I stand subject to correction by the members of the Department who are present. I believe it was 62 cents.

Mr. QUIE. For both 1955 and 1956?

Mr. GARLAND. That is my understanding.

Mr. MARSH. The average farm price of wool for the first year of the program was approximately 42 cents, and the percentage difference between the 42 cents and the incentive level of 62 cents was paid to the producers. And the second year the farm price was around 44. cents. For the third year it will be around 52 cents. In each case the percentage difference between the farm price and the incentive level of 62 cents is added to the producer's net return and this constitutes his incentive payment.

. Mr. POAGE. Mr. Marsh, I think that what Mr. Quie wanted to ask would be answered by pointing out that in 1954, just before this program came into effect, that the average price was 53.2 cents, and that was the then support level because prior to this time we supported wool through a loan program exactly as we support cotton and wheat. And that loan program was 53.2 cents, and the market price was 53.2 cents in 1954. And in the previous year, 1953, the market price was 54.9 cents and the support price was 53.1 cents.

Mr. QUIE. But according to these figures that 52.3 we received in 1957 was higher than the 2 years previous, so the 1958 price really is not unreasonable, if it were stimulated a little bit it would be back up there around 42 and 44 cents. And it costs the Government about the same as it does those first 2 years.

Mr. JOHNSON. How could he arrive at that 53 percent of parity on page 4?

Mr. GARLAND. That is the presently quoted price for wool, domestic price, without the incentive payment.

Mr. JOHNSON. How much a pound?

Mr. GARLAND. That is the present quotation, 37.7. That was as of April 15, 1958.

Mr. POAGE. You may proceed.

Mr. GARLAND. In addition to this price structure disparity, we are convinced that other harmful effects are resulting from the uncertainty of the reenactment of the law. Speaking now, in part, from years of experience in the banking business where a large part of our clientele consisted of farmers and also as one now who must convince the banker or lending agency of the soundness of the credit of the borrower, we are convinced that the present uncertain state of the act is contributing to tighter and more difficult operating credit arrangements for the producer.

We are just as certain that this credit restriction is unfavorably influencing the number of ewe lambs being held over to increase breeding stock numbers. It is also apparent to us that the manufacturer is projected into a state of indecision by the present uncertain status of the law.

Among specific advantages of the act is the general increase in the flocks. In the case of my client, Mr. Salyer of the Salyer Land Co., the number of breeding ewes has been doubled or increased from 6,000 to 12,000 head together with the necessary increase in the number of breeding rams which now number approximately 400.

These numbers will be further increased by my client with the reenactment of the law. This is further evidence of the fact that

potential gains remain to be realized from the act and suggest the advisability of permanent status for the law.

The degree of unanimity for approval of reenactment of the law we believe will justify its permanent reenactment.

We also believe that the disadvantages we have enumerated will be eliminated. Any corrections or revisions of the act will always be possible in any general session of the Congress.

Section 708: In the category of emphasing the importance of certain sections of the Wool Act, we desire to dwell on section 708. The underlying principle interwoven into this section is indispensable to the success of the act and to the accomplishment of the purpose we believe the Congress envisioned at the time of adoption.

The deduction of funds from the growers' payments in amounts agreed to by the Secretary of the Department and the ASPC is a sound, simple, and well-established practice.

The principle of expanding consumption through advertising and sales promotion as well as establishing consumer preference in the market place is now a necessary part of business. Building prestige and good will in behalf of commodities is likewise accepted as good business practice.

It so happens, I have for 35 years contributed to the building of demand for California Sunkist citrus fruits, for Blue Anchor grapes and tree fruits, and to the expansion of the olive market on almost the same basis as far as deductions are concerned. The success of these groups is well known and certainly due in great measure to the degree of promotion involved.

Had the financing of the sales promotion in the case of these products been dependent on the individual growers' contributions in a less certain and direct way, failure would have resulted.

We know of no case wherein a sheep and wool producer or anyone else who is sincerely interested in the success of the Wool Act of 1954 is possessed of a radically different opinion.

To disrupt the procedures and practices provided for in section 708 of the act would be to trifle with the very purpose for which the act came into being.

The contractual arrangements between the Secretary of the Department and the ASPC which stem from section 708 provide adequate and constant safeguards which assure the continuity and success of the whole act in behalf of the producer. Activities carried out under this section also lend valuable demand and price structure stability to the manufactured end products of wool. The constant and growing competition from synthetics and other fibers cannot be successfully dealt with in any other way.

