Mr. CREAN. Any; and sometimes when we consign a car to the eastern market, when the market is glutted, that is no one's fault, except the consumers, because they are not eating enough of it. That car will be broken and will start to make sales-that is, the receiver willand he cannot finish up, he cannot clean up the car soon enoughmight have it on hand 5, or 6, or 7 days and some may be dumped. There might be a freight deficit. It might be from one to six hundred dollars. We pay that. After producing the car of lettuce, consigning it, you might say paying someone to take the gift of a carload of lettuce. That does not happen frequently, but it happens every year to some of the producers. That is the worst part of it. Let us take a car-take this car that this gentleman said was good lettuce.

Mr. FISHER. That was the top.

Mr. CREAN. You can go down on the Washington Street Market and probably buy a dozen truckloads of good edible lettuce that will satisfy any of these ladies here from $2.75 to $3.50.

Mr. FISHER. That is right.

Mr. CREAN. The top price does not always indicate that the quality is of the best. Many times a car will come in-someone will send in an order a hundred cars go out and the price is $4.50. The next that goes out is $4.25. It comes out of the same field, same quality, same market, same receiver. However, I do not know whether that would account for the wide differential in the prices of these heads named here. I noticed some was 23, some 29. I haven't examined them but just looking at them here, one is a little stale on this side. But they seem to be about the same size and weight.

The car that started to ride from Salinas to New York State, after it comes in here, then it is unloaded.

Mr. ANFUSO. Where is it unloaded?

Mr. CREAN. If it is on the New York Central it is on the train tracks, 33d Street. If it comes in on the Pennsylvania they have to lighter it across, do they not?

Mr. FISHER. Either that or ride it to Jersey City. They truck it over or lighter it if they want to unload on the New York side. Mr. ANFUSO. They put it in barges, if it is coming to New York City-they put it in barges and then it comes down here to the market, is that right?

Mr. FISHER. Loaded across the North River.
Mr. ANFUSO. You are interested in this.

Suppose you bring in

this freight car-whether you bring it into New Jersey or in at 33d Street, when do you sell it, and to whom?

Mr. CREAN. We consign it, let us say.

Mr. ANFUSO. To whom do you consign it?

Mr. CREAN. Senanski and Nathan, Irving Okum when they were

in business, Heller.

Mr. ANFUSO. What names are you mentioning?

Mr. CREAN. Receivers, New York City.

Mr. ANFUSO. You consign it to any one of these receivers, is that right?

Mr. CREAN. That is right. As a rule particular growers and shippers will work with particular receivers.

Mr. ANFUSO. You have your set of receivers, is that right?
Mr. CREAN. I do.

Mr. ANFUSO. Had the price been fixed when the lettuce left California? It has not, has it?

Mr. CREAN. No.

Mr. ANFUSO. No price has been fixed, you just consign it, you send it on consignment, is that right?

Mr. CREAN. Yes.

Mr. ANFUSO. When is the price fixed, and how?

Mr. CREAN. When the car comes into New York. There was a car arriving last night, I think, in New York, midnight.

Mr. FISHER. The Congressman was there.

Mr. CREAN. Do they open at midnight now?

Mr. FISHER. We open earlier.

Mr. ANFUSO. They were open at 10:30 when we were there.

Mr. CREAN. They open at night. The car is unloaded and the merchandise displayed on the walk down there and the buyers look at it, and that is when the trading starts. That is when the sale is made.

Mr. ANFUSO. In other words, you have no guaranty and no way of knowing what you are going to get—

Mr. CREAN. None at all.

Mr. ANFUSO. For that lettuce, that is right?

Mr. CREAN. That is it exactly. The only time that we have a guaranty, and even then it isn't a guaranty, is when we sell a car f. o. b., to a buyer at a shipping point.

Mr. ANFUSO. In California?

Mr. CREAN. California.

Mr. McINTIRE. Is that f. o. b., at shipping point, or do you guarantee delivery?

Mr. CREAN. When we sell it-when we sell out there, we sell on terms f. o. b., acceptance. Whenever one of our cars arrives with over a certain percentage of defects we get that back, too.

Mr. MCINTIRE. That is not f. o. b., acceptance final transactionit is condition on arrival.

Mr. CREAN. That is right. I would say that less than one hundredth of 1 percent of all of the lettuce produced in the State of California and Arizona-they are winter producers-less than that percent is sold f. o. b., acceptance final.

