maintain our fair share of the world market. This bill also directs that United States cotton mills be protected by import quotas at reasonable levels on manufactured cotton goods.

Japanese sales of cotton cloth to buyers in this country since midsummer have spiraled to a dimension equivalent to 19,000 United States textile jobs. Such volume, unless checked, must inevitably take a toll in mill employment and a reduced market for the United States farmer's cotton. August fabric sales by the Japanese Government to United States buyers totaled 52 million yards-a 1-month figure exceeding the entire amount of cloth imported from Japan during all of 1954, which was 47.8 million yards, which figure was taken from Cotton Trade Journal for October 14, 1955.

Japan buys the greater part of its raw cotton from countries other than the United States, so this flood of cloth imports also is the equivalent to the importation of many thousands of bales of foreign grown cotton. Agricultural law in this country requires United States mills to use only domestic cotton except for a negligible fraction of foreign specialty growths under a quota.

Only the imposition by Congress of an import quota on cotton manufactures, similar to the quota long in effect on raw cotton, can protect the jobs of United States textile workers and the market of the United States cotton farmer. United States cotton mills are committed to the cost and wage structure of the United States economy. They now have a floor of $1 an hour minimum, esablished by Congress to be effective March 1, 1957, as compared to 13 cents an hour for the Japanese.

2. We recommend closer coordination at Cabinet aimed at resulting in a stepped-up program of surplus disposal and expansion of markets. It is reliably reported that when the workable cotton export program first developed by the Department of Agriculture reached the White House for discussion with the President, Secretary Benson urged adoption of the program, but Secretary of State Dulles opposed it. Vice President Nixon also spoke out strongly for the plan. The President sided with Dulles and the argument that sale of stocks at world prices would have international political and economic repercussions.

Further, when the march by Congress on the White House forced some action, the President, still over State Department protests, authorized the limited sale of surplus cotton after January 1.

Senator EASTLAND. That is based on, that limited program is based on what inch staple?

Mr. GILFOIL. Seven-eighth, I believe.

Senator EASTLAND. Thank you.

Mr. GILFOIL. Announcement of the qualities to be sold-all grades of 15/16-inch and shorter staples-shows that the State Department succeeded in having them eliminated from cotton eligible for sale. Senator EASTLAND. Repeat that statement, please.

Mr. GILFOIL. Announcement of the qualities to be sold-all grades of 15/16-inch and shorter staples-shows that the State Department succeeded in having them eliminated from cotton eligible for sale. Senator EASTLAND. Isn't it true that the State Department sat down with officials of the Department of Agriculture and attempted to designate what grades and what staples could be exported? Mr. GILFOIL. That is my understanding.

Senator EASTLAND. And it was very strange that the representatives of the American State Department were specifying grades and staples for the export program that would not compete with the cotton financed in Brazil by one of the large export American houses, is it not?

Mr. GILFOIL. Yes, sir.

Senator EASTLAND. In fact they were there representing, the officials of the State Department were there attempting to protect a large American cotton exporter who was financing Brazilian production?

Mr. GILFOIL. Well, sir, in my opinion we face a situation
Senator EASTLAND. That is what happened, was it not?

Mr. GILFOIL. Yes, sir. We face a situation that is unique as far as I know, not only in the history of this country but in the history of the world, and that is this: I think historically speaking the function of any foreign service department of any country has been to protect the interests of the citizens of that country. Insofar as cotton is concerned, it has become apparent over the past few years that our State Department has been concerned primarily with protecting interests of producers of foreign growths to the detriment of the American cotton producer. I think that can be said with certainty.

Senator EASTLAND. What greater calamity could happen to any industry than for that industry to lose its markets?

Mr. GILFOIL. None. It places it in a hopeless position.

Senator EASTLAND. The State Department of the United States, as Senator Ellender said, has promoted foreign-aid programs, has sent technicians to build up foreign production, and has then stood guard to give them the market of the American farmer, haven't they? Mr. GILFOIL. Yes. I would like to point out another very great danger that faces us there if something isn't done to change that. That is this: We all know that our foreign market has been steadily diminishing. If it isn't increased under the present law we could very soon get in a position where our minimum national baleage allotment would drop under 10 million bales. I am sure you understand that position in the law. For instance, if our total consumption for the coming year should be indicated as, say, 1012 that we conceivably could have an allotment providing for a 912 million bale crop. That is the danger which faces us and it is an immediate one. The only way we can get away form it is to increase the movement of this cotton. Senator THYE. I would like to ask a question at that point. There has been no interference on the part of any governmnetal agency as to what the individual exporter did in exporting; has there been? Mr. GILFOIL. No, sir; not that I know of.

