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arid range lands as well as the mountain regions of my own district in western Colorado. I am proud to say that some of the finest wool in the Nation is produced in my district of Colorado and this area is also noted for its production of some of the finest and most appetizing lamb in the country. These lambs are marketed in the fall directly off our high forest areas and provide delicious food for America's dining tables.
My colleagues in the Congress from Colorado also appreciate the importance of this great industry because sheep are also contributing to the prosperity of their areas. Also, in counties east of my district in Colorado, over 500,000 lambs are fed annually. These lambs come from ranges not only in Colorado but also from Wyoming, New Mexico, Texas, and Montana to be finished on beet tops and other products of our Colorado farms.
Colorado's interest in the sheep industry may be judged by the fact that this is one of the most important agricultural enterprises in our State, ranking third or fourth from year to year. In fact, nearly $30 million in new wealth is created in our State each year through the marketing of lambs and wool. There are some counties and areas in Colorado that are largely dependent on the sheep industry for support of their business enterprises. I know that this holds true not only in Colorado but in a dozen other Western States where sheep utilize and convert into meat and wool, grass resources that would otherwise be wasted. I know, also, that sheep raising is becoming an increasingly important enterprise in some of our Eastern and Southern States.
At the time the National Wool Act became law in 1954 the sheep industry of this Nation was in a desperate financial plight. Conditions beyond the control of sheep producers caused a drop in sheep numbers by almost half in the 12 years prior to 1954. In the interests of national defense, wool prices were frozen throughout World War II, while sheep production costs went steadily upward. Then after the war the tariff on imports of raw wool was cut by 25 percent. The unsatisfactory price support and loan programs established in an effort to alleviate conditions in the sheep industry, only piled up surpluses of wool in a Government stockpile.
The National Wool Act of 1954 is the first program that has been established that has stopped further piling up of wool in Government storage. I am advised that not only is no wool going into storage since the establishment of this program, but also that the big stockpile that the Government had in storage has now all gone to market. This is, I think wonderful news.
This is also a program that is tailor-made to meet the rather peculiar requirements of a commodity that must meet heavy foreign competition here at home. In fact, wool and sugar are among those few commodities of which we produce less than we consume. In the case of wool, we are producing a little more than one-third of our normal peacetime requirements. And, of course, during national emergencies, demand rises and foreign supplies become more difficult to obtain.
I think the woolgrowers should be especially commended for establishing a self-help program. Through the contribution of a part of the incentive payments on wool they are establishing a promotion and advertising program on both of their commodities-wool and lamb.
In the case of wool, this is an effort to offset huge advertising budgets of the synthetic fiber manufacturers and to hold wool's rightful place in the market on the basis of the unique qualities of this wonderful fiber. In the case of lamb, the promotion efforts are aimed at widening demand in areas where lamb consumption is low and also evening out price fluctuations when heavy supplies of lamb hit the markets.
It is true that the Wool Act went into effect under two adverse conditions. One was a reduction in world prices of wool during the first 2 years of the program. The other was a prolonged drought in our Western and Southwestern States which has only subsided in the last few months. However, with the return of moisture we are finding a heavy demand for breeding ewes of all ages which is most indicative of the present great interest in increasing sheep numbers. That interest, I am sure, will continue if this act is extended, The Congress revived an old and important industry in this Nation with the establishment of the National Wool Act. It is highly essential that this vital and beneficial measure be continued and I cannot urge too strongly favorable action on this important piece of legislation.
Mr. ASPINALL. Mr. Chairman, I have, of course, been supporting this legislation since it was introduced into Congress, and just last year I introduced a bill which would provide for the extension of the Wool Act.
Although not an expert in this field by any means, I feel that legislation has firmed up the woolgrowing industry, together with the sheep industry as such, the meat-producing industry, and it seems to me that in order to keep this particular industry in good shape and permit it to render to our national economy the value which it can, the Wool Act should be extended.
Whether by an individual bill or by an omnibus bill, I would have no choice whatsoever. But I do feel that we must take care of this before the expiration of this act.
Mr. Dixon. Mr. Chairman, may I ask the gentlemen from Colorado a question?
Mr. POAGE. Certainly.
Mr. Dixon. Would you rather see the Wool Act bill by itself or included in an omnibus bill?
Mr. ASPINALL. I personally would rather see it in an act by itself, Mr. Dixon, because then I feel that it can be given the attention that it itself deserves being an integral part of the law at the present time.
Mr. Dixon. And you do not want it to be in either good or bad company; is that the idea?
