One thing which is not sufficiently emphasized in most discussions of rent control is that the tenant's reduction in rent is taken from the landlord. If the tenant must be subsidized, and certainly our chart showing the increases in the buying power of wages would not indicate this to be the case, there can be no equitable defense of forcing the landlord to subsidize the tenant. One reason that so little rental property exists on today's market has been the refusal of landlords to carry on under these unfair provisions. As a result, property has been progressively withdrawn from the rental market and the prospective tenant has been forced to buy rather than rent. The end of rent control would undoubtedly see a large increase in the number of properties available for rent and it would no longer be necessary for a person needing a home and housing to rent, to buy on a market which is very close to the all-time high level. I firmly believe that many of the units which have been frozen would increase in rent by reasonable amounts such as those shown in the six cities which have been decontrolled, and that many of the higher rent units would gradually come down when forced into competition with an increasing supply of units for rent. This might throw some of the more recently erected apartment buildings into difficulty as they were built at very high costs to rent for high rentals made possible by the high scarcity market, a market which probably could not be maintained if the supply of rental units were greatly increased. The bill now before Congress has provisions for the control of commercial rents as well as the control of residential rents. The chart to the right shows the average rents of office buildings in the United States as computed from the figures of all buildings operated by members of the Building Owners and Managers Association. This includes practically all large buildings in the United States. It will be noticed that in 1932 office building rents started dropping rapidly and lost more than one-third during the next 6 or 7 years. Since 1945 office building rents have been rising, but the rise has been insufficient to take care of the increase in operating costs, a figure derived from the same source and shown for the same buildings over the entire period. It will be noticed that while the rent level of all office buildings is now 7 percent higher than it was in the 1925-29 period, the operating costs are 48 percent higher and the cost of building a new building is 104 percent higher, or more than double. I believe that it is inevitable that office building rents will climb further, and to prevent further increases would be to prevent additional building in the office building field. This would increase the pressure on existing space and would make it more difficult to hold down rent levels against a demand in excess of supply. The shortage of office space which still exists in many communities would be perpetuated. The most certain way to depress office building rents over the long period is to allow them to rise to the point where they furnish an incentive for additional building. The resultant building oversupplies the market and, as a result, competition between owners of buildings for tenants causes office building rents to fall. ROY WENZLICK. The CHAIRMAN. We appreciate your comments, Mr. Summer. The committee will stand in recess until 2: 30 this afternoon. (Whereupon, at 12:30 p. m., the committee recessed until 2:30 p. m.) AFTERNOON SESSION Senator BENTON. The committee will come to order. Is Mr. Carpenter here? Mr. CARPENTER. Yes, sir. Senator BENTON. Will you come forward, Mr. Carpenter, please. Will you go ahead with your statement or summarize it for the committee in any way you see fit. It will be printed in full in the record, and perhaps you will just want to comment on it as you go through, or perhaps you have supplementary material. STATEMENT BY CLIFF D. CARPENTER, PRESIDENT, INSTITUTE OF AMERICAN POULTRY INDUSTRIES; ACCOMPANIED BY MR. TOBIN AND MR. HISE Mr. CARPENTER. We have some charts, Senator Benton, and some material we want to insert in the record. Incidentally, I have with me Mr. Tobin on my right and Mr. Hise on my left, who are associated with the institute, in the event there are some questions that might be put to me which they could better answer than I. Senator BENTON. Are you three full-time employees of the institute? Mr. CARPENTER. No; I am the only full-time employee, the executive head of the institute. Senator BENTON. And these two associates of yours raise