Mr. WALL. Well, it is primarily oak and gum and maple.

Mr. STILWELL. And your hardwood market is right there where you produce it in North Carolina?

Mr. WALL. That is right. The furniture industry uses the hardwood.

Senator THURMOND.

not?

Mr. WALL. Yes, sir.

Some of the furniture factories use it, do they

They all do, without exception.

Senator THURMOND. What are they using now, chiefly?

Mr. WALL. Well, of course, they always use poplar for lumber core, and if you get into our more expensive face woods they are using domestically cherry and walnut and ash and maple, the so-called better grades of hardwood. But they use it all, Senator.

It depends entirely upon what the price of furniture the man is manufacturing, whether he is a middle-price-range producer or a high-price-range, quality furniture manufacturer or a low price range. Senator THURMOND. Are they buying that timber chiefly around North Carolina, or are they bringing any in from Canada anywhere? Mr. WALL. You mean the lumber in the furniture? Senator THURMOND. The furniture people.

Mr. WALL. No, sir. They do not use any softwood at all. And none of the Canadian species that I know of would be suitable unless it might be a small amount of birch, something like that. But it is of no consequence in the market.

Senator THURMOND. What about western lumber?

Mr. WALL. No, sir.

Senator THURMOND. So they are using all southern lumber, southern hardwoods?

Mr. WALL. Yes, sir. There is a small amount of white pine off the west coast that is used but that is insignificant.

It

Senator THURMOND. You presented a very good statement. contains a lot of valuable information. We are glad to have you with us.

Mr. WALL. Thank you, sir.

Senator THURMOND. Do you have any questions?

Mr. HORTON. No, sir.

Mr. MASON. I would like to ask just one. You talk about trucking about 200,000 feet into the Chicago area or something like that. Mr. WALL. I did not hear, Mr. Mason.

Mr. MASON. Do you not truck some softwood lumber into the Chicago area?

Mr. WALL. We truck 90 percent of what we sell up there now.. Mr. MASON. All right. Now, you haul back hardwood?

Mr. WALL. Yes, sir.

Mr. MASON. Which ones are those?

Mr. WALL. The hardwoods?

Mr. MASON. Yes.

Mr. WALL. Well, they come from generally the Pennsylvania and Ohio, southern Ohio and West Virginia areas where they grow— cherry, maple, walnut, and some poplar.

Senator THURMOND. All right. Thank you.

Mr. WALL. Thank you, sir.

Senator THURMOND. Mr. W. A. Pope, president of Wilkes County Chamber of Commerce, wired me:

Respectfully request 30 minutes for six statements by lumber manufacturers and timber growers before your Commerce Committee hearing in Atlanta, April 27.

Is Mr. W. A. Pope here?

Mr. POPE. Yes, sir, Mr. Chairman.

Senator THURMOND. Come around, Mr. Pope. You are from Wilkes County, Ga.?

Mr. POPE. Yes, sir, Mr. Chairman.

Senator THURMOND. I believe that is where my ancester, John Thurmond, who came down from Virginia, first came to, and also where the Thurmonds came from that went over to South Carolina, so we have a Georgia origin.

STATEMENT OF WILLIAM A. POPE, PRESIDENT, WILKES COUNTY CHAMBER OF COMMERCE, COUNTY COMMISSIONER, AND SECRETARY OF CAROLINA-GEORGIA LUMBERMEN'S ASSOCIATION

Mr. POPE. Thank you. I appreciate the privilege of coming before

you.

Mr. Chairman, I know you will be happy to note that I will only present four people at this time, and we will not take 30 minutes. I imagine it will be nearer 10 to 15 minutes, sir.

I am

Senator THURMOND. All right. Go right ahead. Mr. POPE. Mr. Chairman, my name is William A. Pope. president of the Wilkes County Chamber of Commerce, a county commissioner, secretary of the Carolina-Georgia Lumbermen's Association, a timber grower, and a former lumber manufacturer in Washington, Ga. I appreciate the opportunity you have given me to present a few of our lumber problems.

