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to the problem, you give it to me,” I say we are at fault rather than the President or anybody else.

I don't care where right is in this dispute, whether management is right or the union is right, or the Wage Stabilization Board is right or wrong, I think when that came up to us at that time, when that very distressing situation was presented to us, and the President said "I am going to keep these mills running, law or no law,” whether that is right or wrong is quite beside the point, we are in an emergency, and we are trying to build up our security and our defenses so as to remain

And he sends up word to us in the Congress, "If this isn't the thing to do, tell me what to do, and I will do it," and we sit back and just attack him and kick him around, literally, instead of doing something, the fault is ours and I say the public and the voters have the right to say to the Congress, not to you and me as individual Congressmen, but to all of us collectively as Members of this body, that we have been derelict in our duty, and instead of finding fault with the Wage Stabilization Board or the President, or union or management, we should have gotten busy and done something about it.

Mr. LUCAS. Mr. Multer, I am in a rather amenable frame of mind this afternoon, and I want to agree with you to a large extent, that the Congress perhaps has failed in not providing some means of protecting the public interest in the event the 80-day weapon for protecting the public failed.

But, my colleague, that 80-day weapon has not yet been used.

Mr. BROWN. I suggest we leave this question to the Supreme Court for the time being. We have other witnesses.

Mr. Lucas. I am glad to discuss it with my colleague.
Mr. PATMAN. Had you finished your testimony, Mr. Lucas?
Mr. LUCAS. Yes, sir, I have, Mr. Patman.

Mr. MULTER. There is only one thing I want to say to Mr. Lucas, and I am sure he and I are in agreement on this. We respect each other's opinion and we both have but one thing in mind, and that is the best interests of our country, and we will do our best to work it out either together or with any other group of Congressmen.

Mr. Lucas. And my purpose in being here, Mr. Multer, is to help you and give you the benefit of not my wisdom but the information which I have obtained as a member of the House Education and Labor Committee.

Mr. Brown. Does any other member of the committee desire to interrogate the witness?

Mr. PATMAN. If Mr. Lucas desires to submit additional information along with his statement, he may do so, I assume?

Mr. Brown. I have already authorized him to do so. glad to bave your views, Congressman.

Congressman Harrison, you may come around.

We are very

STATEMENT OF HON BURR P. HARRISON, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF VIRGINIA; E. B. MOORE, CHAIRMAN, NATIONAL APPLE INSTITUTE; L. A. PUTNAM, SECRETARY, WESTERN NEW YORK APPLE GROWERS ASSOCIATION; AND CARROLL R. MILLER, SECRETARY-MANAGER, APPALACHIAN APPLE SERVICE

Mr. HARRISON. Mr. Chairman, I want to express to the commitee my deep appreciation for hearing me out of order at this late hour of the day.

Mr. Brown. I understood you had some of your friends with you. You may call them around if you wish.

Mr. HARRISON. I have with me Mr. E. B. Moore, who is chairman of the National Apple Institute, and Mr. L. A. Putnam, secretary of the Western New York Apple Growers Association, and Mr. Carroll R. Miller, the secretary manager of the Appalachian Apple Service, covering the apple growers of Maryland, Pennsylvania, West Virginia.

Mr. Brown. Mr. McDonough of California might be interested.

Mr. HARRISON. I might say that California and Oregon and Washington State people are on their way to this capital, and are in agreement with what we will have to say this afternoon.

Now, what I have to say, Mr. Chairman, applies particularly to apples, but I think the same situation is bound to apply to all other food.

It is a situation in which the law, carefully drawn by this committee on two former occasions, is being shamefully and flagrantly violated by the Office of Price Stabilization, and the apple industry, the fruit industry, has been to the OPS and has endeavored time and time again to get some relief in the situation, and can't do it, and we have come to this committee and asked for legislative protection.

Now the particular thing to which I would like to direct the committee's attention, just as briefly as I possibly can, is this: Fifty-four percent of the apple harvest goes to processors, who process it and can it into apple sauce, apple slices, baked apples and apple juices.

I think that general situation applies to all fruit. Of course, probably not citrus fruit, but a good deal to citrus fruit as well.

