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and I think they asked the Department what else they could do, except through persuasion. Efforts were made to do that very thing, and the whole committee has talked to, as I recall, the State DepartmentI know I have as chairman-but to no avail so far.

Senator SCHOEPPEL. Mr. Chairman, might I inject in here-and my good friend Jim Eastland is here who headed that subcommittee I was a member of that committee, listened to that testimony. In utter fairness to the Department of Agriculture, we had officials of the Agriculture Department on a very high level who came before that committee and pointed out to us the difficulty that they were encountering by reason of the State Department. Let us call the tune on this thing. They were most sympathetic and respectfully suggested that the Agriculture Committee and other Members of Congress could be most helpful if this matter were arranged in some way so that the Agriculture Department itself, and the officials in the Agriculture Department, would be free of the difficulties they were encountering on the foreign side from members of the State Department.

I found the Agriculture Department very, very sympathetic to a broader approach to this problem, free from a lot of the entangling difficulties and roadblocks they had encountered in the State Department. My friends in the State Department will not like this, but it is true and Jim can correct me if I am wrong.

Senator EASTLAND. That is absolutely true.

Mr. BROOKS. I don't think your problem on this job is in the Department of Agriculture. It is across the way.

Senator EASTLAND. What it is, it is discretionary in the law now whether this cotton be sold competitively or whether it be sold at all, is it not?

Mr. BROOKS. Yes.

Senator EASTLAND. And the State Department has been able to block it in the Cabinet and at the White House; that is true, is it? Mr. BROOKS. So far yes, except to the extent of 1 million bales. Senator EASTLAND. A limited program.

Mr. BROOKS. Yes.

Senator EASTLAND. Do you think in your judgment it would be helpful if we would remove that discretion and order it sold?

Mr. BROOKS. I think this: That the roadblock must be removed or otherwise we are going to have an economic collapse in the Cotton South that is going to be far more serious than I think anybody in the State Department yet realizes, and I think some way the State Department must be reached with the facts because I realize that we have great responsibilities around this world now and we are the leaders of the free world and we must measure up to this responsibility.

On the other hand we can't measure up to it by going broke ourselves and we have reached the point now that we are going broke with this program if we do not make some changes. If we go broke we cannot finally help our friends.

Senator EASTLAND. You are exactly right.

The CHAIRMAN. You mean our country going broke.

Mr. BROOKS. The Cotton South.

The CHAIRMAN. I thought you meant the country. I was going to inject we are almost broke now.

Senator EASTLAND. Drastic acreage reductions that we have are largely due because these stocks are not sold; is that not right?

Mr. BROOKS. Yes.

Senator GEORGE. I have one thought. The State Department has had the rather restrained view that they could make sales only to governments, they could O. K. sales only to governments, and that what the government did with the advantage they got under 480 sale was up to the foreign government.

In that, I think the State Department has been wrong because I do not think it constitutes dumping in any fair sense of the word to permit sales under 480. But unfortunately the State Department wished to use our 480-I hesitate to make this statement for this record, but I am compelled to say I believe it to be true-some in the Department wish to use 480 when used sparingly and in a way to indirectly add to the foreign aid that we are already giving in very liberal quantities to these foreign governments. I believe the State Department has undergone some change of mind and thinking.

I would like to join you, Mr. Brooks, in saying while I disagree very strongly with many of Secretary Benson's suggestions, on this particular matter he was most anxious to use 480 as you and I and Senator Eastland, who is familiar with it, part of the forces that organized the legislation which finally became law-he wished to use it as we conceived it should be used; not for the benefit of governments necessarily and certainly not as a coverup method of foreign aid, foreign assistance to those governments, but to get the cotton out of this country. And in order to do it I think you are entirely right when you put the finger on the fact that the governments got the benefit but not necessarily the spinners in those foreign countries or the people who wanted this cotton for use in those foreign countries. Mr. BROOKS. Senator, in fairness to a statement I made I want to make this additional statement. I said that some of the cotton firms of this country had used their finances to help expand production. The reason why I stated that was because a lot of producers in this country have felt that maybe some of the benefits of what the State Department has talked about that was going to some of these foreign producers, that lots of it flowed back into this country from other people.

