Mr. GARLAND. It is used for both, Mr. Hagen. The maximum amount is set forth, the maximum amount of the deduction from the producer is set forth, in the contract between the Secretary of the Department of Agriculture and the American Sheep Producers Council. At the present time that deduction cannot be in excess of 1 cent per pound on the wool, and the equivalent of that in lambs going to slaughter.

Mr. HAGEN. It is used for both the fiber promotion and the meat promotion; both purposes?

Mr. GARLAND. Yes; it is. And that ratio is worked out cooperatively between the Secretary of the Department and the producers council.

Mr. HAGEN. One other question, and then I would like to make an observation, Mr. Chairman.

You referred to the disposal of Government-held surpluses following the adoption of this program. Now I would assume, and if I am wrong correct me, that prior to the adoption of this program the Government was engaged in a conventional price support operation with respect to wool; is that correct?

Mr. GARLAND. That is correct.

Mr. HAGEN. They were either making purchases of wool or making loans on wool?

Mr. GARLAND. They engaged in both during the 10 to 12 years immediately proceeding the adoption of the act

Mr. HAGEN. And as a result they accumulated substantial surpluses

Mr. GARLAND. That is correct.

Mr. HAGEN. Which they were paying storage on and so forth?
Mr. GARLAND. That is correct.

Mr. HAGEN. With that, establishing that fact, Mr. Chairman, I would like to make this observation:

There is a lot of talk around, and particularly in this committee, about how we can distinguish this wool program from the various other price support programs, and some of the reasons are not too convincing. But I think this is important.

We support fiber, cotton, and there are areas of disagreement among cottongrowers, for example, as to what is a proper cotton program. There is no disagreement, as I understand it, among woolgrowers as to what is a proper wool program.

Now here we have a situation where wool as a fiber was as entitled as cotton to some kind of a price support program.

However, using conventional support methods the Government was in the position of losing a great deal of money because wool had this difference, wool did not have the protective tariff laws that cotton and meat and corn and some of these other commodities had.

In other words, the door was open to foreign competition, to undercut the support program and exaggerate Government losses and it was for this reason that this program was so appealing, because it got the Government out of a difficult situation, and it did so without inducing the effect on demand that an unreasonable price structure would have.

And I think that is the main distinction between the wool program and some of these other price support programs, to wit, the necessity for a different program when tariff barriers were lacking.

Mr. GARLAND. Your observation does not call for a comment on

my part?

Mr. HAGEN. No.

Mr. SIMPSON. Mr. Chairman, I would like to ask Mr. Garland how many acres of land there are in the Salyer Land Co.?

Mr. GARLAND. How many what?

Mr. SIMPSON. How many acres of land in the Salyer Land Co.? Mr. GARLAND. Through their sheep ranges, cattle ranges, and lands they farm to various crops, my guess is it would range up to 60,000 or 75,000 acres.

Do not let that dissuade you unfavorably, however. The Salyer Land Co., particularly Mr. Salyer, Sr., is very much disturbed over the present trend of elimination of small farms.

And since you have mentioned that facet of the problem, it is our studied opinion that in the West, one of the reasons there has not been a more rapid increase in the number of sheep is because it has been the small farmer who is going out of business, the little fellow with 50 or 75 ewes.

And when he goes out of business, the most convenient way to dispose of his flock quickly, which he usually has to do when he goes out under economic stress and strain, is to take them down to the sales yard and sell them for slaughter.

Now there is another disturbing factor involved, and that is that these things are all relative.

I happen to be a farmer myself, and I have a few thousand acres on my farm. I am well diversified, also, but I am not as large a farmer as Mr. Salyer. But unless something is done to check this very dangerous trend that has been in operation for some time now-I consider it dangerous-the time is not far distant when I will be in the category of small farmers that will be eliminated, and a few steps after I am eliminated, the next echelon up is likely to include Mr. Salver.

Mr. SIMPSON. The fact there is 60,000 acres in the Salyer Land Co. does not disturb me a bit. I have one farmer in my county who has 110,000 acres. That does not bother me at all. I just wanted to know how many acres were in it.

