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Washington, D.C. The committee met at 10 o'clock a. m., pursuant to call of the chairman, in the committee room, Capitol, Senator Albert B. Cummins presiding

The committee had under consideration the following bill:

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A BILL Authorizing and directing the Interstate Commerce Commission to conduct in.

vestigations and to make orders relating to warehouse facilities of certain common carriers at certain ports.

Be it enacted, etc., That the Interstate Commerce Commission is hereby authorized and directed to investigate the warehouse facilities of the various common carriers by railroad at the several ports on the Atlantic, Pacific, and Gulf coasts at which such carriers have trackage, for the purpose of determining whether each of said carriers has warehouse facilities proper and adequate for the prompt and efficient handling of all grain and grain products transported by such carrier to such ports for export.

SEC. 2. That in making such investigation public hearings shall be held, of which interested parties shall be given notice and at which they shall have an opportunity to be heard.

SEC. 3. That if, upon such investigation, it shall be found that such warehouse facilities of any such carrier or carriers are not adequate for the purposes mentioned, then and in that event said commission is authorized and directed to determine what new facilities or additions to existing facilities will be reasonably necessary for such purposes and to make proper orders requiring said carrier or carriers to erect such new warehouses or to make such additions to existing warehouses as are so determined to be necessary.

SEC. 4. That the said commission shall have authority to fix reasonable charges for the storage of grain and grain products in all such warehouses owned or operated by such carriers.

The CHAIRMAN. Gentlemen, I will say that we will not able to secure a full attendance of the members of the committee this morning as they are rather exhausted from their work during the last few weeks; but this testimony will be reduced to writing so that it will be at the service of the committee.

Mr. Jacobson, will you open up the matter and take charge of the presentation of the testimony?



Mr. JACOBSON. Mr. Chairman and members of the Senate Committee on Interstate Commerce, we are here representing the State of Minnesota to urge in behalf of the people of our State that your honorable body give its approval and your substantial support to a


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bill by Senator Knute Nelson, which is now before you. This bill, in brief, prepares a way for providing adequate facilities at the seaports of the United States for receiving, storing, handling, and shipping grain and grain products. In recent years it forcibly has been brought to the attention of all persons connected wth or dependent upon our transportation system that there is something radically wrong somewhere. There is something in the big machinery that does not function properly and in harmony with the other component parts. This has become apparent through the repeated series of so-called “ freight congestions," " car famines," and" car short

” “ ages," resulting in the establishment of various embargoes on transportation, the use of preferential lists and other devices for alleviating various acute and instant conditions.

My personal investigations and study have convinced me that the weak spot or weak link in our transportation system is to be found in the lack of adequate and proper storage facilities for grain and grain products at the principal Atlantic ports, from which exports are made. I, personally, have seen in the New York terminal yards, at one time, thousands of grain-laden freight cars which had not been moved for weeks, and which were held many weeks longer before they could be unloaded. Could those cars have been unloaded with reasonable dispatch and promptly returned for transportation work, I sincerely believe that there would have been enough freight cars in every period of so-called car famines for the traffic needs of our country. Freight cars are not built for storage purposes, and when so used transportation facilities are thereby hampered. A car which makes but one trip from the interior grain markets to tidewater instead of six or eight is but fulfilling a very small part of its purpose. When thousands and thousands of cars are thus improperly used the situation becomes a menace to public transportation and may produce a national calamity.

We have had many experiences with so-called car famine and grain and flour embargoes in the Northwest and have not only been hampered in conducting our industries but have sustained serious monetary losses. It is for this reason that we are deeply interested in any movement which will bring relief. This matter is a live question in the Northwest. The legislature of Minnesota by joint resolution has approved the purpose of Senator Nelson's bill some time

' ago, and the Minnesota Agricultural Society in its annual meeting adopted resolutions demanding the improvement in the transportation facilities of the country. Three weeks ago the Farmers' Grain Dealers Association of Minnesota adopted resolutions specifically urging the passage of the Nelson measure, and similar resolutions have been adopted from time to time by other bodies.

This indicates that the subject is one of live interest and concern to the Northwest, and gives evidence of the state of public opinion on this matter.

Mr. Chairman, three years ago at the national association's annual meeting held in Washington, the car shortage was one of the problems before the National Railway Public Utilities Commissioners, and at that meeting a committee was created with Commissioner Funk, of Illinois, as chairman, and I was a member of that committee. At the next annual meeting a report was sent out by the chairman of the committee; I did not sign that, but we had a minority report, because I had traveled and paid out good State money and had investigated what the shortage really was. The next year I was appointed chairman of that car-shortage demurrage committee, and I. have been its chairman for two years, and I have made a study of the transportation facilities of the United States.

