Mr. BALLINGER. The Supreme Court has passed on that case.
Mr. BISHOP. There are a good many more I could think of.

I don't know whether they are facts or not, but I get those through the national magazines that are published throughout the country. The gentlemen who preceded we merchants, I think, have covered the case entirely and thoroughly.

There is one other thing: The Government bureaus are so slow in acting. You can present something to them and you are lucky if you get a final solution in 5 or 6 years.

That is about the only thing I care to say.

Mr. BALLINGER. What about the next witness?

Mr. BECKY. I think he has covered it adequately.

Mr. ROBERTS. Mr. Bishop has covered our difficulty. The fault comes from the Government. I think it is very lax, and, as has been mentioned here before, it takes from 5 to 10 years before we can get action.

I believe everything has been covered very thoroughly.

Mr. BALLINGER. What about you?

Mr. THOMAS. The same.

Mr. BALLINGER. What about you?

Mr. RICHARDS. I think Mr. Bishop has covered it adequately.

STATEMENT BY LIEF ERICKSON ON BEHALF OF VARIOUS POLE OPERATORS IN THE STATE OF MONTANA

Mr. ERICKSON. Mr. Chairman, I would like to call forward here the people I represent today.

I am going to present two matters, representing two different

groups:

The first group is the pole operators of the State of Montana. I would like to have those gentlemen come forward.

Mr. Curtis is here, Mr. Oaas, Mr. Dury, Mr. Carlisle, and Mr. Robert Curtis.

Mr. PATMAN. Have you discussed with counsel for the committee the manner and method of testifying?

Mr. ERICKSON. No; I have not.

What I had intended to do here, if it meets with your approval, is to make a very short introductory statement, then call on Mr. Curtis who would know the business. He can make it much more briefly. Mr. PATMAN. Along the lines of taking a few minutes each? Mr. ERICKSON. Yes.

I have had experience before committees.

Mr. PATMAN. You may proceed.

Mr. ERICKSON. Let me say at the outset I feel that it is properly appropriate that your committee come to Montana to start this series of hearings, for the reason that in Montana we have no large business. We have one or two large companies, and with the exception of those, everyone in business here is on a very small scale. Our manufacturing is on a small scale, and everything we do.

Any attempt by Congress or by anyone else to alleviate the situation of the small-business man here is of great importance to us.

Then the second thing I would like to say is that in modern times the Government has gotten so big and so away from the people that

the average citizen has no feeling of contact with the Congress, with the Senate or with the House of Representatives, or with the Government in general.

Now, when you Congressmen come out here, and the committee comes out here, you are bringing a little segment of the people's government here where we can talk about the power of competition and so on and indulge in the power of petition, and so on.

Mr. PATMAN. That is Mr. Ploeser's idea, our chairman, and I am sure he will be glad to know you agree with him.

Mr. ERICKSON. I think it is one of the soundest and best things that can be done in this day of big government.

The first matter I want to present is on behalf of the pole industry of the State of Montana. We have needed industry very badly here. We need diversification of industry.

Historically, the only poles used in line construction were cedar poles.

The supply of cedar poles became very limited, and, as a result, through the cooperation of the Forest Service and the Rural Electrification Administration and the private power companies, a considerable amount of research has been done on making usable more available species, including pine, of which we have a tremendous amount, fur, lodge, and other species that are in great supply.

The Rural Electrification Administration was the chief user of poles. They started a program back in 1942, 1943, and 1944, and from there on to encourage the establishment of pole-treating plants that would treat these species like lodgepoles that are available. There are two methods of treating poles:

One of them is under pressure; and the other is in an open vat.

In Montana the investment required in a pressure-treating plant is very great, a very costly proposition.

In Montana, with one exception, all of the plants, seven of them, are open-vat-treatment plants. All of them were started with the current shortage of poles.

Mr. Curtis will tell you that there is only one thing that is important in the treatment of poles and that is getting the treating material into a certain penetration. It makes no difference whether it gets there fast under pressure or whether it gets there slow in an open vat. So far we have been talking today about the harm that comes to small business from nonaction on the part of the Government.

