Mr. CURTIS of Nebraska. And the problem of surpluses is not one problem that can be segregated from the whole dairy industry. It affects the domestic price, does it not?

Mr. HOLMAN. Yes.

Mr. CURTIS of Nebraska. It affects the political forces that determine whether or not there is going to be any support price at all, does it not?

Mr. HOLMAN. Yes, sir.

Mr. CURTIS of Nebraska. So it is quite an important factor in the entire future of the dairy farmer, this matter of surpluses.

Mr. HOLMAN. Yes, sir.

Mr. CURTIS of Nebraska. And is it your opinion that that cannot be met and handled without due and proper attention given to the controlling of imports of milk products?

Mr. HOLMAN. Yes, sir. There is another reason for that, too. The trade agreements program as administered building up from individual arrangements like arrangements between two countries, gradually getting more and more entangled into collective trade agreements, such as Geneva and Torquay, has had the effect, as far as dairying is concerned, of cutting our duties that were passed in the 1930's down to where it is almost free trade, and we do not have the former protection that we had. So you have that combination to face. We have had to resort to the suggestion of Mr. Andreson that we go on quota basis, rather than to try to fight back for some time to come to the levels in force. The quota is the only protection that we have today.

Mr. CURTIS of Nebraska. Mr. Holman, your group has made a very fine appearance here. You have an excellent paper, and it is well supported with facts that the committee should have.

Mr. HOLMAN. All of our papers are institutional.

Mr. CURTIS of Nebraska. It is a very helpful paper. It might be interesting to note that for the past 5 years the farmer's share of the national income has steadily declined. In 1948, the farmer received 10.3 percent of the national income and it has gone down every year since. By 1949, it was 8.3 percent, last year 1952, the farmers got 7.3 percent of the national income. It has been a sort of two-way spread, their prices going down while the prices of the things they buy were going up.

It is also true, is it not, Mr. Holman, that farmers as a class are good purchasers of all the products made in America. Is that not true?

Mr. HOLMAN. That is very true. As you know, we have whole sections of the country where the prosperity of the small towns and small cities, and even cities up to 100,000 and more than that, is almost completely dependent upon the trade of the agricultural community. Mr. CURTIS of Nebraska. That is all, Mr. Chairman.

Mr. JENKINS. In that connection, I would like to observe that the production of the farmer adds to the natural increased value of the material things of the country.

Mr. HOLMAN. Yes, sir.

Mr. JENKINS. Mr. Holmes.

Mr. HOLMES. Mr. Holman, are there any facts available as to the impact of substitutes on the sale of domestic butter?

Mr. HOLMAN. Yes, sir.

Mr. HOLMES. I was wondering if it would be possible for you to insert a few facts on that in the record?

Mr. HOLMAN. I will be very glad to do so. It is one of the biggest economic problems facing dairy farmers today. Mr. HOLMES. Is that permissible, Mr. Chairman? Mr. JENKINS. Without objection, it is so ordered. (The information is as follows:)

IMPACT OF SUBSTITUTES ON SALE OF DOMESTIC BUTTER

The principal loss in butterfat consumption to butter substitutes has been in the case of butter. Per capita consumption of butter dropped from 17.2 pounds in 1939 to 8.8 pounds in 1952. In terms of milk equivalent this drop was equal to 171 pounds per person. This is in comparison with total per capita milk production of 816 pounds in 1939 and approximately 740 pounds in 1952.

A considerable and increasing volume of butterfat formerly used in ice cream and evaporated milk is being lost to vegetable oils. Exact data on this are not available, but the Bureau of Agricultural Economics is in the process of obtaining this information.

A recent report from the Chicago Milk Market Administrator's Office indicates that in August and September, 1952, the percentage that vegetable oils represented of all fats in frozen desserts in the Chicago area ranged from 10.4 to 11.2.

Per capita consumption of oleomargarine increased from 2.3 pounds in 1939 to 7.8 pounds in 1952.

Mr. JENKINS. Mr. Goodwin.

Mr. GOODWIN. Mr. Holman, I understand your National Federation is a clearing house for a large number of regional associations? Mr. HOLMAN. That is correct.

Mr. GOODWIN. Of which our own NEMPA is a part.

Mr. HOLMAN. Yes, sir.

