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are today. There was enough population there to consume what we were producing.

Up to 1920, I think, our largest shipment-I thought I had it here but I have not-was about 15,000 or 16,000 cars of potatoes. We, had a rate at that time to Chicago, from Idaho Falls of either 50 or 55 cents per hundred. We had a very reasonable rate into Texas and we had an outlet to the east of us for our commodities, whereas in the Oregon and Washington territory what potatoes were produced were consumed west of us.

Since that time they have increased their production. There have been new territories come in, the same as we have increased our production and they now have a surplus to contend with, both west of us in California and in our own territory.

Mr. MARTIN. Is it the new production, new territories brought into production and not the long-and-short-haul clause that has made the difference to your marketing of your products?

Mr. DELONG. Well, at that time, as I say, we had a very reasonable rate and of course the question of the fourth section did not enter into it very materially, because there was nothing to speak of west of us to come through us and we were paying the eastern rate which was the high rate, and we did not have the trouble finding the outlet that we do today, and we also had enjoyed rather more of a market in Texas and Oklahoma, Kansas and Nebraska, than we do today. They, too, had developed considerably during that period, whereas, I believe your State has reduced its production some since that time.

Mr. MARTIN. While you are interrupted there: I asked you a question this morning about the great depreciation in your acreage. Mr. DELONG. In apples.

Mr. MARTIN. Yes.

Mr. DELONG. Yes.

Mr. MARTIN. I want to ask one more question.

Mr. DELONG. I will be glad to answer it if I can.

Mr. MARTIN. That is on page 3 of your memorandum.

Mr. DELONG. Yes, sir.

Mr. MARTIN. I notice that you have increased your carlot output of potatoes about 7,000 cars in the last 3- or 4-year-period as compared with the 3- or 4-year period prior to that time.

Mr. DELONG. We have.

Mr. MARTIN. It went up from

Mr. DELONG. It went up from twenty to about twenty-seven thousand cars.

Mr. MARTIN. It went up from about twenty to twenty-seven thousand cars.

Mr. DELONG. That is correct. And that also is due to the fact that we have had more territory developed. We have had more water developed in the Snake River Valley during that period. Also due to other facts that other commodities, such as beans and onions, were not paying. In our territory we find the tendency is to go to potatoes when some of the other crops fall off; also by reason of the fact that we have developed a potato that is grown more in the eastern section of the United States. They have gone to producing more of them. Our potatoes sell at a very high premium in the Eastern States.

During the past we have had considerable trouble with discrimination and I refer to it not so much in argument against

Mr. PETTENGILL. Mr. DeLong, I am sorry to interrupt you at this point, but you have run over your time.

Mr. DELONG. I will finish very quickly.

In connection with this statement, I wish to call your attention to the fact that from 1912 to 1922, inclusive, Idaho, by reason of the fact that she had no competition, suffered untold injury by reason of discrimination in car service. In fact, it went so far that this honorable body-the United States Congress-passed a resolution, at the request of the late Senator Gooding, requiring the Interstate Commerce Commission to hold a hearing and determine whether or not something could not be done to correct the situation in Idaho and other parts of the United States. During this period I was actively engaged in shipping potatoes from the State of Idaho and I know of my own knowledge that in the early part of the deal every year our carrier moved trainload after trainload of empty refrigerators into Washington and Oregon territory where there was competition and moved their potatoes, apples, and onions to market, while Idaho had to wait until that movement was largely over and were even compelled to move their potatoes to market in box cars instead of refrigerators.

I am not citing this as an evil that is corrected by the fourth section, but I am citing it because we in Idaho feel that if you remove the fourth section as it now exists we will have to meet the same discrimination in rates that we met in car service, because we have no competition to speak of for the railroads and on account of our distance from market, the territory through which we have to haul during the winter months, it is impossible for use to ever have any great competition developed. For these reasons on behalf of the producers of the State of Idaho we want you to give this your most serious consideration.

