America, and the British Government controls that wool and will for several years. They fix a floor price which they will not permit wool to go below and they buy in the wool at the floor price and reoffer it at subsequent auctions. Their prices are higher.

You see, when you gentlemen were good enough to insist on the Wool Act being passed, the price of foreign wool was lower than the price of our wool. Now that situation is completely reversed and the price of foreign wool is higher than the price of domestic wool and very much higher-close to 40 cents higher; 30 cents higher, at least, clean-than the Commodity Credit Corporation support price.

Senator AIKEN. Then your aim through the proposal which you have here is to maintain as nearly as possible the average wool production of the last 10 years?

Mr. JONES. That is correct, Senator. In the next paragraph it is explained the 10 year period 1930 to 1939.

Senator AIKEN. I see.

Mr. JONES. We think it is reasonable to expect a normal level of production of 360,000,000 shorn pounds can be maintained, which is commensurate with our natural resources and with the industry's ability to produce.

The CHAIRMAN. The market situation, then, is quite favorable?
Mr. JONES. Yes.

The CHAIRMAN. In the United States?

Mr. JONES. Yes; it is, and they are utilizing and consuming more domestic wool than has been the case for some time.

Mr. WILSON. Purely because the price is less.

Mr. JONES. That is right.

Wool prices averaged for the years 1920 through 1939, inclusive, approximately 82 percent of parity as determined under this bill.

Exhibit J shows how the normal production formula of 360,000,000 pounds of shorn grease wool at 75 percent of parity support would have operated during the past 18 years and if it was in operation

in 1948.

This formula would have leveled the valleys and cushioned the disastrous break in prices in 1932. Support, however, would not have been necessary the next year, 1933.

This formula would give an incentive to increase production of wool when needed and yet would tend to discourage production when above the normal level.

OTHER RECOMMENDATIONS

We concur in the testimony of the American Farm Bureau Federation that the Commodity Credit Corporation should be permitted to sell its holdings of wool at competitive prices, regardless of the established loan rate for wool, the reason being that we do not want to see a stock pile of wool held year after year.

The CHAIRMAN. Who is producing the best wool?

Mr. WILSON. It depends entirely on what one means by the best wool. The Australian wool is longer and has a softer feeling than our wool. Our wool is stronger. Australia produces a lot of 80's. We produce very little of that. That is the diameter of the fiber. That is reflected in the feel of either the manufactured article or the wool itself.

The CHAIRMAN. Are we making some progress in that direction? Mr. WILSON. No; we are not making any progress in that direction for the very simple reason that wool has been for several years now a losing proposition.

The CHAIRMAN. Wool has been a losing proposition for whom? Mr. WILSON. For the grower, the producer. Let me explain it this way. Over a period of 40 years in Wyoming, the State that I happen to be from, which is the second largest wool-producing State in the Union, 47 percent of the income over a 40-year period came from wool and 53 percent from lambs.

I should say last year and I have not any of the figures, and am just reaching up in thin air-that 30 percent came from wool and that 70 percent came from lambs.

The high price of lambs was the only thing that permitted the wool-growing industry last year to break even and make a profit. They did break even and in most cases made a profit.

Senator AIKEN. The proposed parity formula using a 10-year moving average base also increases the parity value of lambs so that the disparity between production of wool and production of lambs would still remain as great as it is now. That is, assuming you would get exactly parity for both wool and lambs, there would still be a little greater incentive to produce lambs.

Mr. JONES. That is correct, but we do not have the problem of lamb importation that we have with foreign wool importation, and that is our big problem there.

The CHAIRMAN. Are we handling that problem pretty well?

Mr. JONES. We think there is a much better way of handling it. Of course, the Government has been buying the wool clip since 1943. We would much prefer to see a proper tariff to compensate for that difference in cost of production but we have accepted this support program in the last 5 years.

The CHAIRMAN. Has there been any attempt made to secure that tariff, Mr. Jones?

Mr. JONES. Yes; we have worked on that.
The CHAIRMAN. Have you gotten anywhere?

Mr. JONES. No; we have not, as yet.

Wool has never participated in the use of section 32 funds. For a number of years duties from foreign wool imports has supplied 30 percent of the total funds for section 32. (See exhibit E.) These importations of foreign wool have had a definite effect upon the price of domestic wool. In view of this fact domestic wool should certainly participate in section 32 funds.

