Km d00 8 r^55 ALBERT R. MANN LIBRARY New York State Colleges OF Agriculture and Home Economics AT Cornell University wmnmm Date Due jM^QkAM^MIkMi*^ mM _W^^^Mp Ite.. I i Library Burea J Cat. No. 1137 Cornell University Library HD 9008.N7N53 Report of Governor Smith's Reconstructio 3 1924 013 842 186 The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924013842186 STATE OF NEW YQ'KY.C S-fa-ffj EXECUTIVE CHAMBER REPORT OF Governor Smith's Ref onstruction Commission ON Terminal Markets IN New York City JUNE 14, 1919 ALBANY J. B. L\CN COMPANY, PRINTERS 1919 349901 REPORT ON TERMINAL MARKETS IN NEW YORK CITY Every important public investigating body that has dealt in any way with food market conditions in New York city since the Mayors Market Commission in 1913 has emphasized the import- ance of establishing more adequate and better organized terminal facilities for the ' receiving and distribution of foodstuffs. Reformers have held meetings about it. Politicians have made pre-election speeches on the subject. But nothing has been done. The Reconstruction Commission proposes the adaptation of thel present public market facilities to terminal market purposes as far as this is possible and the adoption of a permanent pro- gram for terminal market development by the city and the State. It is important, however, that the public realize that the establish- ment of ferminal market buildings and transportation connections will not in itself eliminate all malpractices or uneconomical methods and without the co-operation of the trade, terminal markets might even be a complete failure and a source of financial loss to the city. Definition of a Terminal Market The name " Terminal Market " has a definite technical mean- ing entirely distinct from the term " public market " with which it is frequently confused. It deno"tes a space devoted to the meeting of seller and buyer, wholesale as well as retail, prefer- ably a building conveniently located, directly connected with trans- ' portation systems and providing for the storage, distribution and display of foodstuffs. A market possessing any one of the above features may, under special conditions, serve the purpose of a terminal market. The one esseatial is the connection with trans- portation facilities. Inadequacy of Present Facilities The present facilities for receiving rail and water shipments of foodstuffs in New York city have grown up in a haphazard way without much relation to the needs of the enormously in- creased population of the city or the changing character of the city itself. It is marvelous that in spite of the apparent awk- wardness of the system the great quantities of foodstuffs required daily in JSTew York city are landed there by freight train, by lighter, by steamboat and by motor truck and distributed. The food supplies of the city are brought in by nine railroads and about 100 steamship lines as well as a great number of farm wagons and motor trucks. New York city's market for food products is not centered in any one place except in the case of a few products such as California fruits and the idea of a large central market where the maximum of products and the maximum of buyers can meet does not obtain in the provisioning of the city. However, the main market is centered in the lower west side of Manhattan and the other markets are, generally speaking, merely offshots with high prices. The natural tendency is for both sellers, and buyers to seek the biggest market. This is offset to some extent in the case of the Harlem market and the Wallabout market by the objection of the retail dealer to going such a long distance for his goods. These markets, while established pri- marily for the sale of fresh vegetables and fruits, now have sold in their immediate vicinity a great many other commodities used by the retail dealers. Of the nine trunk lines mentioned above only one, the 'New York Central Railroad, has an all rail con- nection with the west side of lower Manhattan which contains the primary food market of the city including the terminals of railroad and steamship lines as well as warehouses and stores, besides a few terminals scattered over the outlying boroughs where a small number of products are received and marketed. Only about 30 per cent of the incoming freight of Manhattan is carried by the New York Central and about 70 per cent is floated' across the Hudson river on lighters or car floats to and from the New Jersey shore diverting the water front from its proper use as aVdocking place for ships and creating an intense congestion of trucks receiving and delivering freight at the several terminal joints. The report of Mayor Gaynor's Market Commission states that the actual cost to the New York shipper of getting freight to and from the water side frequently exceeds the cost of rail service- as far as Buffalo. Owing to the congested pier space and con- centration of terminals on the lower west side of Manhattan, long hauls are necessary for delivery, especially to the northern and eastern sections of the city, making the cost of trucking food sup- plies very high. The area of distribution from the congested West Washington Street Market is enormous. From a central point in this lower west side section it is by air line about