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So, No. 1, that is the first thing that has to be done.
No. 2, is to make sure that the people in the markets, like the fish industry, are unanimously for improving it and lay out a program.
The food and vegetable people have not quite been unanimous but almost 85 percent of the tonnage and maybe 60 percent of the number of people, were unanimous to clean up the situation; and then to go to the city officials and various people to get help as they did when they went to Mr. Crow and got help there.
The third thing that has to be done is to make sure there are no tie-ins with an old regime in the food market and labor unions that have been so current around this country.
There has been a status quo assurance by certain people in the food industry and with certain labor people to make sure that there would not be any exchange in this thing for one reason or another.
I am happy to say that one of the jobs the coordinating committee has accomplished is that in four of the biggest wholesale markets, they have received assurances from the legitimate leadership of the unions involved that they would support improvements that were going to be known to be progressive and be helpful to the consumer and the farmer and everybody concerned.
No. 4, there must be absolute care taken to see to it by persuasion or what have you, that there are no transportation agencies—I will include them all in one-or real estate people or banks or other public businesses to act as a roadblock to improvements.
We have had those cases and they have been regrettable. They are almost cured in the New York area, with 1 or 2 exceptions, but this can be a terribly big stumbling block.
For example, in this one wholesale market, we have the majority of the people and the association and the trade to support this improvement of the market and relocation if necessary.
On the other hand, you had some of the specific trade associations that were not necessarily representative of the food industry, passing resolutions saying “We are opposed to any move that industry makes," and giving reasons completely unrelated to the problems that the food industry faced, completely unrelated to the consumers' and producers' interests as well as the distributors'.
Mr. ANFUSO. Again, I congratulate you on the very fine job you and your committee have done.
This committee is here to help you. Congressman Cooley would like to tell you something about a bill which is now pending to help this very situation. .
Mr. COOLEY. Mr. Adams, first permit me to thank you for appearing before the committee and for your interest in the problems with which we are dealing.
More than 10 years ago I came to New York and made a study of the Washington Street Market. Unfortunately there has not been any improvement during that time. It is a deplorable situation.
I think the entire country has an interest because of the magnitude and the volume of business that is carried on in that congested area.
I realize that the market is impressed with the public interest, because the evidence indicated yesterday that farmers from 46 States of the Union do business in the Washington Street Market. That is amazing when you think about it. The volume in that market is very great, as you know.
As to these buildings, if you have seen the pictures that we have seen of Washington Street Market as it was 100 years ago, it is the same as it is today, with all of the congestion and all of the filth. You just cannot imagine a much worse situation than that at this market.
From information we have about other markets in other cities, similar conditions exist.
What I propose to do—and I had a bill that passed once or twice, is to authorize the Federal Government to underwrite the building of new marketing facilities.
I don't mean in every city in the country, of course, but in the big general markets and let the loan be made by private lending agencies, amortized over a long period of years, so that the whole process would be self-liquidating. The rents from the stores would go toward the payment of the debt.
Finally, the facilities being debt free, they may be operated by a public marketing authority.
The bill does not contemplate that the Government is ever going into the marketing business.
No loan would be made to build a marketing facility unless the physical layout and the draft of the plans of the market would have been approved by marketing experts.
There in my own district we had a deplorable situation in the city of Raleigh, N. C. It was not half as bad as this one in New York. Certainly, it was not as large, but we built a modern market. Trains can roll up to the back door and trucks up to the front door and you can unload cars automatically and cheaply, and you have storage facilities, refrigeration, and every convenience.
It is a model, modern market. The big chainstores are doing the same thing. If we are going to follow their ingenuity we should look around and see what A. & P. and these other big stores are doing. They are doing practically the same thing, they are building their warehouses along the railroad track.
Unless somebody leads off, I think you put your hand right on the throttle—unless somebody in New York has interest enough in the Washington Street situation it will continue that way for another 100 years.
I am glad to hear you say that the present administration has indicated an interest in doing something about this situation.
We can get this bill through in the Houses, I know. We did it twice. The bill was reported out of the committee and is now before the Rules Committee. We can get a rule in January and pass the bill.
I think we can pass it in the Senate, but what I am hoping is that we can create some interest in places like New York, Philadelphia, Boston, and Baltimore and other places that operate on such large volume.
I am glad to hear you say that the administration is now interested in the marketing problem, because it is one in which everybody in America is interested. All of us are either producers or consumers.
Mr. Adams. That is right.
Mr. COOLEY. As I said yesterday this is a disgrace to the distribution system in America. We do have the best distribution system in the world, but it is too expensive and it should be improved.
I know the members of this committee are vitally interested in this. Mr. Grant of Alabama is chairman of a standing Committee on Markets.
Mr. Anfuso has been giving this matter very great consideration. As you know, he is an outstanding representative from the great State of New York and interested in agriculture and its products.
I was glad to see him chairman of this committee because in his own State he has one of the worst conditions in the country.
Someone has asked us what we expect to accomplish by these hearings. One thing. I want to accomplish is to improve, if we can, the marketing facilities of America.
Mr. Adams. That is very encouraging, Mr. Cooley. I was going to ask if you happened to read the Red Book magazine for April, May, and June of 1952, when the three articles called Filth in Our Food were published.
Mr. COOLEY. That is right, I saw them.
Mr. ADAMS. That was a big help. I do not mind telling you that the publicity you got in the morning's Times was a tremendous help. What we have are the road blocks of people and institutions that do not want to see any change. They are people who might in some direct or indirect way serve the food industry, like transportation companies or real estate.
