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? Mr. BERRY. Your problem is entirely different, though, Mr. Chairman. Your problem, with all of these other crops, is a surplus problem. Here we have a shortage. And if we would build up this crop that is in short supply it would help solve these other problems. Mr. POAGE. I fully agree with you on that. I thought that was a fine statement that you made suggesting that it was desirable to promote the sheep industry in order to absorb some of this land from other crops. I think that is sound, and I go along with you on it. However, it does not make any difference whether your crop is in short supply or long supply from the standpoint of the farmer. He is in just as desperate a condition when he is broke growing wheat as he is when he is broke raising sheep. I am just wondering if you feel that we should pass legislation, singling out one industry, and say that we are going to see that you get immediate action, and say to the rest of the people "You just wait here, wait in line, we will do nothing for you now." Do you feel we ought not to do anything about wheat, about cotton, about corn this year? Mr. BERRY. Well, as the gentleman knows, I have been over here a good many times on wheat Mr. POAGE. I know you have. Mr. BERRY. And corn. Not so much on cotton, but Mr. POAGE. We appreciate the fact that you have. Mr. BERRY. The point I was trying to make is this, I do not think that this industry has any more connections with the crops that are in surplus than trying in the fishing industry. Mr. POAGE. Well, Mr. Berry, you have not watched the way some of these people have voted, and the way some of these members have voted if you feel that there is no connection. As quick as they have gained what they wanted for their industry, they have literally thumbed at everyone else. And we have not forgotten it either. Mr. BERRY. Well I noticed last year that that was right, yes, on certain commodities. Mr. POAGE. We want to take care of the sheep industry. Please understand this committee wants to do it and intends to do it, but we feel a responsibility to everyone else, too. Mr. Simpson. Mr. SIMPSON. Mr. Chairman, this is all very interesting to me, coming from Illinois. I understood this sheep program was sort of a trial Brannan run. Mr. POAGE. I think it has worked very well. Mr. SIMPSON. It has been accused of doing that. But the thing that inflates my curiosity, is that it apparently has not raised the population of the sheep in this country. Mr. BERRY. I think it is safe to say, Mr. Simpson, that the problem has been that we started it out in a series of dry years, drought years, when the West was gripped with drought. Now, I do not think the program has had an opportunity to demonstrate its Mr. SIMPSON. It has just been the opposite in the grass country on cattle. The very fact that they had a drought in Texas, and in the range areas, has caused the feeder, or the rancher, to sell his herds, and now he is building back up and not letting those cows and heifers go to market. And that has put up the price of cattle. Has it done the same thing as to sheep? Mr. BERRY. Well, there are two things in this act. The second is the promotion program to promote lamb and so forth. You do not build up these programs in just 2 or 3 years, particularly when you hit drought years. Mr. SIMPSON. I understood you, or someone here, to say this morning that what had caused the program not to increase the population of sheep in this country was the drought. Now speaking on the cattle side of it, the drought that caused the price of cattle to go up, has it done the same thing for sheep? Mr. BERRY. You mean the cattle numbers? The cattle numbers have not gone up. Mr. SIMPSON. No, I am talking about the price. Mr. BERRY. Our problem is not a domestic problem in wool. Our problem is the pulling of wool in here through our imports. If we had a tariff, we would not have any of this Mr. SIMPSON. I am not trying to press the problem, but I have not received an answer to my inquiry. The very thing that made cattle go up is the fact that the people in the West are holding the cows and the heifers, keeping them off the market, which is their privilege, to raise more cattle. Now, that has caused cattle to go up due to a scarcity in the market. The same thing happened in hogs. I would like to know if a similar population has come about in the case of sheep. Has it made the price in the market of sheep go up? Mr. BERRY. I think the price of mutton Mr. POAGE. To give you an answer, the number of cattle was substantially reduced as a result of the drought. There was a much larger reduction in the number of cattle than there was in the number of sheep percentagewise. In fact, these figures show that your sheep population at least remained approximately static-while it did not increase, as you pointed out, it did not decrease. The drought normally would have reduced the sheep numbers very materially, but we did have a program that was working, as I analyze it, and the program was successful enough that it prevented a reduction in the number of sheep. There was no such program for cattle, and the cattle population did reduce materially. Now, then, when we come back to restocking the range, there is a much greater incentive to buy cattle, which are in short supply than to buy sheep, which at least retained their own numbers during the drought. And I think, as the witness says, largely due to this program, the sheep population, while it did not increase absolutely, it increased relatively because all other livestock operations in that area decrease, and the sheep population remained at least static during the drought as the result of this program. Mr. SIMPSON. That brings me to another question, Mr. Chairman. I do not know exactly how long this sheep program has been in effect. Mr. POAGE. Four years. Mr. BERRY. Three. Mr. SIMPSON. But the question is at least you have about 50 million sheep population. Then due to importations they got out |