The CHAIRMAN. We thank you, Mr. Brenckman.

Mr. MAPES. Mr. Chairman

The CHAIRMAN. Mr. Mapes.

UNEMPLOYMENT

Mr. MAPES. The figures you give relative to the number of unemployed in the world, according to available statistics, are interesting and amazing to me.

Mr. BRENCKMAN. They are amazing figures.

Mr. MAPES. They show that 70 percent of the unemployed of the world, where statistics are available, reside in the United States? Mr. BRENCKMAN. That is correct.

Mr. MAPES. Are the statistics, so far as the unemployed are concerned in other countries, as reliable as they are in the United States? Mr. BBENCKMAN. It would be difficult for me to answer that question. As I said in my testimony, those figures were gathered by the International Labor Office in Geneva and included in a bulletin issued a month ago; I secured them from the Department of Labor.

Mr. MAPES. They are given out officially by the International Labor Office?

Mr. BRENCKMAN. Yes. And a copy of that bulletin was in the files of the Department of Labor, where I got it.

Mr. MAPES. And the survey includes the countries of Europe and other countries that you mentioned?

Mr. BRENCKMAN. It includes the leading nations of Europe, excepting Russia, where, I suppose, there are no reliable statistics; and it includes Canada, New Zealand, and certain countries in South America.

As I understand it, not all countries in the world take a census of this kind; but, as I said in my testimony, so far as the statistics are available, that is what this survey shows.

Mr. KELLY. Mr. Brenckman, along that line of thought, is it not a fact that in all of the countries where the unemployed are not engaged in industry they are in the armed forces of those nations?

Mr. BRENCKMAN. You say they are in the army?

Mr. KELLY. Yes; or practically all in the army.

Mr. BRENCKMAN. Well, I am sure I could not answer that question. All that I tried to bring out was that on the face of it, according to these statistics, the United States has 70 percent of the unemployed of the world. As I tried to emphasize in my testimony, until that condition is corrected I do not believe that there is any hope of prosperity for the railroads, for agriculture, or for any other branch of industry in this country.

Here is a significant fact: In 1929 we had a national income of $81,000,000,000. The national income for 1938, according to the best estimates, was around $60,000,000,000. In the meantime, the population has increased approximately 9,000,000 since 1929. So these figures show that 9,000,000 more people than we had in 1929 have 25 percent less purchasing power than we had at that time. There are millions of people in this country-many millions-whose only income is the money that they get from the Government.

So the point that I have in mind is that there is no hope of restoring anything like normal conditions for the railroads or for any other branch of industry until we get these unemployed, or least the major part of them, back to work in private enterprise.

Mr. COLE. Has the membership of your organization grown during the period stated by you?

Mr. BRENCKMAN. Well, as you know, Congressman, most farm organizations had a hard time holding their own. The Grange held its own and increased slightly in membership.

Mr. COLE. I thought so.

The CHAIRMAN. We thank you, Mr. Brenckman.

Mr. BRENCKMAN. Thank you.

STATEMENT OF C. E. CHILDE-Resumed

The CHAIRMAN. Mr. Childe, you may resume.

Mr. CHILDE. Thank you, Mr. Chairman.

The CHAIRMAN. Mr. Childe, do you prefer to proceed without interruption until you complete your statement?

Mr. CHILDE. So far as that is possible, Mr. Chairman, I believe that it would expedite my statement.

The CHAIRMAN. If there is no objection, we will proceed by that method.

Mr. BULWINKLE. Just a minute, Mr. Chairman. If I could reserve the right to object. The only thing about it is that the membership of the committee is concerned. We are not here solely for the purpose of expediting his statement. We are here for the purpose of getting information, and if the members of the committee want to get some information not contained in his statement it is pretty hard to remember that until the man gets through with his statement.

The CHAIRMAN. Of course, the Chair does not want to shut off any member, but we face a very practical situation. It takes about twice as long to get through with our hearings, if the witnesses are interrupted as they go along, whereas if we withhold our questions and permit examination after a witness has completed his statement, we can save that time and frequently the witness will cover the matters that the committee members have in mind, if he is permitted to proceed.

