The CHAIRMAN. If there are no further questions, thank you very much, Mr. Cortright.

EXCERPTS FROM REMARKS BY MR. ROBERT E. BROOKER, PRESIDENT, MONTGOMERY WARD BEFORE THE NATIONAL COTTON COUNCIL OF AMERICA, JACKSONVILLE, FLA.

Synthetic product marketing has provided $70 million for promotion, compared with $4 million devoted to cotton. The difference is even more significant when related to the respective market shares. Synthetic fiber manufacturers have spent $1,700,000 for market development of each 1 percent of market, while cotton spends $66,000 for each 1 percent of market to prevent market erosion.

Faced with these odds it is not difficult to understand why the fine promotion programs developed for cotton have not competed as effectively as they might have.

The manufacturers of competitive fibers have provided a constant stream of new developments and ideas to broaden the market appeal of the products made from the fibers they supply. The producers of the competitive fibers have been concerned with the handling of their product every step of the way—from the spinning until it is in the hands of the consumer whose satisfaction they guarantee.

Our research would indicate that synthetic manufacturers have capitalized on their innovation in fiber and in the esthetics they obtained by stressing the colors, the durability, the easy care which were predetermined as being desirable to the consumer.

*** the most prominent marketing success stories of (your) competitors follow the same five steps: First, the needs of the consumer were determined through consumer research; second, close working relationships with the textile mills, cutters, and designers assured that the fiber was properly used and adequately promoted; third, close cooperation with the retailer provided technical guidance and promotional assistance regarding properties of the fiber in its end use; fourth, educational programs were directed at consumers to assure that they recognized the ability of the fiber to meet their needs and wants; finally, the existing properties were improved and new uses for the product were developed to broaden the market appeal of the products made from these fibers.

The synthetic fiber manufacturers have developed strong programs in each of the aforementioned areas. * * *

My appeal to you is to step up the cotton message to the (textile) producer and through him to the consumer. Why is this need greater today than it has been in the past? When the council was organized almost all of the fiber and textile industry was predominantly concerned with cotton. The proportion of the industry concerned exclusively with cotton has shrunk substantially. Much of this attrition has occurred in those parts of the industry that are closest to the consumer-the textile mill, the cutters, and the other manufacturers of consumer products. The competition has made major efforts to win the support of this part of the industry away from cotton in favor of competitive products. strongly believe that you have the same opportunity through your plan to develop a modern marketing program for the cotton industry. * * *

I

Cotton has a lower cost than competition and it is important to maintain that competitive advantage. In many ways cotton has superior performance, but competition in synthetic manufacture has been able to muster technical know-how in the usage of product and direct product development to a known consumer demand or preference.

Match the efforts of competitors and technical help in consumer research and tell the story to the consumer through strong promotions and you will effect a marked improvement in demand for cotton.

The implementation of the programs which appear essential to your industry in order to increase the demand for cotton requires both money and well-developed marketing programs. The Cotton Producers Institute has already taken the first step to create the funds by proposing a uniform participation. I was glad to read in the paper of its successful adoption here of $1 a bale for all producers which will be devoted to these programs.

The challenge *** is to provide a dynamic program to go with the money. Create demand for cotton that will hold your share of the market. When

through product development with the processor you hold your share of the market, your tonnage will increase with expansion of the population and the growth of the standard of living. Increased tonnage will benefit the economy of the cotton industry and each of the constituents represented here today.

The CHAIRMAN. I want to ask unanimous consent to insert into the record at this point the communication from Mr. H. Wesley McAden of the American Cotton Compress & Warehouse Association, a letter dated February 8, 1966.

(The letter dated Feb. 8, 1966, follows:)

AMERICAN COTTON COMPRESS & WAREHOUSE ASSOCIATION, INC.,

Hon. HAROLD D. COOLEY,

Chairman, Committee on Agriculture,

U.S. House of Representatives,

Washington, D.C.

Washington, D.C., February 8, 1966.

DEAR MR. CHAIRMAN: This association, comprised of owners and operators of cotton concentration warehouses, located in both interior and port points, appreciate very much this opportunity to be heard in support of H.R. 12322, Cotton Promotion and Research Act.

First, we wish to commend the Cotton Producers Institute for taking the initiative in developing and proposing this program, because we believe that it is a very significant indication of their determination to regain and expand both the foreign and domestic markets for American cotton.

Second, we wholeheartedly support their premise that the future well-being of U.S. cotton will depend to a very large extent on the effort and resources the industry is willing to invest in research and promotion today.