four- teen miles to the northern limits of the city, fifteen miles to the eastern limits and nineteen miles to the southwest. Experience shows that when a retailer is more than five or six miles from the wholesale market he finds it uneconomical to go that far for his goods, hence the successful establishment of smaller markets and the elaborate system of jobbers serving as the distributing agency from the central market between the wholesalers and the retailers over the entire city. The system of handling shipments of foodstuffs in the JSFew York market is so fully and accurately described in the report of the Mayor's Market Commission of l^ew York City, published in 1913, and the conditions have changed so little since then that it is a waste of time and space to attempt to describe them here. The report of the State Commission to Investigate the Surface Railroad Situation in the City of ISTew York on the West Side, published in January, 1918, also deals fully with the whole freight terminal question. In connection with its recommenda- tions for terminal markets, this report quotes from the report of the former Market Commission as follows : * " The goods that are brought over by these roads on car floats are unloaded from the cars onto the piers, and in many cases are sold there by the consignees and taken away by the buyers — jobbers and retailers. Otherwise they are trucked away by the consignees to be sold at their stores. * * * The space on the piers is insufiicient to accommodate buyers, sellers, goods and trucks without great delays, which cause expense and considerable spoilage of goods because the construction of the piers is, in most cases, not such as will protect the goods during the long delays * See report of the State Commission to Investigate Surface Railroad Situation, issued January 31, 1918, page 58. from harmful temperatures and great in size to depend on a primary market in only oiie borough. In seasons when the receipts are heavy it not infrequently happens that the con- gestion at the Manhatan terminals will hold back carloads of goods in the Jersey yards for days before they can be discharged for sale. Sometimes they are held back until they spoil and are a total loss to producer and con- sumer * * *." " The present primary market in Manhattan is too con- gested and too far away from the rapidly growing outlying boroughs to be the base of supplies for the greater percentage of the retailers of the city. The time and labor of going to this market are too great and the dealers are forced to buy from the nearer jobbing centers. This lengthens the chain of middlemen and makes much trucking necessary. It is estimated that there axe, on an average, over 1,000 trucks working in the market district daily, and that a truck must earn seven dollars a day to pay for itself. This alone imposes a daily tax on our food supply of $7,000, which does not include the cost of all the grocres' wagons that make daily trips of from two or three to fifteen miles to reach the market into the late hours at night and morning — a condi- tion which does not obtain in any other large city in the country. Concentration of freight facilities in lower Man- hattan also multiplies, three or four times, the number of middlemen through whose hands market produce must pass on its way north and east to the consumers. If it were pos- sible to multiply the terminal points at which market produce could be distributed, the said produce could thus be brought nearer to the retail merchant." The Joint Report on Foods and Markets, of Grovernor Whit- man's Market Commission, Mayor Mitchell's Food Supply Com- mittee and the Wick's Legislative Committee (January, 1917) contains the following : * " During the last ten years millions and millions of dollars have been spent in ISTew York city to enlarge, improve and more conveniently locate railroad terminals and facilities * See Joint Report on' Food and Markets published and transmitted to Legislature January 3, 1917. of all kinds for transporting people. Great and expensive terminal stations have been built, subways and tunnels have been constructed, and a vast amount of time, thought and money have been spent on the transportation of people. "In recent years over $150,000,000 has been spent to in- crease and improve New York city's water supply; hut prac- tically no time, thought or money has been spent to enlarge and improve otir facilities for handling food supplies. " New York city in recent years worked out and perfected a plan to widen Fifth avenue, and much money was spent to gain a few feet more of space in a street largely used for pleasure vehicles; while necessary improvements in West street, for example, where a vast amount of freight coming into and going out of New York city is handled, have not been made, and the congestion has now reached a point where the delays are so great as to add materially to the cost of doing business. "Improved terminal facilities would not only reduce the ultimate cost of food to the consumer but would permit dealers to do business more economically and would provide them with facilities for doing a much larger business." Proposed Terminal Markets The various advocates of terminal markets have been sub- stantially in agreement in their support of plans for the eventual establishment of such markets in each borough of the city. The feature of terminal markets usually emphasized include elaborate buildings with most, if not all, of the following facilities: 1. Platforms to which freight cars can be brought directly from the yards and the shipments unloaded onto trucks and drays, stored or placed on sale. 2. Elevators and conveyances for handling foodstuffs with a minimum of labor and cost. 3. A large market hall for the auctioning of foodstuffs. 