We have been dealing with problems with our larger companies through various methods that have reached a monopoly situation, as typified by steel and automobiles.

The two matters I am going to present, the first one, and, more particularly the second one, are cases where the difficulties of the people I represent come through action of the Government.

We believe that your committee is as much interested in the problems that arise that way as where you have a larger corporation or a group of corporations dominating the field.

The time is limited.

We have with us today Mr. Omar Curtis, of the Curtis Pole Co., who has been in the pole business nearly 40 years.

The pole busines has always been a hazardous one and the mortality is very high in that field.

We feel when we have a man like Mr. Curtis, who has survived the vicissitudes of the business so long, and is in business at Helena with a pole plant, here to tell us about that, he can do a better job than any attorney or anybody else can possibly do.

So I will call on Mr. Curtis to make a statement.

First identify yourself, and then go right ahead. Four of the seven are actually present and we are authorized to speak for five.

Mr. BALLINGER. Suppose you have them identified now.

Mr. ERICKSON. Yes.

There is Mr. Omar C. Curtis.

There is Mr. Earl Drury, who is another old-timer in the pole busi

ness.

How long have you been in it?

Mr. DRURY. Since 1915.

Mr. ERICKSON. Mr. Curtis beats you about 3 or 4 years.

He is of Drury & Son at Troy, Mont.

Then we have Mr. Robert Curtis, who is associated with Mr. Omar C. Curtis, of the Curtis Pole Co. of Helena, Mont.

We have Mr. T. Oaas, of the Montana Pole & Treating Co. of Butte; and Mr. W. L. Carlisle, of the Kalispell Pole & Timber Co., Kalispell, Mont.

We also appear today upon behalf of Mr. Kaiser, of the Granite Pole & Timber Co. of Philipsburg.

Mr. CURTIS. And the Idaho Pole Co.

Mr. ERICKSON. That leaves us with only one officially not represented. We know that he would agree with what we have to say.

I think I will call on you, Mr. Curtis, to make a statement to the chairman and to the committee of what your problems are.

STATEMENT OF OMAR C. CURTIS, PRESIDENT, CURTIS POLE CO., HELENA, MONT.

Mr. CURTIS. The REA Administration a few years ago found themselves very short of poles, so they sent some expediters or promoters to the State of Montana to interest people in the production and treatment of pine poles, lodge pine poles, which had not been extensively used.

It has been used in a small degree in the State of Montana by the telephone company.

As Mr. Erickson told you, originally most of the poles used in the United States were cedar poles. Cedar became exhausted.

Southern pine came to the forefront. Southern pine was promoted largely by the big creosote interests.

Mr. PATMAN. The pressure plants?

Mr. CURTIS. The pressure plants.

In 1944, 1945, and 1946 there were promoters in the State of Montana and they really did get different people interested in building plants.

Mr. Erickson has informed you that there are seven of them in Montana.

Shortly after we got the plants built, the REA sort of turned us down. They changed the rules after they got the plants going. They specified mostly, and gave preference to, pressure treatment, so much

so their field engineers were telling the local co-ops in various parts of the Northwest that they could borrow money from the REA only provided they used pressure-treated poles.

A year ago, or just about a year ago now, the Madison Laboratoryyou are familiar with the Madison Laboratory established under the Department of Agriculture at Madison, Wis., supported by the Government, a research department of the woodworking industry mostly -and the REA officials of Washington, not admitting that they know very little about poles, depended upon the Madison Laboratory for a lot of their information.

The REA seemed to be dominated by the pressure people. There was a man by the name of B. P. Smith, who called himself a pole specialist down at Washington. He really did favor pressure-treated poles.

The result was the field engineers were advocating the use of them. About a year ago I got the Madison Laboratory to send a man out to this country. His name was Mr. Blew, a research man.

I got him to come out to all of our plants to see what we were doing. He was here about 6 weeks.

