ically the program designed to aid cotton farmers actually helps their most vigorous competitor.

This article goes on to say

Producers of manmade fibers to an even greater extent

and I quote here from a Federal textile expert that must be one of your boys, Mr. Secretary, who quips wryly,

if the chemical companies that make synthetic fibers ever give an award for man of the year in their industry, the first recipient should be the individual who sets U.S. cotton price policy.

Well, then it goes on

Within the past year or two, such big manufacturers as Cannon Mills and Erwin Mills, a subsidiary of Burlington Industries, both traditional 100-percent cotton users, have switched heavily into synthetics. "I have been," says Mr. C. A. Cannon, "in the cotton textile industry for 52 years. It has been my intention to use cotton and that is what our mills were built for. I have to stand here today before you and say we are substituting rayor for cotton in the tens of thousands of bales in our plant, making them into fabrics or mixing them with cotton to go into other fabrics, purely on account of the price. We are forced to do it."

Dr. Horne estimates the U.S. cotton industry has lost a market for 1.5 million bales to competition here and abroad between the end of 1960 and the middle of 1963.

This is the end of it, Mr. Chairman, but I think it is worth putting in the hearings.

A significant indicator of how the Federal farm program denies sales to cotton farmers is the number of spindles in the American textile industry producing 100-percent cotton yarn. As recently as 1960 approximately 91 percent of all spindle-hours, one spindle runing 1 hour, went to make 100-percent cotton yarn. The share had dropped to 84 percent by last August. "The thing that really gives us oldtimers in the cotton industry somewhat of a feeling of frustration," says Caffee Robertson, cotton merchandiser from Memphis, "is that we don't think American cotton was in bad shape up until 1929 when the U.S. Government saw fit to come in."

Now, I dont know the answers to all of these things, but the problem is with us, and the chairman did raise the political picture. It is not on a partisan basis, but on a where-do-you-live basis, and it is anybody's guess what will happen to these programs that we are funding here as we begin these hearings, what will happen to them if they are brought out on the floor and they have come very close to being just that.

Secretary FREEMAN. I must say that I appreciate your comments, Congressman Horan, as you know better than I, having been here so much longer, that there are certain laws on the books, certain problems about changing them, and I operate under them, as best I can, and I hope that we will make some improvements on them and I will do my very best, and I appreciate your remarks.

VIEWPOINT OF "NATION'S BUSINESS"

Mr. WHITTEN. I might say this article, you read, is from Nation's Business?

Mr. HORAN. Oh, yes.

Mr. WHITTEN. Which, in turn, as we know—

Mr. HORAN. An organ of the chamber of commerce.

Mr. WHITTEN. Which, as we know, reflects a given viewpoint. It is a good magazine. I read it, myself. I might say, also, that I recognize a need to make some adjustments in line with the suggestions

and recommendations that may appear there. However, it has been commonly known throughout history that there is a competitive situation between buyer and seller, or seller and buyer. The folks mentioned there, primarily, are buyers and this problem with synthetics actually exists.

How much of it is price, I do not know. But any statement by Dr. Horne or anyone else that there is any legal restriction on selling competitively in world markets, whatever the price support may be, is certainly mistaken.

PROPOSALS FOR WHEAT

Proceeding further, we might turn to wheat, which is the next commodity that the President mentions and for which he asks for legislation and some corrective action. I quote from the President's message:

Wheat-Changes in the wheat program are urgently needed to check a drastic decline in producer income from the 1964 crop. In the absence of additional legislation it is estimated that wheat producers will receive between $500 and $700 million less in 1964 than they did in 1963.

I recommend that the existing law be amended to permit producers to participate in a certificate program on a voluntary basis. The law should be designed to (1) raise the income of wheatgrowers substantially above what it would be in the absence of new legislation; (2) avoid increases in budgetary costs; (3) maintain the price of wheat at a level which will not increase the price of bread to the consumer; and (4) enable the United States to discharge its responsibilities and realize the benefits of the International Wheat Agreement. In order to be effective for the 1964 wheat crop, the legislation must be enacted immediately. I urge prompt consideration and disposition of this legislation.

Now, doubtless, Mr. Secretary, in connection with the President's preparation of this speech, you or folks in your Department were counseled with. I would guess they supplied the facts and figures and the records on which this conclusion was reached.

So I would like for you to supply for the record for the last 6 or 8 years, and again I am trying to let you use the period that is most easy to bring together, as long as it stretches over part of both administrations, the acreage, the price support level, amount of wheat on hand, and annual losses in exports, the average exports for dollars and those under various aid programs, as well as the average production per acre. You might discuss now the situation that leads the President to this conclusion, presuming that the Department supplied him with facts and figures which would lead to these recommendations on his part.

And you might tell us what action you have taken to implement the President's request to the Congress, on which you would be his special man before the committee.

Secretary FREEMAN. As the committee is aware, alternative programs were presented to the wheat producers last May in a wheat. referendum.

Mr. WHITTEN. Could we have at this point in the record the law as you found it and these two alternatives? We are going to be talking about it, and we might just as well have the printed record show what we are talking about. You might proceed.

(The information referred to follows:)

The following several tables summarize the wheat situation as it has developed in recent years. Table I shows the supply, utilization, and production factors for the period 1951 through 1962.

Table II shows an estimate of supply and utilization of wheat for 1963-64 and projections of wheat supply and utilization for the 1964–65 marketing year. Table III shows the price support operation and levels of price support and prices received by farmers for the period 1951 to date.

Table IV shows wheat exported by classes (grain only) for dollar sales and under special Government financed programs for marketing years 1957 through 1962.

Table V shows total of CCC export subsidies (cash, export payment certificates, and value of price differential allowed) on wheat and wheat flour for period 1954-63 fiscal years.