Also, I want to say that not all cotton firms in this country have done that because there are cotton firms in this country who feel that we ought to do everything we can to protect the cotton economy of the South and they have been very vigorous in their position.

I did not intend to condemn the cotton industry or cotton firms as a whole by any means or to question it. In fact, if you are interested in making money, certainly maybe those cotton firms had the right to do that and go down and use the money to expand foreign production, but it has been disastrous as far as domestic producers are concerned. It has been very difficult for us.

Now our second proposal is that we protect domestic mills through quotas on goods coming back into this country because we must, if we sell this cotton at lower prices in foreign countries, we must protect the domestic consumer of goods because otherwise we will soon lose that one, to. We must protect this domestic mill, either voluntarily or through invoking section 22 of the law which we already have on the statute books.

Now, on the research programs that we have been running, if we will reduce the price of cotton about 3 to 312 cents per pound and meet that blending problem we will increase our consumption about 250,000 bales.

Now the question is always from the viewpoint of the farmer-and he must look at it very carefully-if you reduce your price you want to buy something with it. There is no sense in just reducing prices because we are already on the bottom of the economic ladder, and there is no use of us taking one more step down that ladder unless it is something we are going to buy something with.

Senator EASTLAND. 250,000 bales; it would not be worth it.

Mr. BROOKS. That is right. If you put it exactly on a factual basis, exactly dollars and cents, it would not. The only way in which it might be worth it would be that it might-you see, we have not lowered our prices any, but if we lowered them a little it might stop some of the expansion in the rayon facilities and so that from that standpoint you might get some beneficial effects.

But actually on dollars and cents, as it stands now we would not make anything by reducing the price of cotton a penny.

The CHAIRMAN. Proceed.

Mr. BROOKS. Being over here in the mill territory, Senator, I have naturally worked with a great many of these mills as to what our price problem was with reference to rayon and cotton. Actually the most loss, as I recall, that we ever lost in 1 year to synthetics was when synthetics was maybe twice as high as cotton; but they did a lot of things to synthetics that got them in the market. That is the reason why I have put the emphasis that I have on research here: They have researched us out of a lot of business and to give one example you take rugs. We got the rug market pretty well, Senator, some 3 to 5 years ago. Rayon has about gotten it back from us because of the fact that they produced a fiber that is exactly suited for rugs. The cost of a rayon rug is more than the cost of a cotton rug, it is higher, but we have lost that rug market. We must research back in again.

We have lost a great deal out of our market to these synthetics out of research; we have lost some from price, but we haven't lost all from price by any means.

The CHAIRMAN. Mr. Brooks, is there not something these mills could do to help out the situation? What would become of the mills of Georgia and other parts of the country if the cotton farmers go out of business?

Mr. BROOKS. I think we have had great loyalty from the cotton mills far beyond maybe the call of duty to some extent, because actually there have been times when certain mills could have switched from cotton to rayon profitably.

The CHAIRMAN. Altogether?

Mr. BROOKS. Altogether, or partially, and they could have switched, certain mills could have switched and probably made more money. But the mills have stayed in and spent a tremendous amount of money, cotton mills themselves, on research on cotton.

The mills of the Cotton South here, I know, have a feeling of trying to hold this cotton economy and have an intense interest in it. Maybe not as intense as cotton farmers, but they have certainly gone a long way to work with us in these problems.

The CHAIRMAN. Any further questions?

As I understand, you two gentlemen, Mr. Neely and Mr. Estes, agree to what Mr. Brooks has stated?

STATEMENTS OF R. C. NEELY, WAYNESBORO, GA.; AND W. J. ESTES, TURIN, GA.

Mr. NEELY. Yes, sir.

Mr. ESTES. Fully in accord.

Mr. NEELY. I have one thing. It was brought out here this morning. Reducing the acreage on cotton over the entire belt.

The situation here in the Southeast is such that when we say reduce the Nation this year about 4 or 5 percent, that here in some of the States in the Southeast, here in Georgia, we have a reduction of about 12 percent. When you take that reduction it starts from the base acreage, and another year if the Department would decide not to reduce any acreage whatsoever, if we follow the same formula being followed now, we would automatically be reduced in acreage; and this acreage would be removed from the Southeast and moved into a high-producing area which would not help to lower the surplus which we are faced with today.

