STATEMENT OF HON. D. R. (BILLY) MATTHEWS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA-Resumed Mr. MATTHEWs. Thank you, sir. Mr. Chairman, first of all I want to thank you for this privilege of appearing before you this morning. Here at the outset I would like to say, as my other colleagues from Florida have, that Mr. James Golden, who is the legislative assistant of our senior Senator, Senator Holland, is here and I would like permission at this point in the record to insert a statement by Senator Holland which will be brought to the commitee in a day or two. Mr. ANGELL. Without objection that permission will be granted. (The statement of Senator Holland is as follows:) STATEMENT OF SPESSARD L. HOLLAND, UNITED STATES SENATOR FROM THE STATE OF FLORIDA, 82D CONGRESS Mr. Chairman, I am grateful for the opportunity to file a statement for the record in support of the Rice Creek project in Florida, as recommended by the Corps of Engineers in House Document 446, 82d Congress. Rice Creek is a small creek in Putnam County, Fla., about 10 miles long which flows through low, swampy, and deeply forested lands and discharges into St. Johns River at a point about 3.5 miles north of Palatka, Fla. It is approximately 200 feet wide from the St. Johns River for a distance of about 2.2 miles and then narrows to approximately 80 feet in width. Channel depths in the navigable portion of the stream range from 10' to 40' with the controlling depth across the bar at the mouth 6.6 feet. The creek is crooked and after it narrows to a width of 80 feet, it is partially obstructed by logs, overhanging trees and other debris. Branching off at a point 2.6 miles from the mouth of the creek is an access channel 10 feet deep, 90 feet wide and 1,400 feet long, excavated by the Hudson Pulp & Paper Corp., which leads to a turning basin of like depth adjacent to the paper mill. The Hudson & Paper Corp. has provided 300 feet of marginal berthing space at their turning basin which is open to all on equal terms. It is true, as brought out in the report, that a major part of the benefits from this project would accrue to a single corporation, but it is likewise true that some of the benefits will have a general aspect due to the fact that more economical operation of the paper mill will permit the Hudson Pulp & Paper Corp. to reduce prices in a highly competitive market. It will alo permit the purchase of pulpwood from areas presently economically inaccessible which would benefit the general public through increasing utilization of natural resources. However, it is solely for the reason that one corporation will receive a major portion of the benefits that that corporation will be required to pay one-half the cost of construction and make other commitments to the United States. The recommended project would improve Rice Creek, Fla., by providing a channel 12 feet deep and 100 feet wide from Beacon No. 64 in the St. Johns River to the mouth of Rice Creek, and thence 75 feet wide to the access channel of the Hudson Pulp & Paper Corp. except through the railroad and highway bridges, including a cutoff and suitable straightening, widenng, and snagging with such modifications thereof as in the discretion of the Chief of Engineers may be advisable. The estimated cost to the United States will be $84,600 for construction. The cash contribution on the part of local interests of approximately 50 percent of the construction cost of the channel is estimated at $83,600, plus the furnishing, without cost to the United States, of all lands, easements, rights-ofway, and suitable spoil-disposal areas necessary for initial construction. The benefit-to-cost ratio is 10.2 to 1. This project has been recommended by representatives of the Putnam County Chamber of Commerce, the town of Palatka, and many others because of the vital importance of this corporation to the economy of that section of Florida. It is my understanding that this corporation is Putnam County's largest industry and employs about 1,400 people with a payroll, including woods operations, of approximately $7,500,000 annually. I have been advised that a multiwall bag section is being added to the mill at a cost of $150,000 which will require the employment of an additional 200 people to operate. Mr. Chairman, I am in accord with the recommendation of the engineers and I hope that the committee will favorably report this project. Mr. MATTHEWS. Mr. Chairman, my interest comes from the interest of the people in Putnam County and the people in the adjoining area who expressed to me their conviction that this project would mean a lot to their county and to the people of the counties adjoining Putnam County in which we find Rice Creek. I would like to read a portion of a letter I received from the mayor of the city of Palatka, Mr. James H. Millikan, Jr. He says: I would appreciate it if you would do everything you can to see that this important piece of legislation is carried out. The people of this area would be very happy if this industry could be assisted and the navigation improved as they have suggested. Then I have portions of a letter I would like to read from Mr. Bush, manager of the Putnam County Chamber of Commerce, in which he says: The improvement is highly desirable and very necessary to improve Hudson Corp. operations-and I would like to emphasize this-for the general benefit of the community. As you very likely know, the Hudson Corp. is Putnam County's largest industry. It employs about 1,500 people and has a payroll including woods operations of upwards of $7% million annually. The corporation is now building a $150,000 addition to the multiwall bag sack, and when completed will employ 200 more people. We feel quite sure you will assist the Hudson Corp., our city and county in getting this much needed waterway improvement at Rice Creek. Mr. Chairman, I would like to point out that this great corporation is actually the lifeblood of Putnam County, which is one of the 15 counties in my district. I have the high honor of representing in Florida the Eighth District, which you might call the pine-tree district of Florida. I know some of you are familiar with the development of the pine-tree industry. Four of the eight paper mills in Florida are located in my