Now, following this winter, in the spring, wool will have absolutely no value. And I mean what I say when I say that.

Senator NUGENT. Why?

Mr. HAGENBARTH. You could not sell the wool.
Senator NUGENT. Why?

Mr. HAGENBARTH. Well, that opens up a pretty broad discussion. One of the reasons, in my judgment, is that the Federal reserve bank officials, and Mr. Houston and others, very wisely, I think, engaged in a process of deflation. They sent out word that no more credits should be allowed for handling certain speculative commodities, and wool was specified as such. They do not propose to furnish money for men to buy wool which they will then hold for high prices, but they forget the fact that money has to be furnished for handling wool as a crop. The wool dealers, and even the men that take the wool on consignment, could not find the funds, at least they told us they could not find the funds, for the purpose of financing the wool crop, and there is wool to-day out in the West lying in the shearing sheds that has not been moved at all, and we are utterly unable to move it, we are unable to get even advances on it from consignees.

Now, wool is not sold altogether right off the sheep's back, or from the shearing bin. A great amount of it is sent on consignment. Certain advances are made by the consignee, and the consignee sells that during the year as the mills call for it for their manufacturing purposes. They have told us that they do not have the money to make these customary advances, and the thing has gradually reached the point where the wool could not be handled at all. And one of the reasons for this situation is the lack of credit. And that situation came upon us practically overnight, that is, it all happened in about a week.

Now, whereas very choice clips from Fountain Green, Utah, sold as high as 70 cents a pound, within a very short time a condition was reached where they were worth only 30 cents a pound. And the woolgrower that had depended on liquidating some of these excessive physical costs that he had incurred through bad weather conditions, had to go to his bank and say, "We can not sell our wool. We can not liquidate." In the meantime his expenses go on.

And here is a situation that I want to call your attention to, gentlemen. The conditions in the woolgrowing industry are different from those of other industries. A manufacturer or a mine owner can shut down his plant, but the wool grower can not do the same thing in his industry.

Senator NUGENT. Just a moment, Mr. Hagenbarth. Do you not believe that the principal reason why there is no market for wool this year is because of the fact that the American Woolen Co., the Amoskeag, and other large woolen manufacturing establishments suspended operations last spring, and do you not think that as we can not use raw wool to any appreciable extent, and that it is only of particular value when it is being manufactured, that so long as it is not being manufactured, of course, there is no demand for it, and if there is no demand for it there is no market for it, and if there is no market for it, it is, to all intents and pruposes, valueless? Now, do you not believe that the suspension of operations by the great wool manufacturers of the United States entered very largely into the proposition of depriving the wool growers of a market?

Mr. HAGENBARTH. Absolutely, but there is a cause back of that. Here is a manufacturer, we will say, that bought this Fountain Green wool at 70 cents a pound, and a month later he could buy, or his competitor could buy, similar wools for 50 cents a pound, and a month later than that they could buy it for 40 cents a pound, and a month later they could buy it for 30 cents a pound, and the manufacturers wondered where the bottom was, and where they were at. They could not accept orders for the manufacture of goods for the simple reason that they had no idea whatever what their low costs were going to be for wool.

Senator NUGENT. Well, do you not believe that some of the reasons that actuated the manufacturers in suspending operation were as follows: First, to suspend the manufacture of wool into cloth in order to place themselves in a position where they could buy the raw material, that is, the wool itself, at such a price as they saw fit to fix; secondly, for the reason that by suspending operations and not manufacturing more cloth, they could maintain the high prices that then prevailed for cloth? Do you think those reasons enter into the matter in any way?

Mr. HAGENBARTH. No, I could not give you ulterior motives, but I could state to you facts. It might be true that would be some men's methods of reasoning, but I would not agree with it as a statement of fact. But I can show you one physical reason why the manufacturer would not have been justified, and even up until recently would not have been justified, in starting up his mill. There is a wool called concordia wool, a half blood wool, from Uraguay that sold from between 55 and 56 cents last February. That same wool was offered the other day at 20 cents a pound, landed in Boston.

Now, during this period while wool has been going down, how could a manufacturer, as a wise and prudent business man, know where he was at in buying that wool?

Senator SMOOT. Well, there is another thing connected with it, too. The manufacturer has to buy his wool and manufacture his wool at least eight months before he ever sells and delivers the product, and when the manufacturer receives cancellations for 99 per cent of the orders he has received, how is he going to be able to go on manufacturing goods? It is perfect nonsense. Mr. HAGENBARTH. That is another angle of it.