He spent 3 days at our plant and 2 or 3 days at every other plant. He found that we were really doing a good job of putting the preservative into the wood. After all, it is not a matter of how you get the creosote into the sapwood of a pole. If you get it in you have done the job, regardless of how it is done.

He found out the the nonpressure plants were doing a very good job, and he made a favorable report. Then down at Washington they said they would make out new specifications, based on Mr. Blew's report. That was last October he finished his report.

The "specs" were finally out on the 12th of August and sent out 8 months afterward. In the meantime our plants are suffering from want of business and are practically going broke. Some of the plants have shut down, and those that have not shut down are running at a loss.

Mr. BELL. Which is the cheaper method of producing?

Mr. CURTIS. The nonpressure.

Mr. BALLINGER. The nonpressure is the cheaper?

Mr. CURTIS. It is the cheaper method because they have a much smaller investment.

A pressure plant of any size will cost you anywhere from a half million to a million dollars.

A nonpressure plant can be built for $25,000 to $50,00 or less, depending upon how expensive your operations are.

Mr. PATMAN. I would think that the real difference is that pressure method would be much quicker.

Mr. CURTIS. I doubt it.

Mr. PATMAN. I presume it is their argument that is much quicker? Mr. CURTIS. Their argument is they do a better job.

Mr. PATMAN. They do a better job?

Mr. CURTIS. Yes.

Mr. PATMAN. That is what they contend?

Mr. CURTIS. They can put the oil into the sapwood, and they can also pull it out.

Mr. ERICKSON. Let me interject right here: The Koppers Co. has been a chief exponent of the pressure-treating method.

In the remote past when I was very young I worked for a telephone company as an operator at night. They operated a Koppers plant. Koppers built their plant; they take their money out of the operation over a period of years.

Koppers has been running a series of ads in the big national magazines showing the cross section of a pole. Actually the penetration is only a matter of the surface. That is all that is needed.

They showed the cross section of a pole with the penetration going down to a little bit of a core, leaving the impression in the minds of the general public that in the pressure treatment you get a lot better wood.

I think Mr. Curtis can explain that.

Mr. CURTIS. The fact of the matter is that the wood that is being used under the pressure treatment down South is practically all sapwood, and the sapwood instead of being this thickness [indicating], is 22 inches thick.

So they could show a picture of a sapwood impregnation.
But our timber up here, they cannot get any more than we do.
Mr. PATMAN. You are talking about the loblolly pine?

Here is a piece of Douglas fir that is a relatively fine sapwood. Mr. PATMAN. You contend it is not necessary to go into the hardwood?

Mr. CURTIS. You cannot get it into the hardwood.

Mr. PATMAN. Neither by pressure nor the other method?

Mr. CURTIS. Yes, sir.

Mr. PATMAN. You say then it is unnecesary to go beyond the sapwood?

Mr. CURTIS. Yes.

Mr. PATMAN. Do the experts agree on that?

Mr. ERICKSON. I will call Mr. I. V. Anderson at the conclusion of Mr. Curtis' testimony.

Mr. PATMAN. The point is Mr. Blew was for the Government? Mr. CURTIS. He was for the Madison Laboratory and for the REA. Mr. PATMAN. He recommended that the poles you were putting out through the method you were using were just as good as the pressure method?

Mr. CURTIS. Yes, sir.

Mr. PATMAN. Although the recommendation was made last October, the new specifications only came out in August of this year?

Mr. CURTIS. That is true.

Mr. PATMAN. Which resulted in great delay and damage to your companies?

Mr. CURTIS. Yes, sir.

Mr. PATMAN. They were induced to go into business by the REA? Mr. CURTIS. Yes, sir.

Mr. BALLINGER. The Madison Laboratory was an exponent of the pressure method up to the time its representative came here?

Mr. CURTIS. NO; I do not say that. I do not know. I do not know where the REA got the idea that the pressure method was superior. This man Blew came out here to convince the REA that nonpressure method was all right.