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TABLE II.—Exports and production of tobacco, by type, 1930–46 crop years—Con.

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TABLE III.-Tobacco prices: Average price received by farmers and price of manufactured tobacco products

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1 F. o. b. prices. Price includes Federal excise tax. On cigarettes the tax from 1926-42 was $3.25 per thousand (for cigarettes weighing less than 3 pounds per 1,000). In the Revenue Act of 1942 this tax was raised to $3.50. The Federal tax on 8- to 15-cent cigars was $5 per thousand from 1926-42 and then was raised to $10. The Federal tax on smoking tobacco was 18 cents per pound throughout the period. 2 Preliminary.

TABLE IV (a).-Rates of Federal tax on tobacco products in the United States, as imposed by the Internal Revenue Act of 1942

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1 Cigarettes weighing more than 3 pounds per 1.000 which are more than 61⁄2 inches in length are taxable at the rate imposed on cigarettes weighing less than 3 pounds per 1,000, counting each 24 inches or fraction thereof of the length of each as 1 cigarette. This provision was first imposed by the Revenue Act of May 10, 1934, amending the Revenue Act of February 26, 1926.

TABLE IV (b).-State taxes on selected tobacco products 1

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1 This table does not include the entire tobacco tax schedule of the States, and for reasons of simplification tax rates as presented may not be entirely accurate.

TABLE IV (b).—State taxes on selected tobacco products-Continued

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Representative CHAPMAN. The next witness is Mr. Turner Gilmer, Jr., president of the Virginia Burley Tobacco Association, Lebanon, Va.

STATEMENT OF TURNER GILMER, PRESIDENT, VIRGINIA BURLEY TOBACCO ASSOCIATION, LEBANON, VA.

Mr. GILMER. My organization is only a small portion of the burley tobacco producers in the country. Southwest Virginia, which joins the States of Tennessee and Kentucky, has about 14,000 growers. Small though our production may be, it is important to us mainly because it is divided among so many farmers.

The average amount of tobacco grown is about 1 acre in the State of Virginia. It is raised chiefly on the one-man farm and by the tenant farmer. I would say a larger percent of our tobacco is raised on these subsistence farms than in the general part of the tobacco-acre

area.

So while it only represents a small part of the total tobacco production, it is important to us because it represents the difference between a low standard of living and a fairly decent standard of living for at least 75 percent of our 14,000 growers.

Now I want to say that we are completely satisfied with the program as it stands at present. It has been satisfactory to us in every way and we are in accord with the Kentucky association.

We think that any new legislation that may be enacted should embody the essential elements of the legislation under which we are now operating.

Thank you.

The CHAIRMAN. Thank you, Mr. Gilmer.

Representative CHAPMAN. The next witness will be Mr. L. L. Veal of Murray, Ky., manager of the Western Dark-Fired Tobacco Growers Association.

STATEMENT OF L. L. VEAL, MANAGER, WESTERN DARK-FIRED TOBACCO GROWERS ASSOCIATION, MURRAY, KY.

Mr. VEAL. Mr. Chairman and gentlemen of the committee, as Representative Chapman said, I am manager of the Dark-Fired Tobacco Growers Association of Murray, Ky. We have a membership of 20,000 and we are one of the organizations spoken of by Mr. Rudolph in his

statement.

I want to endorse what he said in his statement and all the other statements made by the gentlemen who have appeared before me. That is all I say, and I thank you.

The CHAIRMAN. Thank you, Mr. Veal.

Representative CHAPMAN. The next witness will be Mr. Harry W. Love of Asheville, N. C., executive director of the tobacco division of the Farm Federation Cooperatives.

STATEMENT OF HARRY W. LOVE, EXECUTIVE DIRECTOR, TOBACCO DIVISION, FARM FEDERATION COOPERATIVES, ASHEVILLE, N. C.

Mr. Love. Mr. Chairman and members of the committee, we have had the privilege of operating in the federation and a great many of the programs, for example, potatoes.

We would like to invite you down to our barns on artificial insemination.

The CHAIRMAN. Asheville, N. C., is a health resort, is it not? Mr. Love. It is a very healthful place, and again we say it has the burley that is grown.

