better picture for transportation. What effect would a 30-day suspension of the movement of CCC grain have? Mr. BALLOU. I imagine you would probably get an increased number of letters over and above what you are now getting, frankly. The CHAIRMAN. Why would that occur? Mr. BALLOU. For the simple reason that usually Commodity Credit Corporation is actually the biggest factor in blocking your country elevators. In other words, we own a tremendous quantity of grain that is located out there in the country that the farmer wants to deliver his 1955 newly harvested grain to. He cannot get into that elevator because the Commodity Credit Corporation has its grain in there, and we have got it blocked. We would like to get more grain out, and we would like to make that space available for the producers. If we just quit shipping, if we just do not move our grain, you are going to have a really tough situation. Senator MONRONEY. And you say you cannot move it until February 28 and March 31, until you take title? Mr. BALLOU. That is right. Senator MONRONEY. Could you not figure the farmer has title to the grain up to that time, but move the physical grain to the seaboard, thereby unblocking the elevators, along about the middle of February or the end of January-I mean give yourself more time for the movement-by giving him a warehouse receipt for the amount of the grain? Mr. BALLOU. I do not know what your attitude as a producer might be, but I think normally speaking, the producer thinks the closer to home he can keep it, the better off at least he feels he is, and he has a greater opportunity to take advantage of a good market, because once you get it down at the end of the line, there is no other place to go; but he does have more flexibility closer to home; as far as markets are concerned. Senator MONRONEY. If it is there in his own elevator, he can look after it? Mr. BALLOU. Yes; that is exactly it. Senator MONRONEY. It is a physical impossibility to move all that grain- Mr. BALLOU. No. Senator MONRONEY. Are there steps taken to have it ready to move on March 31? You know what you are going to take over. Can you have your cars mixed to where there is a terrific movement that begins on that day? Mr. BALLOU. We take title to that grain at midnight, March 31. We have loading orders prepared in advance. They are ready to be mailed the minute we get title to that grain, and there is just no lost motion along the line. Senator MONRONEY. And the only thing you want is to get more boxcars? Mr. BALLOU. Yes, sir. The CHAIRMAN. If it was moved up to February 28, you would have a little better flexibility on movement, would you not? Mr. BALLOU. That is right; but as I pointed out, you are cutting off the producer from the possibility of getting that better price. The CHAIRMAN. You want to give him time? Mr. BALLOU. We want to give him as long as we can and still work this thing out reasonably well. The CHAIRMAN. Are there any further questions? Senator MONRONEY. No. The CHAIRMAN. Thank you for coming up. Off the record. (Thereupon, there was a discussion off the record.) The CHAIRMAN. At this time, I would like to include in the record the following: A letter from Senators Murray and Mansfield and Congressman Metcalf; a letter from Senator Bridges to Senator Smathers; a letter to Senator Neuberger; a letter from Senator Morse. (The above-mentioned documents are as follows:) UNITED STATES SENATE, COMMITTEE ON INTERIOR AND INSULAR AFFAIRS, June 17, 1955. Hon. WARREN G. MAGNUSON, Chairman, Committee on Interstate and Foreign Commerce, United States Senate, Washington, D. C. DEAR WARREN: Members of the Senate and House from the Northwest have been receiving numerous telegrams and letters documenting the boxcar shortage in various wheat-producing areas, as you well know. This boxcar shortage is of course nothing new. It has been aggravated this year, according to the Chairman of the Interstate Commerce Commission, by a heavy movement of freight, big demand for lumber cars on the west coast, a truck strike on the west coast, now settled, and delays in unloading cars at terminal ports. The main reason, according to the ICC Chairman, is simply that "there are not sufficient cars.' According to statistics compiled by the Association of American Railroads during 4 of the past 6 calendar years the number of boxcars retired has exceeded the number of new boxcars installed. During the first 4 months of 1955 the rate of retirement again exceeded the rate of new installations. The figures are as follows: This decrease in the number of boxcars is off set by the conversion of other types of cars to permit their use for grain hauling. Nevertheless, we are disturbed by the fact that, despite growing needs for transportation, the supply of cars available is not keeping up with the demand. We are concerned, too, over the effect this boxcar shortage would have on our national defense were there to be another "Korea." Other questions which come to mind regarding this problem are: What effect would the restrictions on the ICC proposed in the President's Cabinet report on transportation policy, now before your committee in S. 1920, have on the boxcar shortage, if enacted into law? And what effect would the recommendations of the Hoover Commission, if carried out, have