Mr. GOODWIN. And I think an important part. I was interested in your statement that you speak for dairy interests in 46 of the States. I assume from that that there were two States in the 48 in which either there is very little dairy industry or what industry there is does not believe in organization; is that right?

Mr. HOLMAN. That is correct. Those two States are Nevada and New Mexico.

Mr. GOODWIN. Without knowing anything about it, I guessed they might be.

Mr. HOLMAN. The dairy industry is developing slowly, but I think pretty soundly in New Mexico, and we hope in time to have some cooperatives out there who belong to the Federation.

Mr. GOODWIN. That is all, Mr. Chairman.

Mr. JENKINS. Any other questions? The gentleman from Michigan, Mr. Knox, will inquire.

Mr. KNOX. Mr. Chairman, I believe Mr. Holman made the statement to Mr. Eberharter that there were only 35 million pounds of butter imported. What year had you reference to?

Mr. HOLMAN. That was the year 1920, as I recall.

Mr. KNOX. That was a long time ago.

Mr. HOLMAN. I have a table here showing the imports year by year. In 1920 that ran 372 million pounds of butter. It varied and dropped off to 18.6 million in 1921, down to 7 million in 1922; it got down to as low as 4.7 million pounds in 1928, down to 1 million pounds in 1932, 1933, 1934; it went up to 22.7 million in 1935, varied up and down to

almost nothing at points, got back to 20 million in 1942. From that point on it has gone down. That is due largely to the war controls over it.

Mr. KNOX. May I refer, then, to your statement on page 13?

Mr. HOLMAN. Yes, sir.

Mr. KNOX. In 1951, 912 million pounds of butter.

Mr. HOLMAN. That is world trade.

Mr. KNOX. Why do you bring world trade into the question of United States imports?

Mr. HOLMAN. We have to consider all dairy products, and we bring world trade in because if we lose section 104 there is every evidence it may be quite a while before we can get action under section 22 or some other means. You at once have the threat of the exportation of these products like butter and cheese to us than we have at the present time.

Mr. Knox. May I ask, then, what position your industry is taking today to find new markets for dairy products?

Mr. HOLMAN. We try to find markets everywhere we can. The production has been tremendous. That production you see was largely stimulated by the Federal Government during World War II. When the bottom fell out, when the dairy plants in many States that had changed over and were producing a combination of taking the whole milk in, separating the cream, and making the powder. We simply did not know where to get a market for it. We have been building it. The Government has had to buy a lot of it.

Mr. KNOX. What I mostly had reference to, Mr. Holman, was the drive that was being created endeavoring to bring about a new use for the dairy products in a different form than we have been used to in the past.

Mr. HOLMAN. Yes, sir. There is a great deal of research that is going on. It is not enough. There is always that opportunity to find much greater markets in this country through the powders by the further development of the small package which can be put on the grocery shelves. Research in new uses is a long and tedious thing, and it is very difficult frequently to get these great scientists focused upon a commercial objective. They think more in terms of broader aspects of nutrition.

The greatest new use I know of-this sounds humorous, but it is not-is the development of a reducing diet by the use of milk products in every meal. Basically, three glasses of whole milk a day, a pat of butter every day at every meal, some cheese at every meal. It has been demonstrated that by this method you can very easily take off quite a few pounds. It is particularly good for middle-aged men and for middle-aged women. It was developed by the National Dairy Council, one of our educational organizations, and it has been further developed by the nutrition department at Cornell.

That will sell a lot of dairy products and a lot of butter.

Mr. KNOX. We can feel assured that the industry itself is not sitting idly by in this particular program but are cooperating and endeavoring to bring about new uses for dairy products that do not exist today?

Mr. HOLMAN. Yes. I spoke of the National Dairy Council work. I might explain that that is an organization with a great many regional and State members. The work they do is primarily in the public schools and in the private schools where that is permitted.

We have another very great organization that is doing its best to find new uses and to promote the sale of dairy products called the American Dairy Association. It is entirely financed by dairy farmers. They are moving on a program which may eventually go as high as $15 million to $20 million a year. They are advertising in the national magazines. They are advertising in the national radio and television outlets. They are moving slowly, but moving toward advertising in the daily papers of the country. We hope that out of that in a few years we will be able to move all the dairy products that the dairy farmers produce in this country.