The data (table I) showing the supply, utilization, and stocks for the marketing years 1951 through 1962 reflect a significant improvement in the last 2 years of this period from the wheat inbalance that had prevailed during the immediately preceding years. Wheat stocks at the end of the 1962-63 marketing year, while still well above requirements, were 216 million bushels below the record high stocks figure of 1,411 million bushels at the beginning of the 1961-62 marketing year. As shown in table II the reduction in carryover stocks during the 1963-64 marketing year is expected to be 305 million bushels.

The stock reductions during the 1962-63 and 1963-64 marketing years result from the special wheat programs in effect during these years. Record large exports during the 1963-64 marketing year are also making an important contribution to the reduction in stocks.

The 1962 price support and stabilization program for wheat provided price support at $2 per bushel and required a 10-percent mandatory cut in allotments based on a national allotment of 55 million acres. The program also provided payments to producers for the acreage required to be diverted and for additional acreage voluntarily diverted. Under this program 10.7 million acres were diverted from wheat production. Production was lower than in any year since 1957.

The 1963 program provided for price support of $1.82 per bushel for cooperators and $2 per bushel, which included 18 cents as a support payment, to cooperators who also participated in the wheat stabilization program. Farm allotments were on the basis of a 55-million-acre national allotment but payments were made to producers who voluntarily diverted wheat acreage to conservation uses. Under this program some 7.2 million acres were diverted from wheat production. Due to this reduction in acreage devoted to wheat and a record large export movement a significant reduction in carryover stocks will be obtained.

Utilization for the 1964-65 marketing year is projected at 1,320 million bushels, 70 million above projected production.

Even though utilization is expected to exceed production, market prices in the 1964-65 marketing year are expected to be far below 1963-64 levels as a consequence of the reduction in the support level of about 75 cents a bushel. The farm value of the 1963 crop plus Government payments to producers is now estimated at $2,360 million. A 1964 crop of 1,250 million bushels would return to producers $700 to $500 million less if the price received by farmers drops to $1.30 to $1.50 a bushel.

Projections of wheat supply and utilization for the 1964-65 marketing year that will begin July 1, 1964, are also shown in table II. These projections reflect current indications of what might reasonably be expected in the way of stocks production and utilization during the 1964-65 marketing year if no new wheat program is provided by legislation. These current estimates reflect a somewhat smaller production in 1964 than was expected earlier. Based on the Department's December report of winter wheat plantings, wheat producers have obviously exercised a great deal of restraint, due largely to their expectation of future wheat programs, in seeding wheat. The current estimate of 1964 crop production of about 1,250 million bushels also assumes that a large majority of spring wheat producers will also comply with their allotments.

Even though it is currently felt that the wheat price during the 1964-65 marketing year might be slightly higher than originally anticipated, there still remains the possibility that harvest time prices will fall below the price levels of the International Wheat Agreement. In such event the United States may not be able to fulfill its commitments and obtain the benefits of the agreement.

It was in view of this situation that the President asked the Congress for immediate legislation to provide a program for the 1964 wheat crop to forestall the prospective sharp drop in farm income from wheat.

On the basis of our discussions with farm organizations, individual wheat producers, and Members of Congress, we developed and recommended to the Congress changes in existing legislation to provide a program to be effective for the 1964 crop that was in line with the President's recommendations that also had widespread producer support.

Our specific recommendations, as presented to the Senate Committee on Agriculture and Forestry on February 11, 1964, are:

To carry out this goal we would recommend legislation which would substantially raise the income of wheat producers over the level now expected for 1964. Any program should be voluntary. It should include the certificate approach, the system least costly to taxpayers. It should maintain the fair and stable domestic food prices of recent years. It should hold the line on budgetary costs.

Specifically, we would suggest modifications in existing law to

(1) Provide for a voluntary certificate plan for at least 1964 and 1965 crops;

(2) Provide for a loan level which would price wheat competitively with feed grains;

(3) Permit producers to substitute wheat and feed grain acres ;

(4) Provide diversion payments at a level which would cover the producer's cost of carrying and caring for land diverted from wheat to conservation uses; and

(5) Include provisions to insure that producers will continue to enjoy the benefits of the International Wheat Agreement while meeting our responsibilities under that agreement.

TABLE I.-Wheat: Supply and distribution, and production factors, 1951-62

Supply

Utilization

Production factors

Year beginning July 1

Yield

Im

Seed

Begin- Pro-
End- Planted] Har-
ning duc- ports! Total Food and Total ports Total ing acres vested
feed
stocks tion
stocks

Ex

acres

per harvested acre

1 Imports include full duty wheat, wheat imported for feed, and dutiable flour and other wheat products in terms of wheat equivalent.

? Exports include flour wholly from U.S. wheat and other wheat products in terms of wheat equivalent. NOTE. Totals may not add because of rounding.

TABLE II.—Wheat: Estimated supply and utilization, 1963–64 and 1964–65

1 Owing to the lateness of the Soviet Union wheat purchases and the current problems connected with the export of that already contracted, it appears that wheat exports during 1963-64 will total only about 850,000,000 bushels. The previous estimate of 1,000,000,000 bushels assumed exports to the Soviet bloc countries of about 200,000,000 bushels. To date only about 75,000,000 bushels have been purchased by the bloc. In addition, sales to non-Communist countries have slackened somewhat.

TABLE III.—Wheat: Price support operations and levels, and prices received by farmers, 1951 to date

Bushels Bushels Bushels Bushels Percent Bushels Percent Dollars Percent Dollars Percent

1 Includes deliveries of purchase agreement wheat to CCC.

1963-crop wheat through Jan. 31, 1964.

Plus payment of 18 cents per bushel, to loan of $1.82, for total price support of $2 per bushel.