Senator THYE. The individual or the corporate exporter here had access to any world market that existed?

Mr. GILFOIL. Yes, sir.

The CHAIRMAN. Proceed, sir.

Mr. GILFOIL. The result has been that while foreign buyers await cheaper cotton under the revised sales program after January 1, they are buying very little American cotton and are filling their needs from stocks of Mexican and other foreign cottons at prices 3 to 5 cents a pound under the American price. Exports so far this season have been less than half what they were a year ago.

3. There are approximately 4 million bales of low-grade shortstaple cotton in the Government loan. We recommend that the future basis of the loan be determined on the average grade and staple rather than middling 8 inch in order to discourage the production of such unwanted cotton and permit the buyers to discount same at their actual market value.

Senator EASTLAND. By discounting these shorter cottons and moving them into consumption, what we would do is move into domestic markets that have been lost to cotton. That is true: is it not?

Mr. GILFOIL. Yes, sir.

Senator EASTLAND. Of course you know that the Bemis Bag Co. has in the past few months quit spinning any cotton and gone on rayon because the short cotton they used in making bags has been priced too high. It would recapture that market; wouldn't it?

Mr. GILFOIL. It would have a chance and be in a better position. Senator EASTLAND. Yes; and it would move in on paper, where paper has displaced cotton.

Mr. GILFOIL. Yes.

Senator EASTLAND. It would result in expanding the consumption. of American cotton and regain markets that have been swept away.

I

Mr. GILFOIL. I believe, Senator Thye asked Mr. Cortright a question about why people produce that sort of cotton in some areas. think it might be said their principal reason for that is that the yield of mechanical harvester, not the picker, the stripper, that cotton lends itself to that practice and makes for cheaper harvesting and that is why they use it.

Senator THYE. That gives me the answer and it is a good answer. Mr. GILFOIL. No. 4: we recommend a minimum 1957 national cotton acreage allotment based upon an estimated production of 14 million bales, with annual goals of 9 million bales for domestic consumption and 5 million bales for exports. Our cotton economy cannot survive further acreage reductions. The development of our rural area is retarded by reduction in farm income.

The CHAIRMAN. In proposing that you would certainly change the present law wherein it is left to the Secretary of Agriculture to estimate what the foreign sales would be? Today he must estimate, as I understand the law, what may be sold abroad.

Now, suppose that that plan is followed and not as many as 5 million bales are sold, what would you do with it? How would you handle it? Mr. GILFOIL. Well, sir, you will note that is a suggestion for 1957. The CHAIRMAN. I understand, but I don't hope to work off all of these surpluses by that time. I would like to see it started next year or even this year, but the probabilities are we will be quite a long time in working off this surplus.

Mr. GILFOIL. Yes, sir.

The CHAIRMAN. If we are to continue producing at the rate we are now producing, you can see that.

Mr. GILFOIL. Yes, sir.

The CHAIRMAN. If you have the same acreage next year and produce the same amount of cotton we are simply aggravating the situation. Mr. GILFOIL. Yes, sir. I am not at all certain you will have the same yield every year.

The CHAIRMAN. I would rather be on the safe side. We have to vote for these laws and when you get the record over here to show the

production has been fairly constant, you take production of 1953-54, 324.2 pounds; 1954-55, 341 pounds; and this year 367 pounds, you can see that the production at least for the last 3 years has been on the gradual increase and with irrigation there is no telling you might top the 367 of this year.

Those are the things we have to be able to argue before the Senate when we propose such a bill as you are now indicating we should do. You can see the difficulty, I am sure.

Mr. GILFOIL. Yes, sir; and all of this is predicated on the movement of more cotton. Nothing else will solve it.

The CHAIRMAN. The question I ask you is: if you contemplate selling 5 million, you produce for that, what will become of it if you

can't sell it?

Mr. GILFOIL. It has to go back on a smaller program as we have now. The CHAIRMAN. You won't solve the problem then?