Mr. BULWINKLE. As a usual thing, though, Mr. Chairman, the average member follows along in that idea that the witness is talking about right at that particular time. Now, if it is just for the purpose of expediting his statement, they might as well put their statements in the record and we can read it.

The CHAIRMAN. Well, of course, there is no desire to prevent the examination of the witnesses; but if it will follow the completion of his statement, I think it will save time. However, that is a matter for the committee to decide.

It is important for us to proceed as rapidly as possible without slighting the facts in the case.

Mr. COLE. Mr. Chairman, may I ask if in expediting the hearing you are doing so with the intention that the committee, at a reasonably early date, will report some legislation to the House?

The CHAIRMAN. That is the object. It is very important to get this legislation enacted at this session, and it is going to be very difficult unless we conclude these hearings within a reasonable length of time, because the committee, when it writes this bill, will require

considerable time. There are a large number of problems to deal with. And so that is the object that we may have legislation during this session of Congress.

Mr. COLE. I ask for this statement from the chairman, to contradict reports to the contrary found in the press this morning.

The CHAIRMAN. There is no occasion for confusion about the situation. It has been the desire of the chairman and I believe of every member of the committee to hear everybody who had a constructive suggestion to present to this committee, not with the idea that we are necessarily going to put all those suggestions in the bill; but to enable the committee to make as wise a selection as possible of the things that should be in the bill as it is finally written.

So, it is the desire of the committee, no doubt, to try to put in the bill as finally reported to Congress those things which will be of substantial value in dealing with the situation; but we want to have an attentive ear to every suggestion.

Mr. BULWINKLE. The reason why I said that while I do not care to ask any questions myself, yet this is one of the most important parts of the transportation system, if we are to develop a national transportation policy.

Mr. CHILDE. You appreciate, Mr. Chairman and gentlemen, my only thought was to give this committee such information as I could that would be of value to it and also to conserve its time as much as possible.

The CHAIRMAN. Yes.

Mr. CHILDE. I have no objection to answering questions at all. I am glad to, but I do want to get through before I wear out my welcome here.

The CHAIRMAN. Well, if it is agreeable to the committee, we will try to proceed that way and we hope we can all cooperate to try to expedite the hearings and get the meat of the thing to the committee as promptly as possible.

Mr. CHILDE. Yesterday morning,

will recall, I stated the object of the Mississippi Valley Association is to build up the commerce of the interior of the United States. I pointed out the uneven growth and distribution of our population and manufacturing throughout the country and tried to show that we needed more population and manufacturing in the interior to develop our rich natural resources.

I pointed to the high freight rates of the interior as compared with the coastal and Great Lakes areas, as principally responsible for our retarded economic development and I stated that we needed the lowest cost transportation that we could get to build up our interior country and also to give our railroads and other transportation agencies more traffic and earnings.

And I stated that we hoped to achieve that improved condition, an economic parity as between the interior and the coasts, by the development of low cost inland waterway transportation, and spreading the benefits throughout the interior inland from the rivers as well as along the rivers.

The railroads told you in these hearings that you must regulate and restrict the rates and the operations and increase the costs of inland water transportation or else the railroads will be destroyed. I would like to discuss that point briefly this morning.

RAILROAD INDUSTRY IS SMALL COMPARED WITH NATIONAL INDUSTRY

The railroads say they are a big industry and that they have an investment of $26,000,000,000 or $20,000,000,000, if you wish to take the Interstate Commerce Commission's valuation, and that they employ a million people, and spend perhaps $2,000,000,000 a year in wages, and another billion in buying materials and supplies, and they say the whole country will suffer if they do not make more money. Well, we have no quarrel with that general statement. We realize the railroads are big and that they are necessary. We are for the railroads, but we do take issue with them on the point that you must penalize the commerce of this country and penalize other transportation agencies with restrictive regulation and tolls, and so forth, in order to make the railroads prosperous.

This is a big country, and, compared with the whole country which the railroads serve, their investment and their employment and purchases, and so forth, are small. I have before me a statement estimating our national wealth; that is to say, our national investment, as of the year 1929. This was by the Brookings Institution, and is taken from their publication entitled "The Formation of Capital."

