wool production in going into storage. I think we can take a lesson from that. Establishing quotas is not the whole answer.

If we try to drop cotton prices here to meet world competition I am afraid the rest of the world, if they can produce cheaper then we can, will in turn drop their prices to much lower levels.

Senator EASTLAND. Isn't it true that the facts as far as Mexico is concerned that they do not produce cotton as cheaply as we do?

Mr. CORTRIGHT. Certainly their yields per acre indicate that we even now would be somewhere near the same cost of production. Senator EASTLAND. And in addition those countries have export taxes.

Mr. CORTRIGHT. That is right.

Senator EASTLAND. In the case of Mexico it is $35 a bale, is that correct?

Mr. CORTRIGHT. I couldn't say but there is an export tax.

Senator YOUNG. I don't know as much about the cotton situation as I should, but I know 96 percent of the wheat produced in the world is produced under a price-support program. Argentina has a price support of $2.72 a bushel which is about 60 cents a bushel higher than our own. They establish any kind of price they need to export. That is true of every major wheat-producing nation in the world. They have a higher support price than we have, all except three, and all of them greatly subsidize exports of wheat. We run into that same thing in almost every commodity.

Mr. CORTRIGHT. We feel all cotton is being produced under a pricesupport program but it is our price-support program that is sustaining them.

Senator YOUNG. I think you are right.

The CHAIRMAN. Mr. Cortright, do you cover in your statement the effect that the policy adopted by the State Department, as well as other agencies of Government dealing with our foreign aid, had on the increased production of cotton in particular in foreign countries? Mr. CORTRIGHT. In some of that part I briefed it is adequately covered.

The CHAIRMAN. As you know, many of us, I want to be included in those many, have been trying our utmost to prevent the use of your money and my money to grow crops or produce any other commodity in competition with what we grow or produce.

I think again that I can speak with authority. I have been living in an airplane now since August 13. I made a complete circuit of this world and I had occasion to visit many countries on this trip in which your money and my money has been used through the State Department, and through other agencies, to help people grow commodities that were in surplus in this country. Many of us raised the issue right along but somehow the process kept on. It is my hope that we will be able soon to cut out all this foreign aid and as far as I am concerned it will be done this year if they listen to me and others on the Senate floor.

Proceed.

Mr. CORTRIGHT. The second recommendation is that we in addition recommend that all of the national cotton allotment for 1957 be set at a level commensurate with an offtake of 14 million bales, 5 million bales of which should be an export goal. The cotton community cannot continue to absorb the loss in employment opportunities and income

made mandatory by minimum allotments. Continued reductions in acreage serve only to cut farm income and as a signal for foreign producers to increase their plantings.

Senator EASTLAND. What other countries have acreage control programs besides the United States?

Mr. CORTRIGHT. I know of no foreign country other than the United States and of course to the contrary all countries have increased their acreage and their intentions expressed are to continue to increase.

Senator EASTLAND. When the increased foreign production equals the increased foreign consumption, the American cotton farmer is in terrible fix, is he not?

Mr. CORTRIGHT. A recent statement by the International Cotton Advisory Committee, I believe, made the statement that it was very likely that the United States should be in a few years if the trend continues producing for domestic consumption only, foreign production would meet total world requirements outside the United States.

Senator EASTLAND. If the American cotton farmer had to produce for domestic consumption only where would he be?

Mr. CORTRIGHT. He would have been expended.

The CHAIRMAN. You have just made a suggestion that the number of acres be increased so as to produce a minimum of approximately 14 million bales.

As you know, every year we have bills introduced in the Congress to provide a minimum of acres for the smaller farmers. Do you cover that?

Mr. CORTRIGHT. Recommendation No. 3 deals with that, sir.

The CHAIRMAN. All right. When we get to that I want to ask a few questions.

Mr. CORTRIGHT. All right, sir.

Acreage controls are effective only when dealing with the domestic situation or when coupled with a sales program to deal with the surplus in an effective manner.