4. Eefrigerating facilities, including an ice-making plant and insulated rooms of practically constant temperature. 5. Wholesale market rooms, to be leased to wholesalers, com- mission men, jobbers and retailers who can purchase foodstuffs in wholesale lots. 8 6. Ketail rooms with stalls for sale of foodstuffs at retail. 7. Caiming and conserving department in which surplus sup- plies, or foodstuffs not fit for marketing but which can be salvaged, can be utilized through cajming or dehydration by community organizations of housewives. 8. Department for co-operation with producers, impartial in- spection of commodities received and reporting of market prices.* More or less detail plans have been developed for the location of terminals in the various boroughs. In Manhattan it is proposed to utilize the present West Wash- ington Market and Gansevoort Market sites by establishing direct water-front connections and railroad switches so that all railroads can deliver cars to the terminals. In Brooklyn there is at present the Wallabout Market covering thirty-six acres on the waterfront to the east of the navy yard. It has car-float connections by which freight cars may be brought to it but no trackage on which the cars may be run into it. The improvements necessary would be to dredge out Wallabout basin so that loaded vessels of size could come into it and to'lay railroad tracks so that cars could come directly into the market eliminating the tracking of goods from dock to store. In the Bronx, which is now practically dependent upon Man- hattan markets for food supply, it is proposed that a site be pur- chased by the city that will be suitable for the location of a terminal market connected with the New York Central, the Jfew York, Xew Haven and Hartford, and the 'New York Connecting Railroad over which cars may be delivered from the Pennsylvania, the Erie, the Baltimore and Ohio and any other railroad. In Richmond it is proposed to select a site for a terminal market in the neighborhood of St. George and connected with the Baltimore and Ohio and the Staten Island Railroad. Here an important feature of the plan is the provision for wholesale ex- change of produce grown on the island without hauling it to Gansevoort Market, across the bay and back again. For Queens several different plans have been proposed for the location of a terminal market connecting directly with the Penn- sylvania and Long Island Railroad system, the New Haven over * See " Proposed Market Program for the City of New York," by the Commissioner of Public Markets, October, 1918. the Hell Gate bridge and the New York Connecting Railway, but no site has been agreed upon. It is pointed out that a terminal market in Long Island City would be easily accessible to upper Manhattan by the Queensboro bridge and to the Long Island farmers. Summary of Argiument For and Against The chief arguments advanced in favor of the establishment of such a system of terminal markets are as follows : 1. The amount of handling and trucking by the railroads, the -wholesalers, the jobbers and the retailers would be reduced, thereby reducing the cost of foodstuffs. 2. Waste would be reduced by less handling and quicker iandling perishable commodities, by having cold storage facil- ities connected with the terminals and by provision of facilities for utilizing surplus supplies. 3. Gluts and scarcities will be avoided by better organization and centralization of market demand, possible through the public •control of terminal markets. 4. Congestion of traffic in the lower west side of Manhattan -will be relieved, thereby saving expense of horses, drivers, wagons and trucks. 5. Purchasers and sellers can meet and exchange commodities -with greater economy of time and space in one central building in -each borough than in the present scattered places of business. 6. Foodstuffs can be sold at auction under public supervision, -which method would tend to eliminate speculation and artificial prices. 7. ^Malpractices can be effectively regulated through public ■control of the market. On the other hand there are certain arguments presented in opposition to the proposed terminal market system, which may "be deserving of consideration, as follows : a. The worst evils of the present system of wholesale food ■distribution in iN'ew York city would not necessarily be corrected ■by the erection of terminal market buildings, that is, the malprac- tices, the lack of proper organization of the market and other ■causes of waste might easily continue after terminal markets are ■established. 