CHAMBER OF COMMERCE OF GREATER PHILADELPHIA, Hon. JAMES H. DUFF, DEAR SENATOR DUFF: On behalf of the Chamber of Commerce of Greater Philadelphia, I wish to register our strong protest against section 104, title F, Defense Production Act of 1950, as amended, which places cheese and other products under import control. You will recall such controls were provided for under Public Law No. 96 (S. 1717). Total United States imports of dairy products represent a small percentage of our own production and we do not believe there are, at this time, any really valid arguments for exercising quota restrictions on them. On the other hand, the sale of dairy products in the United States represents substantial dollar earnings for a number of countries-countries which were encouraged by us to market such products here as a means of assisting in balance of payments difficulties. Furthermore, the imposition of these import quotas is certainly inconsistent with our acknowledged leadership in efforts to eliminate such barriers to trade as quotas, exchange controls and the like and might well undermine much of the work done in this field. Therefore, when the second session of Congress convenes we hope that S. 2104, or the similar House bill repealing this amendment, will be speedily passed and urge your support of either bill. Yours very truly, ALBERT M. GREENFIELD, President. STATEMENT OF OMAHA WHOLESALE FRUIT DEALERS ASSOCIATION, OMAHO, NEBR., H. D. MORPHEW, SECRETARY Members of Senate Committee on Banking and Currency, the following is a statement issued by Mr. H. D. Morphew, Secretary of the Omaha Wholesale Fruit Dealers association, in answer to announced hearings beginning March 4, 1952, on extension of title IV (price and wage stabilization) of Defense Production Act which expires June 30, 1952. This statement represents an individual and collective sense of all 25 members of this association which comprises the leading wholesale dealers and distributors in Omaha, the largest fresh fruit and vegetable distributing_center in a four State area composed of South Dakota, Nebraska, Kansas, and Iowa. This vitally important segment of the food industry faces a severe test in molding its operation to conform with the Nation's all-out effort to prepare for defense. It is agreed that, while food is less dramatic than tanks, guns, superdreadnaughts and planes, it certainly is not less essential in the national economy, and is justified in receiving the full undivided attention, the best knowledge and the best men obtainable. The food industry is only the intermediate agent providing the mechanism for feeding the public. Any control of production or price necessarily is a problem not only of industry but also all the people. Any loss sustained by the industry due to unsound policies, bickering, dillydallying, unworkable controls, becomes an irrevocable loss to the public. To assure an adequate and essential supply of food requires a united industry and a most efficient Government, both working in harmony. Price fixing or control, as applied to fresh fruit and vegetables, has failed and will continue to fail because of the very nature of the business. It destroys integrity, morals and morale. It is again destroying many sound conscientious business men and sound business practices in food distribution. The chiseler, the cheat, the sharp practice artist all thrived under fixed price control in former years and he is now thriving under OPS control. The economic law of supply and demand should be permitted to prevail. Fresh fruits and vegetables are perishable and, excepting a few commodities, must be moved with expedition in the market and if not sold promptly they may become unsalable. Since business cannot thrive on losses (and many serious losses are being taken this year by operators) prompt sales must be made at a price the commodity will bring. There, again the law of supply and demand becomes operative. There are some 200 competing fresh fruits and vegetables after the dollar Mrs. Consumer has to spend. She has the final decision as to which commodity to buy. If the purchaser deems the price too high, then the commodity remains unsold. It does not and cannot be kept indefinitely like gold. It must be sold for what it will bring. In the final analysis, the price is fixed by the purchaser who is the ultimate con sumer. Arbitrary setting of artificially controlled price ceilings does not reduce the cost of living but increases it. If a commodity cannot be produced profitably, if it cannot be handled and sold profitably, it becomes a scarce item and any losses sustained will, through necessity, be added to one or more of the 200 varieties of fruits and vegetables handled. Sound business practice dictates such a procedure. Or, if as an alternative, the consumer is forced to pay more than the fixed price through the operation of the black market, or some other means, he s denied food he otherwise would obtain. We cannot attempt to cover the miscellany of operations used in the black market and other forms of evasion. The consumer pays for all and the honorable and legitimate tax-paying distributor is thus penalized. Further, let us look at two