Mr. KNOX. That is all, Mr. Chairman.

Mr. JENKINS. If there is no further questioning, we thank you very much, Mr. Holman.

Mr. HOLMAN. I would like to thank the committee.

Mr. JENKINS. This brief that you presented is rather voluminous, and it would be rather expensive to print it, so I wonder if you might consider eliminating some of the appendixes?

Mr. HOLMAN. We will do that, sir.

(Subsequently the federation marked several pages of tables for omission from the printed record.)

Mr. JENKINS. The next witness on the calendar is Mr. F. E. Mollin, secretary of the American National Cattlemen's Association, Denver, Colo.

Is Mr. Mollin here?

(No response.)

Mr. JENKINS. We will pass him. He will probably show up later. The next witness on the list is Mr. E. L. Torbert, vice president, Vitrified China Association, Inc.

STATEMENT OF EDWARD L. TORBERT, VICE PRESIDENT, VITRIFIED CHINA ASSOCIATION, INC., SYRACUSE, N. Y.

Mr. TORBERT. Thank you.

My name is Edward L. Torbert. I have been associated actively with the vitrified china industry since 1895, and presently am vice president of Onondaga Pottery Co., Syracuse, N. Y., manufacturers of vitrified china under the trade name "Syracuse China."

I represent the Vitrified China Association, Inc., and manufacturers of vitrified china. Some of the potteries in this industry are located in towns and small cities. A number of these communities are almost wholly dependent for their existence upon the business, employment, and payroll of the pottery industry.

The vitrified china plants-15 in all-give employment to approximately 8,000 persons.

Also concerned, though I do not represent them, are the clay and materials suppliers to the American industry located in such Štates as Virginia, North Carolina, Florida, Alabama, Georgia, and Texas. Expiration of the Trade Agreements Extension Act of 1951 has provided the free traders with an opportunity for much propaganda and exploitation of such catch phrases as "trade-not aid." Likewise, there is provided the opportunity for careful consideration of a sound and enduring economy for these United States in the years. ahead.

This latter aspect was, I believe, fully understood by President Eisenhower when, in his state of the Union message requesting Congress to study the Trade Agreements Act, he made this important qualification: "This objective must not ignore legitimate safeguarding of domestic industries."

In the light of this Presidential declaration we present the following regarding the vitrified china industry.

In our industry salaries and wages constitute the largest item of cost, amounting to 60 percent of the factory selling price of chinaware produced, even though our operations are mechanized and efficient to a degree unequaled, in our knowledge, by any other country in the world. Imports of china tableware, with which we are in direct competition, come principally from Japan, Germany, and England. Wages paid to pottery workers in the United States are 10 times the wages paid for similar work in the better Japanese potteries, 6 times wages in German potteries, and 3 to 4 times wages paid in English potteries.

The pottery industry in the United States needs adequate protection if it is to continue to exist in a condition of healthy activity. To survive and thrive the pottery industry cannot continue without protection for the very ordinary and simple reason that pottery can be produced abroad, transported to this country and sold here at a price below that at which United States potteries can produce and sell their product.

Ours is an inescapable position that neither methods nor management can change. Our problem is, in essence, a purely wages problem. The American pottery employer cannot afford to pay American wages and sell in competition with the distressingly low wages paid in so many foreign countries.

IMPORTS

The Tariff Commisison in a report published in February 1953 stated:

Annual imports of the kinds of household china tableware which are now dutiable at trade agreement rates of duty have increased sharply in postwar years. The total quantity of such imports was about three times as great in 1950, and about four times as great in 1951, as the annual average in the prewar period 1937-39. Imports of certain household china tableware not dutiable at trade agreement rates but competitive with some domestic household china tableware have also increased sharply in postwar years.

All china tableware imports, whether at trade-agreement rates or otherwise, are competitive with American production. The total of all such imports in the 3 years after the war, 1950-52, was approximately 1 million dozens greater than the imports in 3 years before the war, 1937-39. This would have given employment to several hundred American workmen during the years that employment in American potteries was declining.

Imports of fine china from England in a corresponding period have increased over 1,000 percent. The situation in relation to English shipments was brought to the attention of this committee in April 1945 at a hearing on the Doughton bill, H. R. 2652, from which I quote: