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other agricultural products, not only upon other forms of livestock, particularly beef, but, also, upon other crops in our irrigated areas, particularly, as well as the humid areas. A great number of those sheep are grazed upon irrigated pastures, and, if they were not used for that purpose, the land would be diverted to the production of other agricultural crops.

I sincerely hope that the committee will report this out very shortly and we can get action.

Mr. Poage. Mr. Thomson, you may have commented on it in your statement, but the only serious argument about this bill that Ì have heard is relating to the promotion features rather than to the subsily features.

Did you discuss that at all?

Mr. THOMSON. I did not discuss it at length, Mr. Chairman. I think the promotion features have worked out quite well and have merit.

I believe that the majority of people in our area would like to see it continued.

Mr. PoAGE. As is?
Mr. THOMSON. Yes.
Mr. Poage. Any questions?

Mr. Dixon. Mr. Thomson, with regard to the promotion features, is it not true that there is an additional angle in the promotion of wool and sheep, than just to meet?

Mr. THOMSON. That is quite correct.

There is a competitive product in the synthetic fibres involved in wool, and also, of course, under this program, I think the Government has an interest in seeing some of these funds used to promote the sale through normal channels to reduce any Government participation there might be.

Mr. Dixon. Therefore, the meat promotion program that we have now does not cover all the needs of the wool program.

Mr. THOMSON. No; that is correct.

Mr. Dixon. Would you prefer to have this bill come out on its own merit, or be included in one omnibus bill with other measures?

Mr. Thomson. I would be very hopeful, particularly at this stage in the session, that the bill could come out by itself and be considered solely on its own merits. I think it is important that we get some action upon this quickly in that it would have a very desirable effect upon the wool market.

And I believe there would be less controversy if it came out by itself.

Mr. Dixon. Then you would like it to come out as soon as possible?

Mr. Thomson. I think that is very important, with the condition of the wool market today, that it should come out as quickly as possible. Mr. Dixon. What is the relative importance of wool in agriculture

State? Mr. THOMSON. Wool is one of the most important agricultural products. I think that we are about second in the Nation. Second only to the chairman's State there as far as the production of wool is concerned, and certainly there is unrest at the present time with wool being sold, what little is being sold, just a little bit under, or a little bit over 40 cents a pound.

in your

Mr. Dixon. Thank you, Mr. Thomson and Mr. Chairman.
Mr. PoAGE. Are there any further questions?

Mr. Hagen. I have one question in connection with Dr. Dixon's questioning

This act does not expire until next year, does it?

Mr. Thomson. No; it does not, Congressman Hagen. But on the other hand, people are planning their herds and flocks, and it leaves them with an uncertain condition.

So that I think it is very important, as I mentioned last August 29I think when several of us introduced this legislation, including yourself—it is important that we act at this session of Congress so as to be able to give them a look into the future so they can plan their operations accordingly.

Mr. Hagen. Do you know offhand what the latest date next year would be for passage that would prevent a hiatus of time in the operation of the program?

Mr. Thomson. It seems to me, and I am not positive about this, that is in April, which would be very difficult, to get the bill considered and through both Houses of Congress, probably a conference, and signed by the President by that time. Mr. Poage. Thank you very much, Congressman Thomson. Mr. THOMSON. Thank you, Mr. Chairman.

Again, I express my appreciation to the committee for the action on this and the diligence they have shown.

Thank you.
Mr. PoAGE. Congressman Ullman, of Oregon.

STATEMENT OF HON. AL ULLMAN, A REPRESENTATIVE IN

CONGRESS FROM THE SECOND DISTRICT OF THE STATE OF OREGON

Mr. ULLMAN. Mr. Chairman, I want to thank the committee for the opportunity of appearing here to make a very brief statement. I would like to have my statement appear in the record.

Mr. POAGE. Without objection it will be included in the record. (The document referred to is as follows:)

TESTIMONY OF Hon. AL ULLMAN, OF OREGON Chairman Poage, I want to thank you and the other members of this subcommittee for this opportunity to appear before you this morning in support of legislation extending the National Wool Act of 1954. I am very pleased to be a sponsor of H. R. 9535, which is one of the legislative proposals before you today.

Mr. Chairman, there is little need to dwell on the adverse economic conditions which existed in the sheep industry in 1954. The war years and the postwar years dealt barshly with the industry and sheep producers were feeling the cost-price squeeze long before this problem became the chronic ailment of large segments of American agriculture. Feed, labor, land, equipment, marketing, and transportation costs moved relentlessly upward while wool prices remained frozen throughout World War II. Following the war, keen competition from low-cost areas of the world complicated an already critical problem. It is small wonder that the 12-year period from 1942 to 1954 witnessed a 45-percent drop in the country's sheep population.

