Alson

Ralph Redditt, Sidon, Miss., January 7, 1955.-Deplorable cotton acreage situation in Carroll County. Six to seven hundred farmers in county planted 5 acres last year and will have from 1 to 4 acres this year. Have talked to two bankers in Carrollton and they say will be very difficult to finance these farmers. bankers in Greenwood confirm this. The proposed 1955 cotton allotment will work a great hardship on the majority of our people. I can't believe the cotton program is designed to bankrupt a county or area.

W. H. Robinson, 205 North 26th Avenue, Hattiesburg, Miss., January 7, 1955.We need a m'n'm m on this acreage, even if only 3 acres. Present crops of 3

acres could virtually be eliminated otherwise.

Stanton A. Pepper, Route 1, Blytheville, Ark., January 7, 1955.—Roads are full of croppers and renters who don't know where to go or what to do. Please get us more cotton acreage.

Mr. WHITTEN. I would also like to insert a resolution adopted recently by the Delta Cotton Council.

(The resolution is as follows:)

RESOLUTION ADOPTED BY DELTA COUNCIL, NOVEMBER 18, 1954, ON FOREIGN TRADE

We urge that our foreign trade policy, tariff, and import regulations be thoroughly overhauled and geared to our present-day economy. We recommend the adoption by our Government of positive, announced export targets for agricultural commodities in keeping with United States agricultural resources and the size of the world market. For cotton, this goal should be 5 to 51⁄2 million bales annually. Export goals for agricultural commodities should be established so as to be recognized around the world and should be supported in such a manner as to place United States commodities on a competitive basis in foreign markets.

OFFERING OF COTTON STOCKS FOR EXPORT

Mr. WHITTEN. I checked with the Department this morning, and the Department has no program of selling cotton competitively from the Commodity Credit Corporation's stocks. The information I received from the Department itself is that the only program you have is to run the gantlet of this committee in which Treasury, State, and everybody else has to approve it before you can sell it. I am talking about the Commodity Credit Corporation stocks which you counted in determining the reduction in cotton acreage. That was the statement of the Department this morning.

Mr. RICHARDS. We have not offered cotton from Commodity Credit Corporation stocks for export.

Mr. WHITTEN. How long has it been since you have offered cotton from Commodity Credit Corporation stocks for export? Is it not a fact that you have no such program to move cotton in Commodity Credit Corporation stocks on a competitive bid basis into world trade?

Mr. RICHARDS. Exports are being made of cotton all along, so that our cotton is moving. It is moving through private hands and for that reason has not been sold out of Commodity Credit Corporation stocks.

Mr. WHITTEN. Did you offer any last year or have you offered any this year from Commodity Credit Corporation stocks in world trade? Mr. BERGER. The cotton people recommend that we not do that. Mr. WHITTEN. I do not mean to go around them. Have you offered any Commodity Credit Corporation stocks to American exporters on a competitive basis? Commodity Credit Corporation stocks are not available to American exporters on a competitive basis so that they can compete with this million-bale production that we have been instrumental in building up in foreign countries.

Mr. RICHARDS. A large part of the cotton trade has not wanted us to offer stocks for sale at all.

Mr. WHITTEN. What it means, then, is that you are setting the world price for cotton at the prevailing price in the United States? Mr. RICHARDS. Yes, sir.

Mr. WHITTEN. And it means you are inviting an increase in production in India where they have 30 cents a day labor.

Mr. BERGER. Yes.

Mr. WHITTEN. Your program helps bring about what I saw in Italy, namely, Pakistan and Russian cotton. It helps cause some big American producers to go to Mexico and Peru to produce cotton. Is the Department going to continue to hold this big supply back by cutting these farmers that have 5 acres or less of cotton? Are you going to continue that policy?

Mr. MORSE. Are you suggesting that we move into the world market?

Mr. WHITTEN. I am suggesting that of necessity we are going to have to recapture our world markets; and the Department of Agriculture has done precious little to do it.

Mr. MORSE. I am interested in that viewpoint very much, that you suggest we move into the world markets.

Mr. WHITTEN. We have built up these reserves and are going to have to gradually move back in for the good of all concerned. I would suggest that certainly beginning July 1-and the only reason I am suggesting we begin then is that I do not know what is involved in the present market operations, and I do not want to hurt anybodybut I would suggest an announcement that beginning July 1 at least 100,000 bales of cotton will be sold each week to American exporters. Mr. BERGER. Would you include linters?

Mr. WHITTEN. I have not studied that as much. But having gone through Europe, where you can see countries buying agricultural commodities from all over the world because of our shortsighted policy, I feel it is time we move American agricultural products back into world trade on a competitive basis.

Mr. MORSE. During the July-September quarter our cotton exports were 644,000 bales, which is an increase of 21 percent over the preceding year. You suggest that we move in with these Commodity Credit Corporation stocks when the traders are selling cotton? Mr. WHITTEN. I would suggest that you announce now that at the beginning of the new crop year you will move it. You are trying to cure the problem by cutting back the cotton acreage.

Mr. MORSE. We would be very happy to explore that suggestion. Mr. RICHARDS. The entire cotton industry recommended last summer to the Secretary that no export subsidy be paid on cotton. Mr. WHITTEN. Where did you get any idea you would have to pay a subsidy?

Mr. RICHARDS. Selling it at a reduced price.

Mr. WHITTEN. You have had authority from the start to sell these stocks competitively in world trade channels, and the State Department would not let you. That is the fact about it. Do you not agree that you had the authority to sell it?

Mr. MORSE. Yes.

Mr. WHITTEN. Do not your records show that where you offered to sell some on a competitive basis you sold over $400 million worth?

Mr. RICHARDS. A large segment of the industry would be opposed to that.