on the situation? The boxcar shortage is not a temporary problem. It is a perennial problem which disrupts the economic life of the Northwest and, in fact, most parts of the country. It is a problem which could seriously impair the defense of this country in a national emergency. For these reasons we respectfully request that your committee consider conducting an investigation of the boxcar shortage. We make this proposal without prejudice against any group connected with the problem, in the hope that from 66148-55 your committee's investigation would proceed recommendations or laws which would improve the Nation's economy and national defense. Sincerely yours, Hon. STYLES BRIDGES, United States Senate, Washington, D. C. DEAR SENATOR BRIDGES: In reply to Mr. King's letter of June 13, I am enclosing copy of a letter which I have received from the Interstate Commerce Commission answering the letter of James L. Bickford, president of the TollesBickford Lumber Co., Inc., 20-30 Quincy St., Nashua, N. H. I trust that the Commission's letter will permit you to make a satisfactory reply to Mr. Bickford in connection with the shortage of boxcars. Sincerely yours, GEROGE A. SMATHERS, Chairman, Surface Transportation Subcommittee. INTERSTATE COMMERCE COMMISSION, OFFICE OF THE CHAIRMAN, Hon. GEORGE A. SMATHERS, Chairman, Subcommittee on Surface Transportation, United States Senate, Washington, D. C. MY DEAR CHAIRMAN: This will acknowledge receipt of your letter of June 14, transmitting copy of letter addressed to Senator H. Styles Bridges by Mr. James L. Bickford, president, Tolles-Bickford Lumber Co., Inc., 20-30 Quincy Street, Nashua, N. H., dated June 6, concerning the boxcar shortage. The Commission is well aware of the shortage of boxcars, not only in the lumber and plywood industry, but also in the wheat areas of the country. This has been brought about by several things. A strike involving 90 percent of the trucking industry in 11 Western States went on for a period of 22 days. We are glad to report the strike has now been settled, but during that time freight ordinarily hauled by truck had to be carried by rail. The demand for boxcars in the lumber area has been very heavy and the demand for cars in the wheat sections of the country is also extremely heavy. In view of the increased business throughout the Nation, and the truck strike, there just are not enough boxcars to go around. You may rest assured the Commission is doing all in its power to relieve the situation. Your enclosure is returned. With kindest regards, I remain RICHARD F. MITCHELL, Chairman. TOLLES-BICKFORD LUMBER CO., INC., Senator H. STYLES BRIDGES, Washington, D. C. DEAR SENATOR BRIDGES: The great increase in the use of plywood for building construction has created the need of boxcars for shipment, mainly from the Northwest, class A boxcars. We are informed that 800 cars daily are required. Also information is received that in the State of Oregon 43 cars, or 5 percent, of their requirement is ther allotment. Telephone June 2 states that three large plywood mills were closed down because they have been unable to get cars to ship stock in. They say that in only a short time more mills will be obliged to shut down for lack of boxcars. We trust that some method may be evolved toward getting relief to ease this situation. Sincerely, JAMES L. BICKFORD, President. Hon. RICHARD F. MITCHELL, JUNE 14, 1955. Chairman, Interstate Commerce Commission, Washington, D. C. DEAR CHAIRMAN MITCHELL: Senator Bridges has forwarded me the enclosed copy of a letter from Tolles-Bickford Lumber Co., Inc., 20-30 Quincy Street, Nashua, N. H., relative to the boxcar shortage. Will you please let me have a report on this situation in order that I may reply to Senator Bridges. Sincerely yours, GEORGE A. SMATHERS, Chairman, Subcommittee Surface Transportation. UNITED STATES SENATE, June 13, 1955. SUBCOMMITTEE ON INTERSTATE COMMERCE, Senate Office Building, Washington, D. C. (Attention: Mr. Baynton.) DEAR MR. BAYNTON: Pursuant to our telephone conversation, I am sending you the attached letter to Senator Bridges from the Tolles-Bickford Lumber Co., Inc., in Nashua, N. H. I would appreciate your addressing a reply to Senator Bridges after you have had a report from the Interstate Commerce Commission. Sincerely yours, EDMUND T. KING, Hon. WARREN G. MAGNUSON, UNITED STATES SENATE, COMMITTEE ON FOREIGN RELATIONS, Chairman, Committee on Interstate and Foreign Commerce, United States Senate, Washington, D. C. June 15, 1955. DEAR MAGGIE: Enclosed is a letter dated June 6 from Herbert J. Cox, of Eugene, Oreg., concerning the annual car shortage in Oregon. This is a close personal friend, and I would appreciate any assistance you can render. With kindest regards, WAYNE MORSE. LUMBERMEN'S BUYING SERVICE, Hon. WAYNE MORSE, United States Senator From Oregon, Senate Office Building, Washington, D. C. DEAR WAYNE: During the 47 years that I have been actively engaged in the western Oregon forest products industry we have been afflicted with an annual car shortage of more or less severity on the Oregon lines of the Southern Pacific Co. During the early days when the industry was much smaller and Oregon's population much less the implied and expressed attitude of the Southern Pacific Co. was, "The public