Senator YOUNG. May I interrupt you there? How much of the section 32 funds has wool produced for the Treasury?

Mr. JONES. Was the question how much has wool produced of section 32 funds?

Senator YOUNG. Yes.

Mr. JONES. It has produced $213,500,000 from 1941 through 1946, or an average of $35,500,000 to the section 32 funds each year, or 30.3 percent.

The CHAIRMAN. How does that compare with the previous period? Mr. JONES. I am sorry; I do not have that. These 6 years are all that I have.

I do not have 1947, but it will be lower in 1947 because there was not the flood of foreign wool importation that we had in 1946.

Mr. WILSON. Answering your question, Senator Capper, this would be higher than the average of the previous 10 years because of the heavy importation of wool due to the defense program and the necessity of clothing our soldiers and so on.

Mr. JONES. We are in agreement with the statement of the National Council of Farmer Cooperatives that section 22 of the Agricultural Marketing Agreements Act of 1937 should be included in this bill and that whenever the Secretary of Agriculture determines that importations of foreign commodities or products processed therefrom are interfering with any Government support program, imports should be limited or fees assessed to protect the Government form loss and enable the domestic producer to maintain an equal economic position with other groups.

Senator AIKEN. That proviso was what got the first wool bill vetoed last year.

Mr. JONES. Yes, sir.

Senator AIKEN. Do you have any greater reason to believe that the administration has changed its position?

Mr. JONES. No, sir; but we feel that would be sound policy. But that is what happened, all right.

Senator AIKEN. You feel that the administration might be reluctant to destroy the entire farm program in order to veto one provision of it? You need not answer that question; I am sure you do not know.

Mr. JONES. Thank you.

Again, permit me to commend the committee for the inclusion of wool in this bill and for making wool a basic commodity as far as support prices and parity are concerned. We urge inclusion of wool, however, as a basic commodity applicable to all laws. The main reason for this request is so that never again will wool come before the Congress in the form of special legislation, but will automatically be considered with other agricultural legislation and thereby receive the same treatment.

We agree with the thought expressed by some members of the committee that if it is found impossible to reach an agreement upon all of the provisions of the bill under consideration, your committee should report and press for the passage of title III of the bill for reasons that are obvious to all of you.

Again, I thank the committee for this opportunity to present the position of domestic wool in the consideration of S. 2318 and we assure the committee our cooperation.

The CHAIRMAN. If there is any opposition to title III, from whence would it come?

Mr. JONES. Well, we have no opposition to it at all. We think that wool, being a deficit commodity as compared with a surplus commodity in field crops, would take a little different formula, but we would expect the same treatment that is given the surplus commodities.

Senator AIKEN. I notice that you desire to have the cost of labor included in the parity formula, the 75-percent parity income coverage. If the cost of farm labor is not included in the formula an 80-percent average would have practically the same effect, would it not? Mr. JONES. Yes; it would. It would be a little higher. Senator AIKEN. It would be a half cent a pound higher.

Mr. JONES. Yes.

The CHAIRMAN. We thank you very much for your testimony, gentlemen.

Mr. JONES. Thank you.

Mr. WILSON. We thank the committee.

The CHAIRMAN. At this point in the record I will insert the statement of Hugh Munro, president of the National Wool Trade Association and a member of the Boston Wool Trade Association.

(The statement referred to is as follows :)

STATEMENT FILED BY HUGH MUNRO, PRESIDENT, NATIONAL WOOL TRADE ASSOCIATION, BOSTON, MASS.

My name is Hugh Munro. I am president of the National Wool Trade Association and a member of the Boston Wool Trade Association. I am representing both trade associations here today. Prior to the war years the members of these associations bought and sold most of the wool consumed in the United States. The views of these associations regarding wool price-support legislation are well known to the members of this committee.

Consistently before this committee and other committees of the Congress in the past it has been the position of these associations that Congress should enact legislation which would adequately protect the wool grower and at the same time remove the Government from the wool business and return it to free enterprise. We believe that wool should receive the same level of support from the Government on a long-range farm program as other basic agricultural commodities, which is provided in Senate bill 2318. This will give the wool grower the protection which he needs and at the same time return the wool business to normal commercial channels.