Mr. GARLAND. Yes.

Mr. SIMPSON. Now you say you raise feed grains?

Mr. GARLAND. Yes, sir.

Mr. SIMPSON. And grain sorghums?

Does the Salyer Land Co. go into the acreage conservation reserve program this year or last year?

Mr. GARLAND. I do not believe they have any land in the soil bank. Mr. SALYER. No, we haven't any.

Mr. SIMPSON. None in the acreage reserve or conservation reserve? Mr. GARLAND. I do not believe you have participated in that at all. He does participate, of course, in any crops that are supported by price-support programs, such as cotton.

Mr. SIMPSON. I notice you raise hogs?

Mr. GARLAND. Yes.

Mr. SIMPSON. There is nothing much wrong with the price of hogs right now, is there?

Mr. GARLAND.. What?.

23102-58-pt. 2

Mr. SIMPSON. There is not much wrong with the price of hogs right now, is there?

Mr. GARLAND. No, I would not say there is. And likewise, you can apply that to cattle. In the cattle business I find the price structure very satisfactory.

Mr. SIMPSON. What are hogs bringing in California? I am asking for my own information.

Mr. GARLAND. Pardon me?

Mr. SIMPSON. What is the top price on hogs in California?
Mr. SALYER. About 24 cents for fat hogs.

Mr. SIMPSON. Then they are higher than they are in Chicago? Mr. SALYER. That is correct, they are higher on the west coast than they are at Chicago at the present time.

Mr. SIMPSON. What about Minneapolis? They are higher than any terminal market. Hogs are higher in California than they are in any terminal market, according to that.

Mr. GARLAND. That is not uncommon, sir.

We have a deficiency of pork in California, we are an importing State.

Mr. SIMPSON. I have just one more question, Mr. Chairman.

Here is a confusing figure to me. Some gentleman gave $57 million expenditure the first year, $52 million in the second, and $20 million for the third for a total of $129 million. And in 1957 you received 52 cents a pound for wool, and in 1958, you received 37.7, and yet there is only $20 million expended that year. In other words, the lower the price of producers, the less money spent by the Government. Mr. GARLAND. I am fearful that I have confused you by my

statement.

Mr. SIMPSON. It was not your statement. You gave the figure 52.3, 80 percent of parity in 1957; 32.7 for 1958 and 52 percent of parity.

We asked someone here about the expenditure and he gave $57 million the first year $52 million the second, and $20 million the third, and after the third would be 58 for the wool.

STATEMENT OF FRANK W. IMMASCHE, DEPARTMENT OF

AGRICULTURE

Mr. IMMASCHE. I think I can clear the Congressman's question on that.

Mr. POAGE. Identify yourself for the record, please.

Mr. IMMASCHE. Frank ImMasche, Department of Agriculture. The third year has just been completed. That is the 1957 marketing year. The price of wool rose to about 56 cents in May, a year ago, but we do not know yet what the national average will be for the full marketing year. That will be figured by late June.

However the amount of payments for the third year is likely to be less than half of the amount in either the first or second years.

Mr. SIMPSON. Is it true then the price of wool is less to the producer, and yet the Government

Mr. POAGE. May I interrupt again?

I think where you are getting confused is that the payments made in 1958 are not made on the 1958 clip, but are made on the 1957 clip. And the gentleman just pointed out the 1957 clip got to pretty high

levels, at least in the early part of the marketing season, and consequently the payments that will be made in 1958 will be low because of the high level back a year ago. The payments are made a year behind in this program.

Mr. SIMPSON. That explains it. My question certainly was not out of order.

Mr. POAGE. No.

Mr. SIMPSON. When you say you have 37.7 cents a pound in 1958, and they said they only spent $20 million-I could not reconcile the figures.

Mr. IMMASCHE. That 37.7 is the average for the first month of the current marketing year. Now we do not know what the average for the full year will finally be. We will not know that until June a year from now.

Mr. SIMPSON. I will ask you one more question. Has the Government surplus of wool been cut since this program has been in effect?

