That concludes Mr. Wilkinson's statement on behalf of the National Association of Wool Manufacturers. Mr. POAGE. You not only favor direct compensatory payment but you recognize the money should be available from certain predesignated sources? Mr. O'DUNNE. That is correct. Mr. POAGE. And that you would support direct compensatory payments even though the money comes directly out of the Treasury? Mr. O'DUNNE. That is correct. Mr. POAGE. And that you feel that the promotion program is good, too? Mr. O'DUNNE. That is correct, sir. Mr. POAGE. Well, I thank you very much. Are there any other questions? If not, we are very much obliged. We are now honored to have with us the distinguished Senator from the State of Wyoming. I would like to have a statement from Senator Barrett. STATEMENT OF HON. FRANK A. BARRETT, A UNITED STATES SENATOR FROM THE STATE OF WYOMING Senator BARRETT. Mr. Chairman, I am very pleased to have the opportunity to say a word on behalf of the bill extending the Wool Act at this time. I served with a good many of you gentlemen on the House side for many years, and I may say, Mr. Chairman, that I spent many happy days on the House side. Sometimes I regret that I left the House for other public service. Mr. Chairman, I am intensely interested in this legislation. During the 15 years since I first came to Washington the woolgrowers of the country as well as other segments of our agricultural economy have encountered some very perplexing problems. I have endeavored to find some method whereby we could protect the growers of wool in this country against competition from wool produced abroad particularly in those countries where labor costs are much lower and taxes much less than they are in this country, and in fact where all other costs of production were lower than here at home. Personally, I would have preferred to have set up a system of quotas, something along the lines of the Sugar Act, or second, an adequate tariff possibly in conjunction with a quota. I realized after many years of effort that it was almost impossible to get legislation along that line enacted because of opposition, mainly from the State Department. Accordingly, we found ourselves in the position where the sheep industry had declined in numbers from 49 million head in 1943 to 26,270,000 head in 1953, and that represented a drop of 50 percent in the total sheep population of the country in that 10-year period. Unfortunately, during the war when every other industry was enjoying a high measure of prosperity, the OPA set a ceiling price on wool at 42 cents a pound at the time of Pearl Harbor and maintained that same figure all during the war. Costs went up, skyrocketing in fact, and many people left the sheep business to engage in the cattle business. As a consequence, the numbers declined as I stated a moment ago. We found ourselves in a position where something had to be done if we were to save the sheep industry for complete liquidation. And as a result we worked out the Wool Act that takes a certain portion of the tariff on wool and wool manufactures and uses it to make incentive payments to woolgrowers on a level that will encourage them to a point where they will produce in the aggregate 300 million pounds of wool a year. The incentive figure has been set at 62 cents a pound average price, grease wool. Since the act was put on the books it has operated in my judgment in a very satisfactory fashion. Woolgrowers, large and small in every State in the Union, have received benefits under the act. Thousands upon thousands of farmers who run small bunches of sheep participate in the program and they get material benefits which help them in carrying on their farming operations in a fairly successful fashion. It appears to some people who are not well versed in the industry that the sheep business is practically entirely a western industry. The fact of the matter is that if you take the aggregate number of sheep that are run on farms in the heartland of our country such as in Indiana, Ohio, Illinois, and all through the East and even the South, to some extent, that you will find that the farmers who run from 50 to 100 head of sheep produce more wool and more lamb than we do in the West. So I say this program has been of great benefit to farmers all over the country. It has worked very successfully. Mr. CHAIRMAN, I do not know of any other way that we can provide a measure of encouragement to the producers of wool and lambs in this country and give them the protection needed so that they can compete with foreign producers and in this fashion be assured that they can get just about a third or a little more of our own market here at home. I do not quite agree with the statement made a moment ago by my good friend, Gene O'Dunne, that we ought, if necessary, to resort to direct appropriations out of the Treasury to finance the Wool Act. I say that for this reason: For more than 20 years now we have been using 30 percent of the tariff receipts on wool and other commodities to finance some 86 other agricultural commodities. As a matter of fact, about a billion and a half dollars have been expended over that period of time to help various