ST. LAWRENCE SEAWAY FRIDAY, MARCH 2, 1951 COMMITTEE ON PUBLIC WORKS, The committee met, pursuant to adjournment, at 10 a. m., Hon. Henry D. Larcade presiding. Mr. LARCADE. The committee will come to order. The committee is meeting for the further consideration of House Joint Resolutions 2, 3, 4, 15, 102, 122, and 159 and H. R. 2536, approving the agreement between the United States and Canada relating to the development of the resources of the Great Lakes-St. Lawrence Basin for national security and continental defense of the United States and Canada, and providing for making the St. Lawrence seaway self-liquidating. The first witness scheduled this morning is Mr. Roy F. Hendrickson, representing the National Federation of Grain Cooperatives. Is Mr. Hendrickson present? Mr. HENDRICKSON. Yes, sir. Mr. LARCADE. We will be glad to have your statement, Mr. Hendrickson. STATEMENT OF ROY F. HENDRICKSON, WASHINGTON REPRESENTATIVE, NATIONAL FEDERATION OF GRAIN COOPERATIVES Mr. HENDRICKSON. I have a very brief statement, Mr. Chairman, if I may read it. Mr. LARCADE. Yes, sir. You may read the statement and then make any further observations you desire, at which time the members of the committee may desire to interrogate you. Mr. HENDRICKSON. Thank you. My name is Roy F. Henderickson. I am executive secretary and Washington representative of the National Federation of Grain Cooperatives. This organization consists of 16 regional grain-marketing associations which are owned by approximately 1,000,000 farmers who are members of more than 2,500 local cooperative marketing associations. Our membership is located in all of the principal grain-producing areas of the Nation. The federation favors the development of the St. Lawrence seaway. Its most recent resolution on the subject-there have been many in the past-adopted at its last meeting in Omaha, Nebr., on January 11, 1951, reads as follows: Whereas the new defense program has created a new and special urgency for construction of the St. Lawrence seaway and power project; and Whereas construction of such a seaway would provide economical and safe access for sea-going commerce from the Atlantic seaboard to the heart of the grain-producing regions of the United States and Canada; and Whereas the plan is to have the cost of construction and operation amortized through sale of power and imposition of tolls on shipping: Therefore be it Resolved, That the National Federation of Grain Cooperatives, composed of 16 regional grain cooperatives representing more than a million producers who market their grain through more than 2,500 local cooperatives located from Texas to the Canadian border and from Ohio to the Pacific Northwest, urges the immediate undertaking by the United States and Canada of the construction of the St. Lawrence seaway and power project. Grain transportation is suffering terrific hardships due to shortages of baxcars at the present time. That shortage will be far worse during this year's harvesting season. At the present time the export of grain is limited chiefly by inability to move it to ports. If the Great Lakes seaway project was developed, it would greatly assist, we believe, in relieving the transportation crisis in the years ahead. It would make it possible to move into foreign commerce at lower transportation costs very substantial quantities of wheat, corn, and oats; and I should add to that one other commodity, soy beans. That is all that I have, and I would only like to add one thing. That is, even this morning I have learned that this transportation crisis with respect to boxcars is now going to have to result in a new Defense Transportation Administration order that contemplates putting the entire movement of boxcars to port elevators on a car-by-car permit system. There has been a permit system in effect in the Gulf area and most of the Atlantic, but to that are being added all other movements, including the Pacific Northwest movements. Of course, one might say this is a temporary situation, but the evidence does not seem to indicate it is temporary, because there is still not a very satisfactory rate of increase in the production of boxcars. I might add one more thing. That is that there has been a very real tendency in recent years, at least in the export grain programs, to increase the quantities of soybeans and corn, particularly, which are moving in export. The wheat has been up and it has been down somewhat, and it is still pretty high. But in the case of corn and soybeans they have gone up very high, and the biggest production of those tends to be in the area that is quite adjacent to the lake region. That is all I have to say, Mr. Chairman. I thank you very much. If there are any questions, I would be glad to attempt to answer them. Mr. LARCADE. Thank you. I was just wondering if you had appeared before the