3. We recommend one change in the provisions of the law applicable to cotton acreage allotments. With acreage allotments at present low levels, State and county reserves are wholly inadequate to deal effectively with small-farm hardship cases. We urge that a national cotton acreage reserve, over and above the national allotment, be authorized that would be earmarked specifically for small farms. Such a reserve would prevent displacement of many farm families if used to adjust allotments on small farms to 4 acres or the highest planted in the past 3 years, whichever is smaller.

The CHAIRMAN. In that formula I understand it would mean an acreage in excess of the 21 million, if you adopt that as the acreage necessary to produce the 14 million.

Mr. CORTRIGHT. In excess of whatever it was, yes, sir.
The CHAIRMAN. Will not that aggravate your surplus?

Why do you make it in addition to your national acreage? You know we have problems to meet in the Senate and that proposal or a similar proposal was-in fact, I think there is one pending now before the committee and I am not familiar in all detail as to how that should work. But if your goal is to produce 14 million bales of cotton on, say, 21 million acres of land, and then you further propose that we add to that national acreage some more to take care of the smaller farms, can't

you visualize that that will probably endanger the program or it may further aggravate our surpluses.

Mr. CORTRIGHT. Yes, sir; you are absolutely right in that situation. The CHAIRMAN. Why wouldn't you put that within whatever amount that is required? Why would you not suggest that if it requires 21 million acres on an average to produce 14 million bales, why don't you within that pattern of 21 million acres provide a formula whereby the smaller farmers can get a minimum acreage as you agree should be done?

Mr. CORTRIGHT. One thing is these farms we are talking about are not going to produce the full average and they are not going to produce as much cotton per acre historically as the larger and more efficient farms. It would aggravate the problem to some extent.

The CHAIRMAN. To a large extent, let's put it that way for this reason, as I see it. I am taking the negative on you.

Mr. CORTRIGHT. Yes, sir.

The CHAIRMAN. As I remember the facts, we had 168,000 small farms to take care of with the bill suggested I think by Senator Stennis, and others, that would carry out the suggestion you are now making.

Now if you increase the acreage of that many small farmers to a minimum of, say, 4 acres that you propose, it may entail the production of as many as three-quarters of a million or a million bales of cotton particularly where today the farmer can use irrigation, he can use more fertilizer and things of that character.

It strikes me that what we should by all means do-I am still taking the negative that we try to remain within the framework of the number of acres you think are necessary in order to produce the 14 million bales you say should be produced each year. Do you agree to that?

Mr. CORTRIGHT. I think you have a very reasonable point there. I would point out that these acres we are talking about are being given to a group of farmers who historically have not been planting any cotton at all. If they had been planting cotton on any basis at all they would within the framework of the present law have their acreage set up to the 4-acre minimum. We are suggesting something to get this man that had other income, the major portion of it, and with the advent of acreage controls has tried to get back into cotton production, something to help him.

If we took care of him out of the normal allotments it would penalize the historic producer who has been in this over the years, it would just penalize him and possibly excessively with the number we have to work with.

The CHAIRMAN. How would it penalize him when you are presenting 21 million acres to be divided on the historical basis and you set aside a certain amount of this national allotment now to take care of cases where the smaller producers or other producers are unjustly treated? You do that now.

Mr. CORTRIGHT. Here is a man who has not contributed to cotton history in the country. We are giving him acres of the oldtime grower. The CHAIRMAN. You mean to say this amount that you are now arguing for would be used solely for new producers?

Mr. CORTRIGHT. It would not be used for new producers but many of them would be new producers who did not have any history under the law.

The CHAIRMAN. You mean a history to get as many as 4 acres?

Mr. CORTRIGHT. Yes, sir.

The CHAIRMAN. But you grant this, though, that those small farmers have all planted from 1 to as many as 21/2 acres, as I remember the figure. The plan as I recall it, envisioned increasing those with 1 or 112 or 2 acres up to 4.

Mr. CORTRIGHT. My information is the problem is possibly most acute in North Carolina where they have tobacco and very small cotton. That is probably the most acute State.

