lambs, $7.62; old ewes, 48 cents; less cost of replacements, 95 cents; leaving income of $10.88, an average loss per head of 0.07.

The average incentive payment received in 1956 on the 1955 wool clip was $1.70, making the average gain, after the incentive payment, $1.63, and interest on the money borrowed would be deducted from the above. The figures for 1956 on 43 sheep accounts, 115,726 sheep, shows $12.25 per head operating expenses, with income of $12.50 per head, a gain of 25 cents per head before the incentive payment. The average incentive payment for 1956 received in 1957 was $1.87, making the total average gain $2.12 per head.

I have seen the records and figures of other livestock loaning agencies in Utah for the same period, and they are similar to the figures I have given. I have talked with other production credit association officials from other areas and I firmly believe these figures would be typical in our other sheep-producing States.

Operating costs continue to increase. Many of the budgets prepared at renewal time last October, November, and December were increased 10 to 15 percent. Many of the sheepmen have been forced to obtain loans on their real estate to assist in the costs of their operating expenses, and they have to depend on the income from their sheep to make the principal and interest payments on their real-estate debts in addition to their other fixed operating expenses. In many instances, it has been necessary for the livestock loan companies to take realestate mortgages, assignment of water stocks and waivers on grazing permits from the sheepmen as additional security in order to continue with their financing.

I have been secretary-treasurer and manager of the Utah Livestock Production Credit Association since 1936, or 22 years. Many of the sheep accounts, in fact, most of them are on the books today that were there in 1936 with but little financial gain, if any, in the 22 years.

We have numerous inquiries from sheepmen each year seeking credit relief, many with the total debt on their sheep so large that we cannot accept them. This means liquidation and perhaps a loss to a man who has spent many years trying to stay in the sheep business. It is evident that considerable liquidation of range outfits would have been necessary without the incentive payment on wool.

The 1954 Wool Act with the incentive program has been most helpful to the sheep and wool industry. We rely on the sheep industry for one of our greatest supports; without it our schools and other activities face trouble.

We earnestly request that the Wool Act of 1954 be extended as a measure of security for the sheep industry.

Thank you.

Mr. MATTHEWS. Thank you very much, Mr. Smith. I wonder if there are any questions that the committee would like to ask? Mr. HILL. At the bottom of page 2 you say:

In many instances, it has been necessary for the livestock loan companies to take real-estate mortgages.

Mr. SMITH. Yes, sir.

Mr. HILL. Then you follow with:

Assignment of the water stocks and waivers on the grazing permits.

How could they-how could anyone sign a waiver on a grazing permit without the consent of the Forest Service?

Mr. SMITH. They do consent to it.

Mr. HILL. They consent to it?

Mr. SMITH. Yes, sir. Their waiver is sent to the regional office and is consented to by the Forest Service.

Mr. HILL. Is that all the bank leaves out?

Mr. SMITH. We do not take it only on necessity-only when we have to.

Mr. HILL. If you have to have assignments you ask for them?
Mr. SMITH. I think we would have to; yes, sir.

Mr. HILL. The sheep farmers are not doing as well as some of the folks would think?

Mr. SMITH. That is right.

Mr. HILL. With this act, if that is extended, you see some hope for the sheepgrower?

Mr. SMITH. Yes, sir, that is right.

Mr. DIXON. I, certainly, compliment you on your presentation here. The data is compiled in a way that I have never seen data compiled. It is very useful. Maybe you cannot answer the question. Maybe someone else here can. As I understand it, the National Banking Act prohibits a national bank from taking grazing permits as part of the security on loans that the industry is supporting legislation which would permit the national banks to take waivers on grazing permits as security.

Mr. SMITH. If I may, I believe that we have had inquiries as to the form we use on a waiver, on a permit, and I do not know whether there is a law against their taking it or not but I think they have endeavored to take it.

Mr. DIXON. They are probably not national banks.
Mr. SMITH. That could be. I can't answer that for you.

Mr. DIXON. Maybe someone can answer that question while the wool people are here.

Mr. MATTHEWs. Is there anyone who could answer that question of Congressman Dixon?