Mr. ASPINALL. I am not worried about the company that it might have, but I think that a piece of legislation that is as important as this particular piece of legislation deserves separate study and consideration by the Congress. | Mr. Dixon. Mr. Chairman, I wish to compliment our friend from Colorado on his statement.
Mr. ASPINALL. Thank you very much.
Mr. POAGE. Thank you. The committee appreciates very much your statement.
Mr. ASPINALL. Thank you.
STATEMENT OF HON. E. KEITH THOMSON, A REPRESENTATIVE
AT LARGE IN CONGRESS FROM THE STATE OF WYOMING
Mr. Thomson. Mr. Chairman, and members of the committee, I have a prepared statement, a copy of which was previously submitted to the committee, and I would like to have it placed in the record if I may.
Mr. PoAGE. Without objection that may be done. (The document referred to is as follows:
STATEMENT OF Hon. KEITH THOMSON, OF WYOMING Mr. Chairman, on August 29, 1957, I joined with many of my colleagues in introducing legislation to extend the National Wool Act or 1954, the number of my bill being H. R. 9532. On that date, speaking on the floor of the House, I stated that it was essential "that legislation be enacted early in the next session to extend the act, if we are to avoid the harmful effect of uncertainty within the industry.". I wish to congratulate the committee and the chairman for recognizing this need for early action by promptly requesting reports and arranging these hearings.
The testimony in these hearings, previously submitted, has, generally, very well covered the need for legislation, as well as the justification of the enactment of this particular legislation, as a solution to the problem, at least for the immediate future. I will attempt to avoid burdening the record by repeating factual testimony that has not and cannot be controverted.
The chaotic conditions of the industry existing prior to 1954 are well known. The fact that a conventional Government price-support program had only resulted in the accumulation of 150 million tons of wool in Government warehouses, stored at taxpayers' expense with a depressing effect upon the free market, is well recognized. The last of that wool has been removed from Government storage.
I think it is important that we constantly keep before ourselves the fact that wool and sugar are the only two major agricultural crops which we produce in this country that are not produced in surplus or in excess of our rate of consumption. We produce in this country only about one-third of the wool which we
With regard to these commodities, the problem is a tariff problem, and not one of surplus commodities. The American producer of these products, as with almost all other agricultural or industrial products, simply cannot compete with the lower living standards, the lower wages, the lower taxes, and the lower costs of production in other countries.
I think we must, also, constantly keep in mind that wool is certainly a basic agricultural commodity, in the sense that it affects the country as a whole. Sheep and wool are produced and fed in significant quantities in almost every State in the Nation. Livestock and livestock products account for by far the greatest portion of our farm income. When wholesale reductions occur in the production of sheep, as in the postwar period prior to 1954, the effect on all other segments of the agricultural economy is significant and is bad. Lands used for this production are diverted to the production of cattle or other agricultural products, with attendant price and supply dislocations. The fact that this decline in production of sheep has been halted has been a benefit to most other segments of agriculture.
The effect of the act or its extension is not to place a tax burden on the American people, to produce an unneeded commodity, or a commodity in excess of requirements. Revenues come only from tariff on imported wool. The solution could have been by tariff increases or by import quotas, but this was determined in 1954 to be contrary to our trade policies. Wool is a strategic material which we need from domestic producers in greater quantities even than now produced. To provide for this incentive payment from the tariff revenues, rather than to provide higher tariffs or quotas, is not to give wool a preferred position over other primary agricultural products. These other agricultural products with regard to which we have price and supply problems are given far greater protection by either tariff, quotas, or absolute embargoes on imports. Even under the act, we are giving wool something less in the way of protection.
Another thing I think we should remember is that, even though this legislation was the salvation of the important wool industry faced with outright extinction, it has not solved all of the problems. The price has improved. Without speculating on the effect of the removal of the Commodity Credit stockpile, the fact is that payments in the initial year of operation were $58 million, or 44.9 percent of the market price, to maintain a 62-cent incentive level, whereas estimated payments for this year will be something in the neighborhood of $20 million, or from 15 to 20 percent of the price received on the market, to maintain the same support price of 62 cents. This shows a tendency to achieve the objective. The improvement in price has worked to the advantage of all segments of the industry and the consumer. Nevertheless, another important thing for us to remember is that the only market for American-produced wool is the American manufacturer and the American consumer.
It is alarming that mill consumption is running 17 percent below a year ago. Without speculating on what would have happened had there been no drought, it is of concern that our production in 1957 was only 226 million pounds, and far short of the 300-million-pound objective, and that imports still make up twothirds of the domestic consumption.
