Vermont:

1. Vermont Sheep Breeders Association, Don Balch, secretary, Burlington, Vt.

Virginia:

1. United Wool Growers Association, K. A. Keithly, manager, Dayton Pike, Post Office Box 187, Harrisonburg, Va.

2. Southwest Virginia Sheep Breeders Association, G. Allen, Jr., secretary, Blacksburg, Va.

3. Valley-Northern Virginia Sheep Breeders Association, Blacksburg, Va. Washington:

1. Washington Wool Growers Association, Philip B. Kern, secretary, East Cherry Lane, Ellensburg, Wash.

West Virginia:

1. West Virginia Wool Marketing Association, F. L. Miles, secretary, 476Hite Street, Morgantown, W. Va.

2. American & Delaine-Merino Association, Charles M. Swart, secretary, 4000 Water Street, Wheeling, W. Va.

3. West Virginia Purebred Sheep Breeders Association, F. L. Miles, secretary, Morgantown, W. Va.

Wisconsin:

1. Wisconsin Cooperative Wool Growers Association, R. E. Richards, manager, 530 East Corcoran Avenue, Milwaukee, Wis.

2. Wisconsin Sheep Breeders Cooperative & Wisconsin Livestock Breeders Association, Dr. A. L. Pope, University of Wisconsin, Madison, Wis.

Wyoming:

1. Wyoming Wool Growers Association, J. B. Wilson, secretary, McKinley, Wyo.

2. Wyoming Wool Marketing Association, W. T. Kirk, manager, 401 East 15th Street, Cheyenne, Wyo.

Mr. CLYDE. Sheep are produced in all of the 48 States. In fact, Government records will show that out of the 3,057 counties in the United States there were only 15 of them where sheep are not produced and consequently only 15 counties which were not actually benefited by this program.

In behalf of we people who raise sheep and wool in the United States, I want to express to the Congress our deep appreciation for your foresight in passing the National Wool Act of 1954. This action clearly indicates your recognition of the serious problems our industry was facing and a sincere desire to place our strategic wool industry on a sound economic footing.

It is also with pleasure and pride that we report to you what has been accomplished and the sincere effort on the part of the American woolgrower to make the National Wool Act work. The act is helping create stability out of a chaotic condition which existed in one of America's oldest industries in 1954. It has enabled us to begin a long-term program to completely rehabilitate an enterprise which has played an important role in the affairs of the Nation.

As woolgrowers we are truly appreciative of the great confidence you have placed in us and the wonderful support that you have given our industry. It has replaced fear and despair with hope and confidence that the future of our industry will again be bright.

We had seen approximately a 50-percent reduction in sheep numbers between 1942 and 1954. Six years prior to 1954, in 1948, a 25-percent cut in the tariff on imports of raw wool was negotiated under the Trade Agreements Act. Duties on wool textile were likewise reduced in 1948.

Our tariff protection was further reduced by the inflation which our country experienced between 1942 and 1954. The drop in the value of the dollar when applied to a cents per pound duty on wool imports,

reduced the amount of protection which the tariff afforded our industry to such an extent that it could not and does not compensate for the high operating costs in the sheep industry of the United States as compared to costs in foreign producing countries. The tariff today represents less than one-third of the protection it gave us before World War II.

Due to this substantial loss in tariff protection and the further fact that our wool was going into a Government stockpile under a loan program, we requested in 1953 an investigation under section 22 of the Agricultural Adjustment Act to confirm our contention that further tariff protection was needed. As a result of this investigation, the United States Tariff Commission found that a tariff increase was necessary to protect the support program for wool.

However, the administration decided that due to the necessity of maintaining the friendliest of relations with our allies, that this recommended tariff increase was inadvisable.

The President had recognized that with sheep numbers having been reduced from 56 million in 1942 to 31 million in 1952, relief for the wool industry was most essential. In 1953 he ordered a study made to determine what type of program could be instituted which would give stability to the domestic sheep industry and which would also be consistent with the United States policy for an expanding foreign trade. We cooperated in this study and joined in bringing the results to you.

It was recommended that in lieu of tariff increases as a method of halting further reduction in sheep numbers that the present inadequate tariffs be not further reduced but that the duties collected should be made to do double duty by using these funds for the relief of the industry when imports depressed prices of domestic wool below our production costs. It was at that time that the Congress passed the National Wool Act.