Mr. McINTIRE. How much of that produce is sold for diversion without a consignee?

Mr. CREAN. Without a whom? What you call a tramp car?
Mr. McINTIRE. Yes.

Mr. CREAN. At times of lessened production, maybe 5 to 10 percent of the daily loadings. But normally, I do not think it would be over 1 or 2 percent.

Mr. ANFUSO. I suppose that when the lettuce gets here you are in no position to take it back, therefore, you must sell it at any price, is that right?

Mr. CREAN. Yes.

Mr. ANFUSO. Do you think that that is a healthy situation?

Mr. CREAN. No. I would not say it was a healthy situation, but then again it is not the consumers' fault. We produced it. We loaded it. No one else is at fault but ourselves when we run the stuff out. It is just a method of doing business in the industry. There are certain commodities handled 100 percent on consignments.

Mr. ANFUSO. Who has established that method?

Mr. CREAN. I guess it was established a century or more ago.
Mr. ANFUSO. It just grew up, is that the idea?

Mr. CREAN. Yes.

Mr. ANFUSO. Do you find that to be satisfactory to the farmer? Mr. CREAN. No, no.

Mr. ANFUSO. Do you have any suggestions to make-any recommendations to make to the committee?

Mr. CREAN. You mean put everything on an f. o. b., basis? No; I am afraid we have to suffer along with the evils as well as the good times in the business.

Mr. COOLEY. You are familiar with the operations on the Washington Street Market, are you not?

Mr. CREAN. Very much so.

Mr. COOLEY. Do you not agree that the Washington Street Market is not only a disgrace to the great city of New York but a disgrace to our distribution system in this America of ours?

Mr. CREAN. For 25 years I have been waiting to answer a question like that.

Mr. COOLEY. What is your answer?

Mr. CREAN. My opinion of the New York closed market is that it is the most obsolete, antiquated, inefficient operation in all North America and maybe in the entire world.

Mr. COOLEY. I agree with you. I have been many times in the Washington Street Market and I am sure that it is just like it was back 100 years ago, in the horse-and-buggy days, before we had big trucks and modern transportation facilities.

I have a bill pending in Congress now-it has already been reported by the House committee has been before the Rules Committee which would authorize the Federal Government to finance on a long-term basis, at low and reasonable interest rates, the building of new and modern marketing facilities in all of the metropolitan areas. The justification for that, as I see it, as a southern Congressman, is that the New York market is such an important market that it is actually impressed with a public interest, because you in California, my farmers in North Carolina, the farmers in the lower Rio Grande Valley, farmers all over America, have a right to trade in that market, and, therefore, they have an interest in the market.

When you pointed out a moment ago the difficulties that you have as a shipper in actually delivering your produce to these housewives, you encounter obstacles right here in the metropolitan area which could be eliminated; in other words, if the market in which we are now operating could be abandoned and new and modern marketing facilities could be established, at some easily accessible location, you could ship your freight cars right into the market, and you could deliver into the warehouses and out into the trucks that go to the uptown stores, and you could deliver more efficiently and cheaply.

We had a study made. Here is one short paragraph in our report which was filed on April 21, 1957:

The committee found in 2 large cities that at modern chainstore warehouses with direct rail spurs, products were being unloaded from cars into warehouses at a cost of $9 per carload, while in these same cities the cost ranged from $75 to $115 a carload to move perishables from the railroad car into warehouses of wholesalers in the produce market district, representing an unnecessary charge to consumers of from $66 to $106 on each carload.

I realize that the building of modern facilities in itself is not an answer to the problem, because as you pointed out a moment ago, you deliver the products of your field into the great consumer centers and the price that you receive depends upon the supply at the moment you deliver, isn't that right?

Mr. CREAN. Yes.

Mr. COOLEY. We have tried to provide marketing information which would be, and I think should be and is, beneficial to farmers. Mr. CREAN. Very much so.

Mr. COOLEY. You still find that you will deliver produce on a glutted market and that means a hardship on you as a producer; does it not? Mr. CREAN. Yes.

Mr. COOLEY. If we could shorten the distance between the producer and the consumer, I think we would be accomplishing something. I know that these great markets, in cities like New York and Philadelphia and Boston-I believe Boston is planning now to improve their situation are just obsolete, antiquated ratholes.