Another matter has been mentioned in the course of these hearings and that is the amount of taxes the railroads are paying, particularly with reference to the upkeep of the highways and the maintenance of our State and county governments. I cannot speak for any territory outside of the State of Idaho. However, insofar as the Union Pacific is concerned in the State of Idaho, we find that from 1913 to 1932 their taxes were increased 68 percent. This looks like a material increase. However, I desire to call your attention to the fact that during the same period of years the taxes on the producer in the State of Idaho were increased 201 and a fraction percent, or approximately three times the increase that the railroads are complaining of. I wish to call your attention to the further fact that the highways in the State of Idaho are largely built and maintained by the gasoline tax which is 5 cents a gallon in the State, 1 cent per gallon to the National Government, together with the Federal aid received and not on direct taxation.

In closing, gentlemen, let me state I feel I have only partially covered the conditions affecting the producer, but I hope I have given you a picture of some of their problems. Permit me to call your attention to just one more fact and that is our railroads are still enjoying rates equivalent to 133 percent-pre-war rates-while your producer is receiving around 68 to 70 percent on his commodities and

what he purchases is daily advancing. He cannot exist much longer under this condition, and it is for him that we urge your most earnest consideration of any matter that might increase the cost or affect the transportation of his commodities, or might destroy any of his present markets.

Thus far I have only touched upon our conditions as they now exist and not what may happen when some of the larger Government projects in the West are completed. I feel, however, I have imposed at some length upon your time but must request on behalf of all the farmers of Idaho that this bill be reported to the general committee unfavorably.

I would like to call attention to one or two statements.
Mr. PETTENGILL. Go ahead.

Mr. DELONG. I notice that some attention has been called to the matter of taxes. I can only speak so far as the State of Idaho is concerned. From 1913 to 1932, the taxes on the Union Pacific system which is the only road serving our territory was increased 68 percent. This looks like a material increase. However, I desire to call your attention to the fact that during the same period of years, the taxes of the producers in the State of Idaho were increased 201 and a fraction percent.

I also want to call your attention to the further fact that the highways in the State of Idaho are maintained largely by the gasoline taxes, which is 5 cents a gallon, and I just have one other fact to state and that is that our railroads are still enjoying rates equivalent to 133 percent of pre-war rates, while our producers are receiving around 68 to 75 percent. It has been fluctuating back and forth, and we are also paying more for the commodities we buy.

Now, we feel that the growers cannot exist much longer under that condition, and we do not want any aggravation of that condition. I wish to thank you gentlemen.

Mr. PETTENGILL. Thank you.

STATEMENT OF MR. R. J. BAKER, PRESIDENT OF THE AMERICAN STEAMSHIP OWNERS' ASSOCIATION, 11 BROADWAY, NEW YORK, N. Y.

Mr. PETTENGILL. We will hear you, Mr. Baker.

Mr. BAKER. Mr. Chairman and gentlemen of the committee: My name is R. J. Baker. I am president of the American Steamship Owners' Association, with offices at 11 Broadway, New York, and appear for that organization in opposition to the enactment of H. R. 3263, H. R. 5362, and H. R. 3610, all having for their purpose the amendment of the fourth section of the Interstate Commerce Act. The American Steamship Owners' Association is a voluntary association, composed of 72 steamship companies which own in excess of 4,484,982 gross tons of shipping, all registered under the American flag and engaged in what is generally termed as deep sea trades; by that I mean the foreign, intercoastal and coastwise trades. Twentysix of our companies operate in the Atlantic and Gulf of Mexico coastwise trade a total of 259 steamers of approximately 1,000,000 gross tons and 10 of our companies operate in the intercoastal trades 109 vessels of 787,388 gross tons. That aggregation of tonnage, Mr. Chairman represents the backbone and. indeed, the vital and sub

stantial part of our American merchant marine. It is aside and apart from that vast tonnage comprising our fleets on inland waterways, rivers and lakes, for which I am not undertaking to speak. I will file with the committee a list of the lines which are members of the association.

The American shipowner is intensely concerned in the proposals before this committee. The repeal of the fourth section of the Interstate Commerce Act, as amended, would bring chaos upon the shippin ndustry. We believe it would be most destructive of a basic tras ortation instrumentality of vital interest to the public, and the injur that would result by the repeal of the fourth section would be more far-reaching in its effect than, we fear, is generally appreciated. With this conviction deeply rooted in our minds, with shipping being one of the oldest forms of transportation in the history of mankind, with the vehicles with which this transportation is performed being also of vital interest to the Government as a means of national defense, in addition to the great service to the shippers of the country, Congress should analyze most carefully the representations that have been made and will yet be presented to it by various branches of the shipping industry.