Third, we believe that all parties interested in maintaining and expanding the production of raw cotton in the United States have an obligation to support the efforts of any segment of the industry that are consistent with that objective. In conclusion, we recognize this as a major effort on the part of cotton farmers to help themselves, and we respectfully urge the favorable consideration of this proposal by each and every member of this very distinguished committee. Yours very truly,

H. WESLEY MCADEN, Executive Vice President.

The CHAIRMAN. It is now 12:25 o'clock. The House is in session. We have numerous other witnesses yet to be heard. And they are scheduled to be heard today. We have a full list of witnesses for tomorrow. We will come back here at 3 o'clock this afternoon and resume the hearings.

We will recess now until 3 o'clock.

(Whereupon, at 12:25 p.m., the committee recessed to reconvene at 3 p.m. the same day.)

AFTERNOON SESSION

The CHAIRMAN. The committee will please be in order.

We will proceed with the call of the witnesses we have listed here. Mr. Hervey Evans, Jr., we are very glad, Mr. Evans, to have you with us, and we will be very glad to hear from you now.

STATEMENT OF HERVEY EVANS, JR., CHAIRMAN, COTTON PRODUCERS INSTITUTE STEERING COMMITTEE FOR NORTH CAROLINA

Mr. EVANS. Thank you very much, sir.

Mr. Chairman, gentlemen, my name is Hervey Evans, Jr., from Laurinburg, N.C. I am a cotton producer, a cottonseed breeder, a cotton ginner, and have interests in other types of cotton handling

and processing business. I am serving as the chairman of the CPI Steering Committee in North Carolina and am also president of Cotton Council International, an organization that is engaged in coordinating cotton promotion programs in 16 foreign cotton consuming nations. I am appearing today in my capacity as CPI chairman in North Carolina.

It has been well established in previous testimony that thoughtful and responsible cotton growers know they must have a vastly larger program of research and promotion and are willing to pay for it.

Our growers in North Carolina are no different. We were one of the last States to initiate CPI on its planned time schedule, but support for its program has been excellent wherever it has been introduced.

We

Our problem is the vast number of small growers and the prohibitive costs of reacihng them through meetings or other means. know from previous experience with other agricultural commodities in our State that the big majority of all growers will support worthwhile programs of self-help if a mechanism like that embodied in H.R. 12322 is employed. We already have a North Carolina Cotton Promotion Association which the growers in our State organized to help promote the cotton industry in North Carolina. For a number of years, such programs have also succesfully operated within our State on tobacco and on peanuts.

The basic principles found in this enabling legislation have been carefully considered by all of the producer organizations in North Carolina that represent cotton growers. These are the North Carolina Cotton Promotion Association, North Carolina Farm Bureau Federation, North Carolina State Grange, and the North Carolina Cotton Cooperative Association. I am happy to say that these groups are backing the proposal. It has also received the endorsement of the Carolinas Ginners Association and other handler-processor groups. Mr. Cooley's release announcing the introduction of this bill stated he was proud to sponsor this rather unusual piece of farm legislation-one that the taxpayers will not be called upon to pay for. We are proud of it for the same reason and being from North Carolina, we are especially proud our distinguished fellow North Carolinian is sponsoring such an act.

In closing, I can't stress too strongly the urgent need for this program to go into effect with the 1966 crop. Even one year's delay will cost us cotton markets and cotton acreage that will be difficult, or even impossible, to recover. I haven't talked to a single cotton farmer in our area who doesn't agree that we need to find an effective way to raise the research and promotion money so desperately needed to be able to stand up against our synthetic fiber competition.

Mr. Chairman, I would like permission also to read into the record a statement that I was asked to put on record by Mrs. Harry B. Caldwell, who is the Master of the North Carolina State Grange.

The CHAIRMAN. Without objection, you may include it in the

record.

Mr. EVANS. I read her statement as follows:

Mr. Chairman and members of the committee, we appreciate your interest in the problems confronting cotton farmers and the entire cotton industry. Failure to find satisfactory solutions will have serious economic repercussions throughout the entire Cotton Belt.

Cotton producers are fighting for survival. Action by the Congress to make cotton fiber more competitive with synthetics and thus more acceptable to the mills while at the same time protecting the incomes of producers, whose labor and investment incomes are among the lowest in the Nation was a step in the right direction, but it is not enough.

There is an urgent need for an expansion of all research and promotion programs if disaster is to be avoided. We believe that production costs can be substantially reduced, quality improved and markets, domestic and foreign, expanded so that producers, consumers and the Nation will benefit from well organized and adequately financed programs. It is our hope that the Congress will provide funds to support these activities.

