Mr. MATTHEWs. I want to make an explanation to you ladies and gentlemen who have come from some distance to appear before our committee. I regret very much that we do not have a large number up here. I would like to assume that we make up in quality what we lack in quantity here this morning.

This committee is nonpartisan, but many of our colleagues have made plans a year ahead of time to make special talks during this week. And that is the reason that they are not here with us this morning.

We feel that we have an obligation to you, ladies and gentlemen who have come a long distance to be with us and despite the fact that we do not have the full committee here, we want to assure you that the full committee will be informed of your testimony, it will be in the record. We think we can give you the opportunity of a good hearing, in spite of the fact that a number of our members are away.

We are delighted to have the ranking minority member, Congressman Hill, with us, and most of you know Congressmen Johnson, Dixon, and myself.

With the permission of our witnesses who have come from some distance, we have two Members of Congress here, who have a very brief statement to make, and I am going to give them the opportunity to make their statements because they are members of other committees that are meeting at this same time, and they will have to leave soon. I am going to ask first of all Senator Yarborough to present his statement.

Mr. HILL. I would like to make this request, that Congressman Keith Thomson of Wyoming have an opportunity to file his statement following the testimony that we have here of the Senator from the State of Texas and other Members of Congress.

Mr. MATTHEWS. Without objection, permission is granted. Following the Senator's testimony, Congressman Thomson of Wyoming and other colleagues who would like to present testimony may do so in the record at this point.

Senator Yarborough, we will be delighted to hear from you.

STATEMENT OF HON. RALPH YARBOROUGH, A UNITED STATES SENATOR FROM THE STATE OF TEXAS

Senator YARBOROUGH. I greatly appreciate your courtesy in letting me present this brief statement, particularly in the light of the informed witnesses who are leaders in the wool industry from over the Nation. I only ask this permission to present mine first because I am a member of the Senate Post Office and Civil Service Committee, that is meeting at 10 o'clock, and they have a little difficulty obtaining a quorum. They meet the same difficulty that this honorable committee is meeting this moring. I am pledged to leave here and go there as soon as possible. It is my privilege to be a coauthor with Senator Barrett of Wyoming, that great wool-producing State that has been mentioned here, of a bill pending in the Senate, on which hearings have already been held to extend the Wool Act of 1954, which expires this year for an additional 4 years.

I consider this a privilege to be here because our State is a leading wool-producing State, and we are concerned with this decline because 10 or 11 years ago Texas produced about 25 percent of the wool

produced in the United States. In 1957 we produced only 10%1⁄2 percent of the wool produced in the United States. The woolgrowers there have had to combat 7 years of drought in addition to the economic factors that have otherwise worked as adverse forces on the wool industry. And other persons who will appear before this committee, Mr. Kincaid, president of the Texas Sheep & Wool Growers Association, who is well informed on this question.

Mr. Chairman, I would like to point out that the number of sheep in this country is far smaller now than was the case 10 years ago. In my own State of Texas, we had, in 1945, 81⁄2 million head of sheep. In 1957, after 7 years of drought, we had 4,700,000 head of sheep. The sheep population is about cut in half. You cannot double the number of sheep, in a year's time. And wool is a critical material, a strategic material.

At the beginning of World War II we were caught short with an inadequate supply of wool. We tried to import it from South Africa, and from Australia, and that first year the German submarines stopped about 85 percent of our wool imports.

The aim of the National Wool Act is to stimulate production so that we will produce domestically one-third of the wool we consume. Even if the purposes of this act are successful we will be importing two-thirds of our wool and producing only about one-third.

I would like to point out also that with the end of the drought this extension of this act is needed as a stimulation to wool production. We are not in the status on wool that we have with cotton where we can produce our domestic needs and export millions of bales.

Sheep on the farms and ranches of the United States number about 27 million head this year, and as I have stated about 4,700,000, or about 18 percent of these are on the Texas farms and ranches. our area is very much interested in the act.

There have been objections from some wool producers to the act. But last fall, to find out what this situation was, I made a factfinding trip on the Edwards Plateau region of Texas in the great woolproducing area around San Angelo, Sonora, and the other woolproducing centers, and I found that the overwhelming majority of the woolgrowers there think that the act has not been sufficiently supported and that it is absolutely essential if we are to keep up this domestic production of one-third of our national needs. This has led to other industries.