hypothetical cases before the consumers. In one case, where the consumer pays a price that compensates the producer, what is the result? He is encouraged to continue production and even to plant a heavier acreage, all of which reacts to the benefit of the consumer, inasmuch as it more nearly insures a sufficient supply for his table. In the second case it would be a reversal of the first. The producers do not receive adequate compensation. All the patriotism in the world will not stimulate production at a loss, and the consumer would be staring into famine's face as a result of production curtailment. Prices based on parity is a fallacious device and is used by some as an instrument to falsely set a price formula. Fresh fruits and vegetables, in which costs are highly variable, due to the wide area in which they are grown, weather and climatic conditions, high and advancing hand-labor costs, varied amounts of irrigation, varied amounts of material for pest control, varied amounts of fertilizer, and many other factors which vary from season to season. All these costs are unknown until the season is over. The yield which is saved and sold determines the cost of production. To fix a price now for crops not yet planted, or in bloom, or harvested, together with the uncertainty of production or unknown costs and to make the finding final, legal, and enforceable by law is like a blind man trying to draw the bow to hit the apple. Governmental seizure of authority over production and prices should only be exercised during a period of grave national emergency and, inasmuch as such a condition does not now exist, control over these business functions should be discontinued forthwith. In closing, we believe the above proves beyond the realm of conjecture that fresh fruits and vegetables should be permitted to return to the free economy of supply and demand; that any tampering of these commodities by a planned economy is un-American and we plead for your favorable consideration in our behalf. PITTSBURGH, PA., March 9, 1952. Senator MAYBANK, Chairman, Banking and Currency Committee, United States Senate Office Building, Washington, D. C.: On behalf of the traveling salesmen of my organization I urge you and your committee to reimpose Federal rent control on transient hotel accommodations. MILTON J. OPPENHEIMER, President Infants' and Children's Wear Salesman's Guild. Hon. BURNET R. MAYBANK, Care of Senate Office Building, SPARTAN GRAIN & MILL CO., Spartanburg, S. C., February 25, 1952. Washington, D. C. DEAR SIR: May we ask your earnest consideration of the proposal made by the American Feed Manufacturers Association, the Soybean Crushers Association, and various farm groups for decontrol of soybeans and kindred products. This proposal is not a measure intended to benefit the soybean crushers and feed manufacturers, but every poultryman, dairyman, cattleman and other feeders of livestock are vitally interested in quick action to relieve this abnormal situation. As set forth in various arguments in support of this proposal soybean meal has been one of the principal ingredients in poultry and dairy feeds for many years, and since the development of antibiotics soybean meal has been proven to be the most economical and efficient ingredient into which these growth and disease resistant factors may be utilized. Because of the present price of beans and the low price of oil practically all soybean crushers have been unable to produce soybean meal at the ceiling price of $74 except at a terrific loss, which has resulted in the recent order permitting the crushers to offer mineralized soybean meal, or other supplemented forms of soybean meal anywhere from $12 to $20 per ton over the ceiling price of soybean meal, or permit the feed manufacturer to buy the beans and have them crushed which makes the meal cost $12 to $20 per ton more than the ceiling price. These permits have simply added to the cost of soybean meal without increas ing the nutritional value in the slightest, in fact in most instances the nutritional value has been lowered. Since soybean oil meal is only obtained through these subterfuge methods present ceilings are of no avail and make no contribution to control of inflation. We are now supplying feed for approximately 2 million heads of poultry and thousands of dairy cattle throughout the South, and are absolutely dependent on a supply of soybean meal for these feeds. There is no other substitute, and if we do not get a supply quick the whole poultry and dairy economy will be seriously and disastrously affected. The situation is desperate and demands immediate attention, and we hope you will lend your influence and support to a quick solution of this most perplexing problem. Sincerely, Hon. BURNET R. MAYBANK, SPARTAN GRAIN & MILL. CO. By C. B. FRETWELL. STATE STREET TRUST Co., Boston, Mass., March 20, 1952. Chairman, Senate Banking and Currency Committee, United States Senate, Washington, D. C. DEAR SENATOR MAYBANK: With reference to the hearings about to be held by your committee on the extension beyond June 30, 1952, of the provisions of the Defense Production Act, the Boston Chamber of Commerce, through its foreign trade committee, strongly urges that section 104 of the said act be omitted from any extension thereof, or otherwise canceled, to the end that the restrictions be abolished on the imports of certain fats and oils, including all commercial imports for domestic consumption of peanuts, peanut oil, butter, butter oil, nonfat dried milk solids, flaxseed, flaxseed screening, linseed oil and rice, as well as the restriction quotas on imports of certain types of cheese and of casein. In our opinion the desirability of the withdrawal of these restrictions transcends any question of the protection which they confer on American producers, and that it rests on the much broader basis of our avowed national policy to promote in the largest degree possible the exchange of products between the free nations of the world, thereby assisting the establishment of sound economies in those nations. For that purpose, we have expended many billions of Marshall plan funds. In our opinion these restrictions already have offended friendly nations, notably Denmark and others with which we have reciprocal trade relations, and have raised questions as to the good faith of our country. We ask that this communication be presented to your committee. Sincerely yours, WM. HOLWAY HILL, Chairman, Foreign Trade Committee, Boston Chamber of Commerce. STATEMENT OF THE SWITZERLAND CHEESE ASSOCIATION, INC. The Switzerland Cheese Association, Inc., is a New York corporation organized in 1929 to assist in the marketing of cheeses of Switzerland. The association has invested substantial sums of money in consumer and trade advertising to promote the consumption of Switzerland Swiss cheese. There is now an established and steady market in the United States for this imported product. The cheese-import restriction imposed by the Secretary of Agriculture pursuant to section 104 of the Defense Production Act of 1951 arbitrarily reduces this market to about one-half of its potential and seriously threatens the investment of the association. The association urges that section 104 of the Defense Production Act of 1951 be repealed. Apart from this motive of self-interest, the association submits the following additional reasons in support of repeal: (a) The effects of section 104 are contrary to the best interests of the American consumer. (b) Importers, distributors, and retailers of cheese, who have substantial investments in their businesses, are faced with an unneeded loss of business through the effect of section 104. (c) The American cheese industry cannot benefit from section 104, and many other segments of American agriculture will be adversely affected. (d) Section 104 vitally affects the European farmer and the economy of other countries; it is disrupting established friendly foreign relations. (a) The consumer.-DF03, issued by the Department of Agriculture pursuant to section 104, for all practical purposes, limits the consumption of foreign cheese in the United States to 70 percent or less of the quantity used in 1950. The quotas of cheese importers are now almost exhausted. Importers' warehouses are practically empty. Retail stores are finding it impossible to replace their stocks from wholesale channels. The two principal types of cheese from Switzerland are Swiss cheese and Gruyere process cheese. The supply of these cheeses in this country for distribution has become negligible, and this is also true of many other imported cheeses. The American consumer is deprived of the right to exercise his free choice so long as section 104 continues to be law. Shortage of imported cheese brought about by section 104 will not cause an increase in the production domestically of foreign-type cheese. Milk production has remained stable, while fluid milk consumption has greatly increased, so that less milk is now available for the manufacture of cheese and other dairy products. Most domestically produced foreign-type cheeses are also in short supply. Domestic Swiss cheese, for instance, is not available in sufficient quantities to replace Switzerland Swiss cheese excluded by section 104. Assuming the consumer of imported Swiss should now turn to domestic Swiss, he could not get all he needs or wants. He is, therefore, being deprived of a particular food he prefers. The shortage of domestically produced Swiss cheese has resulted in a steady increase in price. The wholesale price in New York for first grade Wisconsin Swiss was 46 to 49 cents a pound in August 1951. At the present time quotations are from 61 to 65 cents a pound, an increase of 32 percent. Therefore, the shortage of Swiss cheese which could be relieved to a marked extent by unrestricted imports has adversely affected consumers of domestic Swiss who may never have used the imported Swiss. (b) The American businessman.-To most of the wholesale cheese dealers in the United States, imported cheese is a most important item. To some who specialize in it, it is their whole business. They require refrigerated warehouses, experienced staffs, and in some instances fleets of trucks. They depend in varying degree on the income derived from handling imported cheese. There are several hundred cheese importers in the United States; of these, about 50 deal in Switzerland Swiss. Stocks of cheese distributors consist in the main of domestically made cheeses, but most carry some imported cheese to fill out their lines because of consumer preference. They, too, derive some of their income from the sale of imported cheese. There are many thousands of cheese distributors in the United States whose business depends to some degree on imported cheese. Of the several hundred thousand retail stores in the United States that carry a variety of cheeses, many also handle one or more imported cheeses. These stores have invested good money in expensive present-day cheese display equipment. Their success as retail merchants depends to a large extent on a full enough line to satisfy existing consumer preference. With no imported cheese available in the months to come, and with domestic producers unable to supply the existing demand, all of these dealers in cheeseimporters, distributors, and retailers-will suffer losses in income and considerable hardship because of the import restrictions imposed pursuant to section 104. (c) The American dairy industry and the American farmer.—The cheese producers who manufacture foreign-type cheese in America owe their very existence to the fact that a foreign cheese had been imported and had found acceptance by American consumers. Swiss cheese had its origin in Switzerland. Yet, more Swiss cheese is now made in the United States than in Switzerland. In 1950 domestic Swiss cheese was selling in full and fair competition with the Switzerland product. In that year, 99,483,000 pounds of domestic Swiss cheese was produced, while only 6,383,000 pounds of Swiss cheese was imported from Switzerland. Under competitive market conditions, domestic production was up 51 percent over the 1945-49 average of 65,816,000 pounds annually, and Switzerland imports had fallen 28 percent from the 1939 prewar level of 8,925,000 pounds a year. In the face of this record, the Secretary of Agriculture, acting under section 104, established quotas for Switzerland Swiss which limit imports to an annual rate of approximately 4,300,000 pounds. It is quite possible that these imports of Switzerland Swiss and the possibility of comparison have been one cause for the quality improvement of domestic Swiss cheese which has taken place in recent years. The consumption of domestic Swiss certainly has benefited thereby. The per capita cheese consumption in the United States rose from 5.5 pounds (1935-39 average) to approximately 7.2 pounds in 1951. A good percentage of this increase is due to the mounting popularity of foreign-type cheeses, a condition which could not have existed without the interest stimulated by imported cheese. America, on the whole, is an exporter, not an importer, of farm products. In 1950 the United States exported over $39 million worth of agricultural products to Switzerland; in return, the United States purchased less than $7%1⁄2 million of farm products from Switzerland. With money obtained from exports of cheese, Switzerland buys the American farmer's cotton, his tobacco, his fruits, his fats and oils, and his grains, amounting in all to almost six times the value of Switzerland's agricultural products sold to the United States. Switzerland, which is not receiving United States aid, needs that trade in cheese if she is to purchase American farm products as freely as she has been. Evidently, only repeal of section 104 could accomplish that. (d) Foreign relations.-The example of the United States domestic economy, where industrial and agricultural products move freely from State to State to the ultimate benefit of all, has been presented to Europe as the goal to be achieved. Section 104 has been a most serious blow to that ambition. In Switzerland, it has struck at an ancient and vital industry. The Federation of European Agriculture, comprising 300 large national agricultural organizations and institutions from 18 countries, expresses the bewilderment of the European farmer in the following paragraph extracted from a recent letter: "The Council received a report dealing with the restrictive measure taken by the U. S. A. and its effect on the export of dairy products to the U. S. A.. especially as it concerns cheese. The burdensome restrictions on the export of the products involved have been cause for anxiety, dissatisfaction, and irritation in the European countries affected. Exports, and the strived-for economic balance between United States of America and Europe, including the increased productivity of European agriculture which had been encouraged by the U. S. A., are now painfully disturbed. We regret deeply the emergence of such a development, not only because of its economic effects, but also in the light of the momentous tasks which the U. S. A. and Europe including its agriculture were to accomplish together." The positive effect of section 104 in Switzerland is to force the cheese makers to reduce production: the negative effect is to force Switzerland to enact its own import controls, not in retaliation, but out of sheer economic necessity. Import controls in Switzerland do not mean just a little less cheese; they mean a great |