Now the law that this committee drafted and sent to the floor of the House, which was approved by the Congress, says that in the placing of ceilings on any produet made from an agricultural product, the ceiling shall be such as shall reflect to the grower parity:

That is the first thing the law says. The OPS has fixed a ceiling on apple products, and the parity is $67.30 a ton. That is parity. The OPS has fixed a ceiling that reflects to the grower $27.70, which is 41 percent of parity.

The law says, and this committee wrote it into law--it isn't a floor amendment, this committee wrote it--that in fixing the price of processed agricultural products, ceilings must be such as will reflect to the grower the price he got in the base period. Logic, of course.

A ceiling is to prevent runaway prices, to prevent inflation.

The ceilings which have been fixed and maintained on the processed apple product are 27 percent below the cost in 1950—May and June of 1950.

Now, of course, the law specifically prohibits that. But it is done. And it has nearly ruined this industry.

And time is of such essence that we have imposed on you today. We have completed the season and are struggling under those conditions. We start soon with the harvest again, into another season. What we are asking this committee to do is to draft this law so as to decontrol fruit, or to provide in some effective way that a great industry such as this shall not be treated in such a shameful manner; in other words, to provide in an effective way that the growers shall be paid parity.

Now, then, of course, the processor hasn't any complaint.

Mr. BARRETT. If we decontrol them, as you point out, what will be the increase in price to the consumer?

Mr. HARRISON. I don't know, sir, but it won't be any increase over 1950.

Mr. FUGATE. Is the price up to ceiling now?

Mr. HARRISON. No, sir, the price can't get to ceiling under the situation they have got. It is a practical impossibility to get to ceiling under the ceilings they are allowed.

Mr. FUGATE. Well, is price up to parity?

Mr. HARRISON. No, it is 41 percent of parity. Parity is $67.37 a ton. The present return to the grower is $27.70 a ton. Ceiling price is 41 percent of parity.

Mr. FUGATE. Well now, since it is not up to parity-
Mr. Harrison. Those are Department of Agriculture figures.

Mr. FUGATE. I say since the price is neither up to parity nor to ceiling, how does the OPS control it?

Mr. HARRISON. Because when they fix the price--I would like this gentleman to explain that.

Mr. PUTNAM. Gentlemen, it goes back to the ceiling last year. Last year, with apple prices at a severely depressed level, processors calculated the ceiling. The ceiling has now been frozen to all practical purposes at that level. That level, as Mr. Harrison just pointed out, is approximately $27.70, or approximately 41 percent of parity.

Mr. MULTER. Is that what it is selling for now?
Mr. PUTNAM. The ceiling, of course, is on the processed product.
Mr. FUGATE. The ceiling is on the processed product.
Mr. PUTNAM. Yes, sir.
Mr. MULTER. What is the product selling for?
Mr. PUTNAM. I believe it is
Mr. FUGATE. What is the level of prices?

Mr. PUTNAM. The level of prices of the finished product? Let me clarify it this way: The market is somewhere around $1.20 for 30 cans, but going back from there to the grower, the price that was fixed into the ceiling, in arriving at present ceilings, is this figure that we are talking about.

Now, actually, the market price at the present time, because of depressed conditions last year, and a number of other complicating factors, the market today is not up to some of the ceilings of individual processors.

Does that answer the question?

Mr. FUGATE. Well, that would be a violation of the act, in that ceilings cannot be placed below parity.

Mr. PUTNAM. That is right.

Mr. HARRISON. It is a violation, a definite violation.

Mr. FUGATE. I don't see how they can maintain that position, knowing this fact,

Mr. HARRISON. Well, you know the story of the lawyer who said, ““They can't put you in jail.”

Mr. Multer. What does the agency say as to why the ceiling price is less than parity.

Mr. HARRISON. I wish you would tell me. I have got a file. I wrote them a letter and asked how they did it and they wrote back and said, “We put ceilings on.'

Well, I knew that. Then I wrote and asked them the same question. The ceiling, you understand, is on the processors. They are allowed to put a ceiling on the processor. But the ceiling they put on the processor must be such as to reflect to the grower (a) parity and (b) the price received in the base price level.

So I wrote them again and I called their attention to the law, and they come back and said, “We haven't put any ceiling on the grower. We put it on the processor."

Mr. FUGATE. I think there is a difference right there.
Mr. HARRISON. I haven't been able to get a satisfactory answer.