committee previously in support of this project? Mr. HENDRICKSON. No, sir; I have not. We have communicated to the committee our point of view, but we have never actually physically appeared. Mr. LARCADE. Your organization never has had representatives testify before this committee on this project before? Mr. HENDRICKSON. That is right. We have had resolutions, however, since I became associated with the organization in 1946. We have had at least an annual resolution on it, and we usually, through our president, communicated that to the committee and to many Members of Congress personally. Mr. LARCADE. I see. Mr. Davis, do you have any questions? Mr. DAVIS. No questions. Mr. LARCADE. Mr. Dondero. Mr. DONDERO. Mr. Hendrickson, has your association ever made an estimate of the amount of grain that would be shipped through your organization if the seaway were built? Mr. HENDRICKSON. Well, it would be incorrect to say through our organization, because we do not maintain a so-called export organization of our own. We possibly could. We normally sell to the exporters who have been in that business for quite a while. We have made various estimates, and I do not believe they are very reliable for the reason that it is almost impossible to forecast the movement of grain in export channels ahead. However, I would say it is going to be many, many years before we go below 200 to 225 million bushels moved annually. We have been up as high as 600 million bushels one year, and there has been a trend here in these more recent years to shift over and drop wheat somewhat and go up on coarse grains and soybeans. It has to be remembered that the main source of soybeans from international commerce for many years was Manchuria, and that area is, practically speaking, cut off from the European customers. So they turn to us for soybeans. I would say that the quantities would be very substantial, in any event. Mr. DONDERO. It runs then from 200,000,000 to 300,000,000 bushels a year? Mr. HENDRICKSON. Yes. The total of exports would be that. Mr. HENDRICKSON. I would consider 225,000,000 bushels the minimum that we can expect to export of grains and soybeans in combination for a great many years ahead, and it can well run up to 50 to 60 percent above that figure. Mr. DONDERO. Have you made an estimate as to the amount of saving that would be made on the cost of transportation as between the present system and what it would be if the seaway was built? Mr. HENDRICKSON. No; we have not really made any. On that I would just like to say this: It is not only a matter of costs that we have been interest in. It has been the matter of availability-the ability to move it. For instance, during the month of February, Mr. Congressman-and I can forecast this for the month of March-this country could export easily twice as much grain as it will export if it were able to get it to the ports and through the ports. Ocean transportation is not the shortage factor at all. It is the port facilities, but mainly the boxcars to get it to the ports. Mr. DONDERO. Which we do not have? Mr. HENDERSON. We simply do not have them. Mr. LARCADE. Mr. Pickett, any questions? Mr. PICKETT. No, sir. Mr. LARCADE. Mr. Angell. Mr. ANGELL. Mr. Hendrickson, our problem is especially acute in the Pacific Northwest, in the area I come from. They have a long haul getting there, and we find it almost impossible to get boxcars to ship lumber and grain and other products. Mr, HENDRICKSON. I might say in response to your question that this morning a friend of mine, who happens to be from the Pacific coast and is a very responsible man, Mr. Sanford, vice president of the Continental Grain Co.-he is at Portland, Oreg., and he is a very competent man in this field-he has done lots of work for the Government on a consulting basis, and he tells me that at the present time in your grain area you are getting a maximum of 600 cars a week, and your minimum requirement is 300 cars a day. That is the contrast. Mr. ANGELL. Mr. Sanford is a man who is an expert on grain and shipping. He comes from my district and I have known him a long time. Mr. LARCADE. Mr. McGregor, any questions? Mr. MCGREGOR. Just one or two. Mr. Hendrickson, the boxcar shortage, I think, has been facing us for a long time, and it is a spasmodic condition to some extent, is it not? Mr. HENDRICKSON. Well, as long as I have been associated with grain and food movements, which goes back to experiences I had in the Government, I was responsible for the procurement of food for the lend-lease program for some years going back, I do not recall any time since 1938 or 1939, when we might say that outside of short periods during the year, such as February, that is, such as right now, when you really had plenty of them. The grain movement has been handicapped for years. Now, I would say this: That there are some