We come before you today in support of H.R. 12322, a bill to enable cotton producers, by referendum, to assess themselves $1 per bale for research and promotion activities. The Grange, both State and National, supports self-help producer programs of this kind because we have found this to be the only means for securing general support. In North Carolina, this procedure has been successfully used for many years in the "Nickels For Know-How" program to support the Agricultural Foundation at North Carolina State University, and special programs for the support of Tobacco Associates, Cotton Promotion Association, Peanut Growers Association, and other commodity groups.

The provisions in the bill pending before this committee are similar to the laws enacted in the past by the North Carolina Legislature at the request of the North Carolina State Grange and other producer organizations.

Furthermore, farmers have been voting since 1938 in referendums on farm programs so that they are familiar with the principles involved.

The bill, H.R. 12322, provides that all funds collected would be used for research and promotion. It contains other safeguards providing that farmers who do not desire to participate may obtain a refund of the money paid in, that 10 percent of the farmers voting in the initial referendum may call for a new referendum to determine if the program is to be continued and that no substantial changes could be made in the original program without two-thirds approval of the farmers.

The Grange believes that a self-help program for cotton farmers will be a factor in stabilizing the national economy. We urge the immediate passage of this bill so that growers by referendum may have the opportunity to accept or reject the program.

That concludes the statement by Mrs. Caldwell.

The CHAIRMAN. We thank you very much, Mr. Evans. well is well known to all the members of this committee.

Mrs. CaldShe is held

in high esteem by all of us. I regret she is not able to appear in

person.

I apreciate your presenting the statement on her behalf.
Mr. EVANS. Thank you, sir.

I would like also to make several other comments, if I might.
The CHAIRMAN. Yes, sir.

Mr. EVANS. This matter has been brought up in both North and South Carolina before the Farm Bureau Federation of those respective States. Resolutions have been passed by those respective State Farm Bureau Federations in favor of this type of legislation and if I may, I would like to read their resolutions into the record.

The CHAIRMAN. Yes, sir.

Mr. EVANS. In November 1965, in North Carolina, at the annual Farm Bureau meeting we passed this resolution:

We favor national enabling legislation to permit grower assessments to step up research and promotion.

Now, in South Carolina, also in November 1965, the following resolution was passed:

We recommend and support the development and enactment into law of appropriate enabling legislation to provide for a grower referendum to determine

grower preference on cotton research and promotion assessments, and subsequently establish uniform collection procedures if needed.

Now, sir, I would like also, with the committee's permission to make a couple of other comments as regards questions which were brought out this morning in the testimony.

The question was raised, I believe, by Mr. Findley, as regards the voluntary provision in the bill. As I remember the question it was if this was a voluntary program, why not eliminate in the beginning those who wished not to participate, rather than go through the uniform collection procedure.

Now, I am a cotton farmer and also a ginner, and I think I have got pretty clear understanding as to what is involved competitively and otherwise with this type of program as it affects the people in my area, and I would like to speak to this.

In the first place, if you would consider what would be involved administratively in his proposal, I think it would be administratively an enormous problem to separate in the normal marketing of the cotton crop those bales which would be identified with people who elect not to participate in a collection program and those who would. Administratively, it's much more feasible to have a uniform collection and then let the man who does not want to participate apply for his refund.

Now, just on the grounds of administrative feasibility alone, I think that is adequate justification.

But really more importantly, I think the competitive nature of the thing dictates that we have a uniform collection procedure.

With the reduction in acreage which is taking place all over across the belt this year, due to the new cotton bill, competition among the handlers of cotton is going to be greater than ever before. Any device which could be used at any level of handling to create a competitive advantage would be used by the handlers. The temptation would be too great. And we feel that the only way to remove this obstacle is to have uniform collection procedure, so that it no longer is a competitive factor in any sense, and then let the voluntary provision operate by the grower requesting a refund if he is not satisfied.

We think it has one further advantage that in effect this is a selfpolicing program and the cotton farmer himself is not going to participate unless it is a well administered program, and this is one of the major things that we think is involved in this act.

Now, we feel that if we can have a uniform collection program, this bill will work fine. If we do not have a uniform collection program, we feel that we are just back in the same position we are in right now, which is the situation where competition just won't let us collect the money we need to do this promotional program might as well not be before this committee asking for this legislation in the first place.

I don't want to in any way minimize the importance of that, sir, and I think that is an extremely important point.

Another point that I would like to address myself to, sir, has to do with the adequacy of the funds in this legislation.

One of the questions raised this morning had to do with whether this $12 million or so that was raised by this legislation would be sufficient to do a good job in competing against the enormous amounts of money that are being spent by the synthetic fiber producers.