Mr. DIXON. The reason I ask it is that the wool people in Utah face that problem. That is quite a serious handicap to their getting loans.

Mr. McINTIRE. Just one question, Mr. Smith. In the short time that the act of 1954 has been in operation, and I do state it is a short time, do you see the effects of this act as the basis for an increase in sheep population in your area?

Mr. SMITH. Very much so. Some of the smaller operators would not be able to stay in or get in without the assistance and help from the act.

Mr. McINTIRE. But are there increases in sheep numbers going on? Mr. SMITH. Yes, sir.

Mr. McINTIRE. In all sizes of operations?

Mr. SMITH. Yes, sir. Some of the flocks are bringing the herds back up to an economical unit because of the fact that they are getting this additional incentive payment.

Mr. MCINTIRE. So the act is

Mr. SMITH. Beneficial.

Mr. McINTIRE. You would say that the act's objective has been helpful-that being to build toward a more adequate supply of wool produced in this country?

Mr. SMITH. Yes, sir.

Mr. MCINTIRE. Do you think that phase of the act is showing up constructively and beneficially?

Mr. SMITH. Yes, sir; I do.

Mr. MATTHEWs. Are there any other questions?

Thank you very much, Mr. Smith. We surely do appreciate your testifying.

Mr. SMITH. Thank you.

Mr. MATTHEWS. I would like to acknowledge the fact that I think Mr. Casey Jones, executive secretary of the American Sheep Producers Council, has come in. The committee would like to recognize you if you want to testify.

Although you did not testify you did a good job.

Mr. Winder very ably stated your feelings about this "important legislation" and in the record we have stated that you collaborated with him.

Mr. JONES. Thank you.

Mr. MATTHEWs. If there are no further questions the subcommittee stands adjourned until 10 o'clock tomorrow morning. We are delighted to have had you here.

(Whereupon, at 12:30 p. m., the hearing was adjourned, to reconvene on Wednesday, February 12, 1958, at 10 a. m.)

EXTEND NATIONAL WOOL ACT OF 1954

WEDNESDAY, FEBRUARY 12, 1958

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON LIVESTOCK AND FEED GRAINS

OF THE COMMITTEE ON AGRICULTURE

Washington, D. C.

The subcommittee met pursuant to notice at a. m., in room 1310, New House Office Building, Hon. W. R. Poage (chairman of the subcommittee) presiding.

Present: Representatives Poage (presiding), Matthews, Hill, and Johnson.

Also present: Representatives Dixon and Fisher; Mabel C. Downey, clerk; Francis M. LeMay, staff consultant.

Mr. Poage (presiding). The committee will please come to order. We will have some more of the witnesses today on this subject of wool.

I want to state that we do not intend to conclude the hearing today. There are others who will want to be heard and will have an opportunity to be heard at a little later date, but we do want to hear those who are here. I think Mr. Matthews followed the right course yesterday in hearing those from a distance first.

We have still listed here some from distant points. I think they should be heard first. I am going to change the order in which we are hearing the witnesses, to hear those from distant points first.

Mr. Dan Fulton from Montana, I wonder if you would like to be heard early in order that you might be able to get away.

Mr. FULTON. I should like to be heard now.

Mr. POAGE. We will be glad to hear from you.

STATEMENT OF DAN FULTON OF ISMAY, MONT., PRESIDENT OF THE MONTANA WOOL GROWERS ASSOCIATION

Mr. FULTON. Mr. Chairman and members of the committee, my name is Dan Fulton and my address is Ismay, Mont. I am a sheepman and president of the Montana Wool Growers Association, I also produce cattle and am the immediate past president of the Montana Stockgrowers Association.

We

The Montana Wool Growers Association includes in its dues paying membership over 90 percent of the sheep owners in our State. are now producing approximately 15 million pounds of wool each year as compared to 25 or 30 million pounds in the early 1940's.

Montana, due to its climatic conditions, is naturally favorable to sheep production and there are thousands of acres now grazed by cattle, formerly grazed by sheep, which could once again be used for increased production of wool and lamb.