special types of grain today where the market is not in the grain. The market is in the boxcars that you can get to move the grain. Mr. MCGREGOR. Also, the determining factor is whether the farmers or co-ops, or whoever wants to put the grain on the market, are getting a proper price. It depends on the value of the grain at that particular time. Is that not true? Mr. HENDRICKSON. There is a great deal of season in it. Mr. MCGREGOR. I think I met you at the meeting a few months ago, when we were trying to get boxcars in the Midwest. Mr. HENDRICKSON. That is right. Mr. McGREGOR. Two years ago, when the price of wheat on the stock exchange was low, we did not hear a word about the shortage of boxcars; but then, as soon as the market went up and the prices went up too, there was a cry that the far west wanted the boxcars immediately. Mr. HENDRICKSON. Well, I would not say that. I do not know of any time when we have been really long on boxcars, except possibly we will say in a period of February and March, and right around there. They have not been long, as far as grain movements are concerned, for a good many years past. This situation since last May has been one that has been almost unbearable, as far as I am concerned, because people think you can do something about it in Washington, and apparently you cannot. least, I am unable to. Mr. MCGREGOR. I think Congress is in that same category. At Mr. ANGELL. In your judgment, why do not the railroads build enough boxcars to take care of the traffic? Mr. HENDRICKSON. I think they were hesitant for a time, and they really intend to and are trying to build them today. At this moment they have plenty or orders in to get boxcars and have not been able to get steel. Mr. MCGREGOR. Has that been the situation for sometime they could not get the steel and lumber to repair the old cars or build new ones? I remember very distinctly at a hearing before the Commission we laid the figures before them, and we asked them why we were not getting the boxcars as per agreement, and they said, "We cannot get the steel and lumber to repair the old boxcars." Mr. HENDRICKSON. That has been a phenomenon since Koreanot before. For a year or more I must confess my impression and belief is that the railroads had a tendency to sit on their hands. Possibly for good financial reasons, in their opinion. Mr. MCGREGOR. Now the Government owns them, so they ought to go ahead and do whatever they want to. Mr. HENDRICKSON. What was that? Mr. MCGREGOR. The Government is operating and controlling the railroads. Are we getting any more boxcars now, or are we getting less? Mr. HENDRICKSON. I suspect that the rate of increase of boxcars over the number retired is probably greater than the number retired right now, partly because they have greatly increased the repair program, and they are not retiring boxcars, no matter how old they are, with the speed they did earlier. Mr. MCGREGOR. I think you will admit this emergency also increased the shortage of boxcars. Mr. HENDRICKSON. There is no question about that. Mr. McGREGOR. That is true? Mr. HENDRICKSON. That is right. Mr. McGREGOR. And that has been really a determining factor in not being able to move our grain. Mr. HENDRICKSON. Yes. Mr. MCGREGOR. In connection with the shortage of boxcars, would you say the railroad strike had something to do with our not being able to move our boxcars-the grain from the far West. Mr. HENDRICKSON. There is no question but for a temporary period that was very serious. Mr. McGREGOR. I notice you gave us some figures on the export of farm products. I represent a farm area, and naturally am interested in it, but the figures you gave are emergency export figures and are not peacetime export figures. Mr. HENDRICKSON. I think we live continually in an emergency now. I do not know what normal is any more. Of course, there was a period when that certainly was not normal during the depression period, when our exports went off to nothing; but we gradually built up during the thirties and by 1940 we were doing a considerable amount. We would have exported a lot of grain during the war period itself, except that ocean shipping was so short that we concentrated on the so-called highly concentrated foods, and did not move a lot of grain at that time. We put the grain in here in feeding and got it in the form of eggs and milk. Then, in the postwar period I was Deputy Director in charge of UNRRÁ, in charge of supplies for 21⁄2 years immediately after the war, and for a time it was ocean shipping, and for a time it was availability. We actually could not get grain here. In 1946 the Department of Agriculture had to offer a subsidy of 30 cents a bushel to get the grain. That was very unusual; but at that time we had a shortage of boxcars and a shortage of ocean shipping for a long time, too.. 81181-51-pt. 1—28 |