We think that there is a happy medium in there: That we should establish a base and not let that base keep coming down, and reduce our base before the reduction is done. In other words establish a base during this emergency on the farm for each farm which would stay with it during the emergency.

The CHAIRMAN. Freeze it?

Mr. NEELY. Yes, sir.

The CHAIRMAN. Any further suggestions?

Thank you ever so much.

The committee will now stand in recess until 1 o'clock.

(Whereupon, at 12 noon, the hearing was recessed, to reconvene at 1 p. m. the same day.)

AFTERNOON SESSION

The CHAIRMAN. The committee will please come to order.

This morning we heard witnesses on the cotton problem and on the list before me we have peanuts, dairy, tobacco, livestock, poultry, conservation, small grain, naval stores, fruits, vegetables and general subjects. This area is almost as bad as California. We had as many different subjects to deal with there and I am glad to see that.

There is one more witness I understand who desires to be heard in respect to the cotton problem. I wonder if we could do that now? May I suggest before we start if there are witnesses present or others who desire to file a statement with the committee, I want to give assurance that if the statement is filed with the clerk that the statement will be printed in the record.

Mr. Lawson, do you have anything new to add to what was said this morning with respect to cotton?

Mr. LAWSON. I can add a few new things, I hope.

The CHAIRMAN. I wish you would confine your statements to new things, if you will, because we have a lot of witnesses to hear this afternoon and it is my hope to hear all of them. I want to give as

Now, on the research programs that we have been running, if we will reduce the price of cotton about 3 to 31⁄2 cents per pound and meet that blending problem we will increase our consumption about 250,000 bales.

Now the question is always from the viewpoint of the farmer—and he must look at it very carefully-if you reduce your price you want to buy something with it. There is no sense in just reducing prices because we are already on the bottom of the economic ladder, and there is no use of us taking one more step down that ladder unless it is something we are going to buy something with.

Senator EASTLAND. 250,000 bales; it would not be worth it.

Mr. BROOKS. That is right. If you put it exactly on a factual basis, exactly dollars and cents, it would not. The only way in which it might be worth it would be that it might-you see, we have not lowered our prices any, but if we lowered them a little it might stop some of the expansion in the rayon facilities and so that from that standpoint you might get some beneficial effects.

But actually on dollars and cents, as it stands now we would not make anything by reducing the price of cotton a penny.

The CHAIRMAN. Proceed.

Mr. BROOKS. Being over here in the mill territory, Senator, I have naturally worked with a great many of these mills as to what our price problem was with reference to rayon and cotton. Actually the most loss, as I recall, that we ever lost in 1 year to synthetics was when synthetics was maybe twice as high as cotton; but they did a lot of things to synthetics that got them in the market. That is the reason why I have put the emphasis that I have on research here: They have researched us out of a lot of business and to give one example you take rugs. We got the rug market pretty well, Senator, some 3 to 5 years ago. Rayon has about gotten it back from us because of the fact that they produced a fiber that is exactly suited for rugs. The cost of a rayon rug is more than the cost of a cotton rug, it is higher, but we have lost that rug market. We must research back in again.

We have lost a great deal out of our market to these synthetics out of research; we have lost some from price, but we haven't lost all from price by any means.

The CHAIRMAN. Mr. Brooks, is there not something these mills could do to help out the situation? What would become of the mills of Georgia and other parts of the country if the cotton farmers go out of business?

Mr. BROOKS. I think we have had great loyalty from the cotton mills far beyond maybe the call of duty to some extent, because actually there have been times when certain mills could have switched from cotton to rayon profitably.

The CHAIRMAN. Altogether?

Mr. BROOKS. Altogether, or partially, and they could have switched, certain mills could have switched and probably made more money. But the mills have stayed in and spent a tremendous amount of money, cotton mills themselves, on research on cotton.

The mills of the Cotton South here, I know, have a feeling of trying to hold this cotton economy and have an intense interest in it. Maybe not as intense as cotton farmers, but they have certainly gone a long way to work with us in these problems.

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