Senator COOPER. There is not any difference as far as the yield is concerned. Senator AIKEN. No; it is about the same. Mr. MALONEY. Thank you, Mr. Chairman and members of the committee. The CHAIRMAN. Thank you, Mr. Maloney. Representative CHAPMAN. Mr. Chairman, Representative Albert Gore, of Tennessee, is the next witness to be called. STATEMENT OF HON. ALBERT GORE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE The CHAIRMAN. We are very glad to have you here, Mr. Gore. I have been around this place for about 10 years now and gentlemen, I find this quite an unusual hearing. Almost without exception the committee sessions which I have attended have been either for the purpose of settling an unsolved problem, resolving differences of people or providing some assistance. This group today, all types, comes united, no problems which we are asking you to solve, no assistance that we are seeking. The program has not yet cost the Government and the people of the United States anything. We do not contemplate that it will. We hope that it will not. If we see that it is running into any expenditures, I think I can bespeak the sentiments of the tobacco industry that we will seek changes. We come before you asking only that in the enactment of a broad agricultural program the peculiarities of the tobacco industry be recognized and that we be allowed to proceed. Now I shall not take the time of the committee to a longer extent. You have been very patient and enduring. The CHAIRMAN. So far, are the indications favorable to that type of program? Representative GORE. Very favorable, Senator. The people I represent are entirely favorable to the program, as has been shown in various referendums. I would not like to leave unmentioned, however, the wild claims to quantity and volume made by my colleagues from Kentucky and my friends from North Carolina. It just shows that their minds run to the material things, and being more interested in the human element I will just content myself with saying I represent the best farmers in the world. I can lay no claim to 70-percent production. The CHAIRMAN. That is a great State from where I come, too. Representative GORE. Thank you, Mr. Chairman and members of the committee. The CHAIRMAN. Thank you, Congressman. Representative CHAPMAN. My colleague, the gentleman from Kentucky, Mr. Gregory, was here during part of the hearing and when he left he gave me a note stating that he and Representative Doughton, of North Carolina, and Representative Cooper, of Tennessee, had to hold a session in regard to a very important measure vitally affecting the agricultural economy of the United States and that all of them would have liked to be present to express their approval of the present program. Also, I desire to note the presence during most of this hearing of Representative Jennings of Tennessee, Representative Ellis of West Virginia, and Mr. Whitaker of Kentucky, who on Monday will take the oath of office as a Member of the House of Representatives to fill the vacancy created by the recent inauguration of Representative Earl C. Clements as Governor of Kentucky. All of these gentlemen, if they were here at this moment and were to speak, would express their entire approval of the tobacco program as it has been enacted and administered as the result of legislative enactments during the past 15 years. The CHAIRMAN. They are not here? Representative CHAPMAN. They have gone. They had to go. At a meeting of representatives of growers of flue-cured, fire-cured, burley, dark air-cured and Virginia sun-cured tobacco, held at the Ambassador Hotel in this city, April 23, 1948, an agreement was reached on the five points that have been discussed very ably and fully by these witnesses today. Tobacco growers of all types of tobacco under quotas are in entire agreement in favor of continuing the present program and I would like, upon the request of these gentlemen at that meeting yesterday, to read into the record of this hearing the brief statement of those five points on which there is complete agreement. At a meeting of flue-cured, fire-cured, burley, dark air-cured, and Virginia suncured tobacco growers at Washington, D. C., on April 23, 1948, it was agreed as follows: 1. Continue the present method of computing "normal supply" of tobacco in determining the mount of the national quota. 2. Continue the present definition of "parity price." 3. Continue price support loans at the present percent of parity, in accordance with present law. 4. Continue section 2 of Public Law 163, of the Seventy-ninth Congress, approved July 28, 1945. This section applies to the support level for fire-cured and dark air-cured tobacco. 5. Provide for marketing quotas for types of tobacco now under quota and for Virginia sun-cured tobacco. Thank you, Mr. Chairman and gentlemen of the committee. We will now hear from Senator Cooper, who is a comparatively new member of the Senate. He is an excellent Senator and we are happy to have him before us. We shall be glad to give you all the time you may desire to make your statement, Senator Cooper. STATEMENT OF HON. JOHN SHERMAN COOPER, A UNITED STATES SENATOR FROM THE STATE OF KENTUCKY-Resumed Senator COOPER. Thank you, Mr. Chairman. I want to say in the beginning that I am going to make a short statement. The ground has been adequately and fully covered by men who are intimately acquainted with the peculiar problems which relate to tobacco. I do think you realize that there are peculiar problems relating to the production and marketing of tobacco. There has been a great deal of concern about this bill upon the part of tobacco growers but I have told them that in my short time here, one of the happy experi ences that I have had has been discovering that you who are on the Committee on Agriculture and Forestry are deeply interested in the problems of agriculture, and that I knew from my conversations with you that it was not your desire to hurt in any way those who are interested in the production of tobacco. I feel that after these hearings, these gentlemen must agree to that statement. This problem does not affect agriculture generally in the country, but it does affect several States and it vitally affects the economy of