agricultural commodities under section 32 of the Agricultural Adjustment Act and I think wisely and properly. I am entirely in accord with that procedure. It is only in the past 3 years that wool has been able to get the same benefits as these other 86 commodities by the provision in the Wool Act which sets over 70 percent of the custom receipts on wool imported into this country in competition with the wool produced here at home to be used to make the incentive payments. It is true that under the present law that 70 percent of the tariff receipts on wool and wool manufactures may well be inadequate to finance this program. But the present law applies only to the specific duties on wool and wool manufactures. That is, the tariff at 25% cents a pound clean wool coming into this country and the tariff on fabrics coming into this country or partially processed wool coming into this country in the form of yarn, at the rate of so much a pound. It seems to me that the act should be amended at this time to provide not only that the specific duties on wool and wool products should be dedicated to finance this program but that in addition we should take the ad valorem tariff on wool and wool manufactures and dedicate it also to the support of this program. By that I mean only 70 percent of the ad valorem on wool and wool manufactures. I say that is proper because after all the wool manufactures come into this country are as much competition to our sheep industry as wool that is produced elsewhere because manufacturers abroad use foreign wool to make the woolen goods that come in here and have to a large extent taken over the market. I can call your attention to the fact that over the past 11 years some 280 American woolen mills have had to close their doors because they were unable to compete with the foreign manufacturers where labor costs are much lower than here at home. So I think that the tariff on wool and wool manufactures, not only the specific duties but the ad valorem duties ought to be used to do double duty. No. 1, to protect in a small way the producers here at home, and No. 2, to pay for the incentive payments under the Wool Act. And so I hope, Mr. Chairman, that your fine committee here will give consideration to amending this act and using 70 percent of not only the specific duties but the ad valorem duty as well on wool and wool manufactures imported into this country to finance the Wool Act as extended. There is one other amendment that I would like to take a moment to discuss. When this bill was up in the Senate 4 years ago we passed it on 2 different occasions and in both bills we provided no limitation on the life of the act; in other words, it was in a way intended to be a permanent act. When it came over here this committee in its report indicated that while it did not mean for the act to be a temporary measure in any way, still it thought there ought to be a limitation of 4 years put on the life of the act, so it could take another look at it to see how it was operating. Now we have had a chance to take a look at it. We have found it has worked out very well and it seems to me that it would be wise if the committee in its good judgment could see its way clear to extend the act and take the time limitation off. I did not have a prepared statement, Mr. Chairman, but I certainly appreciate the opportunity to come over here and to appear before you gentlemen again and to say a word on behalf of this great industry. I know that you are well aware of the situation confronting the industry. I can say to you as a result of my study of this matter since I have served in the Congress, but also my experience over many years in the industry itself, that unless we get this legislation through that this segment of our agricultural community will be in a mighty bad way. Thank you very much. Mr. POAGE. We are always glad to have you come before this committee. We hope you come back any time you see fit to. It is a matter in which we know you have a deep interest. I did want to get your view on one point. It was said before you came in that woolen fabrics were faced with serious competition from synthetics. Of course, I think that is true. I gathered from your statement that you do not think there is any threat? Senator BARRETT. Oh, no, Mr. Chairman, I didn't mean to leave that impression. If I did, I want to correct it here and now. Mr. POAGE. I don't want to misconstrue what you said. Senator BARRETT. I know that, Mr. Chairman. I realize full well that we have very serious competition from synthetics. That is the main reason why a tariff probably isn't the adequate answer to this problem. If we had a tariff that would be effective at the present time it would of necessity be so high that it would open the door to widespread opposition from the synthetics. Mr. Poage. That is exactly the point I wanted to ask you about, how you would meet this synthetic threat? You imply raise the price by the tariff. We understand you can raise the price to a dollar a pound easily enough by shutting off everything else. Senator BARRETT. That is right. Mr. POAGE. But I do not think that we would sell much wool because Du Pont could