These problems yet remain unsolved. I bring this out because I want my colleagues to fully understand that the passage of this legislation is not in any way going to lessen my support for general legislation that will provide adequate protection and a proper share of the market for domestic producers of all products. When their production and their price are being adversely affected by unfair foreign competition due to cheap labor, lower taxes, and the taking advantage of our successful effort to raise the standard of living for all of our people, it is in the interest of every American businessman, laboring man, and agricultural producer that this overall situation be corrected. I shall continue to work to that end after the passage of this legislation, just as I have while the 1954 law was in effect. There is no market for American wool in Japan or other cheap-labor countries. The problems of the American woolen mills and manufacturers must be solved. In the interest of the general economy, this extends to cotton and other American products. American workers must be kept employed to provide a customer for agricultural products at a fair price to the producer. The great intra-American mass market must be preserved so that our country can continue to advance and raise our standard of living for all of the people as an example and an incentive to the rest of the world. This is in the interest and to the advantage of the free world and can, in my opinion, be done without any damage, but rather advantage, to the free world. The overall effect will be to promote sound trade and not to improperly restrict trade.
In the meantime, this act that has proved itself should be extended. The extension should be for an indefinite period. Even with the passage of more general legislation, it is impossible to determine how long it would take to remove the necessity for this legislation. That decision would always rest in the hands of Congress, as the inherent right of Congress to change the law as needed would not be affected. Placing it on an indefinite extension, however, would give the additional confidence in the future needed to bring about the required expansion of the industry with consequent lessening of pressure on other agricultural commodities. Because of the indefinite extension and the uncertainty of economic conditions now and for an indefinite future, the limitation of sources of revenue to specific duties should be eliminated to assure adequate financing in all events, which would still be without any burden on general revenues and would only be a payment in lieu of tariff from present tariff income.
The extension of this act is essential in the interest of all of agriculture, in the best interest of all of America and of Americans everywhere. I urge that this be done without delay.
Mr. THOMSON. I would just like to comment on that statement. Time is getting short for this very necessary legislation, and I sincerely hope the committee will see fit to act upon it with due haste. I appreciate the committee has gone into it and has been acting with diligence. I hope the bill can be reported out shortly. I think it is particularly important at this time, with the condition of the wool market, that the bill should be reported and acted upon. I believe it will operate to restore confidence in the woolgrowing industry.
Furthermore, I would like to point out that wool and sugar are the two main agricultural commodities that we raise in this country in a lesser supply than which we consume them, and I think that the expansion of the wool activity will have a very desirable effect upon
other agricultural products, not only upon other forms of livestock, particularly beef, but, also, upon other crops in our irrigated areas, particularly, as well as the humid areas. A great number of those sheep are grazed upon irrigated pastures, and, if they were not used for that purpose, the land would be diverted to the production of other agricultural crops.
I sincerely hope that the committee will report this out very shortly and we can get action.
Mr. PoAGE. Mr. Thomson, you may have commented on it in your statement, but the only serious argument about this bill that I have heard is relating to the promotion features rather than to the subsidy features.
Did you discuss that at all?
Mr. Thomson. I did not discuss it at length, Mr. Chairman. I think the promotion features have worked out quite well and have merit.
I believe that the majority of people in our area would like to see it continued.
Mr. POAGE. As is?
Mr. Dixon. Mr. Thomson, with regard to the promotion features, is it not true that there is an additional angle in the promotion of wool and sheep, than just to meet?
Mr. THOMSON. That is quite correct.
There is a competitive product in the synthetic fibres involved in wool, and also, of course, under this program, I think the Government has an interest in seeing some of these funds used to promote the sale through normal channels to reduce any Government participation there might be.
Mr. Dixon. Therefore, the meat promotion program that we have now does not cover all the needs of the wool program.
Mr. THOMSON. No; that is correct.
Mr. Dixon. Would you prefer to have this bill come out on its own merit, or be included in one omnibus bill with other measures?
Mr. Thomson. I would be very hopeful, particularly at this stage in the session, that the bill could come out by itself and be considered solely on its own merits. I think it is important that we get some action upon this quickly in that it would have a very desirable effect upon the wool market.
And I believe there would be less controversy if it came out by itself.
Mr. Dixon. Then you would like it to come out as soon as possible?
Mr. Thomson. I think that is very important, with the condition of the wool market today, that it should come out as quickly as possible.
Mr. Dixon. What is the relative importance of wool in agriculture in your State?
Mr. THOMSON. Wool is one of the most important agricultural products. I think that we are about second in the Nation. Second only to the chairman's State there as far as the production of wool is concerned, and certainly there is unrest at the present time with wool being sold, what little is being sold, just a little bit under, or a little bit over 40 cents a pound.