The CHAIRMAN. Are there any questions? I want the record to show that Senator John Tower from Texas is present and we are glad to have you.

Senator TOWER. Representing the largest cotton-producing State. The CHAIRMAN. Yes, I can see your interest in this legislation. Are there any questions-if not I want to thank you and you can go back to your work now.

All right, Mr. Robert R. Coker, Mr. Blake, and Dr. Horne. I presume all of you want to sit together here and Mr. George Buck. Is Mr. Buck present? Oh, yes.

Mr. Coker, will you identify yourself for the record?

STATEMENT OF ROBERT R. COKER, PRESIDENT, NATIONAL COTTON COUNCIL, HARTSVILLE, S.C.

Mr. COKER. My name is Robert R. Coker. I am a cotton producer from Hartsville, S.C. I am appearing here today as president of the National Cotton Council.

The council is the overall organization of the raw cotton industry with headquarters in Memphis, Tenn. It is made up of and represents all six branches of the industry which produce, handle, and process raw cotton and cottonseed. These branches are cotton producers, cotton ginners, cotton warehousemen, cotton merchants, cotton spinners, and cottonseed crushers in each of the 19 cotton-producing States, extending from the Carolinas to California.

I have here with me today the chairman of our board of directors, Mr. Burris C. Jackson, a cotton merchant of Hillsboro, Tex.; Mr. William Rhea Blake, the council's executive vice president; Dr. M. K. Horne, our chief economist; and Mr. George S. Buck, who heads the council's scientific research operations.

Mr. Chairman, the National Cotton Council celebrated at El Paso, Tex., last January its 25th-its silver-anniversary. The council was organized to look after cotton's markets-to increase the consumption of U.S. cotton, cottonseed, and the products thereof, both in this country and abroad.

I have had the pleasure and the privilege of playing an active part in this organization since its very beginning. I am very proud of the record which it has made over these past 25 years in defending and building cotton's markets against many old and able competitors, and a whole host of new ones that have come into being in more recent years in the form of synthetic fibers and other materials.

Frankly I think that all of us in the cotton industry today shudder to think of what would have happened if we hadn't had the council over the last quarter century. We have not been able to add spectacularly to our markets although they are several million bales larger than they were 25 years ago, but a modest gain in cotton consumption is a small part of the story.

Think of the enormous market losses that have been prevented. With the competition we have faced survival, itself, has been a tremendous accomplishment. But, Mr. Chairman, we have come here today because U.S. cotton's markets are in serious trouble the most

The cotton council has a very strict requirement governing the adoption of any policy or position. Each such policy or position must receive the affirmative vote of at least two-thirds of our voting delegates representing each of the six branches of the industry-each branch voting separately. This means that a fraction more than onethird of the delegates representing any one of the six branches of the industry has the veto power to prevent the council from acting.

It also means that, when the council does act, it is speaking with virtually the unanimous voice of the entire raw cotton industry.

At our El Paso meeting, the attention of the whole industry was, of course, centered on this, the most serious of all of the crises which have ever confronted us, and with the steps which might be taken to meet this crisis.

I am happy to report to you, sir, that the council did adopt a positive program. I believe that if it is properly and promptly implemented by the Government and the industry, working together, it will not only resolve this present crisis, but also will move us forward into an era in which U.S. cotton will be able to make ever-increasing contributions to the welfare of our industry and to the Nation as a whole.

Now to place this whole matter before you, including our recommendations, I will call on Mr. Blake-Rhea Blake our executive vice president.

The CHAIRMAN. All right, Mr. Blake.

STATEMENT OF WM. RHEA BLAKE, EXECUTIVE VICE PRESIDENT, NATIONAL COTTON COUNCIL, MEMPHIS, TENN.

Mr. BLAKE. My name is Wm. Rhea Blake. I am executive vice president of the National Cotton Council with headquarters at Memphis, Tenn.

Mr. Chairman and members of the committee, as our president has told you, the council's job is to look after the markets for American cotton, and we are here today because American cotton is in the deepest trouble in its markets that it has ever been in.

The main reason for this difficulty is that the price of cotton is not competitive. Dr. Horne has prepared an analysis of this whole situation and I am going to ask him to present it to you at this time.

STATEMENT OF DR. M. K. HORNE, JR., CHIEF ECONOMIST, NATIONAL COTTON COUNCIL, MEMPHIS, TENN.

Dr. HORNE. Mr. Chairman and members of the committee, my name is M. K. Horne, Jr., I am chief economist of the National Cotton Council of America. I live in Memphis, Tenn.

As Mr. Blake has indicated, my testimony will deal with the market side of the cotton problem. I fully realize that this is not the only side of the problem by any means, but if I can be helpful to you it will be in laying out a clear analysis of what is happening to the markets for American cotton.

Dr. HORNE. Let us begin with a glance at the overall market picture, which is summarized in chart 1.