In conclusion, we believe that reenactment of the Wool Act of 1954 on a permanent basis is now advisable. Reenactment, however, on a term basis should by all means be with an indisturbed continuation of section 708.

Mr. Chairman, that concludes my written statement.

Mr. POAGE. Thank you very much.

Congressman Hagen wanted to ask you a question.

Mr. HAGEN. Mr. Chairman, Mr. Marsh is present, is he not? Gordon, I wish you would put in the record yourself, with the help of Mr. Marsh, a list of the vital uses of wool. One of the justifications for this act is that this is a commodity which we must have in wartime,

and therefore we should preserve the wool industry. I wonder if you or Mr. Marsh could supply that information for the record? Mr. GARLAND. The quantitative uses of wool for what purposes it is used, and insert it in the record?

Mr. HAGEN. All, an exhaustive list.

Mr. GARLAND. Yes, I would be very happy to participate in that with Mr. Marsh.

(The information above referred to is as follows:)

End use consumption of apparel wool, scoured basis, United States, 1955

End use consumption of apparel wool, scoured basis, United States, 1955-Continued

Includes new and reused and reprocessed wool and other animal fiber used in the production of items other than carpets and rugs. The survey measures the poundage of fiber consumed in the production of textile products in the United States and hence includes imports of textile raw materials and semimanufactured goods. Wool used in the production of military blankets is not included, but wool used in the production of military garments, except those cut from Governmentowned fabric, is included.

Source: Compiled from Textile Organon, a publication of the Textile Economics Bureau, Inc. Apparel wool consumption and fabric production within the woolen and worsted industry, average 1935-39, annual 1939-45

Source: From Wool During World War II, War Records Monograph No. 7, Bureau of Agricultural Economics, USDA.

Total mill consumption and fabric production are from Bureau of Census reports except for fabric production in the years 1940 and 1941 which were estimated in part from reports of the National Association of Wool Manufacturers. The breakdown is part between military, export, and civilian was obtained as follows: Fabric production, 1934-38, 1939, 1942-44, and first half of 1945, material as published by the WPB. 1940, 1941, and second half of 1945 from announced

military requirements. Wool consumption 1942-44 and first half of 1945 from unpublished WPB data on rated orders. 1935-39, 1940, 1941, and second half of 1945 from announced military requirements and purchases. In addition, reports of the National Association of Wool Manufacturers and the Army Quartermaster, data pertaining to civilian production, and other information were used. Data on mill consumption include wool used on cotton and other systems of spinning and wool processed into felts and knitgoods, in addition to wool processed into woven cloth. In 1939, these other industries used about 16 percent of the total apparel-wool consumption. They were a smaller proportion during the war. Wool used by the military forces, scoured basis, United States, 1950-52

1950. 1951 1952__

Million

pounds

30

150

65

Source: From Textile Organon, a publication of Textile Economics Bureau, Inc.
Wool used by the military forces, clean basis, United States, 1955-57
[In thousands of pounds]

Poundages shown are derived from information furnished to the Department of Agriculture by the Department of Defense on receipts of major textile items by the Armed Forces. The fiber equivalent of the individual products is determined by using conversion factors, developed for this specific purpose, which take into account waste in manufacture and nonfiber content. Since the textile items reported by the Department of Defense cover about 80 to 90 percent of the textile items actually delivered, the fiber equivalent of the total reported receipts is divided by 0.85 to arrive at an estimate of total fiber used in all textile items delivered to the military. This adjustment is listed as "other" in this table.

Mr. GARLAND. I would like to say, Mr. Congressman, in response to your observation, that while I concur in the thought that this act came into being as part and parcel of a program to support our national economy and our national security, I believe that the program would be entirely justified even if we forgot about the national security facet of the reason for why it came into being.

Mr. HAGEN. Another question I want to ask you: Are sheep grown principally, if there is a principal purpose, for the meat or for wool? Mr. GARLAND. Well, it is impossible, as far as I have been able to observe, to grow them for one purpose without the other. As long as there is a demand for meat, the wool is an annual crop and you would either turn the increase into meat after taking the pelt off, or you would just have continuous increase in the number of your herd for the production of wool.

Mr. HAGEN. Now another question on this promotion fund which you refer to in your statement. Is that devoted exclusively toward expanding meat consumption, or do you do some of that institutional fiber advertising, such as the synthetic fiber industry does, advertising acrilon and these various synthetics?