I can say without hesitation that this act has been the salvation of the sheep industry and if it had not been enacted, I know that many producers in the business today would have been forced to reduce their herds or liquidate entirely. The National Wool Growers Association conducted an extensive survey this winter in large sheepproducing States. Questionnaires were sent to financial institutions which make operating loans to sheep producers.

This survey shows that in the western range States the two incentive payments made to date under the National Wool Act have meant the difference between profit and loss for the majority of the sheep producers.

Now that a serious and prolonged drought in the Western and Southwestern States is well on its way out, there are a number of indications that a definite increase in sheep production and consequently an increase in wool production is on the way.

In fact, during 1956 when we were still in a drought in some areas, 26 States showed some increases in sheep numbers, and 12 held population at the previous year's levels. However, 10 States, mostly in the West and Southwest, showed decreases due to these serious. drought conditions. Texas, the largest sheep State of the Nation, had to liquidate 18 percent of its sheep numbers because of droughtravaged pasturelands during the years 1955 and 1956.

Range and feed conditions during 1957 have, however, been greatly improved. Demand for breeding ewes of all ages this fall and winter is far exceeding the available supply, showing the tremendous interest in increasing production. We feel confident that the sheep population numbers to be released by the United States Department of Agriculture this month will show the increase is underway.

Increases in wool production, the goal of the act, could hardly be expected to come much sooner than 1958 when we consider that the first incentive payment under the act reached growers only 18 months ago.

Only 2 incentive payments have been made under the program and the drought began to subside only 9 months back. Furthermore, the very nature of the sheep enterprise makes rapid production increases impossible. It takes time to build up flock numbers even under the most favorable conditions. Only one lamb crop can be produced in a year. All lambs are not ewe lambs. And it takes 2 years to get the first production from your young ewes, while full production cannot be reached in less than 3 years from the lamb crop.

The act has restored confidence and a modest profit in the sheep industry, has prevented considerable liquidation and now shows it can provide the needed incentive to increase wool production to meet our defense needs.

Furthermore, it has enabled wool to move directly into consumption on a free market at prices competitive with synthetic fibers. Since the Wool Act came into operation, not one single pound of wool has gone into Government storage.

There is no better point in my statement than this, to compliment the Department of Agriculture on the orderly and complete disposal of the wool accumulated from the previous program.

When the Wool Act became effective, the CCC owned 150 million pounds of wool, piled up under the former Government support program. The last pound of that wool was sold the second week of December, and the Government no longer has to merchandise wool. Continuation of our present Wool Act will keep it that way.

Furthermore, one section of this beneficial legislation enables growers to help themselves. Section 708 of the act has authorized the establishment of a self-help program through which growers authorize use of their own funds to stabilize and promote markets for wool and lamb.

The aims of this self-help program on the part of growers are to strengthen our markets and iron out severe fluctuations in lamb and wool prices. In providing this self-help provision, Congress again recognized the difference between the problem sof sheep production in deficient supply and those of other commodities produced in surplus. We produce two products, lamb and wool. They are totally unrelated in the problem of establishing sound consumer demand. To sell wool we must complete with vast sums being spent to publicize and advertise synthetcs The decreasing supply of lamb due to the reduced sheep population so narrowed our markets during the past 15 years that we have lost steady consumer demand.

For many years we have contributed financially to the National Livestock and Meat Board. We are continuing to do so even with the establishment of the American Sheep Producers Council. While we have the greatest respect for the work of the meat board, that

organization has not been in a position to promote individual commodities such as lamb, faced with reduced consumer demand.

They are not permitted to do direct advertising and they are not in any position to help us on wool promotion. As a two-product industry in a highly competitive market, only the sheep producer organizations can do this job effectively. We recognize the value of the work of the meat board in research and education and in the general promotion of all red meats. We want to compliment them for their accomplishments, but must call to the attention of this committee that they alone cannot carry the burden of proper promotion and advertising for our peculiar two-product industry.

I am sure that this committee will be interested in the report of what the growers are doing for themselves through their American Sheep Producers Council which is to be presented to you later, or filed, by Mr. G. N. Winder, the president of that organization.