Mr. GILFOIL. No; that is admitting defeat.

Senator EASTLAND. Mr. Gilfoil, say acreages remain at levels that they are now or that they will be in 1956 and 1957. Over a 10-year period with those lower acreages where would the American cotton farmer find himself?

Mr. GILFOIL. Well, I would hate to try to speak for all of them. I know I have found as far as I am personally concerned that even with the reductions in acreage that we have sustained over the past few years, that each year my total costs have gone up. That doesn't sound reasonable but it is the truth.

Senator EASTLAND. Could you stay in business?

Mr. GILFOIL. No, sir; that is the point.

Senator EASTLAND. It will break

you.

Mr. GILFOIL. Yes; I have a very large amount of equipment, I have a lot invested in that on a per-acre basis and that equipment is capable of taking care of quite a bit larger acreage than I now grow and when I restrict it back it chokes me.

Senator THYE. How large is your operation? How many acres do you have under your management?

Mr. GILFOIL. Total of about 700.

Senator THYE. And what is your cotton acreage on that 700-acre unit?

Mr. GILFOIL. Two hundred and thirty acres.

Senator THYE. Do you have any tenants or is this an operation of your own?

Mr. GILFOIL. It is all day-labor operation. I have six families on the place.

Senator THYE. You employ them?

Mr. GILFOIL. Yes, sir.

Senator THYE. I note that you belong to the Louisiana Delta Council. Do you also belong to other farm organizations?

Mr. GILFOIL. Yes, sir; I have been a member of the Farm Bureau for many, many years. I have been an official in our local organization from time to time.

Senator THYE. Are there any other farm organizations besides the Farm Bureau in the area?

Mr. GILFOIL. No, sir; none that I know of.

Senator THYE. Ís the council an affiliate of that farm organization?

Mr. GILFOIL. Of the Farm Bureau?

Senator THYE. Yes.

Mr. GILFOIL. No, sir; however, I dare say that very nearly 100 percent of the members of the Louisiana Delta Council also belong

to the Farm Bureau.

Senator YOUNG. What position do you take with respect to 90 percent or flexible supports?

Mr. GILFOIL. I would go along on just exactly what Mr. Cortright told you. In other words, I am not advocating any less for anything because I need more.

Senator YOUNG. It is a bit confusing for us members of the Agriculture Committee to find out what farmers want. You belong to one organization advocating 90 percent supports and another advocating flexible supports. We find the same thing on wheat. The Farm Bureau wants flexible supports, yet many of their members belong to the National Wheat Growers Association, which wants a 2-price system. It is difficult to determine just what farmers do

want.

Senator EASTLAND. The 90 percent is about 312 cents a pound below the 90 percent that we have now, based on seven-eighths inch? Mr. GILFOIL. Yes, 90 percent based on the change in the basis of the loan to Middling inch.

Senator YOUNG. Is that position supported by the Farm Bureau in this area?

The CHAIRMAN. We will find out later.

Mr. GILFOIL. They will give you their views, I am sure.

Senator YOUNG. This gentleman is an official of the Farm Bureau. Mr. GILFOIL. No, sir; I have been in the past but I am a member of the Farm Bureau.

Senator YOUNG. What position does your local organization take? Mr. GILFOIL. The local Farm Bureau?

Senator YOUNG. Yes.

Mr. GILFOIL. The last I knew of it they favored 90-percent supports. I can't guarantee that is the case now. I don't know if they have had a recent board meeting.

The CHAIRMAN. Mr. Gilfoil, I thought I might pose this question for you because it has been with us at every meeting: You say you have a total acreage under cultivation of 700.

Mr. GILFOIL. Approximately, yes, a few more or less.

The CHAIRMAN. In cotton you have

Mr. GILFOIL. 230.

The CHAIRMAN. Now, there has been a suggestion made that on the diverted acres no crop be planted that would compete with other protected crops or even with some of them went so far as to say any other crop that is in surplus. Since you are receiving protection on a given acreage to grow a certain crop, no crop should be planted on those diverted acres that may compete with any other crop that may be in surplus or in which you may hurt others by producing that extra

crop.

Have you any views on that? We are going to have to meet that without any question.

Mr. GILFOIL. If that happened it would without any question at all in my mind provoke such an economic depression in the South as they have never had before.