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AGRICULTURAL ACT OF 1948

TUESDAY, APRIL 20, 1948

UNITED STATES SENATE,
COMMITTEE ON AGRICULTURE AND FORESTRY,

Washington, D. C. The committee met pursuant to adjournment at 10 a. m., in room 324, Senate Office Building, Senator Arthur Capper (chairman), presiding.

Present: Senators Capper, Aiken, Young and Thye.
The CHAIRMAN. The committee will come to order.

This is a resumption on the hearing on Senate bill 2318. At this point in the record I wish to include an amendment to S. 2318 which amendment was proposed by Senator Magnuson and introduced by Senator Lucas.

(The amendment to S. 2318 is as follows:)

[S. 2318, 80th Cong., 2d sess.)

AMENDMENT

Intended to be proposed by Mr. MAGNUSON to the bill (S. 2318) to provide for a

coordinated agricultural program, viz: On page 46, line 11, strike out “SEC. 404" and insert in lieu thereof "SEC 405," and insert before the new SEC. 405 the following new section :

SEC. 404. Section 22, as amended, of the Act entitled “The Agricultural Adjustment Act," as added by the Act entitled "An Act to amend the Agricultural Adjustment Act, and for other purposes,” approved August 24, 1935 (U. S. C., title 7, sec. 624), is amended to read as follows:

“SEC. 22. (a) Whenever the Secretary of Agriculture finds that any foreign agricultural commodity is being or threatens to be imported into the United States in such quantities and under such circumstances as to interfere materially with any agricultural support, diversion or soil conservation program, including any marketing agreement, or with the profitable marketing of any like agricultural commodity produced in the United States in quantities sufficient to fill domestic requirements, he shall so certify to the President, with his recommendations. If the President shall be satisfied that such importation exists or threatens, he shall undertake the negotiation of an agreement with any country or countries from which any such commodity is imported into the United States, which agreement shall provide such fees on the importation of any such foreign agricultural commodity or such limitations on the total quantities of such commodity which may be imported, or both, as the President determines are necessary to prevent the existing or threatened interference, and he shall then by proclamation impose such fees or limitations, or both. as the agreement provides: Provided, however, That if the President determines that no such agreement can be concluded or that substantial hardship might result to domestic producers of any such commodity pending the negotiation of any such agreement, he shall by proclamation impose such fees or limitations, or both, as he determines are necessary in order to prevent such interference.

“(b) The fees and import restrictions imposed under this section shall become effective at such time and shall remain effective for such time as provided by the President in his proclamation, and such fees and restrictions may be revoked, suspended or modified at any time by the President if he finds, upon certification by the Secretary of Agriculture or otherwise, that such revocation, suspension, or modification is warranted and is consistent with the purposes of subsection (a) hereof and any agreement entered into hereunder.

"(c) No limitation shall be imposed under this section on the total quantity of any commodity which may be imported into the United States which reduces the permissible annual importation of such commodity from any country to less than 50 per centum of the average annual quantity of such commodity which was imported from such country during the period from January 1, 1929, to December 31, 1933, both dates inclusive. No fee imposed upon any commodity under this section shall be in excess of 50 per centum ad valorem, and all such fees shall be treated for the purposes of all provisions of law relating to customs revenue as duties imposed by the Tariff Act of 1930.

“(d) Any decision of the President as to facts under this section shall be final."

The CHAIRMAN. Our first witness this morning will be Mr. J. M. Jones, secretary of the National Wool Growers Association, Salt Lake City, Utah, and Mr. J. B. Wilson, legislative chairman, National Wool Growers Association, Washington, D. C.

STATEMENTS OF J. M. JONES, SECRETARY, NATIONAL WOOL

GROWERS ASSOCIATION, SALT LAKE CITY, UTAH; AND J. B. WILSON, LEGISLATIVE CHAIRMAN, NATIONAL WOOL GROWERS ASSOCIATION, WASHINGTON, D. C.

Mr. JONES. My name is J. M. Jones, secretary of the National Wool Growers Association, with headquarters at Salt Lake City, Utah.