those States. For example, in the State of Kentucky, which I represent at present, 50 percent of the agricultural income of Kentucky depends upon tobacco. If that production of tobacco should be destroyed or diminished, it should be noted that there is no crop to which producers could turn in order to supply the deficit in income. Furthermore, because of the peculiarities of soil and climate there could be no interchange of types of tobacco. For example, certain sections of Kentucky can raise only certain types of tobacco, and if the production of that type should be reduced, it would not be possible to turn to other types of tobacco. So, if this bill should hurt the production of tobacco in these States, it would damage materially the entire economy of the State. There is fear that the proposed program might have such an effect. I think it would be wise before making a change to determine whether or not the present program has been successful. The experience of the last years, as these gentlemen have stated, has demonstrated that it has been successful and that they have worked it out over a period of years. It is also important to remember what Mr. Clay has said about the peculiar position of the tobacco industry in relation to the market. It is not a free price market in the usual sense of the term, but it is a market in which just a few buyers operate. The present program with its parity support levels does enable the grower to bargain with buyers and get a fair price for their tobacco. Because this matter must be determined in this committee and finally on the Senate floor, because your determinations are based on the record as made, and because I am here representing Kentucky at the present time, I want to make a few remarks on some of the points that are in issue. These gentlemen have pointed out the provisions of the bill which they think will hurt the tobacco program. I would like to direct my attention first to that provision which would set up a new definition for "normal supply." Today, the marketing quota for any particular type of tobacco is that amount which can be produced in all of the tobacco States, which means that the amount which is allotted for Kentucky and the amounts which are allotted to a county, and the amount which can be allotted to an individual is determined to a great extent by the determination of "normal supply." As has been pointed out, the chief objection to the proposed definition of "normal supply" is that it would not take into account the current trends in the use of tobacco and the peculiar trade conditions of the tobacco industry, but it ties production upon an inflexible formula based upon the last 10-year average, which moves with each year. To give you some idea of what is happening with respect to the consumption of tobacco, it should be pointed out that tobacco produc- Mr. Clay pointed out that the present formula for "normal supply" (The table referred to is as follows:) Burley tobacco-support price 3 Current burley exports running about 25 percent below previous year. Senator COOPER. Chiefly because of conditions in Europe which have Under existing law the Secretary of Agriculture can take into For example, in determining total supply he estimates the normal It is not a 1-year crop. It is a crop which, as someone has said, The present definition takes that into account. The new definition would not take that into account. So the Secretary adds that estimated stock which must be kept on hand for the purpose of the trade. Then he adds the normal export per year. Then again he adds to that an additional amount because it is the experience of those in the export business that they must have on hand an additional amount to meet the current needs. I think you can see that this is a flexible procedure which can be adjusted yearly and the results which have been obtained under it confirms its validity. I think that can be demonstrated in two ways. First, on the basis of price. The year-to-year price on burley tobacco has been stable and changes have not exceeded 10 to 20 percent of the average price for a previous marketing season. I file here a table showing those facts. These facts would indicate that the program is achieving stability of price, which is one of the purposes of the agricultural program is achieving stability of price, which is one of the purposes of the agricultural programs. (The table referred to is as follows:) Senator COOPER. Second, I wish to emphasize that all loans made in burley tobacco prior to 1946 have been liquidated in full with interest, and of the comparatively large amount of loans found necessary in 1946 because of reconversion difficulties, about one-third of the holdings have been liquidated. During the war there was a tremendous demand for cigarettes, for domestic use and for our troops. Our country actually encouraged increased acreage in production and I believe that is the real reason for the increase in stocks both in burley and in dark tobacco in the year 1946. The defects in the definition of "normal supply" in S. 2318 are shown by the fact that it would decrease the marketing quotas for burley tobacco at a time when its use has expanded, and increase the quota for dark tobacco at a time when its present use is decreasing. The computation prepared by the Department of Agriculture and inserted in the record by Mr. Berry today, shows that the provision of the proposed bill would have operated to reduce the needed production of burley and increased production of dark tobacco. If it had been the law at the time the 1948 supply was being determined, the production of only 314,000,000 pounds of tobacco would have been permitted, the smallest in 12 years, and about 35 percent less than the 474,000,000 pounds determined under the present law for 1948. In 1947, 485,000,000 pounds were raised, of which amount all but 35,000,000 pounds were sold to the tobacco trade. If a 314,000,000pound burley crop had been determined for 1948, the result today would be an acute shortage of over 100,000,000 pounds with sharp advances in price instead of stability. Senator COOPER. A few minutes ago Mr. Clay demonstrated that if this program had been in effect this year, today there would be a |