It shows that the investment of the country is $460,000,000,000 as compared with the railroads $20,000,000,000 or $30,000,000,000, whichever it may be.

In an exhibit which Mr. Murray left with you last week is a statement taken from the census of 1930 of the number of gainful workers employed in the United States, exceeding 49,000,000, as compared with the railroads' 1,000,000.

The money spent in this country for materials and supplies, if you please that is to say, articles of commerce is just about equal to our national income, which in 1929 was $80,000,000,000 as compared with the $2,000,000,000 or $3,000,000,000 the railroads spent.

The railroads pay taxes amounting to $300,000,000 or $400,000,000 a year, which is likewise a very small proportion of the total taxes paid in this country.

Obviously, it would not do to injure the country as a whole or to neglect its needs on the theory that that will help the railroads.

RAILROADS NEED MORE COMMERCE GREATER ECONOMY AND EFFICIENCY

Everybody knows that the basic trouble with the railroads today, as it is, indeed, with the whole country, is lack of commerce.

The railroad tonnage has fallen off some 300,000,000 tons measured in tons originated from the peak year of 1929 to 1938.

Give them back that much, or half that much, and they will be prosperous again, even without the $150,000,000 or more that they could save, according to Mr. Eastman and according to the present Chairman of the Interstate Commerce Commission, Mr. Caskie, if they would adopt more economical and efficient practices.

There is another $250,000,000 which, according to the Interstate Commerce Commission's Bureau of Statistics statement 3867, issued last month, the railroads have lost by relocation of industry and by cutting freight rates to meet or destroy competing transportation.

130981-39-pt. 4-4

Mr. BULWINKLE. Would they not have lost more if they had not cut rates to meet competition; would they not have lost more tonnage? Mr. CHILDE. Congressman, they spend many times more; I would say, 100 to 1, in rate cutting; that is, they lose it in rate cutting, as compared with what they get back, and I will have a little bit to say about that a little later, if you will permit.

There is no doubt the railroads have thrown away many dollars trying to keep their competitors from getting traffic for every dollar they have gotten back by that practice.

This same statement, 3867, of the Interstate Commerce Commission, indicates that according to their best estimates, the difference between the actual and the potential railway traffic of 1937 versus 1928 is 160,000,000 tons. That is to say, that represents the losses on account of decentralization and shifting of transportation to other agencies.

It does not follow that the 160,000,000 tons would have moved if these other agencies had not come into the picture, because in many instances these other agencies have saved commerce that otherwise would not have moved at all. Nevertheless, taking this 160,000,000 as a major of measure of potential traffic that the railroads have lost and compare it with the 300,000,000 tons which their tonnage has decreased, and it is easy to see that it is industrial recovery that the railroads need to restore their tonnage and not taking the traffic from competitive agencies.

WATER LINES HAVEN'T TAKEN THE RAILROADS' FREIGHT

I would like to call your attention to table No. 4 on page 70 of the report of the railroad Committee of Six, which shows the railroads' own compilation of commerce on the rivers and canals of the United States over a period of years. Those figures show that all of the commerce of the barge lines in the Mississippi Valley for 1928 was 2,045,000 tons; in 1937 it was 3,139,000, an increase of 1,100,000 tons, which is the most that could be said that these barge lines could have taken from the railroads in that period.

This same statement shows a 2,000,000-ton increase on the New York State Barge Canal. It shows that on all rivers and canals and connecting channels of the United States, taking all of the bulk commerce which the railroads themselves tell you is noncompetitive; taking the commerce, a lot of which is coastal and lake commerce, the increase from 1928 to 1937 was some 86,000,000 tons, as compared with the 300,000,000 tons lost of the railroads in the same period.

REMEDY IS GREATER NATIONAL PROSPERITY

I say that 300,000,000 tons, which the railroads have lost, can be regained by a restoration of national industry, national prosperity, national income, but not by legislation which would raise transportation costs and cripple commerce.

I point in substantiation of that statement to another report of the Brookings Institution which found that even in the peak year 1929 three-fourths of the families of the United States fell short of a minimum decent living standard of something like $2,000 per year.

This same report says that if our productive activities in this country were brought up to that modest minimum living standard, it