In this report we believe the sheep producers have real proof of their own efforts to help themselves and make the Wool Act work.

The hearings and study made in committee on the bill to extend the Wool Act affords Congress the opportunity to review its operation and accomplishments. Prior to 1954 the Government and the industry had, over a period of years, sought ways to halt the declining production of wool in the United States. Never before has one of these programs proved successful. There have been various loan programs and purchase programs. All of them created Government stockpiles which in turn continued as a depressant on the open market.

The act provides that payments shall be limited to an amount equal to 70 percent of the specific duties on wool and wool manufactures commencing with January 1, 1953. Since the provisions of the Wool Act did not become effective until April 1, 1955, a backlog of funds was available for payments. We anticipate a small reserve following the present 4-year operation of the program. Because of a combination of factors, during the first 2 years of the programs' operation, farm prices of wool were lower than expected. Fund requirements were greater than were anticipated by either the Government or the industry.

In the past 3 years we have seen a tremendous increase in wool imports arriving here in the form of manufactured fabrics and less wool arriving in its raw state.

There are these factors: (1) There has been 150 million pounds of Government stockpile wool fed into the market; (2) Under the act, we have fed our domestic production directly into the market where before much was going into a stockpile rather than into the market; (3) wool requirements have been down and therefore total imports of raw wool have been down. The specific duties have thus not provided as much in funds as was anticipated at the time of the passage of the

act.

Inasmuch as these imported fabrics are lessening the demand on the part of the American manufacturer for wool, we feel that it is only fair that the finished fabric imports carry a greater share of the cost of this program, if it becomes necessary. We also feel that this is a better approach than a suggestion that 100 percent of duties on raw wool be made available for the act because that would disrupt a long-established program of the Congress to use 30 percent of the tariff duties under section 32 of the Agricultural Adjustment Act for

other agricultural supported programs. It is interesting to note that wool duties alone in the 12-year period of 1942 through 1953, the time when our production was dwindling, contributed $385 million to 86 other agricultural commodities, without one penny going to the woolgrowing industry.

It would be a very simple matter to make the act operative on a truly incentive basis if the word "specific" in sections 704 and 705 was removed along with the following parenthetical phrase in each section reading, "(whether or not such specific duties are parts of compound rates)."

The present language is proving to be a limiting factor on fund availability to such an extent that a part of the intent of the act to encourage production is lost. If the word "specific" is removed, as requested, funds would be available for incentive payments up to an amount equal to 70 percent of both the specific and the ad valorem duties on wool and wool manufactures.

Congress has recognized that wool has a strategic importance in war or peace. It is necessary to the economy of the country. It harvests the natural resources of our grazing lands, particularly in the vast arid regions of the West. It provides employment for many thousands of people. It provides taxes for our schools. Let me cite an example of my own personal knowledge. In Rich County, Utah, a few years ago, some of the major livestock outfits were unable to pay their taxes when they were due. That fall there was no money to open the schools in that county. It was not until the sheepmen could borrow the money to pay their taxes, at the request of the local school board, that the schools could open.

And, to cite a case of utilization of the natural resources of our grazing lands, in my own State of Utah, comprising over 52 million acres, less than 3 million are under cultivation because of the limited irrigation water supply.

That leaves us with 49 million acres of land that would be wasteland if it weren't for livestock to harvest the available feed. This is certainly essential to the arid regions of the Western States, both as a tax base and to bring to our economy what wealth we can produce on these acres where forage is so limited.

In the Midwest the sheep industry is essential to diversified agriculture, and more and more a little band of sheep is becoming an economically profitable enterprise, particularly on the small farms, with a minimum of labor requirement.

When we get in the south, we find sheep getting their feed requirements by grazing on and thereby controlling unwanted grass and weeds. We even found, to the surprise of some of us westerners, that there is a dual purpose in barns in some areas used for tobacco storage, during certain seasons they become maternity wards for lambs in the spring.

In summary, the woolgrowers of the United States and their respective organizations in 48 States, earnestly request that you extend the provisions of the Wool Act of 1954 under the declared policy of Congress to increase wool production as a measure of national security and in promotion of the general economic welfare.

We further request that sections 704 and 705 be amended to remove the word "specific" and the following parenthetical phrase in order to provide a more practical limit within which to develop a proper incentive program.