The committee has already had explained by testimony in opposition to the repeal of the fourth section, with which we concur, that in the development of this great country of ours, the Congress of the United States has always shown intense interest in providing means of utilizing our natural resources in the shape of waterways and in encouraging through large appropriations the development of water transportation so that the country would be provided with the most economical mode of transporting from place to place the products of the soil and the manufactured articles produced in various parts of the country. It is the most economical form of transportation, and, therefore, is able to transport for less than competing forms of transportation. It cannot be taken for granted that the entire traffic of the water lines has been diverted from the railroads. The water lines themselves have been instrumental in developing large movements that have never moved-and probably could never move-at the higher rates of other forms of transportation.

Anything, therefore, that will militate against the continued use of this economical, dependable means of communication, should be weighed most carefully before action is taken that would be destructive of its continued use and enjoyment.

Water transportation as a competitor of the rails-that is, in the transportation of competitive commodities-handles such an infinitesimal part of the commerce of this country that if the entire amount of transportation indulged in by water carriers were turned over to the railroads, it would prove negligible, and yet in the loss of that commerce, negligible in amount to the railroads, a great industry employing hundreds of thousands of men both directly and indirectly would be destroyed. Believing this, as we conscientiously do, you can understand our concern.

The water carriers have suffered tremendously as a result of the depression. Hundreds of ships have been in lay-up awaiting the return of more nearly normal conditions so that it must not be assumed that while the railroads were suffering through loss of traffic in consequence of this Nation-wide depression, this traffic is being

transferred to the water carriers, and that the latter are benefiting to the detriment of the rails. That is not so. In times of depression more economical forms of transportation are favored of necessity and continue to carry the necessities of life whereas the consumption is less with respect to items falling into the luxury classes that generally move by the higher cost and more expeditious methods of transportation.

I am not going into detail concerning the various forms of water transportation mediums that exist but refer the committee to the comprehensive report of Commissioner Eastman in Senate Document 152. I want to record with the committee the fact that the policy of the United States to have a merchant marine has been demonstrated and declared on so many occasions that further reference would seem unnecessary. We call attention to the fact that the large percetange of American vessels trading between domestic ports are even more quickly available and potential for national defense than are vessels in the overseas trade, and as a matter of fact constituted the only tonnage available when the World War broke out. Congress has repeatedly declared that

it is necessary for the national defense and for the proper growth of its foreign and domestic commerce

that we have a merchant marine. I believe that, generally, three could be said of steamship services what Coordinator Eastman commented with respect to the Atlantic-Gulf common carrier group. He said:

This trade route, connecting the North Atlantic States and the vast territory of the South and Southwest, is one of the more important of our domestic traffic lanes and provides cheap and efficient transportation for an ever-increasing commerce (p. 109, S. Doc. 152).

In section 500 of the Transportation Act, 1920, Congress, after careful study, declared it to be its policy

to promote, encourage, and develop water transportation, service, and facilities in connection with the commerce of the United States, and to foster and preserve in full vigor both rail and water transportation.

Yet attempts are now being made, to which Congress is asked to lend its cooperation, to exterminate water transportation.

In their support of this legislation, it appears to us that the railroads have resorted, in large part, to an appeal to a sense of fairness and sportsmanship to the end that the roads request the lifting of what they deem a restrictive, discriminatory, and oppressive handicap in section 4 of the Interstate Commerce Act. They state that they seek only such relief in the repeal of this section as will enable them fairly to compete for a reasonable share of the domestic waterborne commerce. Just what a "reasonable share" is has not been defined.

In our opinion, the railroad support of this legislation resting on such an appeal reveals a startling lack of candor and directness. The roads, we think, have not stated fully to this committee what their aims really are in advocating this legislation.

Mr. PETTENGILL. What do you think their aims really are?
Mr. BAKER. To annihilate water carriers.

Mr. REECE. Do you think that the Interstate Commerce Com mission would permit them to set rates which would do that?

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