undersell you. Senator BARRETT. You are exactly right. Mr. POAGE. From that standpoint, I was wondering if you could suggest-whether the tariff was a preferable method or not—in view of that if you think of any method that is preferable to this direct payment method? Senator BARRETT. Yes, I indicated that the quota system if you could work one out, would be preferable to the incentive payment method. By a quota system we could insure that the producers of wool in this country would have the first opportunity to sell their product in the American market and then the doors would be opened to foreign producers. We worked a plan of that kind pretty well with sugar, as you well know. And I believe that it could be done and made to work at least with a combination of tariff and quota. But as a practical matter, we cannot get the legislation through. That's the whole thing in a nutshell. The State Department would not go for it. Mr. POAGE. Are there any further questions? We thank you very much, Senator. Mr. HILL. I would like to say that I consider the Senator from Wyoming one of the finest experts in the wool industry who have appeared before this committee. I would like to recall to your mind that you stood before this committee with tears in your eyes and your voice when they froze the price of wool during World War II at a 20-year low. That really broke the back of the wool industry in our area. Senator BARRETT. I remember that very well. And I remember the great help that the distinguished Congressman from Colorado gave to the industry at that time. Of course, everything turned out precisely as we anticipated then. I thank my old friend for his very kind words and thank you, too, Mr. Chairman. Mr. HILL. You will recall the area in the West where you and I live we lost 38 percent of all of the large herds or bands or flocks of sheep in the West, over a period of less than 10 years. Senator BARRETT. That is exactly right. If I might take just one more minute, Mr. Chairman, because your State of Texas and Wyoming are identical in many respects. We both are great producers of wool. You produce much more than we do. We are great producers of cattle. And you produce more than we do. Texas is a bigger State than Wyoming, about 5 times as big. That is the whole thing in a nutshell. If you were no bigger than Wyoming we would probably have more sheep and more oil than you do in Texas. Anyway, you have it. Here is the point. You drive these fine citizens out of the sheep business and they have to go some place. Their land is good only for one purpose, that is, to graze livestock. So they had to convert from sheep into cattle. And that would demoralize the cattle industry. We have to keep things in balance and this law is working out in good shape and I hope that we can keep it on the books. After all, it is alright to say, we would rather do it this way or that way but as a matter of fact this is the only thing we can do. And so we better do the thing we can do and keep this industry on its feet. I thank you for your kindness and courtesy, Mr. Chairman, and I appreciate the opportunity to be heard. I will leave it to my old friend, Congressman Clark Fisher-he was my leader here when I was over here in the House when it came to sheep or wool matters. Mr. POAGE. At any time we are always glad to have you come back here. Senator BARRETT. Thank you very much. Mr. POAGE. Now we will hear from Mr. Jackson of the National Grange. STATEMENT OF C. W. JACKSON, DIRECTOR OF PUBLIC RELATIONS, NATIONAL GRANGE Mr. JACKSON. I am C. W. Jackson, director of public relations for the National Grange. I, certainly, appreciate this opportunity to meet with this committee and to give you the Grange views on this proposed legislation. And we did have a statement prepared. However, to be perfectly frank most everything we had prepared to say has already been said much more effectively, perhaps, than we would say it, by others who have testified previously. So with your permission I would like just to highlight this statement and then have it made a part of the record, that is, the statement as a whole. Reading from page 2 of the statement: For many years the Grange has advocated the commodity-bycommodity approach to the farm problem. We have also recommended that "self-help" mechanisms, wherever possible, should be a basic feature of farm program planning, and that programs should be designed to channel income to farmers from consumers-rather than from Government. The Wool Act of 1954 provides these features. The Grange, therefore, supported this legislation at the time it was proposed and passed. And, today, after 3 years of experience with the program our support continues. We are glad to join sheep and wool producer associations in their almost unanimous request for an extension of the act for at least another 4 years. We feel that the extension of the act is justified from the standpoint of producers and the public interest. Section 708 of the act authorizes a self-help advertising and sales promotional program when approved by producers in a referendum to increase the demand of domestic wool and lamb and to provide a higher price in a free market. |