We now have industries in Texas that are engaged in scouring this wool to get the grease out. We have wool textile plants at Houston, Eldorado, Brownwood, and San Antonio, although most of our wool is shipped out of the State to Boston and other great markets for processing and for use in the textile plants in the eastern part of the country. But the most important of the manufacturing phase is probably the processing phase in my State where efforts are being made to scour the grease to put it in a premium class where it will bring more money.

Mr. Chairman, I have a little bit more extended statement than that describing the terrain and the vegetation problem in Texas during the years of drouth. In the interests of this committee and knowing that many experts will follow me and they will doubtless cover all of these fields, I would like to just file my statement with the reporter.

I have given a brief condensation of it here.

These facts will be presented orally when I look at this list of expert witnesses, and I am certain that the committee will bear anything else that I might have in my statement.

Thank you.

Mr. MATTHEWS. Without objection the extended statement will be filed for the record.

(The statement referred to is as follows:)

STATEMENT OF RALPH YARBOROUGH, A UNITED STATES SENATOR FROM THE STATE OF TEXAS

Mr. CHAIRMAN. I appreciate this opportunity to appear before your committee on behalf of the sheep and wool producers of Texas. Sheep and wool producers in the State of Texas have a vital concern in the extension of the 1954 National Wool Act. I should be remiss if I did not call your attention to the fact that Texas producers lead the Nation in wool production. In 1957, they had an estimated clip of 37.4 million pounds; approximately 16.5 percent of United States production. Wyoming stands second with approximately 8.3 percent of total United States production.

In earlier years, Texas' share was even larger. I would like to call your attention to the sharp decline in wool production in Texas since 1945. The decline has been much greater than in the United States as a whole as is indicated by the following data:

1945. 1946.

1947.

1948_

1949.

1950

1951.

1952

1953.

1954

Production of shorn wool in the United States and Texas, 1945 to date 1

1955. 1956. 1957 2

1 USDA cumulative supplement to wool statistics and related data. Washington, March 1957, p. 6 (Agricultural Marketing Service, Statistical Bulletin No. 142).

Texas University. Texas Business Review, vol. XXXII (1), January 1958, p. 14 (Bureau of Business Research).

Sheep on farms and ranches in the United States number more than 27 million head this year. Of this number almost 5 million, or more than 18 percent of all the Nation's sheep are on Texas farms and ranches.

The importance of the sheep and wool industry of Texas cannot be measured by income and production statistics alone, for this industry supplements agriculture on many ranches, utilizing more efficiently, land which otherwise would be only partially productive. This is particularly true of the Trans-Pecos and Edwards Plateau regions, where approximately three-fourths of Texas sheep are grownareas which have excellent conditions for sheep raising with respect to climate, terrain, and vegetative cover. Utilization of these rangelands by the sheep industry represents the most efficient use of these geographic factors.

The sharp decline of the sheep and wool industry in Texas in the last decade is the result of both unfavorable prices and unfavorable weather. I need not dwell on devastation caused by the prolonged drought the past few years in the sheep producing areas of Texas.

Fortunately, we now have sufficient moisture on our sheep ranches to produce substantial vegetation again. Sheep numbers on farms in United States January 1

are expected to be somewhat higher this year than last, a reversal of an almost continuous downward trend in the past 15 years. With the improved moisture conditions in Texas we expect an increase in sheep numbers in our State too.

If we have more normal weather conditions in the next few years, sheep and wool production should recover rapidly in Texas. But to have a healthy sheep and wool industry Texas ranchers must have both normal weather and a satisfactory price for the wool.

Texas ranchers are vitally interested in the extension of the 1954 National Wool Act. They have suffered enormous losses in the past few years because of the unfavorable weather. It would be most unfortunate, now that weather conditions have improved, if they should find that their opportunities for recouping a part of the losses have been denied them because of our failure to renew the 1954 National Wool Act which provides for supplemental payments out of tariff

revenues.

With tariffs on wool imports at only about 17 percent of the price for domestic wool, imports prevent wool prices from reaching levels which are an incentive to maintain sheep and wool production in Texas. It is absolutely essential that the 1954 National Wool Act be renewed if there is to be an incentive for our Texas ranchers, financially handicapped by years of drought, to make a comeback in wool production.