We appreciate the possibility that in view of the shortness of time it may be impossible for the Congress to enact S. 2318 or similar legislation at this session of the Congress. This year under existing wool legislation with world wool prices high, a large percentage of the domestic clip was sold through normal channels. We see no objection to reenacting existing wool legislation which expires on December 31, 1948, for an additional year during which the Congress will have an opportunity to enact a long-range farm program.

The CHAIRMAN. Our next witness is Mr. Favor R. Smith, president of the Empire State Potato Club and executive secretary of the Long Island Agricultural Council.

STATEMENT OF FAVOR R. SMITH, PRESIDENT, EMPIRE STATE POTATO CLUB, AND EXECUTIVE SECRETARY, LONG ISLAND AGRICULTURAL COUNCIL, RIVERHEAD, N. Y.

Mr. SMITH. Mr. Chairman and members of the committee, I appreciate this privilege of appearing before you. I commend the work and detailed report of this committee and I believe your long-range program for agriculture-as presented in your bill S. 2318-deserves the support of agricultural leaders throughout this Nation.

I appear before you in the multiple role of a farmer, president of the Empire State Potato Club, executive secretary of the Long Island Agricultural Council, and I have been asked to speak in behalf of the Long Island Farmers Institute.

The above organizations believe your bill is a definite forward step for agriculture. Farmers are looking only for their fair share of the national income and will always be the first to criticize undue expenditure and duplication of effort on the part of the Government. They are strict in their business dealings and hew closely to the line once a bargain has been made.

We are certain, from the interest shown by this committee, that no one of you want to ever again see potatoes sell for 50 cents per hundredweight. We offer for your consideration the following facts: The CHAIRMAN. Has that happened in Long Island?

Mr. SMITH. It has happened all over the country in the past.
The CHAIRMAN. Does it look better now?

Mr. SMITH. Yes; it looks better now, sir.

Approximately 3,000,000 farmers in the United States grew some potatoes. New York State is one of the leaders and Suffolk County, Long Island, is the third largest potato-growing county in the United States. In 1947 Suffolk County grew approximately 17,500,000

bushels.

Senator AIKEN. Do you mind telling us what the second largest potato-growing county in the United States is?

Mr. SMITH. Kern County, Calif., for the record.

Senator AIKEN. They raised a lot of potatoes that year.

Mr. SMITH. Yes, and I believe they are going to raise more if the weather is favorable in 1948.

The CHAIRMAN. Is Suffolk County the third largest county?
Mr. SMITH. Yes.

The CHAIRMAN. In your State?

Mr. SMITH. In the United States.

Potato production is a highly specialized industry and the prosperity of Long Island as well as of the country as a whole is highly dependent upon the welfare of its farmers.

Potato growing is a hazardous undertaking. In many cases it is the sole income of the farmers. It requires high capital expenditures for land, machinery, and cultural practices. Potato production and final yields are vitally dependent on the weather. I emphasize that

statement.

Early frosts in the fall or late frosts in the spring may spell ruin for the potato farmer. Too much rain may cause heavy blight infections and early break-down of potatoes. Lack of water may reduce the crop 50 percent. We have all heard of the large 1946 potato crop. This crop was the largest crop in history, but it was grown on the smallest acreage in 40 years. It was chiefly the result of ideal growing weather, over which farmers have no control.

Your committee heard Mr. Wells, president of the Suffolk County Farm and Home Bureau Association, state in his report on Fridaythat all the agricultural groups in Suffolk County recently met to discuss recommendations for your committee. The Long Island Agricultural Council, the Long Island Farmers Institute, the Long Island Cauliflower Association, and the Suffolk County Farm Bureau were all represented and all agreed on the general provisions of your bill. These groups, The Empire State Potato Club and I personally are urging for your consideration-that potatoes be considered in your bill as a basic commodity.

I have noted with considerable interest the testimony of various leaders on this question. Some speak in favor and some against such action. This difference of opinion adds to your task and I hope that this committee will give consideration to the problem.

I note with pleasure the comments of Albert S. Goss, master of National Grange and the statement of Mr. John H. Davis, executive secretary of the National Council of Farmers Cooperative. Both of