Senator SMOOT. Mr. John P. Wood told me the other day that his mill had received an order for one piece of goods in the last 90 days. Now, Mr. John P. Wood is not going to work and buy wool if he knows that he can not sell his goods, or have any place to put them. Now, that is the situation that the woolen manufacturers are in.

Mr. HAGENBARTH. Well, the same thing is true in regard to the clothier, who is the man you just spoke of, Senator, as canceling his orders; he does not know where the bottom is There is no stabilization.

Senator NUGENT. You say that wool was imported into this country from Uruguay and sold for 20 cents a pound?

Mr. HAGENBARTH. Yes.

Senator NUGENT. Wasn't that wool purchased ultimately by these manufacturers?

Mr. HAGENBARTH. Yes.

Senator NUGENT. And they purchased that wool at a les than they could purchase wool for here?

Mr. HAGENBARTH. Yes. Now, this was just about thr ago, and this condition is continuing right along in that way bottom has not been reached yet.

Now the western grower, Mr. Senator, receives 14 cents in Boston for that same wool. The very best wool that he he gets 14 cents a pound for. The foreigner that imports wool from Australia would add 40 per cent to the price tha by reason of the exchange situation. He will get, we will cents a pound and the western grower 14 cents a pound.

Senator NUGENT. I merely asked you these questions fo mation. I am a western man, from Idaho, and I am perfectly with the situation confronting the western woolgrowers, bu asking you these questions for information.

Senator SMOOT. Is that the lot of wool that was reported a been purchased by the Cleveland Woolen Mills?

Mr. HAGENBARTH. No; that is another lot. That comes fro same people, but that is another lot.

Senator SMOOT. In answer to the Senator from Idaho I that that wool that was purchased in Boston at 20 cents a po not be in cloth for perhaps 10 months.

Senator NUGENT. I don't think that affects the situation. Senator SмOOT. If you had to raise the money to carry might think it would.

Senator NUGENT. I am talking about the manufacture, the that actuates the manufacturer.

Mr. HAGENBARTH. Now, Senator Nugent, here is a piece of o blood wool. The man who brought this wool from South A happens to be in this room now. We raise a lot of such Idaho and a lot of it in Utah; it comes from our mutton b sheep. And that sold for 9 cents a pound in Boston. If it w for the health of his sheep the western wool man in Idaho co afford to take that off of his sheep. It costs more to shear th off the sheep, load it on the cars, and pay the expenses of selli Boston than the wool is worth when it gets to Boston. Senator SUTHERLAND. What is the freight?

Mr. HAGENBARTH. Three cents a pound, and the selling about the same, so about 6 cents a pound nas to be taken off wool for those expenses.

Senator SIMMONS. The freight is 3 cents a pound from wh Boston?

Mr. HAGENBARTH. From Idaho, Oregon, Washington, Utah, ming, and that general intermountain territory. And we ha two advances in freight rates, Senator Simmons.

Senator WILLIAMS. Is the freight the same.from all those p Mr. HAGENBARTH. Practically the same from all that ter from the Rocky Mountains. There is very little variation in Probably 20 to 30 cents a hundred variation.

Senator SIMMONS. How is that packed for shipment? Is compressed in any way, or is it loose?

Mr. HAGENBARTH. No, no; it is sacked wool. You get a small differential of 25 cents per hundred if you put it in bales, amounts to very little, Senator Simmons.

Senator SIMMONS. Would that be 21 cents a pound?

Mr.HAGENBARTH. No, 25 cents a hundredweight. So there is not gain there. The cost of doing that, the labor and so on, is prohibitive.

Now, you gentlemen can readily understand why a man can not pay a debt of $9 per head on sheep when he can not afford to take the wool off his sheep. There is no need of going into any details on that feature of it.

I would like to put in the record some quotations, for the use of the committee, covering the different grades of wool being shipped in at present prices, and these are good grades of wool, staple grades of wool. And in this statement we are not taking the very choice grades of wool, nor are we taking the low-priced wools, but we are taking the best averages of wool, giving domestic and foreign wools, and what they will net to the fleece grower in Dakota or in Illinois, or the grower in Utah or in Idaho.

Senator SIMMONS. You have handed in a long document there. Can you not, in a few words, give us the differentials in prices that that document shows? I would like to save the committee from having to read as much of this as possible.