10 b. The saving in trucking expense to boroughs outside of .Man- hattan would not result in lowering the cost of food to the public sufficiently to justify the large financial outlay for establishing and maintenance of terminal markets. c. With the individual wholesaler the saving in cost of handling would be overbalanced by multiplied overhead expense if it became necessary to operate in all five terminal markets. d. The present centralization of the market for most com- modities is a convenience of both producer and retailer because of the facility of contact between supply and demand and decentralization for each borough would mean a surplus of a given commodity in one borough when there was a scarcity in another without easy means of exchange. e. The men who have through years of efforts established their business in a certain locality cannot be expected to risk the loss of trade or the diminution in the value of their property that might result from changing their location. f. The channels of distribution of some of the most important food commodities such as meats, flour and sugar are now so firmly and efficiently established that these commodities woiild not be dealt in at the proposed terminal markets, and for the distribu- tion largely of perishables expensive terminal markets are not justified. Where terminal markets have been most successful in Europe they have handled all commodities. Attitude of the Trade In order to find out the attitude of. the wholesale food trades toward the proposed terminal market plans, various leading rep- resentative men in different lines of wholesale food business were interviewed. Most of them have no definite idea as to what a terminal market is and were inclined to confuse terminal markets with the public retail markets, or push-cart markets, or some other form of market against which they had a deep prejudice. After explanation of the features of a terminal market and the experi- ence of terminal markets in European cities, these men generally advanced one or more of the arguments in opposition mentioned above. A few of the most public spirited of the produce whole- salers, however, feel that terminal markets would reduce the cost of handling and result in benefit to the trade and to the public. 11 Among the retail dealers in the Bronx, in Brooklyn and in Queens there is an increasing interes.t in the subject which has expressed itself in formal action on the part of several of their associations favoring the establishment of terminal markets in those boroughs.* Conclusions and Reoommendations In summing up the evidence in favor of the proposed plans for terminal markets and the arguments against them the Eecon- struction Commission is of the opinion that v?hile such markets are by no means a certain panacea for all the evils of the food distribution system in New York city, some adaptation of the terminal market idea should be carried out in at least three boroughs. The spending of vast sums for elaborate terminal market buildings in each borough is unjustified. The possible saving to the public is not commensurate with the burden of cost that the public will have to bear. The solution of the basic evils of the present system of food distribution in Xew York city will depend in great measure on other remedies than the mere changing of the physical movement of foodstuffs. Terminal markets may, however, be a great aid to the accomplishment of the other remedies recommended by this Commission. Without the carrying out of a general program of improvement in trade practices and conditions, particularly the establishment of standard grading of farm products and the sale of such products by standard descriptions, the erection of terminal market buildings might have very little effect in im- proving the present bringing together of large volumes of j^roduce at one point. With due consideration of the relative importance of other improvements needed in the food distribution system, this Com- mission endorses the principle of establishing more adequate ter- minal facilities. In Manhattan it seems entirely practicable to construct a -spur track connection for the receiving and unloading of freight cars and boats. Covered platforms should be provided * At a hearing before the Board of Estimate May 9, 1919, representatives of the retail grocers associations of Manhattan, Brooklyn, Queens and the Bronx appeared in favor of the terminal market plan proposed by the Commissioner of Public Markets. 12 for the unloading of freight cars and loading of trucks and every practical convenience for the prompt and economical handling of shipments. The extent to v^hich other features of a model terminal market are added should be determined by the definite prospects of their immediate utilization by the trade or by co- operative organizations on such a rental basis that the city will get a reasonable return on its investment. In the Bronk the conditions are such as to offer the most favor- able prospects for success in establishing a complete terminal market with every modern convenience for the centralization of the wholesale distribution of foodstuffs for the borough and part of upper Manhattan, Here it seems practicable to erect a terminal market building on a site convenient for connection with all the railroads entering the Bronx and with docks at the Harlem river. Such a market would also serve as a wholesale center for the cities of Westchester