I do not want to reflect on our distribution system because I think we have the best distribution system in the world; there isn't any doubt in my mind about that. It is too expensive.

I want to ask Mr. Fisher a question. I know he will be certainly interested in this-when you finish--to give us some idea as to what can be done and what should be done to improve this deplorable situation.

Marketing facilities is a partial answer, as I see it, but it certainly isn't the entire answer. We have the situation constantly facing us because we are the Agriculture Committee.

The housewives go into the stores and buy these products of our fields, and naturally the first impulse is that the farmers of America must be getting rich, as for example here, we paid 10 cents for the tomato and 13 cents for an apple, and when she gets home and looks at the small amount of groceries, the large amount of money, immediately she focuses her attention on the farmer.

The merchant who sells the produce to her is not defending the farmer. He is not explaining the situation is the result of, as Mr. Fisher points out, a lot of costs involved here in addition, such as freight rates, and so forth.

Mr. CREAN. That is true.

Mr. COOLEY. The cost of transportation enters into it, we have been told. I think the Department experts traced a carload of lettuce into the New York market and more than 50 percent of the ultimate cost that the housewife paid attached to the lettuce after it came into the city of New York.

Mr. CREAN. You say more than 50 percent?

Mr. COOLEY. Yes.

Mr. CREAN. In these figures that I cited, 6.5 and 5.5, 12 cents, one lady paid 23 cents and another 29 cents; those figures vary.

Mr. COOLEY. What I am talking about is-I think I am correct in saying that even including the cost of production of your lettuce in California, the cost of producing it, raising it, packaging it, shipping it, from California to New York, that after it got to the city, within the metropolitan area, an additional 50 percent of the cost was added thereafter. In other words, it costs more to get it from across the

river to the housewife in New York City than it did to produce and ship it and deliver it to New York.

Mr. CREAN. That is right. May I inject this?

Mr. COOLEY. Isn't that right? That is a deplorable situation. Every citizen should be interested in this. Is that right, Mr. Crow? Mr. CROW. Yes.

Mr. COOLEY. We are dealing with these problems in which we have a community of interests. When I say "we," I means producers and consumers, because I am a producer and a consumer. I know that the cost of living is constantly increasing and farm income is constantly declining.

What we are here for, I know, is to find out from you producers and consumers, and you merchants, what the Congress of our great country can do to improve this situation. You cannot tell me that it is a local problem. It is not, because I think about 20 percent of the produce of America comes through this Washington Street Market; isn't it 20 percent, Mr. Crow?

Mr. CROW. That is a little high. It is more nearly 10 percent.

Mr. COOLEY. It comes into this one market. It isn't consumed in some other area. It is not shipped out of here. That shows how important the market is. It is important to every consumer in America to see that these conditions are abolished.

I should like you as a shipper who has been dealing with the markets to give us any idea as to how we might improve this situation.

Mr. CREAN. Going along step by step, going back again to this car that we rode in all the way from California. It arrives in New York. There is what they call a cartage charge. It ranges anywhere from 15.5 to 18.5 cents per carton. That is from one to two hundred percent higher than it was 10 years ago. Find out the reason for that. I mean that is one example.

We have already gone through the growing and the harvesting. We found out it cost us 61/2 cents.

Cooling is 15 cents a carton. That is roughly two-thirds of a cent. Another large item that you really could do something about is this 3-percent transportation tax. It hits us right between the eyes and it starts right from the field and comes all the way through to the time that it is delivered to the receivers. That is the tax on the freight bills, the refrigeration bills, the cartage bills and every truck that handles them. That is a tremendous item. It sounds small but it is tremendous. We in the West have been hit the hardest with this and have been crying to our Congressmen, both Democrats and Republicans and to the Arizona Congressmen-and I believe the Texas Congressmen-but we have been pounding on deaf ears so far. That is a good place to start to reduce the cost. That is the transportation tax.

To go back to this cartage, it is a mystery to me why it will range from 15.5 to 18.5 cents. I do not know all of the mechanics of the handling of fresh produce in New York. Maybe it is due to where it was unloaded and what terminal and where it went.

Mr. FISHER. I think I can answer as to that differential. The trucking industry has set up zones in the metropolitan area and set a rate schedule from below 14th Street to above 14th Street such as Jersey and other parts. There is where the range comes. That is in the contract with the people that they work for.