I live in an area that is approximately 70 percent forest land. One of our greatest natural resources and income-producing commodities is timber. Our lumber industry has suffered from many adverse factors which are apparently beyond our control; however, we recognize that our internal problems concerning purchases, production, and sales are problems we inust face and solve on our own. On this we have no excuse nor ask any quarter.

Today, Mr. Chairman, we are asking you to help us in those areas where Government and international trade affect us so greatly that all our efforts to produce economically add up to little in the national and international picture.

With the Government in control of such things as wages and hours, Federal unemployment tax, social security tax, interstate commerce, tax on timber sales, workmen's compensation, FHA, VA, and freight rates, how can we compete in production and price with countries that do not have these laws and are not required to produce under these standards?

You can help us by:

1. Restricting the import of foreign lumber to a reasonable quantity not subject to international feeling or diplomacy. This is directed more particularly at Canadian imports at this time.

2. A thorough investigation of freight rates to give the southern shippers the same rights and privileges accorded the west coast shippers on blanket rates, diversion charges, free-holding time, and holddowns.

The inequities produced by the rate structure, et cetera, was one of the primary factors involving our decision to discontinue our own lumber operations in 1957.

3. Another factor causing our shutdown was the raise in the minimum wage. This is a major factor in all lumber operations and ours was no exception.

You can help us by making adjustments in the wage and hour law to allow lumber people to work longer hours in a week at the same minimum without paying overtime. As lumber operations are priinarily outdoor and vitally affected by weather conditions, some weeks lumber operations can be conducted only 1 or 2 days on account of rain. Some provision is needed to permit operators to work extra time in successive weeks without paying overtime on hours worked over 40. Insert a cumulative clause to permit time accumulation over a reasonable period, perhaps a month, in figuring overtime. This would be a tremendous help to us.

4. Efforts are being made to change our capital gains law affecting the sale of timber under the guise of a tax reform measure. We vitally need capital gains treatment on all timber sales and urge you to do all in your power to resist any change in the present tax structure involving capital gains. It takes a lifetime to grow timber, and good forest management today is the direct result of assistance afforded by capital gains tax treatment.

Respectfully submitted.

I appreciate this opportunity.

Senator THURMOND. You have made some very good points here, and I am glad to have you with us.

You can call your other witnesses around.

Mr. POPE. Thank you, sir.

I would like while I am still here seated to read a statement from Mr. Holcombe Verdery, and I would like to present that at this time. Senator THURMOND. All right.

STATEMENT OF HOLCOMBE M. VERDERY, JR., PRESIDENT OF WASHINGTON PULPWOOD, INC., AND SECRETARY OF EAST GEORGIA PULPWOOD, INC. (PRESENTED BY WILLIAM A. POPE)

Mr. POPE. Mr. Verdery could not be here on account of other business and asked that I read this statement for him.

My name is Holcombe M. Verdery, Jr., president of Washington Pulpwood, Inc., secretary of East Georgia Pulpwood, Inc., landowner and tree farmer with operations covering 12 counties in Georgia.

The present trend in southern pine stumpage is now such that the return to the landowner is at a minimum. Further reduction in stumpage prices, which foreign imports have made necessary, will cancel gains made by the timber industry during the past 15 years. Reduction in returns and increase in the cost of ownership are at the critical points.

A change in the structure of capital gains treatment of timber sales will further penalize timber growers and the lumber industry.

The southern lumber industry should be allowed the advantage enjoyed by the west coast lumberman as to freight rates and lumber inspection.

Present capital gains treatment should not be changed.

Respectfully submitted.

Senator THURMOND. Thank you.

Mr. POPE. Sir, at this time I would like to call Mr. Robert Murphy, consulting forester, and he will present his own statement.

up.

Then I would like to ask Mr. Mose Gordon if he would like to come

Senator THURMOND. All right.