The CHAIRMAN. I have no sympathy for one who shifts from one to another. Whenever a crop is all right and they can create a history and shift to something else, I have no sympathy with that fellow. We have any number of them who have continued in cotton and, as I recall because of a change in the law which had provided a 5-acre minimum, as you remember, these small acreage farmers are hard hit. It was the suggestion of many that instead of providing percentage over and above your national acreage that that percentage of acreage be taken within the national acreage and utilized so as to close up inequities of different kinds that may occur in the distribution of acreage. We have provided an acreage reserve as you know, on the State level and also on the county or parish level to do that very thing. It may be accomplished by simply raising up the percentage of the least bit.

Mr. CORTRIGHT. We certainly have faith in the good judgment of your committee to deal equitably with that problem.

Senator SCHOEPPEL. Mr. Chairman, I would like to ask a question at this junction but before I ask the question I want to point out something in line with what Senator Ellender has presented here to you, sir.

I come from a wheat-producing State. In fact, between Senator Young's State and my State we are the top wheat-producing States. We eclipse him many times. It has a relationship to the question and matter proposed here for the consideration of the committee as we go back in our deliberations. Being the Devil's advocate for a moment with you, sir, in the wheat situation it was suggested and effectively established that we reduce wheat acreages from 61 million plus acres to 55 million acres. We found when we did that that we came within about 50 millions of bushels of producing on 55 million what we produced on 61 million plus acres.

Now there has been a feeling in certain sections of the wheatproducing areas-I won't get into other States too quickly—and especially in my own State that same situation has developed that you are being confronted with here in your area and in your industry, namely, farmers have been cut so low on acreages, in the historical wheat areas even, that if they are cut further, it will force out of existence thousands of farmers who are on family-sized and family-occupied farms.

Now in the wheat areas of our Nation many of the wheat farmers realize that we have these tremendous surpluses and that we must keep trying to work them off, and if we can work them off we figure

we will be out of the woods. But there is the problem of how to work them off effectively.

There is a feeling being manifested that cutting acreages of these small farms low enough to reduce our surpluses will also cut them out of existence, and that we should make some readjustment within this 55-million-acre base, until surpluses are reduced and not wreck these smaller family-sized and occupied farms.

Now I am interested in making this readjustment some way while we have these surpluses, because in the wheat producing areas, if readjustments are not made upward with additional acres, we are going to be bombarded by our folks saying they have done it in cotton, rice, maybe tobacco areas. As a result the folks in the wheat areas will expect their representative in Congress to do the same for them and horse-trade to get it done.

I want you to understand that as this relates to you it is going to relate to us and I would be very much interested in knowing how we can make this adjustment and this transition, with these surpluses the way they are.

The CHAIRMAN. I am sorry to note my good friend from Kansas has openly confessed there is horse trading among us, but what he really means is that cotton States legislators depend on the good judgment of the wheat State men and vice versa.

Mr. CORTRIGHT. You will note that we recommend that this national allotment take effect in 1957 and 1956, which gives you some year and a half to start this surplus disposal program and see if it does work. We feel at this stage it is necessary to go along with minimum allotments in 1956 and we recommend allotment to the 14-million-bale level for the 1957 program.

The CHAIRMAN. I would like to ask you one question, and then you may proceed.

I notice that in 1954 the harvested acres of cotton were 19,251,000, from cultivated acreage of 19,791,000, and the production on this 19,251,000 acres was 13,696,000 bales actually and that for this year 1955 the cultivated acres were 17,096,000, and the harvested, contemplated, will be 16,636,000. The production on that smaller acreage, a difference of almost 3 million acres will be up to 14,843,000 bales. With almost 3 million acres less you are producing over a million bales more.

How do you account for that? Is it good weather or is it that farmers have used more fertilizer and planted their cotton rows closer, and so forth?

The reason I am asking that is this: We have a proposal before us, or quite a few proposals, that instead of putting the marketing quota on acreage put it on the basis of bales or bushels or whatever unit is produced and used in the trade.

Mr. CORTRIGHT. Certainly I think we are all agreed that the good Lord's hand and ours are together to the same extent each year. The higher our acreage, the higher production per acre. Some years he has enveloped us and sometimes shunned us. The last few years he has enveloped us and increased yields.

The CHAIRMAN. You have the problem posed as to whether or not a new formula should be devised whereby instead of saying to a farmer, "We will allot you so many acres," the thing may be we may have to do it according to a lot of testimony