The next year our National Association of Railway Utilities Commissioners adopted my report, signed by the other members unanimously. I have copies of that report here and will be glad to submit it to the committee.

Senator KELLOGG. I imagine that that ought to be put into the record.

The CHAIRMAN. Yes; that will be inserted in the record.
Mr. JACOBSON. I will read the elevator capacity at the seaboards.

Senator KELLOGG. You may just have it put into the record. You do not need to read it.

Mr. JACOBSON. It will probably be interesting to you to know what it is.

The CHAIRMAN. Anything that you desire will be put into the record and it will be read by the members of the committee.

(The paper referred to is here printed in full, as follows:)



W. C. Kendall, manager of the Car Service Section, Division of Operation, United States Railroad Administration, informed this committee that he believed the general situation with reference to grain and coal had been quite satisfactory. Efforts had been made to increase the rolling stock by constructing additional cars, but particularly by repairing damaged cars. This latter was regarded as of the utmost importance, as thousands of cars which are but slightly defective and could be used to advantage often are unduly delayed because of lack of repairs. Mr. Kendall further stated that there had been cooperation between various Federal bodies more or less intimately connected with transportation and that there was a complete understanding of purpose. Special efforts had been made at the ports of the Atlantic seaboard to get them in position for the expeditious handling of all cominodities so as to prevent their congestion. Orders had been given that no grain or flour or other commodity should be shipped to any Atlantic port without a permit from a responsible Federal agent and that no permit to ship would be issued unless assurance was given that the shipment would be promptly received and unloaded upon its arrival at destination.

Mr. Kendail as well as other Federal officials, notably C. E. Spens, Director of Inland Traffic for the United States Food Administration ; Julius H. Barnes, head of the Grain Corporation; Col. Frederick B. Wells, in charge of the overseas shipments of the Quartermaster Department of the United States Army ; while speaking optimistically of the past, present, and future of the Federal Administration of railroads, frankly confessed to the chairman of this committee, Commissioner 0. P. B. Jacobson, of Minnesota, that admirable as the entire transportation system appeared to be and capable as was its management there is one weak link in the chain.

They agreed with the statement of Mr. Jacobson that the deficiency of elevator capacity on the Atlantic seaboard (caused the so-called “ car famine of 1916. They also admitted that a like lack may produce a similar famine at any time, in spite of the elaborate precautions that have been taken by the Government. It is well worth the attention of the association, and unless the Government already has taken active steps to supply the deficiency in grainstorage facilities upon the Atlantic seaboard, it should exert its influence in every way possible to obtain this result.

A very brief review of the conditions in 1916 and their causes will not be amiss in a discussion of this subject. Industry and commerce were disorganized thoroughly by what was termed a “car famine," and a deficiency of hundreds of thousands of cars was reported. Thousands of bushels of grain were brought to market and, for lack of elevator space or empty cars, were dumped on the ground, subject to damage and destruction by the elements; mills and mines were closed through failure to obtain fuel; shipments of raw materials to factories were delayed, not weeks but months, and they were compelled to shut down for longer or shorter periods. Workers were thrown out of employment. Their incomes were reduced and, of course, their buying power. All retail merchants suffered in their business. When the East and all Europe were clamoring for flour and grain, every flour warehouse in the Middle West was bursting with flour and every grain elevator was full to overflowing. Yet, while the East demanded grain and the West had plenty of it, there was an embargo on grain shipments. Such was the situation, as all will recall.

It was called a “ (ar famine," but it was no shortage of cars which caused the congestion. There were cars in plenty for the legitimate demands of business, but they were not used for transporting freight. The car shortage was represented by freight cars filled with grain and fuel and used for storage purposes in countless freight yards from the Atlantic seaports to the far West. Records easily obtainable will show that thousai ds upon thousands of box cars remained idle in the yards of the eastern railroads at their terminals, not only for weeks, but actually for months, without a wheel being turned. The terminals were congested with cars of grain because the cars could not be unloaded upon their arrival; the cars could not be unloaded because the elevators at the port were full. The result was that the congestion backed up from the seaboard to the far West, almost paralyzing the entire railway network of the country. Had there been ample elevator capacity upon the Atlantic seaboard so that the cars of grain could have been uploaded promptly upon arrival and released again for transportation purposes, there would have been no cry of car shortage. It must, of course, be conceded that extreme climatic conditions intensified the congestion, but such interruption was of a temporary nature only, while the elevator shortage as continuous and prolonged.

In order that there may be a general appreciation of the limited elevator capacity at the terminals on the Atlantic seaboard as compared with other sections of the country, the following tables are appended :

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Statement of licensed elevator capacities in the United States.

[Prepared by United States Food Administration, Inland Traffic Section).]

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