ery for the use of fine merino wool, and they developed styles and developed a large trade for these fine merino wools, with a great deal of competition in those fine merino wools for civilian use.

When the war was over and the Government began canceling its orders for soldiers' uniforms, etc., there was a large stock of coarse three-eighths wools and quarter-blood wools and other wools thrown on the market for which there was no demand, owing to the fact that styles and everything else had been arranged for the fine merino wools. Those wools sold down to very, very low prices, as low as, for example, 20 cents per pound for quarter-blood wools which cost 45 cents per pound to produce.

Now, the emergency feature of this is what I presume this committee is interested in. We are not here to discuss economic principles of tariff; we are not writing a tariff, as I understand, at this time, at all. It is an emergency measure that is being considered, and it is our plan to show the emergency.

Now, the wool industry in this country, in common with all industries, is suffering from poor credit and mighty poor markets, poor consumptive power; the mills that would consume our product are shut down, and we have all the other evils that are afflicting the economic body of the country. But what we want to call your attention to particularly is a condition that is not entering into the situation of any other industry, and that is the physical condition that has entered into this problem, which I will explain to you.

In the winter of 1918-19 the West was visited with a drought, all the western country, and the Northwest, resulting in very light snowfall. The largest rivers in the West failed to give their usual supply of water. The Snake River in Idaho, the greatest irrigation stream in the world, not excepting the Nile, was so low that women and children would walk across the river in order to say in future years that they had done so. That resulted in a 50 per cent loss in the hay crop; sugar beets, grain, and crops of all kinds were reduced by about 50 per cent throughout that country. And all during the summer of 1919 there was not one drop of rain, until the latter part of September. And at that time all the accumulated moisture that had failed to come before began falling, and in October we were in the midst of winter. And that winter continued for seven solid months. In October there was 2 feet of snow over a great area in the West and the Northwest, and whereas we usually figured on feeding for 90 days as the extreme maximum, we fed at that time for as much as 7 months, owing to the light crop of hay, which, as I previously said, amounted to only about 50 per cent of the usual hay crop, and so the hay went up in price from $4 a ton to $30 a ton, the average price being from $20 to $25 a ton. Cottonseed meal was shipped in from Texas and Oklahoma to save that stock, which cost us as high as $100 a ton, or 5 cents a pound, and you men who know cottonseed meal know what that means. Corn cost about $90 a ton delivered to the railroad stations. In addition to that, we had the extra cost of taking it out. Now, I am citing all these details so that you gentlemen will understand the statements I am going to make.

The live-stock men had to take one of two horns of this dilemma. He either had to refuse to feed his live stock and lose them entirely through starvation, or he had to go to nis bank or his cattle-loan

company and mortgage his farm or his ranch and borrow money to buy this feed with, or he had to ship his stock down to Texas, New Mexico, or Arizona by rail, a country where they had good feeding conditions, and winter his stock there and ship them back again in the spring.

Most of them chose taking a chance on buying the feed and mortgaging their live stock. We came out of that winter with mortgages on sheep averaging $9 a head throughout the entire West. That is unbelievable, but it is so; and the value of those sheep to-day is not that great, and there is going to be a loss not only to the growers but to the banking structure of that country that will be unparalleled unless something can be injected into this situation to stabilize values. The banks never can liquidate these loans under present market conditions, and you will understand that when I tell you that ewes that are mortgaged at $9 a head are shipped down to Chicago, and if you get a dollar and a half a head for them you are getting a big price.

Ewes weighing 93 pounds-and those of you who know sheep know that a 93-pound ewe is a ewe in good, fat, fleshy condition-have sold as low as 33 cents a head.

Senator NUGENT. Excuse me a moment. Do you mean 33 cents a head net to the grower?

Mr. HAGENBARTH. Thirty-three cents net a head to the grower; yes, sir. Those sheep were shipped from Rock Springs, Wyo., by the Rock estate. They struck the market at a time when there was no demand. There was so much of that stuff coming in for liquidation purposes that the market could not absorb it.

Senator NUGENT. Well, isn't it true that the freight charges and the commission charges, etc., amounted to somewhere in the neighborhood of $5 per head on those sheep?

Mr. HAGENBARTH. Well, hardly that much.

The CHAIRMAN. Mr. Hagenbarth, would this bill materially benefit that condition?

Mr. HAGENBARTH. It would, Mr. Chairman.

Senator SMOOT. It would at least stabilize the market and give you a market that you haven't got now?

Mr. HAGENBARTH. Yes, sir. Now, leading up to that question, if the chairman will permit before I answer your question I would like to state two other facts.

The CHAIRMAN. We want all the information we can get.

Mr. HAGENBARTH. Now, I realize that no business has got a right to come here to Congress and ask for help under ordinary circumstances. If we had an ordinary change of administration, under ordinary circumstances, I feel that the wool industry, or any other industry, could wait in an orderly manner until in its wisdom Congress passed such tariff measures or any other acts as fit the circumstances. But we have an emergency here that demands immediate action. We are discussing the question of a man who is out in the water and has sunk twice and is about to go down for a third time, whether we will throw him a plank to save him temporarily until the boat comes along, or whether we will say to him, "Wait until the boat comes."

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 SMOOт. 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 lesser price than they could purchase wool for here?

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

Now the western grower, Mr. Senator, receives 14 cents a pound in Boston for that same wool. The very best wool that he produces he gets 14 cents a pound for. The foreigner that imports a similar wool from Australia would add 40 per cent to the price that he gets by reason of the exchange situation. He will get, we will say, 28 cents a pound and the western grower 14 cents a pound.

Senator_NUGENT. I merely asked you these questions for information. I am a western man, from Idaho, and I am perfectly familiar with the situation confronting the western woolgrowers, but I am asking you these questions for information.

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

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

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

Senator NUGENT. I don't think that affects the situation.

Senator SMOOT. If you had to raise the money to carry it, you might think it would.

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

Mr. HAGENBARTH. Now, Senator Nugent, here is a piece of quarterblood wool. The man who brought this wool from South America happens to be in this room now. We raise a lot of such wool in Idaho and a lot of it in Utah; it comes from our mutton breed of sheep. And that sold for 9 cents a pound in Boston. If it were not for the health of his sheep the western wool man in Idaho could not afford to take that off of his sheep. It costs more to shear this wool off the sheep, load it on the cars, and pay the expenses of selling it in 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 cost is about the same, so about 6 cents a pound nas to be taken off of the wool for those expenses.

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

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

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

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

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