STATEMENT OF ROBERT N. MURPHY, MURPHY & BARKER, CONSULTING FORESTERERS, WASHINGTON AND ELBERTON, GA., AND PRESIDENT OF BROAD RIVER FORESTRY ASSOCIATION

Mr. MURPHY. Mr. Chairman, I am Robert N. Murphy, I am a partner in the firm of Murphy & Barker, Consulting Foresters, of Washington and Elberton, Ga. I am president of the Broad River Forestry Association.

In our section of the State 70 percent of our land area is in timber. Pine saw timber is the primary crop produced by these lands. The lumber business is a major contributor to our area's economy. There are many hundreds of farmers and landowners whose income is to a very great extent dependent on the production of saw timber.

Only a short time ago more than 30 sawmills were operating in our county cutting southern pine timber. Today we have only one large mill located in our county. A relatively large manufacturer recently went into bankruptcy in our city.

We have experienced a sharp decline in the prices paid landowners for saw timber. This has occurred at a time when better management and protection have caused an increasing amount of timber to be grown. Much more timber is being grown on these lands than is being cut at the present time.

Many of the timber growers in our area attribute their loss of markets and decline in prices to competition from Canadian and west coast lumber and to unfavorable freight rates. Many of our landowners are fearful of their future in the timber-producing business. This concern has caused some to cut their timber without regard to the future. Experience has shown us that the lower the prices that are paid for forest products, the poorer the quality of forest management and protection.

We are afraid that unless something is done to help the lumber manufacturer in the South, a further decline in the lumber business and in our economy may be forthcoming. If this situation worsens further, many of the timber growers will lose their incentive to produce and protect timber. The overall effect on our rural economy will be disastrous if this takes place.

Capital gains treatment of timber sales has encouraged landowners to properly manage their timber lands. We request that this law not be changed. We also ask that imports of foreign lumber be held

to a reasonable amount and that transportation regulations be equalized so that one section of the country may compete on an equal basis with another.

Thank you, sir.

Senator THURMOND. Glad to have you with us.

Counsel has a question here.

Mr. STILWELL. I would like to ask you one question, please, Mr. Murphy.

Both you and Mr. Pope mentioned the fact that approximately 70 percent of the land in your area of the State is forest land.

Mr. MURPHY. That is correct, sir.

Mr. STILWELL. Is that all privately held, or do you have some publicly owned, Government-owned land?

Mr. MURPHY. We have a small amount of publicly owned land, and I think the figure would be less than 10 percent in our area. Mr. STILWELL. Are they successful in selling stumpage off that

land?

Mr. MURPHY. Yes, sir. They have been. Yes, sir.

Mr. STILWELL. That is all. Thank you.
Senator THURMOND. Any questions?

Mr. HORTON. No questions.

Senator THURMOND. Any questions, Mr. Mason?
Mr. MASON. No, sir.

Senator THURMOND. That is all. Thank you.

Mr. Pope, do you have any other witnesses?

Mr. POPE. Mr. Gordon I believe would like to testify, Mose Gordon of Mose Gordon Lumber Co.

STATEMENT OF MOSE GORDON, MOSE GORDON LUMBER CO., COMMERCE, GA.

Mr. GORDON. My name is Mose Gordon from Commerce, Ga., Mose Gordon Lumber Co.

Senator THURMOND. Go right ahead.

Mr. GORDON. I do not have a prepared statement other than what these present_depressing conditions have prepared for me in the last 5 years. It has been most depressing.

We have been in the location we are now for 36 years, and up until 5 years ago we averaged a production of 12 million feet of lumber a year.

For the past 5 years that has been reduced to 7 million feet per

year.

We employed approximately 150 to 165 employees in this production of logging, kiln-drying and manufacturing, principally-at least 90 percent-pine timber and a little hardwood.

We are located in northeast Georgia where there is quite a holding of the U.S. Forestry Service. And the question has arisen as to the price of stumpage. Those people have reduced it considerably, but in the midterm of Eisenhower's administration they put in the prac tices of the west coast logging conditions imposed on other conditions, which is practically impossible.

For instance, we have to build roads comparable to the west coast roads that they put in there.