We would like to discuss this morning the sheep-industry problem in connection with S. 2318, a bill providing for a coordinated agricultural program

The domestic-sheep industry is deeply grateful and highly appreciative of the work and accomplishments of your committee with respect to providing stop-gap legislation in the first session of the Eightieth Congress for the continuation of the wool-support program. We are also grateful to Senator Aiken and his colleagues for including wool in S. 2318, and for initiating a long-range program now rather than to rely on continued stop-gap legislation.

Since November 1945, the Congress of the United States has had the problem of the domestic-sheep industry under discussion and deliberation. Your committee is well aware of this industry's problem.

So that the committee may have before them, for ready reference, a group of exhibits are attached to this statement which are pertinent to this discussion.

Exhibit A: Stock sheep on farms and production of domestic wool. The reduction of stock sheep numbers since the high of 1942 is 38 percent as of January 1, 1948.

(The exhibit A is as follows:)

EXHIBIT A.Stock sheep on farms and the production of domestic wool in the

United States

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The reduction of stock sheep numbers since the high of 1942 is 38 percent as of January 1, 1948.

Mr. JONES. Exhibit B: Cash income of various agricultural commodities in the 12 Western States and Texas. The sheep industry has dropped in rank of importance with the industries from 7th to 8th place in 1946.

(The exhibit B is as follows:)

Exhibit B.-Cash income of various agricultural products and relative importance

in 12 western States and Texas

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Petroleum
Fruit and nut crops.
Cattle and calves
Vegetable crops.
Dairy products.
Food grains.
Chickens and eggs.
Sheep, lambs and wool..

$1, 661, 248
1, 155, 796
1, 126, 329

794, 552 615, 034 596, 205 370, 821 277, 307

22.0
15.0
15.0
11.0
8.0
8.0
5.0
4.0

EXHIBIT B.-Cash income of various agricultural products and relative importance

in 12 western States and Texas---Continued

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Source: U. 8. Department of Agriculture; U. 8. Department of the Interior, September 1947.

Mr. JONES. Exhibit C: Wool production and consumption for 30 years. Only once in the last 30 years has domestic production exceeded consumption and that was the depression year of 1934.

(Exhibit C is as follows :)

EXHIBIT C.-Wool shorn and wool pulled from domestic fleeces in the United States, and the annual mill consumption of apparel shorn and pulled wools, 1918-47

[In millions of pounds]

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Mr. JONES. Exhibit D. Tariff tied to foreign rates of exchange. A compensating tariff for wool should be sufficiently flexible in order to adjust with changing rates of foreign currency.

(Exhibit D is as follows:)

EXHIBIT D.-TARIFF TIED TO FOREIGN RATES OF EXCHANGE

Tariffs, in many instances, have been ineffective because rates of exchange of money between countries have not been stable. This situation is very forcibly brought to mind at this time because of the recent devaluation of the franc and the threatened devaluation of the British pound, which, if done, will render the remaining tariff on wool and wool products entirely ineffective.

It would seem comparatively simple to adjust the tariff with the fluctuation in the value of foreign currency in relation to our dollars.

For example: If a compensating tariff (difference between the cost of wool production here and abroad) on imported wool per clean pound was 40 cents when the rate of exchange for one British pound is four American dollars, any change in the currency relationship would be reflected in the tariff assessed. The following table illustrates the point:

1 British pound=$5.00–Tariff, 32 cents per clean pound.
1 British pound= 4.50—Tariff, 35.5 cents per clean pound.
1 British pound= 4.00—Tariff, 40 cents per clean pound.
1 British pound= 3.50—Tariff, 46 cents per clean pound.

1 British pound= 3.00—Tariff, 53 cents per clean pound. Source : National Wool Growers Association.

Mr. JONES. Exhibit E. Import duties. Duties collected on foreign wool importations during 1941–46, inclusive (1947 not available) amounted to $714,400,000 for these 6 years, or 30.3 percent of total import duties. Therefore duties from wool supplied 30.3 percent of section 32 funds. When I prepared this exhibit it was not possible to secure 1947 figures.

(Exhibit E is as follows:)

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Mr. JONES. Exhibit F. Parity calculations. Modernized or 10-year moving base parity for wool as of February 15, 1948, without wages amounted to 52.8 cents per grease pound; with wages 55.4, parity prices under present formula was 45.4 as of the same date.

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