Wool is important-even strategic-to the defense requirements of the country. Yet we import about two-thirds of our domestic consumption requirements. The Armed Forces have found no substitute for wool and continue to require large quantities each year.

Texans' concern for reversing recent trends in sheep and wool production has an industry angle. They have made strides toward establishing wool scouring facilities within the State in an effort to compete more effectively in marketing graded wool. In 1954 and 1955 scouring facilities were doubled, with plants at Brady and San Marcos now capable of cleaning nearly 30 million pounds of grease wool annually.

The efforts of leading producers, growers, organizations, chambers of commerce, and other interested Texans in establishing wool textile plants have met with moderate success. Today, wool textile plants are located at Houston, Eldorado, Brownwood, and San Antonio. While developments in this activity are limited, it is hoped that with a reversal in wool production trends an expansion of textile plants will eventually occur.

These are, then, some of the important factors relating to the wool industry in Texas which cause us to urgently request extension of the 1954 National Wool Act for a 4-year period. We now have favorable moisture conditions on Texas ranges which give much hope to sheep ranchers. When we can promise them an extension of the 1954 Wool Act, they can look forward to the future with renewed faith.

Mr. MATTHEWS. I want to assure you that we appreciate your testimony.

Senator YARBOROUGH. The House was taking a percentage of the tariff collected on the imported wool, to pay these incentive payments. I am certain that will be presented by the Agricultural Department and others. We are a great agricultural State and I think the Wool Act is the most successful of all of the agricultural acts with which I have had any experience, as it operates in our State. Thank you very much.

Mr. MATTHEWs. Thank you very much.

Senator YARBOROUGH. I appreciate it.

Mr. MATTHEWs. We are delighted to have with us our colleague from Texas in the House, Mr. Fisher, and we will be glad to have him make a statement to us.

STATEMENT OF HON. O. CLARK FISHER, A REPRESENTATIVE IN CONGRESS FROM THE 21ST DISTRICT OF THE STATE OF TEXAS

Mr. FISHER. I appreciate this privilege. I will be very brief out of deference to the witnesses who are here from long distances.

Of course I associate my statement with the statement just made and that which will be presented by the National Wool Association. It works very well, and apparently is the best program that has been devised. We have been probing around to find some solution to this wool problem for years and years. My good friend, Mr. Hill, from Colorado is an expert on wool problems.

I shall therefore confine my statement on the subject to an explanation of two suggested amendments to the bill that has been introduced. I think that many bills have been introduced.

These amendments were offered in the Senate, were very favorably received by the Senate committee, and we note in the interests of orderly procedure it would be well to lay them before the committee now before the other witnesses come forward.

You might want to question the Department about them.

The first proposed amendment would be that the 4-year limitation be removed. Now this would be done by striking out the second sentence of 702 of the Wool Act.

The bill as it originally passed the Senate 4 years ago, has as its termination the goal of the act is the annual production of 300 million pounds of wool. The 4-year limitation was placed in the bill in conference with the idea of giving Congress the opportunity to refuse legislation since it was a new approach.

The 300 million pounds goal would be more satisfactory termination date, for the industry since the production of sheep, is a long-range problem.

pro

After a lamb is born it is more than 2 years before the animal duces a lamb and full production is not reached until they are 3 years of age. Therefore, in the program where a 4-year limitation, the last 2 years are a period of uncertainty in which growers are unable to plan ahead, in the purchase of replacement ewes for the flock, and in securing loans for their operation.

Removing the 4-year limitation and making the termination date of 300-million-pound production goal, would give considerable added stability and confidence to the industry and that is the objective of this act, and always has been.

Secondly, the second amendment as suggested would remove the word "specific" and parenthetical phrase which follows section 704 and section 705. This would have the effect of making the limitation on the extended payments 70 percent of the duty on all wool and wool manufacture rather than 70 percent on just the specific use as is the case now. In other words, it would add to the fund limitation the ad valorem duty, as well as the specific.

The reason for this proposed amendment is that imports of raw wool have not been as high as anticipated during the past few years and consequently, amounts available for extended payment have been somewhat limited.

Also, more wool has come into the country in the form of manufactured goods in my opinion. Furthermore, the program for the