Mr. HAGENBARTH. These are simply the prices on these various grades of wool, and I am trying to save the time of the committee by not taking time to read all these figures into the record now, and that is the reason I offered to put it in without reading it.

Senator SIMMONS. We will be better able to ask you questions if we know what is in the document that you are putting in the record. Mr. HAGENBARTH. Well, now, for instance, I have a table showing the prices that domestic wool must sell for on the ranches to compete with South American and Australian wools now offered to arrive. The prices used here are based on average lots. Choice lots would sell for a little more, and poor lots would sell for a little less. Now, for instance, the fine staple wools-and those are the very best wools that we grow in the West, though there is no great quantity of that wool grown in this country, but they are the very best wools that we have got on those wools 16 cents a pound is what they will net. to the western grower.

Senator SIMMONS. You mean at this time?

Mr. HAGENBARTH. At this time; and as a matter of fact, they will not net that much to the western grower, for this reason: You will have to deduct about 2 cents a pound

Senator SIMMONS. Do you mean the wool as it is taken from the sheep, sheared from the sheep?

Mr. HAGENBARTH. Yes; the grease wool. 48 cents a pound to produce, Mr. Simmons. will bring 30 cents à pound. We produce of that.

Those wools cost about The fine clothing wools a considerable quantity

Senator SUTHERLAND. Is that the Boston price, Mr. Hagenbarth, or the net price to the grower at the point of production?

Mr. HAGENBARTH. That is the price at the ranch; half blood staple 14 cents a pound. There is our big, standard clip of western wools, half blood staple, 14 cents a pound. Less than one-third of the cost of production.

Senator SIMMONS, Will you please tell me what those wools cost in 1912, 1913, along about that time?

Mr. HAGENBARTH. Yes; they brought more money at that time, Mr. Simmons.

Senator SIMMONS. Well, about what did they bring at that time, along in 1912 and 1913 ?

Mr. HAGENBARTH. I would prefer, Mr. Simmons, not to answer that question myself, because we have a market authority here from Boston who can give you very accurately the absolute information on that, and I would prefer to have him do so.

Senator SIMMONS. Well, he is from Boston; but you are speaking now, and you have been speaking, about the prices on the farm. Mr. HAGENBARTH. Yes.

Senator SIMMONS. He would not know as much about the prices on the farm as you do, would he?

Mr. HAGENBARTH. Yes; he does know about the prices on the farm. He handles that end of it, and he can give competent, expert testimony on that question.

Senator SIMMONS. You are not able, then, to give us that information yourself, are you, Mr. Hagenbarth?

Mr. HAGENBARTH. No, sir; not from my present information, although I know that it was worth about 30 per cent more at that time than it is bringing now.

Senator SIMMONS. Well, then, that is your answer; that it would have cost on the farm 30 per cent more in 1912-13 than it now sells for?

Mr. HAGENBARTH. Just prior to the war they brought more money than they are bringing now. I make that broad, general statement. Now, the three-eighths wool, which is our next largest production of wool in the United States west of the Mississippi River, brings 13 cents a pound, and it costs 45 cents a pound to produce that wool.

The quarter blood wool of a good grade brings 10 cents a pound. This wool that I showed you here, gentlemen, was an inferior grade of wool, that brings 9 cents a pound.

Senator JONES. Mr. Hagenbarth, do you mean to give the impression that there is a market at those figures?

Mr. HAGENBARTH. No, sir; there is not. When you do sell that is the price you would have to take, or less, for your domestic wools. These are the prices of the foreign wools that are coming in with a favored rate of exchange, and you must add 40 per cent to these prices to get the amount that the foreigner receives for his wool by reason of the favorable exchange situation.

The quarter-blood wool brings 10 cents. The low-quarter brings 7 cents, and braid wool of the best grades brings 5 cents a pound. Senator SIMMONS: Now, you say it would cost about 40 cents to 45 cents a pound to produce that wool?

Mr. HAGENBARTH. From 45 to 48 cents, as shown by the best figures available, Mr. Simmons, in the intermountain territory.

Senator SIMMONS. You mean that would have been the cost last year?

Mr. HAGENBARTH. No; it would cost a great deal more last year. That was before we had the hard winter conditions that I speak of. Senator SIMMONS. You mean during the war period?

Mr. HAGENBARTH. Yes, sir.

Senator SIMMONS. What would it have cost before the war?