Mr. Chairman, in order to save your time we believe that the summation which Congressman Chapman will make to you in a few moments will carry to you and your committee our wishes in the matter of this loan program and the tobacco program in full.

As I said, we have operated a number of programs, but this program, Senator Aiken, has really been a very satisfactory program. We have very small tobacco farms, perhaps an average of six-tenths of an acre, and we join up with the balance of North Carolina in that 76 percent of tobacco and our cash income on these small farms is from our tobacco.

We appreciate very much, Mr. Chairman, the labors of this committee, not only to extend the program to give us a long-range program so that we will know from year to year what to expect, because this program that we now have is working.

We wish to add our endorsement to the statements that have been made by the witnesses before you.

Thank you.

The CHAIRMAN. Thank you, Mr. Love.

Representative CHAPMAN. Mr. Chairman, the next witness is State Senator C. W. Maloney, of Madisonville, Ky., president of the Stemming District Tobacco Association.

STATEMENT OF C. W. MALONEY, STATE SENATOR, AND PRESIDENT, STEMMING DISTRICT TOBACCO ASSOCIATION, MADISONVILLE,

KY.

Mr. MALONEY. Mr. Chairman and members of the committee, I endorse everything that has been said by the other gentlemen.

I want to point out to you that I represent type 36 tobacco, which is the dark air-cured type.

In 1947 dark air-cured tobacco took a 10-percent reduction under this program that we endorse. In 1948 we take a 25-percent reduction. We are asking you gentlemen to continue a program that the farm people have endorsed.

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Under S. 2318 the farmers would have a reduced loan rate of better than $10 on $100.

Senator AIKEN. That is due to their being tied in to the supply, is it not?

Mr. MALONEY. Of course, Public Law 163 gives us that increase tied to burley.

Senator AIKEN. That is, you get quite an increase in the parity price under that bill?

Mr. MALONEY. Yes.

There is one more thing I would like to point out to this committee, that 90 percent of the labor-producing tobacco is hand labor. Therefore, with the price of labor as it is today farm people could not exist under the present scale of wages.

With respect to this present program when you go to write a bill, I might say that it reminds me of the story of a fellow who had two wives and wrote in his will that he wanted to be buried between both of them, but he wanted to be tilted just a little bit toward Annie. So when you write this bill we want to be tilted just as near to the present program as it is possible for us to have.

Senator AIKEN. Why is the parity price on the air-cured tobacco so low?

Mr. MALONEY. You mean at the present time?

Senator AIKEN. Yes.

Mr. MALONEY. Twenty-four and one-half.

Senator AIKEN. Types 35 and 36 I have here are 17.9 as of March 16. Mr. MALONEY. That is right.

Senator AIKEN. Under the new formula it would be 22 to 23 cents, depending on what labor you put in. Why is the air-cured tobacco so much below the other types of tobacco? Is that a case of buyers depressing the price?

Mr. MALONEY. That was the case when the base formula was set up. We could find no base here that was comparable to the parity program direct. In 1945 we felt that the cost of production on air-cured tobacco was in comparison to burley tobacco and, therefore, the University of Kentucky and the University of Tennessee worked out a formula and we tied it in to the parity of burley tobacco whereby it would receive 66% of the parity on burley. That is Public Law 163, section 403 of your bill, that we are asking be stricken.

Senator AIKEN. Now the parity price on burley is given here as 46.6 cents today and parity price on dark air-cured is 17.9 cents, or about 40 percent. Is not that disparity wider than is warranted by the cost of producing the two types?

Mr. MALONEY. I do not understand.

Senator AIKEN. Is not that disparity between parity on burley and air-cured unwarranted in view of the cost of production?

Can you produce dark aid-cured for 40 percent of the cost of burley? Mr. MALONEY. We can produce it for 662% percent.

Senator AIKEN. Then the present parity formula is not applicable to the dark air-cured tobacco.

Senator COOPER. I do not know whether this will have any effect on it or not. Is there a difference in yield per acre of this type of tobacco and burley tobacco which might have some effect?

Mr. MALONEY. I think last year our yield was about 1,136 pounds per acre.

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