Eighth Congressional District. Along Rice Creek we find many little private owners of timberlands who I am sure will take advantage of the improved navigation possibilities if they are effected, to ship some of their pulp wood into the Hudson Corp.'s mill at Palatka. I sincerely believe because of those facts that this improvement is not only an improvement to help one corporation but it is an improvement to help all of the people of Putnam County and the adjoining area. I listened with some interest to the comment about water pollution, and let me say frankly that I am concerned with that. I would like to include how a statement prepared by the Hudson Pulp & Paper Corp. which I believe proved they are concerned about water poslution and have done something about it. The statement referred to is as follows.) HUDSON PULP & PAPER CORP., STREAM POLLUTION ABATEMENT We have made a comparison of the conditions prevailing during the month of September 1953 with the same month the year before and I find that there has been a great improvement. The amount of fiber being discharged in the waste effluent has been reduced 78 percent and the amount of chemicals 22.9 percent. The amount of reduction in fiber loss has been accomplished mainly by using a more nearly closed system on the paper machine. The installation and use of flat screens on the screen reject and a very close watch for careless waste or overflow. The reduction in chemical loss has been accomplished by the installation of lines and pumps eliminating any overflow from the various liquor and soap storage tanks and more efficient housekeeping. It has also been helped some by the more nearly closed system on the paper machine. This reduction of fiber and chemicals in the mill effluent has materially lowered the B. O. D. load being put into Rice Creek. Due to the small flow of water in Rice Creek this reduction has not affected conditions in the creek itself as far down as the highway bridge. At Our weekly creek and river surveys show however a slight improvement in conditions at the mouth of Rice Creek and in the river adjacent thereto. no time have we found the dissolved oxygen content of the river water at any of our test stations to be below that necessary to support marine or aquatic life. It is interesting to note that the condition of the river at our testing station is better now than it was in 1949 in spite of the fact that the production of the mill has been doubled. We are members of the National Council for Stream Improvement. We are listing below and assigning monetary value as follows: 1. Screens rejects system, consisting of a flat screen, Bauer refiner and auxiliary equipment, total installed price approximately $44,000. 2. Fourth State on black liquor washers, No. 1 side, approximate installed price $43,000. 3. New improved soap-collecting system, approximate installed price $20,000. We have included in this item the new soap-skimming tank, etc. installed with the new unit. 4. Partially completed diversion pond, approximately $10,000. 5. Measurement and control of effluent by department consisting of 4 Parshal flumes, 4 sewer samplers and measuring devices, approximate installed price $24,000. 6. Sample collecting system for digester samples previously dumped to sewer. approximate installed price $5,000. HUDSON PULP & PAPER CORP. Mr. Chairman, I believe that is all I would like to say unless the committee would like to ask me some questions. I have two gentlemen with me I would like to introduce to make brief statements to you and to answer any questions you may like to put to them. Mr. ANGELL. I may say to our colleague we are very happy to have had you with us and we thank for this very excellent statement. Are there any questions of Congressman Matthews? (No response.) Mr. ANGELL. If not you may present the witnesses you speak of, and may I ask that they be as brief as possible. I see it is almost 12 o'clock and we have another project here in the district of our very distinguished colleague from Alabama, Mr. Boykin. Mr. MATTHEWs. The first witness I would like to present is Mr. M. D. Malmend, general traffic manager for the Hudson Pulp & Paper Corp. I believe he has a brief statement he would like to make to you. Mr. ANGELL. Very well. STATEMENT OF M. D. MALMEND, GENERAL TRAFFIC MANAGER, HUDSON PULP & PAPER CORP. Mr. MALMEND. Mr. Chairman and members of the committee, I will try to be as brief as possible and emphasize how important this project is to the Hudson Paper and Pulp Corp. Mr. ANGELL. You may file any extension to your remarks you desire to make in addition to your statement here. Mr. MALMEND. I do not have any statement but what I would like to do is take some extracts of testimony from the hearing before the Department of the Army Board of Engineers for Rivers and Harbors at Washington on October 24, 1950, which amplifies the very thoughts that we would like to be made part of the record here. As a matter of fact our executive vice president testified in that particular hearing, and I could not very well improve on his statements. With the permission of the committee I would like to begin. First, in Florida we have a total investment of $24 million and a payroll exceeding $52 million per annum. It represents an investment of $17,000 per employee. We now employ at our plants 1,450 persons, and it is estimated that for every person directly employed there is a person indirectly employed within or in the manufacture related to it, or in various services which the plant requires. I will read from the testimony and extracts which would more or less bring out our points with regard to public use of our dock facilities, and whether the benefit accrues only to the corporation. To show we could use these facilities and how it would be to the advantage of shippers as well, we have purchased thousands of tons of material in the form of paper machinery from a firm at Wilmington, Del. They have adequate facilities for loading and shipping this material by barge, but no barge is able to go at the present time into and through the St. Johns River into Rice Creek to the location of our mill. The result has been that we have been, and as I said before, are unable to use water facilities for incoming shipments, and