Oregon was among the hardest hit of the major sheep-producing States. In 1931 sheep numbers in the State had reached a high point of 2,679,000 head. By 1942 this figure was reduced by more than a million head and by 1954 Oregon recorded only 811,000 sheep and lambs. The percentage decrease for the years 1942-54 was a staggering 50 percent. What had once been a major industry in the Second Congressional District and in the State of Oregon in general was rapidly reaching the point of extinction.

Prior to 1954, various approaches to the problem were tried. A loan and purchase program was initiated by the Federal Government but it merely resulted in the accumulation of a costly Government stockpile while giving little permanent relief to the average sheep producer. The decline in domestic production continued despite a sizable increase in United States wool consumption.

It became increasingly apparent, therefore, that traditional Government programs previously applied to surplus-producing segments of the agricultural economy could not be successfully applied to an industry not producing a surplus supply. Moreover, it was agreed at the time that the international situation prohibited tariff increases which would have afforded the sheep industry a measure of protection.

Faced with these problems and cognizant of the strategic military importance of wool, Congress enacted the National Wool Act of 1954. It was a new approach to an old problem but it is one that I believe has worked admirably well and which deserves to be continued. By encouraging an annual production of 300 million pounds of shorn wool, Congress has made the Nation less vulnerable to future wool shortages. By utilizing an incentive price system which allows domestic production to be sold in normal marketing channels, the 150 million pounds of wool stored in warehouses at high cost to the Government has been successfully eliminated. Moreover, these developments have occurred without upsetting tariff policies incorporated in trade agreements but rather the national wool program has made existing tariff receipts do double duty by financing the incentive payment part of the program.

There is yet another provision of the National Wool Act which I believe to be of extreme importance. I refer to section 708 of the act which authorizes a selfhelp program designed to promote the use of wool and the consumption of lamb. In an economy where competition is keen and advertising commonplace, promotional programs have an important role to play. I think the American Sheep Producers Council is to be congratulated on their program and I think it is safe to predict that within a few years the council's promotional activities may become fully as important to the sheep industry as the incentive payments.

Mr. Chairman, the limited time during which the wool program has been in full operation has produced encouraging results. Despite drought conditions in the Southwest and in certain areas of the Far West, production is on the way up. A once profitable industry is finding renewed vigor and the economy of sheepproducing areas is receiving a much needed boost.

In 1954 the 811,000 head of sheep in Oregon grossed $7,852,000. In 1955 the industry grossed $8,803,000 and in the following year, $9,115,000. When complete data is available for 1957, I am certain a continued dollar rise will be apparent. I am equally confident that given normal weather conditions, other sheepproducing areas of the country will experience a similar rise.

I firmly believe that this improvement is directly traceable in many respect to the adoption of the National Wool Act. However, like most difficult problems, a permanent answer to the decline in the sheep industry will take time. Progress has been made since 1954, but a 15-year decline cannot be totally erased overnight. It takes time to build up flocks just as it takes time to fully implement a self-help marketing program:

Mr. Chairman, the sheep industry, armed with the national wool program, has demonstrated its ability to help itself. I am firmly convinced that they are deserving of a requested extension of the Wool Act. I know that the members of this subcommittee will give this legislation sympathetic attention and I am hopeful that they will approve legislation similar to that I have introduced.

May I again thank you for the courtesy extended to me this morning.

Mr. Ullman. In Oregon we have witnessed a very serious decline in the sheep industry, I think probably the most serious in the country prior to the adoption of this Wool Act. In 1931 we had 2,679,000 head, and then by 1954 this had been reduced to 811,000, which was a drastic decline in this industry. Since 1954 the number of sheep has remained stable and the gross income from this industry has raised each year: $7,800,000 in 1954, $8,800,000 in 1955, $9 million in 1956. And this has stabilized the industry to the point where the sheep people are now looking forward with some anticipation to the future of this industry that has been so important in Oregon in the past.

I very much favor the enactment of this legislation, the continuation of the Wool Act. I feel it is very important to the economy of my region.

Mr. Poage. Any questions of Mr. Ullman?
Thank you very much.
Mr. ULLMAN. Fine. Thank you for the opportunity of appearing.