Source: U. S. Department of Commerce (For 1962-63, see text)

Dr. HORNE. The lower portion of each bar represents our domestic market, the consumption of cotton by the spinning mills of this country. For the crop year of 1962-63 the chart gives the Department of Agriculture's estimate of 8.3 million bales for domestic consumption. This still looks like a pretty good estimate.

The upper part of each bar in chart 1 represents the exports of raw cotton. I believe it is now generally agreed that this season's exports seem likely to wind up at 34 million bales or no more than 32 million. We have plotted 32 million bales in the chart.

The carryover stock of cotton in this country on August 1, 1956, was up at a very high level, 142 million bales. Over the next 5 years, to August 1, 1961, that carryover was brought down to 7.2 million bales. That was a tremendous achievement. But then over the next 2 crop years, ending this coming August 1, the carryover will have gone back up to about 11 million.

The most striking feature of chart 1 is seen in the exports, which held up to a good average level back in the period 1956-60-averaged 6 million bales a year but which in more recent years have been in a serious decline. I want to save a good part of my time for an analysis of this export situation, but first let us look into the domestic part of our market, in which we also have some very serious trouble.

In chart 2 the upper curve reflects the total amount of fiber consumed by the whole textile industry of this country.

(The chart is as follows:)

The cotton council has a very strict requirement governing the adoption of any policy or position. Each such policy or position must receive the affirmative vote of at least two-thirds of our voting delegates representing each of the six branches of the industry-each branch voting separately. This means that a fraction more than onethird of the delegates representing any one of the six branches of the industry has the veto power to prevent the council from acting.

It also means that, when the council does act, it is speaking with virtually the unanimous voice of the entire raw cotton industry.

At our El Paso meeting, the attention of the whole industry was, of course, centered on this, the most serious of all of the crises which have ever confronted us, and with the steps which might be taken to meet this crisis.

I am happy to report to you, sir, that the council did adopt a positive program. I believe that if it is properly and promptly implemented by the Government and the industry, working together, it will not only resolve this present crisis, but also will move us forward into an era in which U.S. cotton will be able to make ever-increasing contributions to the welfare of our industry and to the Nation as a whole.

Now to place this whole matter before you, including our recommendations, I will call on Mr. Blake-Rhea Blake our executive vice president.

The CHAIRMAN. All right, Mr. Blake.

STATEMENT OF WM. RHEA BLAKE, EXECUTIVE VICE PRESIDENT, NATIONAL COTTON COUNCIL, MEMPHIS, TENN.

Mr. BLAKE. My name is Wm. Rhea Blake. I am executive vice president of the National Cotton Council with headquarters at Memphis, Tenn.

Mr. Chairman and members of the committee, as our president has told you, the council's job is to look after the markets for American cotton, and we are here today because American cotton is in the deepest trouble in its markets that it has ever been in.

The main reason for this difficulty is that the price of cotton is not competitive. Dr. Horne has prepared an analysis of this whole situation and I am going to ask him to present it to you at this time.

STATEMENT OF DR. M. K. HORNE, JR., CHIEF ECONOMIST, NATIONAL COTTON COUNCIL, MEMPHIS, TENN.

Dr. HORNE. Mr. Chairman and members of the committee, my name is M. K. Horne, Jr., I am chief economist of the National Cotton Council of America. I live in Memphis, Tenn.

As Mr. Blake has indicated, my testimony will deal with the market side of the cotton problem. I fully realize that this is not the only side of the problem by any means, but if I can be helpful to you it will be in laying out a clear analysis of what is happening to the markets for American cotton.

Dr. HORNE. Let us begin with a glance at the overall market picture, which is summarized in chart 1.

Source: U. S. Department of Commerce (For 1962-63, see text)

Dr. HORNE. The lower portion of each bar represents our domestic market, the consumption of cotton by the spinning mills of this country. For the crop year of 1962-63 the chart gives the Department of Agriculture's estimate of 8.3 million bales for domestic consumption. This still looks like a pretty good estimate.

The upper part of each bar in chart 1 represents the exports of raw cotton. I believe it is now generally agreed that this season's exports seem likely to wind up at 314 million bales or no more than 31⁄2 million. We have plotted 312 million bales in the chart.

The carryover stock of cotton in this country on August 1, 1956, was up at a very high level, 142 million bales. Over the next 5 years, to August 1, 1961, that carryover was brought down to 7.2 million bales. That was a tremendous achievement. But then over the next 2 crop years, ending this coming August 1, the carryover will have gone back up to about 11 million.

The most striking feature of chart 1 is seen in the exports, which held up to a good average level back in the period 1956-60-averaged 6 million bales a year-but which in more recent years have been in a serious decline. I want to save a good part of my time for an analysis of this export situation, but first let us look into the domestic part of our market, in which we also have some very serious trouble.

In chart 2 the upper curve reflects the total amount of fiber consumed by the whole textile industry of this country.

(The chart is as follows:)