Mr. COOLEY. Or railroad companies?
We don't want to be uncharitable but somebody in your position could do a terrific amount by publicity or having hearings on your bills to just point out the fact that these people would be ashamed to wreck this transportation, to have them block an improvement in the wholesale market.
Mr. COOLEY. Yesterday we saw what was happening. There is no justification for a housewife in New York City having to pay 10 cents for a little old rotten tomato, or 15 cents for an apple, or 8 cents for an orange. That is ridiculous.
Mr. ADAMS. It is amazing. I talked to these big chains and they would be mighty happy to see a wholesale market. They would not have to put up such expensive facilities; they could go to a team yard or a truck yard and unload their goods.
They would not have the terrific warehouse expense they have now.
This is important, as you should know, that I have a terrific respect for these food men in New York, who have been able to move people in the food industry who were against it.
They have been able to change the attitude of the labor leaders so that they are for it.
They have changed words in contracts to make sure the contract will not in any way obstruct them from improving the situation.
Those fellows have a lot of courage.
In 10 years not too much has happened but I have seen a lot that would certainly surprise you, that people have taken the things with all of their activities and work and responsibility, they have gone about this thing systematically.
The men on these food and vegetable committees, have done a terrific amount of work in trying to overcome the normal objections that people have to changing conditions from old to new.
They have also been helpful in persuading the mayor and the city council and the board of aldermen and so on. I am very enthusiastic about that and I am very enthusiastic that yesterday they took this matter up and said "We will go ahead."
That is encouraging, so I think, Mr. Cooley, that it is timely you being here, and also, Mr. Chairman, if you can give a little more publicity to this, in the days to come, with what you have done and what you have seen, it will help to make some of these people reconciled to the fact that this is good to be changed. It has to be. The consumers cannot stand it if
do not. Mr. ANFUSO. I want to conclude this by saying that I had a pleasant lengthy talk with you about 2 years ago, and following that talk I introduced a similar bill such as Mr. Cooley has spoken.
It is identical, and supporting the Cooley bill, I am sure that bill will become a law and that should help you in your efforts, we thank you again. Mr. Adams. I thank you. (The two letterheads are as follows:)
LEE E. BEAIRD
For Vice President
Second Vice President
ROBERT M. RUBENSTEIN
Tbird Vice President
Secretary and Treasurn
525 West Street, New York 14, N. Y.
JOHN Q. ADAMS
(Airman of Board of Directors
CHESTER A. HALNAN
TELEPHONE CHELSEA 3. 3500
HONORARY PRESIDENT HON. ALFRED E. SMITH
M. S. HOFFMAN
PIROT VICE PRESIDENT
SECOND VICE PRESIDENT
106 GANSEVOORT ST.
NEW YORK 14. N. Y.
THIRD VICE PRESIDENT
J. K. POTTERTON
CHESTER A. MALNAN
WILLIAN J. McKINLEY
CHRIS H. FOSTER
ARTHUR G. DAVIS
JOHN Q. ADAUS
I. 1. DROWN
Mr. ANFUSO. We will now hear from Mr. M. M. Zimmerman.
STATEMENT OF M. M. ZIMMERMAN, PRESIDENT, SUPERMARKET
MERCHANDISING, NEW YORK, N. Y. Mr. ZIMMERMAN. My name is M. M. Zimmerman. I am president of Supermarket Merchandising Co., a publication devoted to the chains and supermarket field. Is there any other further identification?
Mr. ANFUSO. That is enough. I am sure that you are able to confine yourself to the 5 minutes. I am sorry we cannot give you any more time than that.
Mr. ZIMMERMAN. You paid me the highest compliment. When you asked me to discuss supermarkets in 5 minutes. [Laughter.]
But I will be very brief. I am not going into any statistics. I merely wanted to take you across for a few minutes and tell you that the supermarkets, despite the fact that we have spiraling prices, despite the fact that our economy has been affected with high costs in every phase of our life, the supermarket has been the greatest price leveler in our country. The best statement I can make is that in 1955 we celebrated the 25th anniversary of the founding of the supermarket industry.
We have estimated that during that period Mrs. Consumer of America bought approximately $150 billion worth of food at a saving of over $15 billion. The supermarket has changed our whole distributive system. It has had its effect not only on every branch of retailing, nationally as well as internationally.
If you go back 25 years, we found our food industry in a state of chaos. There was no such thing as costs. The average independent did not know what it cost him to do business. The food combines had made considerable progress and were fast taking over the business when the supermarket appeared upon the horizon. Michael Cullen, who is really—you can say he is the founder of this industry-came out with the idea of a big store, filled with mass displays of merchandise on the floor, at low prices, giving the consumer the lowest possible price for food, and he gave it to the extent that at that time it was selling the food at least 12 to 13 percent lower than the normal stores.
This had a great effect not only on the food chains, on the wholesaler, on the independent retailer. It forced all of theses various distributive systems to change their entire methods of operation.
In those days the wholesaler was a high-cost operation. The retailer had to follow suit and he was a high-cost operation. His gross markups were around 23, 25, and 30 percent. But the force of the supermarket competition made it necessary for the wholesaler to revamp his entire structure, and to save his customers, that is, if the independent retailers, we organized what we called voluntary chains in which he gave his customers the foods at a lower cost which enabled the merchant in turn to sell at a lower cost, being in competition with the supermarket. We gave him services and advertising and training and many such services which were intended to put the smaller man on the same basis as we were.