Mr. IMMASCHE. From the old loan program we accumulated about 185 million pounds. We had that much when this program started. That was in the spring of 1955. All of that was disposed of by last December or January.

Mr. SIMPSON. Do you have any surplus wool now?
Mr. IMMASCHE. No, sir.

Mr. SIMPSON. Then as far as this program is concerned on getting rid of surpluses, it has worked?

Mr. IMMASCHE. Well, that was a peculiar surplus. That was a surplus because we were supporting the price of wool at higher than the market.

Mr. SIMPSON. It wiped out the surplus, and that is the end.

Mr. IMMASCHE. Wool accumulated in our warehouses while foreign wool was being imported to supply our mills. So it was not a true surplus. Our domestic production of wool is less than our total consumption of wool.

Mr. SIMPSON. If this same program would wipe out the other surpluses, I would be glad to be for it.

Mr. DIXON. Will the gentleman yield to a question?

Mr. SIMPSON. Surely.

Mr. DIXON. May I ask this gentleman, how much does it save the Government for every cent the price of wool goes up?

Mr. IMMASCHE. We figure for each 1 cent the price received in the free market increases saves about $3 million of payments. In other words if the average turns out to be 55 cents for the marketing year we have just finished and with the incentive level at 62 cents there will be 7 cents to make up by payments. We figure that would cost about $21 million or $22 million.

Mr. DIXON. Three million for every cent it goes up?

Mr. IMMASCHE. That is a rought rule of thumb figure or ratio. Mr. DIXON. Thank you.

Mr. McINTIRE. For the record, Mr. Garland, what is the present duty on wool tops as they are imported into this country?

Mr. GARLAND. I have that information in my briefcase. May I suggest, Mr. Congressman, so there will be no question about it, about the correctness of the answer, that you direct that question to a member of the Department?

Mr. MCINTIRE. It may be put into the record, and whether or not it is on an ad valorem basis, or just what the basis is on which the tariff is assessed.

Mr. IMMASCHE. There are two kinds of tariff. Raw wool carries a specific duty, and that is 25%1⁄2 cents a pound clean on most wools. Manufactured articles coming in carry both a specific and ad valorem rates of duty. I do not have those rates, but we would be glad to get them for you.

(The data referred to above are as follows:)

The rates of duty which apply to imports of wool and wool manufactures are set forth in Schedule 11 of the Tariff Act of 1930, as amended. Following is a copy of that schedule taken from United States Import Duties (1952) as published by the U. S. Tariff Commission, Miscellaneous Series TC 1.10: Im7/4/952, with changes as indicated by Supplements I, II, III, and IV through May 25, 1957.

"Full rate" column.-Except in a very few specially identified instances, the rates shown in this column are those specified in the Tariff Act of 1930 or the Internal Revenue Code, as amended, unless identified by an asterisk (*), in which case the rate is one established pursuant to section 336 of the Tariff Act of 1930. The full rates apply to products of the following countries or areas, whether imported directly or indirectly therefrom, as a result of actions taken by the President under section 5 of the Trade Agreements Extension Act of 1951, notifications of which were published in the Treasury Decisions respectively indicated.

Country or area

Albania

Treasury
Decision

Bulgaria.

52788

trol)_

China (any part of which may be under Communist domination or con

52828

Czechoslovakia..

52788

Estonia..

52837

Germany:

52788

The Soviet zone and the Soviet sector of Berlin.

Areas under Polish domination or control...

52788

Hungary

52877

Indochina (any part of Cambodia, Laos, or Vietnam which may be under
Communist domination or control)

53012

52788

Korea (any part which may be under Communist domination or control).... 52788 Kurile Islands..

If a product of any foreign country or area not named or described in the preceding paragraph, except the Philippine Republic, is classifiable under a description for which no rate is specified in the "Reduced rate" column, such product also is subject to the rate of duty specified for its description in the "Full rate" column."

"Reduced rate" column.-The rates in this column are the reduced rates established pursuant to trade agreements entered into under section 350 of the Tariff Act of 1930, as amended. They apply to products of any foreign country or area, except the Philippine Republic, which is not named or described in the above list.