Mr. REECE. About their losing the freight

Mr. DELONG (interposing). And, the point I am trying to make is this, that they are keeping their rates so unreasonably high that they are turning the business over to the trucks. In other words, they are going to wake up some day and find that the horse is gone, and then they will lock up the stable.

Mr. REECE. Now, that is all occurring under the fourth section as it now stands.

Mr. DELONG. Yes; and it will be aggravated if the fourth section is repealed. That is the point I am trying to make; it will be aggravated if the fourth section is repealed..

Mr. REECE. You are making the argument against the present rates which are now charged, but I am unable to see how that has any application with reference to the repeal of the long-and-short-haul clause except on the assumption that in establishing the competitive rates in a competitive area, the railroads are going to deplete their resources and make it further necessary to raise the rates, which you say are already so high as to deprive them of the traffic in the interior, and that is a rather violent assumption when you consider that the railroad managements have no interests to serve except protecting the interests of the lines.

Mr. DELONG. Mr. Reece, I do not think-I do not want to be impertinent but I do not think it is a violent assumption when you consider the fact that we have just gone through a battle with the railroads in which they asked for a 10 per cent increase, and we are facing two increases at the present time in our territory, and I will say further, we have had them continually to come back, trying to raise our rates. They are trying to raise our rates every day.

It is true I am here arguing against high rates, and I admit it, and they will continue to raise them. Why? Because of the fact that they have lost traffic to the trucks, short-haul traffic to the trucks, and they have lost traffic to the boats, and now they want to throw the bars down and go out and have an open battle with the boats.

The farmers of the State of Idaho have the very deepest feeling for the railroad employees, and are exceedingly anxious that their numbers be increased rather than decreased, and our able chief of transportation for the Public Utilities Commission, Mr. Root, has introduced an exhibit to show the decrease in employment on the Oregon Short Line, a branch of the Union Pacific that serves the territory which I have described, and has called your attention to the, fact that our freight is now being moved through increased efficiency as one of the reasons there is less employment on the railroad itself. But one of the other reasons for less employment is the fact that a great many men are now engaged in coming into Idaho buying commodities direct, either from the dealer or the producer, hauling them to destination, and selling them to the consumer.

We will grant the railroads' contention that he works long hours; that he has no large pay roll; that he does not take into consideration any depreciation of his equipment. But he still makes himself and his family a living, is performing a service to the producer, and is keeping himself off of the Government relief rolls, and has come to stay as a part of the distribution of the commodities produced on the farms of the United States, and particularly in our western territory.

In passing, I want to mention also the fact that in Idaho we produced from 60,000 to 75,000 acres of sugar beets. While I understand that some of the sugar companies have appeared before your honorable committee in support of this bill from the standpoint of the sugar companies, the sugar beet producrs in the State of Idaho realize that while they might receive some benefits so far as sugar is concerned, they question whether they would not suffer a greater detriment in the increased cost of the supplies which they would have to pay in the way of machinery and other equipment that is moved into our territory.

In support of the statement which I have just made, I am compelled to go back to the time and the condition that existed prior to the amendment of the fourth section of the Transportation Act in 1920. At that time we were operating under conditions that the proponents of this bill would now put us back to, and we cannot, from Idaho, agree to their statement of the fact that competition would prevent them from raising their rates to the intermediate points, or would not discriminate.

At that time we found that on our machinery and implements we were charged a rate through our territory to the Pacific coast and back into the territory from the coast. And it is impossible that the rate could be and would be as cheap as the rate that now exists in the territory which is at the present time exceptionally high.

Prior to 1920 I will admit that, so far as perishable commodities are concerned, we did not have a great deal of difficulty with the fourth section, as it then existed, due to the fact that there was a market on the west coast for practically all of the perishable commodities grown west of us, and, due to the further fact that prior to the horizontal increase in freight rates, Idaho enjoyed a reasonable rate to her eastern markets, and she, too, was not producing in the volume she is today, and the volume she must produce today in order to exist.

The producers feel as if this bill, if it becomes a law, we will have discrimination by the railroads in the matter of handling freight rates, insofar as the long and short haul is concerned, the same as they have suffered during years not far distant in other matters.

Mr. MARTIN. Right there.

Mr. DELONG. Yes, sir.

Mr. MARTIN. What caused the slump in your commodities, after 1920, to the coast? You state, prior to 1920, so far as perishable commodities were concerned

we did not have a great deal of difficulty with the fourth section as it then existed in the fact that there was a market on the west coast for practically all of the perishable commodities grown west of us.

That was before the tightening up under the long-and-short-haul clause and that statement would indicate you have lost your market there since the long-and-short-haul clause has been tightened up, and I am wondering what caused you to lose it.

Mr. DELONG. I do not want that statement to have that effect. There was a market on the west coast for practically all of the perishable commodities grown on the west coast.

I want to call your attention to this fact that prior to 1920 Idaho and Washington, and Oregon, were not such large producers as they

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 discrimi nation 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 hackbone and. indeed, the vital and sub