Mr. Poage. Congressman Berry, of South Dakota, is next. STATEMENT OF HON. E. Y. BERRY, A REPRESENTATIVE IN CONGRESS FROM THE SECOND DISTRICT OF THE STATE OF SOUTH DAKOTA

Mr. BERRY. Mr. Chairman, I have only a very short statement. I previously filed my thoughts and ideas on the bill, but I would like to ask that this wool bill not be tied in with the general agricultural bill for 2 or 3 reasons.

Primarily because wool is the one crop that is in short supply, whereas the other crops are in surplus. It should stand on its own feet, separate and apart from these other crops.

Second, I am certain that the Reciprocal Trade Act will be passed, and if so it places wool in that much more of a precarious or serious position. The incentive program has proven to be sound, it has worked out, and it has provided a good price.

I think that if we continue the program as it is, extend the program for another 4 years, that we can build up a good domestic price and production without adversely affecting the foreign trade of this country.

I want to say again that if the sheep industry were returned to where it once was in this country, that we would have no surplus of any crops because the acreage that is producing surplus crops today, could take up the slack in the acreage, producing a crop that can be used domestically. And I think it would solve the surplus problem in these United States if we gave a protective tariff, which can not be done. But if we build up the sheep industry to where it once was, I think it would solve the entire surplus difficulty we are having in this country.

Mr. Poage. I did not quite understand your statement, Mr. Berry. I did not understand about protective tariff. Did you say, we had to have it in order to build it up, or we did not need it?

Mr. BERRY. No; I say we are not going to get it, we know that. But this program is a substitute and is building back the sheep numbers. And if we had our sheep in numbers back to where they once were, we would have no surplus problem in this country.

Mr. Poage. Mr. Berry, just how much has it brought back?

Mr. BERRY. How much has it brought back? Actually, it has not brought in numbers, we have not increased too much during the past 4 years, primarily because of the drought in the Western States.

Mr. Hill. If the gentleman will yield, the history of the numbers of sheep in the United States is interesting to analyze. After we had the teriffic losses of the 40's, the increase since then has been in the small herds of sheep in the eastern part of the country. In the great western range, in your area and in most of the areas of those who have testified, the increase has not amounted to too much because, No. 1, the sheep area on which they feed, having once been taken off the

range, replaced by cattle, does not very often change back. Now the truth is that we lost between 35 and 39 percent of all the western herds, the big sheep herds went out of existence. Now here are the latest figures: The high for sheep in the United States was 49,340,000 in 1942. Then they dropped down to the low in 1950 of 26,182,000. These are from the Department of Agriculture, beginning in 1938 and going through to 1957. By 1957 we have gone from 26,182,000 up to, in 1957, 26,370,000.

Now what I wanted to show, that increase has been very slow because of the fact the increase has been in the eastern part of the United States, what you call and I call the farm flocks. That is worth taking into consideration. And if we are not going to lose our sheep production and wool production, we have to bring back the large sheep producers in the western area.

An as you said just a moment ago, that land is suitable for this kind of flocks of sheep. However, when once lost, it is very, very hard to have them return.

Mr. POAGE. Might I ask a question off the record (Discussion off the record.)

Mr. BERRY. The operation of a sheep ranch is so entirely different from the operation of a cattle ranch that it takes a long time to get back into the operation of sheep in a country after it has been developed as a cattle country.

Mr. Hill. Well the gentleman is well aware of the hard time we have had, and no one knows better than our good chairman here, in getting sheepherders. We have been passing special legislation to bring them from foreign countries.

You see what I am driving at? Why do we do that? Because the big ranchers practically eliminated that whole type of workman, or herder, when we permitted the price of wool and the price of lambs to drop so low they could not afford to continue in the sheep and wool production.

Mr. POAGE. Again off the record (Discussion off the record.)

Mr. BERRY. If we had a dependable long-range program that these stockmen knew would not be dumped over in a couple of years or so, I am convinced that a lot of them would go back into the sheep business.

Mr. Poage. I think that is true.

Mr. BERRY. And that is primarily the reason that I am pressing so hard for passage of this Act, so that we can get back

Mr. Hill. If the gentleman will yield further, that is a good argument, but it does not only apply to sheep, it applies to other farm programs as well. No farm program should be of short duration.

Mr. BERRY. That is right.

Mr. Poage. And that raises the question, Mr. Berry, that I wanted to ask you when you first made your pronouncement that you wanted this separate and apart from everyone else's legislation.

I think I recognize the importance of the sheep business. It has been pointed out here this morning, my State produces more sheep than any State in the Union, and I think I understand how important it is, and I am for developing it. However, are sheep any more important to this Nation than wheat, corn, cotton, tobacco, dairying?

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