Mr. Fugate. I think they put a ceiling on the margin of profit that the processor is getting, not on the profit, but the margin of profit.

Mr. HARRISON. No, they put a ceiling on his price.
Mr. FUGATE. I know, but to reflect a certain margin.

Mr. PUTNAM. I think I can answer that. In 1951, that is, in effect, what they did. So far as apples were concerned, because of the nature of the way that the apple business has historically been operated, it wasn't a proper ceiling, but that is in effect what they did.

The market was at a depressed level at that time.

A processor took the raw product, cost paid; every raw product, cost paid, added his permitted spread under that ceiling order. There was a slight adjustment in the ceiling, on the 9th of April, very recently.

Then that ceiling was frozen at the dollar-and-cent level. That frozen ceiling had figured into the raw product cost which represents 41 percent of parity. That is the reason. And there is, under the OPS industry earnings standard, theoretically, an opportunity, for recourse.

In the practical operation of the business there is absolutely no opportunity and no recourse for a grower to ever have any adjustment on price, because it cannot be possible to even consider it until after the grower price has been established.

Mr. BETTS. Well, if OPS is violating the law, can't you go to court and ask for a mandatory injunction?

Mr. FUGATE. Actually they are not violating the law.

Mr. MULTER. The Emergency Court of Appeals is set up to review their action if contrary to the law as we laid it down.

Mr. McDonough. As I get it, you have no problem if you sell your fruit raw.

Mr. PUTNAM. That is right.

Mr. McDonough. But because of the frozen prices established by OPA on processed fruit, the grower can't sell to the processor at a profit?

Mr. PUTNAM. That is it, exactly.

Mr. McDONOUGH. He is selling at a loss.
Mr. PUTNAM. Right.

Mr. McDonough. So that the only way you can make a profit in your business is to sell all of your fruit raw in bushel baskets or over the counter, however you sell them, and that would curtail production to the retailer because the consuming public wouldn't get any canned fruit.

Mr. PUTNAM. That is right. In our own area about two-thirds to three-quarters of our production, for the past several years, has been going to processors. It is our biggest market. It is also true in the Appalachian área.

Mr. McDonough. In other words, the public would suffer if they want processed fruit, and you would be justified in saying, “We can't sell to the processor because we can't sell at a loss and stay in business."

Mr. PUTNAM. No question about it. We can't stay in business and sell under these conditions.

Mr. McDonough. That is a complaint that the public ought to register against OPS because it is curtailing procudtion and denying the public a commodity that they are entitled to have at a reasonable price.

Mr. HARRISON. And it is working that way.
Mr. McDONOUGH. I can see it.

Mr. PUTNAM. Last year they had an enormous carry-over, the processors, from the previous season, and that, of course, reflected in the depressed market to the grower.

Mr. HARRISON. And, Mr. Chairman, apart from all that, to just sum it up--I don't understand this, I am not in the industry myselfbut what I would like to say is I just don't see the sense of a ceiling in a depressed industry.

Mr. MULTER. But then the industry has no complaint. If they cannot get the ceiling price and they are selling all of their product under-ceiling price, and prospering, what difference does it make?

Mr. HARRISON. They cannot get it because of the practical application of the ceiling: That is one thing But the second thing. Why do you have ceilings in a depressed industry? Maybe the industry would not be any better off. I think they would, and I think these gentlemen may be convinced that the ceilings are the reason for their difficulty. But if it is not the reason for their difficulties, if your theory is right, then what on earth is the sense of ceilings on a product that will not bring ceiling prices?

Mr. PUTNAM. There are a couple of other points. In the first place, of course, last year, with a depressed level, products in the processing industry in many cases are sold for future shipment. That was true last year. Those products which were sold at very low levels, $1.05, $1.10 per ton, had been delivered through the season. They have influenced the market.

To go back a step further, the crop was not as large last year as it was assumed it was going to be. Then the second thing is this. Mr. Brown. You gentlemen can file statements, if you wish.

Mr. PUTNAM. With your permission, Mr. Chairman, I have a brief that I would like to present.

Mr. BROWN. Very well.

Mr. HARRISON. I just want the committee to understand, in the technical language that he can give and that I cannot, that the impo

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