county, particularly Mt. Vernon, Yoiikers and New Rochelle, and many cities further north which now buy much of their fruits and produce in lower Manhattan and haul it by truck from twenty to forty miles. The important thing is for the city of J\ew York to adopt a program for building such a market at once and appoint a committee, including the Commissioner of Public Markets, the Comptroller and the Mayor and at least one other person who should be specially qualified by training and experience for dealing with the technical problems involved, to prepare detailed plans, select a site and start the construction work. In Brooklyn, it is the conclusion of the Commission that an elaborate terminal market would not be successful enough to justify the expenditure required at this time. It is very impor- tant, however, that the advantages of a terminal market be secured as far as possible by the adaptation of the present Wallabout market. This market could, without great expense, be converted into a terminal. The same facilities as those recommended for the West Washington market should be provided here, but as inexpensively as possible. At the present time it is questionable whether a terminal market in the borough of Queens, in addition to those already recommended, would be successful. There is weight to the argu- ment that because of the rapid growth that Queens is experiencing 13 a terminal market should be established before trade gets fixed in other channels. It would seem practicable, however, for the retailers of Queens to come to the Wallabout market, as many of them now do, and one large market on Long Island will have a much better chance of success, especially where it is already well known, than two separate ones a comparatively short dis- tance apart. For this reason it is recommended, that the large expenditure required to construct a terminal market in Queens- boro be not undertaken at this time. In Richmond the amount of population and the railroad situa- tion do not seem to warrant the erection of an expensive terminal market. The much-talked-of uneconomical practice of hauling . produce grown on the island across the bay to the Gansevoort market and then back again to be sold in the retail stores, can be remedied with the cooperation of the farmers and the Staten Island retailers and jobbers by merely establishing in St. George an open-air public wholesale market where producers and dealers can do business during the growing season. It need be nothing more than several vacant lots, perhaps with inexpensive sheds for protection from sun and rain, and some degree of public supervision. Too much emphasis cannot be placed upon the importance of securing the cooperation of the men in the wholesale and retail food business in the initial stages of development of any terminal market plans. Under present conditions the success or failure of a terminal market depends almost entirely upon the extent to which these dealers will make use of it. Tradition and habit are very influential factors in determining channels of business, and the average business man is too conservative to want to take any chances on upsetting either of these. He knows how much busi- ness he can do in his present location and with his present methods, and he doesn't know what may happen if he goes into a new place or tries new methods. Those interested in promoting terminal markets for the public benefit that they expect from them, should direct their attention, first, to spreading among the trades more enlightenment as to what a terminal market is and may accomplish, and second, to securing the cooperation of public spirited leaders among the wholesalers and jobbers in planning for the utilization of projected terminal markets. 14 There will, of course, be a considerable element among the wholesalers and jobbers who will for selfish reasons oppose any plan of this kind. They can only be ignored. The majority of the trade opposes improvement in the system of handling food- stuffs only from ignorance, and the active cooperation of this majority is essential, else the public might erect the finest kind of a terminal structure and derive no benefits from it for the service of both Brooklyn and Queens. The recommendations of the Commission may, therefore, be summarized as follows: 1. That the city of New York utilize the West Washington and Gansevoort market sites in Manhattan for terminal market purposes by constructing spur track and pier connections, plat- forms and other facilities for the unloading of freight cars and boats. 2. That the city of New York select a site immediately and start construction of a modem terminal market in the Bronx, connected with all the railroads entering the Bronx and with docks at the Harlem river. 3. That the present Wallabout market in Brooklyn be recon- structed for terminal market purposes and developed. 4. That the cooperation of producers and dealers in Richmond be secured for establishing an open public market where produce grown on the island can be sold at wholesale. 5. That, the necessity of securing the cooperation of whole- sale dealers, commission men and jobbers, as well as retailers, in any plans for the establishment or operation of terminal market structures be not overlooked.