poultry? Mr. CARPENTER. Yes; that comes pretty close to the comprehension. They are on the firing line. Senator BENTON. How many members do you have? Mr. CARPENTER. We have in our organization 1,250 companies and individuals engaged in the production, breeding, hatching, processing, and marketing of chickens, ducks, turkeys, geese, guineas, eggs and egg products, and our members are in direct contact with hundreds of thousands of producers and consumers throughout the country, primarily because of the nature of the industry. The institute membership and program, therefore, are directly or indirectly involved in the production, processing, marketing, and merchandising of poultry and poultry products in about 3,000 of the 3,071 counties in the 48 States. Senator BENTON. How much of the industry would you say you represent? Mr. CARPENTER. In the processing and marketing phases it is a fair estimate to say that we represent between 60 and 70 percent. It is hard to tie down, Senator Benton. Senator BENTON. That is enough of an answer. Mr. CARPENTER. The answer could be contested because of so many small units. You see, the poultry industry is engaged in more broadly than any other farm enterprise and involves the farms of some better than 5,000,000 farmers which takes it into every county of the Nation. But from the standpoint of the organized poultry industry, we represent roughly that volume of operation. Our national representation into every segment of this vast industry provides us with grass-roots reaction of great weight. It is the considered opinion of our board of directors, of our membership, and of all our industry contacts, that price controls, including those provided for under the Defense Production Act and the special amendments bill S. 1397 are and would be unworkable and conducive to great confusion and chaotic disturbance on the farm and in the market place. The very flexibility of the production potential for our industry is in itself the surest guaranty against inadequate supplies and exorbitant prices. Poultry and egg production can shift and change quickly and dramatically. To strait-jacket or shackle such an industry would destroy the flexibility and would be nothing short of disastrous for all concerned. Our first chart shows that the poultry industry is no longer a farmyard operation or a pin-money or incidental farm income as it was considered years ago. Today's modern poultry industry is a major agricultural enterprise grossing more than 5,000,000 farmers about $3 billion a year. Senator CAPEHART. You say $3 billion? Mr. CARPENTER. Yes. Senator BRICKER. It has grown more rapidly, has it not, than any other single agricultural industry? Mr. CARPENTER. Yes; it is the fastest advancing major agricultural enterprise with which we are familiar. On chickens-this is per capita production, Senator Benton, of chickens, eggs, and turkeys, the black refers to pounds, the scale on the left; the red refers to number of eggs on the right. In 1935, for example, we were eating about 2.4 pounds of turkeys, and today we are eating about double that, about 5 pounds. In eggs we were consuming in 1935 about 279 eggs per capita; today the Secretary of Agriculture estimates that it will be 394 per capita for this year, but currently we are consuming at an annual rate of 410 eggs per capita, an advance of over 279 eggs in 15 years. Keep in mind, gentlemen, that a dozen eggs is a pound and a half of animal protein. Then chickenwise we were consuming roughly 17 pounds of chicken in 1935, whereas today we are consuming roughly 27 or 28 pounds. So totaling it up we produced last year 60 billion eggs. That is 5 billion dozen. And our total production of animal protein, that is chickens, turkeys, ducks, and eggs, equals 85 pounds per capita, an astonishing figure from the back yard pin money. Senator CAPEHART. The total weight each year is 85 pounds per capita? Mr. CARPENTER. Yes, sir. Senator CAPEHART. Against 146 pounds of meat? Mr. CARPENTER. Yes; projected 146 to 148, if I remember correctly. In 1950 and this I think will give you the amazing growth that Senator Bricker referred to-that is, last year, chickens and eggsSenator BRICKER. We were just trying to settle whether 146 pounds was beef. Mr. CARPENTER. Red meat, I believe. Mr. TOBIN. Red meat. Senator BENTON. That means no bacon? Mr. TOBIN. Pork, beef, veal, and lamb. Senator BRICKER. Beef or sheep and― Mr. CARPENTER. It excludes chickens, poultry, and eggs and excludes fish, otherwise it is a rather comprehensive figure. Senator BENTON. Your curve is going up a lot faster than