received by the Commission. In this case, permission for the increase was granted the same date it was received and the rate requested went into effect that day.

Tariff filings do not indicate that there have been any substantial number of rate changes in the Pacific coast lumber trade. This