be damned," and they took the position that inasmuch as they were the only railroad serving western Oregon and had our vast reservoir of timber completely bottled, the lumber industry would have to wait until transportation suited their convenience. The State of Washington is served by several transcontinental railroads whereas western Oregon, south of Portland, is dependent on the Southern Pacific and a Toonerville-type of feeder line for the Northern Pacific railroad. This line is known as the Oregon Electric with service limited to a specific area in the north central part of western Oregon. In central Oregon where the Southern Pacific and the Northern lines operate as common users over one rail line, empty car supply is always much less serious during periods of acute shortages. The same situation prevails in western Oregon at shipping points where the Southern Pacific meets the competition of Northern railroads. In past years a goodly supply of cars were offered Oregon shippers by Washington railroads provided such cars after loading would be routed from Oregon through the Portland gateway so as to give the supplying railroads the long haul over their own line. The friendly Southern Pacific would never agree to relinquish the long haul but insisted on moving through the Ogden gateway or via El Paso, Tex. During the past few years the Southern Pacific Co. has shown slight symptoms of interest in meeting its transportation obligations to the people of Oregon. Although they have purchased a sizable number of new freight cars the magnitude of the forest products industry, with principal markets in the Midwest and East, requires that the bulk of cars be furnished by Midwest and eastern connecting line railroads. Eastern railroads have deliberately allowed their car ownership to dwindle and cars are being retired much faster than replaced. Consequently, a national crisis has developed. Public utilities such as telephone, electrical, water, and so forth, would not dare to ignore public necessity. But apparently railroads can do about as they please and undoubtedly the powers of the Interstate Commerce Commission are limited. Nevertheless the situation could be materially alleviated if eastern railroads were compelled to turn over cars to the Southern Pacific. The efficient and equitable distribution would make cars available in substantial volume to the forest products industry, and at least alleviate presently existing conditions which are rapidly becoming worse. The Commodity Credit Corporation is using several thousand cars to shuttle mortgaged unsold grain back and forth from temporary storage points. Annual car shortages will exist until the Nation's railroads own sufficient transportation equipment and this will never happen of their own accord. The solution is national legislation empowering some Government agency to carry out the following provisions which represent the opinions of prominent industry leaders. "Each railroad shall be assessed percentagewise according to its freight revenue, and this assessment shall be in lieu of expenditures now being made by the railroads to build empty freight cars. Each road would continue to build its cars, or have them built by the carbuilders, and the roads of course would own their cars. The Government agency would merely see to it that all of the money was spent each year for the building of freight cars. The assessment would be a little more than the roads are now spending for car building. Freight rates should be raised slightly, so that the public would have a hand in helping out, as the public would also benefit. The method named of combining the heavier assess ment with the freight-rate increase would supply enough funds to permit the building up of the car supply, and the maintaining of an adequate supply in the future. This does not mean Government interference in any way with the operations of the railroads; it only means that there will be enough cars in the future to handle the commerce of the country in times of peace, to say nothing of something to go on in case of national emergency. The railroads cannot be expected to build sufficient cars otherwise, because it is only natural that each railroad will hold back, waiting for the other railroads to build the cars." The country is growing, in commerce, industry, and population and I am sure that the railroads of the country want to keep pace with the needs of the people for railroad service. All that is needed is equitable and fair compulsion. Unquestionably your leadership in the enactment of this necessary remedial legislation, as outlined above, will represent your greatest contribution in the public interest and I am sure that you will receive the gratitude of the people of Oregon. I would publicly announce now that I was preparing a bill for congressional consideration and action. You can easily obtain from the Government archives and from the industry, factual data as well as personal and industry support for such legislation. Kindest personal regards and best wishes. Hon. RICHARD NEUBERGER, The United States Senate, Washington, D. C. H. J. Cox. JUNE 14, 1955. DEAR MR. NEUBERGER: We appreciate the efforts which you, as well as all other interested people in Washington, D. C., including associations and com |