the meat curve, is it not? Mr. CARPENTER. It is a very flexible industry, sir, as we will show you in just a moment. In 1950-and this will give you the impact of its rapid development-just last year chickens and eggs were either first, second, or third biggest agricultural crop in 32 of the 48 States. In 1950 we produced 616 million commercially grown broilers. We call those tailored products, because most of them are sold between the ages of 10 and 12 weeks. They are quickly grown; they are bred to standard; they are fed and housed to standard, and because it is developing meat in such a fast pace it is done strictly on a commercial basis in contrast to the original farm flock idea. Senator BRICKER. That is in Senator Williams' country. Mr. CARPENTER. Yes, sir; his area, the Delmarva area; Delaware, Maryland, and Virginia is right down in his neighborhood. Senator BRICKER. That is the heaviest producing area in the United States? Then Mr. CARPENTER. It is the heaviest commercial broiler area. Georgia is second; Arkansas, third, and there are several of them coming in very rapidly. Indiana is now producing around 26 million. Virginia is fourth. There are about 7 or 8-there are now 10 commercial broiler areas that are reported in USBAE figures showing that they calculate them as areas worthy of reporting figures separately. Senator BENTON. Would you describe again what makes a commercial broiler, what accounts for there being none in 1925? Mr. CARPENTER. Yes, sir. In 1925, Senator Benton, the poultry industry was incidental farm income. We used to think of it as pin money for the wife. Senator BENTON. These are full-time people? Mr. CARPENTER. These are full-time growing operations, and they range from 5,000 broilers in a lot up to 200,000 broilers in a given lot. They are specially bred for meat qualities, these chicks. It is a scientific development, a breeding for meat-quality improvement, the same as we did for a quarter of a century or a half century ago on improving egg production per bird. Senator BENTON. These are the chickens that fill those warehouses in Chicago, at least I assume that that is part of this industry. Mr. CARPENTER. Chicago does store quite a bit of poultry, yes, sir. Senator BENTON. No; I mean live chickens. Do they not raise them today in quantities in large cities? Mr. CARPENTER. I think now I know what you are referring to. A big building of about 8 or 10 floors is converted into a battery brooding place. I think they are out of business, sir. I would not recommend it as an urban pursuit. Eastern Connecticut, Senator Benton, is one of the most rapidly growing commercial broiler areas in the Northeast, and as far as that is concerned, throughout the country. In fact, wherever there is urban population today, commercial broiler development, these tailored birds, are growing around these areas. Senator BRICKER. Do you have anything on Ohio there? Mr. TOBIN. I do not have the figures, Senator, but from memory I would say about 7 or 8 million head. Mr. CARPENTER. It is under 10 million, as I remember it. Senator BENTON. Senator Frear regrets he cannot be here this afternoon, but his State is one of the big poultry-producing areas. It is the biggest? Senator BRICKER. Delaware is the biggest? Mr. CARPENTER. Yes; the State of Delaware produces more commercial broilers-and I think there are three counties in the Statethan any State in the Union. There is an area referred to as Delmarva; Delaware, Maryland, and Virginia, it is the Eastern Shore. Senator BRICKER. The reason I asked that question, I talked to Professor Aiken not long ago about the matter, and he told me of the great increase in Ohio and projected it for the next 10 years and said it would more than quadruple, he thought, in the next 10 years in that State. Mr. CARPENTER. I think it is a fair estimate, but I would like to ask Mr. Tobin to check it, that in the State of Ohio on the basis of 7 million, we will say, commercial broilers as of today with the urban population that you have in that State, Senator Bricker, I would estimate that it would be 20 to 25 million broilers a year within 4 years. Mr. TOBIN. I would say that is a very reasonable conjecture. Mr. CARPENTER. That is happening all over the United States, Senator Bricker, because it is such a flexible industry, as we will show you in just a moment, with another chart, how fast we can convert fertile eggs to meat, which was one of the large assets during World War II in filling the meat shortage gap. Senator BRICKER. That shows on your consumption figures very clearly, too. |