we have also been unable to use it for outgoing shipments. The fact of the matter is a large market for our products is naturally in the industrial Northeast where tremendous quantities of both paper and paper bags are used. Our principal competitor near us is in the vicinity of Savannah, Ga. They do use water transportation, while as a competitor Hudson does not. They do have those facilities and have the advantage over us; and their suppliers also have the advantage of being able to use this type of transportation. There is just one other thing I would like to add. That is, I am convinced beyond any doubt that it is not only to our interest, which it certainly is, but it is to the interest of our suppliers to have this type of transportation available. For example, we have never used imported salt cake brought in from abroad even though the material can be brought into this country at lower prices than the domestic mills sell it to us. One of our suppliers, the General Chemical Co., and they are located on tidewater, I believe, in Pennsylvania, will be able to compete with foreign salt cake of which we would use over 1,000 tons per month, if water transportation is available. As a matter of fact, we are using 1,400 tons a month right now. So, there is no question in my mind that this is a material advantage to every supplier. Naturally it is an advantage to the town of Palatka and all the wood handlers there, and all the people who deal with the wood people, and to the merchants and business people in town. When we got to Palatka it was really a town that was on the way to decay. There were no industries there and there was no prospect of any at the moment. Since we went to Palatka the population has increased. There have been hundreds of homes built. There have been many new stores. The whole town is now thriving and prosperous. Deposits in the banks have increased. The town is alive and alert. We have benefited not only the town but the entire county. I might say I think we have benefited the entire State by a payroll of $7 million a year, which will be doubled in the very near future. This is prior to the installation of our second unit. I think in establishing a plant like this, which is basic to the economy of the county, that this country requires, paper, it is essential not only for civilian use but essential in all defense purposes. I think there has been some feeling on the part of the Government that industry has not expanded enough. Well, here we are. We expanded and we are expanding again, and are doing it in our own interest; but in the final analysis it is to the interests of the entire country. It has modern plants which are needed, asI said, not only for civilian use but also for defense use. Now I will continue. The paper industry is notoriously competitive as an industry. Naturally if we have lower rates used in normal times these are passed on to the consumer and it is reflected in the price of sugar if we manufacture sugar bags, or in the price of fertilizer, or in the price of flour for which we manufacture bags. It just follows that in a competitive industry the lower you can get your costs the better. That is the reason why our industry is growing so. Because wood grows faster there and it is easier to log in the forests than it is up North, because you can log the entire year round. It is obvious that the lower costs on our part and these benefits also will spread to the consumer. To continue again: I honestly believe the general public and our suppliers will get as much and perhaps more benefit out of this than the paper company will. They will be able to compete, as I mentioned before, with foreign goods. They will be able to compete with people closer to the mill. A man on the waterway 100 miles from us who has wood, now has a very dubious market for his wood. With this waterway he will have a definite market for the wood. It can be taken to the mill. It is just not economically sound for him not to cut wood, and it is not to the best interests of the domestic economy that he should not cut that wood. The interests of the country would be served by his trading that wood at a profit, just as thousands of other farmers do. I think this is more or, at least to be conservative, as much in the interests of others as it is in the interests of our own company. I want to add one point. I think there has been a lot of criticism of Government spending, the point generally being that it is not productive; but I have not heard much criticism of the Government engineers particularly, because you do actually do things that are constructive and helpful, and do contribute to the economy of the country. We are now currently doing business with the Government in the form of defense contracts, such as the United States Navy, General Services Administration, and the Quartermaster. We are selling them sealing paper, wrapping paper, multiroll bags, paper bags and sacks, paper napkins, paper towels and toilet paper. The last three are manufactured by another mill in Augusta, Maine. In connection with the public use or the public gain on this particular improvement, I might add that we now are very seriously negotiating with a very large company to locate right near our premises at Palatka and to utilize our two docks we have down there in the event the committee approves this particular improvement. So we are making room for new industry. We are inviting new industry down in Palatka. Now with regard to stream pollution. Necessary steps have been taken since the letter from the Fish and Wildlife people which was read to you, to take care of the wastes and treat it from the mill so as to prevent stream pollution. As a matter of fact, we subscribe to and belong to an association, I believe called the Stream Improvement Association, or something of that sort. I am not familiar with the workings of that particular organization but I do know we subscribe to the nonpollution of our streams. In closing I would like to say this: Without this improvement and without the possibility of shipping by barge, being farther south on the southeastern coast than any other new mill, and farther removed from our distributing area which is the northeast, we would have to 39263-54-vol. 1-21 |