Mr. WHITTEN. Are you interested in the viewpoint of the man who is being put out of production?

Mr. RICHARDS. I do not know if the co-ops represent him, but at least the co-ops have that feeling too.

Mr. ANDERSEN. Mr. Chairman, I would like to ask a question at this point.

Mr. WHITTEN. Mr. Andersen.

Mr. ANDERSEN. Does the cotton industry committee include producers in that committee in a sufficient degree?

Mr. RICHARDS. I want to modify that to say a large segment of the representatives of various organizations in the cotton business. Mr. ANDERSEN. After it leaves the small producer's hands; is that what you have reference to?

Mr. RICHARDS. I do not say the cotton cooperatives represent the producers, but I would presume they do, and they were in the group.

REDUCTION IN COTTON ACREAGES

Mr. WHITTEN. I would like the record to show how much reduction you have made in acreage this year from last year and last year from the preceding year.

(The material requested is as follows:)

Commodity Stabilization Service-Comparison of 1954 and 1955 national acreage allotments established under acreage allotment and marketing quota programs

4 Data now being compiled-will be available at time acreage allotments on 1955 crop of corn are announced (not later than Feb. 1, 1955). None in effect.

Mr. WHITTEN. Now I will burden the committee by reading from a letter from a cotton company in Memphis, Tenn. I will not mention the name. I spoke to the agricultural group in the midsouth area and this letter followed. It is addressed to Mr. William A. Crabill, president of the Delta Council. It reads:

I understand that the Delta Council is deeply interested in increasing exports of cotton. With the thought that some views from the trade might be interesting to you, I enclose copy of letter which I wrote to the Honorable Jamie L. Whitten a week ago.

My principal reason for writing to you is to explain why, from the standpoint of the whole southern economy, I believe that the Whitten plan of selling a fixed quantity of cotton to the highest bidder each week will be much more effective in winning back our exports and discouraging the present trend of increased foreign production of cotton.

Let us assume an export subsidy of 4 cents per pound. At first, the increased foreign demand would indicate that next year's crop of say 111⁄2 million bales would not be enough to go around and prices would immediately rise 2 cents. This 2 cent rise in price would immediately nullify one-half of our export subsidy. Then the foreign producer, as he must do because he cannot carry his cotton as we carry ours, will sell his cotton for 25 points under our effective 2-cent subsidy. The trouble with a fixed-price loan over here, or a fixed-price loan less a subsidy, is that the foreign producer must sell his cotton and will always hold his price just a little under our price until he has sold.

Under the Whitten plan, protected by the loan, the producer will get 1 cent per pound over the loan, but the weekly sales of a total of 5 million bales will vary from week to week and the foreigner, not having an umbrella to protect him, will be discouraged from gradually bringing this country to a domestic cotton economy.

The foreign producers really don't fear an export subsidy for the reasons mentioned above. I believe the Whitten plan will do the trick and then after 2 or 3 years, the cotton producing countries may get together and agree that our share of the world cotton market is 5 million bales and then the dogfight will come to an end.

Mr. MORSE. What he is suggesting is an export subsidy plan. That is, in essence, what he is suggesting.

Mr. WHITTEN. No, it is a differential. It is a recognition that American support prices are to offset American costs.

Mr. MORSE. Whether you call it a differential or a subsidy, the dollar-and-cents effect is the same.

Mr. WHITTEN. The one who wants to smear it calls it a subsidy and the one who favors it does not call it a subsidy. Do you know of any country in the world with something it does not need which will not sell it? We are the only nation in the world which has things that we do not need and will not sell them.

Mr. MORSE. I cannot stress too strongly the fact that we have made what to us seems like very encouraging progress, and to do this job most constructively we think we should have the cooperation and work with the State Department, the Treasury Department, and so forth, in these monetary exchange problems and convertibility.

Mr. WHITTEN. It makes we think we should have somebody else to look after agriculture, then.

Mr. MORSE. We feel we have come quite a way and that we are making substantial progress. I am not saying we have gone as far as we should.

VALUE OF COMMODITIES NOT OFFERED FOR SALE ON COMPETITIVE BASIS

Mr. WHITTEN. What is the value of the commodities which you have on hand and which you do not offer for sale on a competitive bid basis? I would like for you to insert a list on the total number and value of those commodities that our exporters cannot buy from you on a competitive bid basis to go into the world market.

(The material requested is as follows:)

Commodity Credit Corporation-Report of price-support commodities as of Dec. 29, 1954, based on records and known commitments in CSS commodity divisions and offices

1 Estimated CCC stocks which are in store and not committed for sale or movement. 2 Estimated total stocks owned by CCC, including stocks shown in col. 1, plus commitments to purchase less commitments to sell. Includes 1 million bales of cotton and 400 million bushels of wheat set aside, and limited as to disposition, pursuant to Agricultural Act of 1954.

3 Indicates commodities some quantities of which have been offered for sale on a competitive-bid basis during the past year. In the case of seeds, vetch only has been offered. Those not so indicated were not so offered.

4 Does not include all quantities of corn to be delivered to CCC under the 1952 crop reseal and 1953 crop programs.

POLICY RELATING SALE OF COMMODITIES ON COMPETITIVE BASIS

Mr. MORSE. When you refer to competitive selling do you mean Government selling or trade selling?

Mr. WHITTEN. Trade selling.

Mr. MORSE. When the trade is selling wheat into export, is that competitive selling?

Mr. WHITTEN. It is. It means that when Mr. X, who is exporting cotton, sees a chance to increase his exports, he would be a bidder when you released this cotton, and he would have a source of supply where he could increase his exports, perhaps.

I will tell you why I am digging into all this. Mr. Morse, last year you told us that the State Department's attitude was controlling on