FIGURE 2.-Price per bale to nearest dollar, based on 1956-57 average spot quota

EXHIBIT 1

The following is an excerpt from material presented by the American Cotton Manufacturers Association to the National Cotton Council as a basis for the resolution by that body in its 1957 meeting. This material seems significant in regard to the question raised in connection with reclassification of cotton loan stocks:

"The Government sales program inaugurated last spring placed in the mills considerable quantities of cotton from the CCC stocks and afforded the mills an opportunity to examine in large quantities and first hand the nature of this cotton coming out of storage. Extensive discoloration of this cotton from some areas has been noted and it is even more disturbing to find that there has been excessive deterioration in the length and breaking strength of large quantities of this cotton. It is now well known that the Commodity Credit Corporation has paid tremendous claims for the deterioration in quality of this cotton when it was reclassed by them, but even considering the reduced class many mills have found this cotton highly unsatisfactory from a spinning standpoint. As a result everyone in the cotton trade is suffering a double loss, first as taxpayers and second in our competitive position with synthetics."

Mr. WHITTEN. The other thing, I was wondering what action the committee might take along this line. It is my information that in many of the mills, due to putting in better types of cleaners, dryers, bleachers, or whatever it is, different equipment, the present class of cotton is not responsive to its use. For that reason a further study should be made as to whether your classing should not be changed. Now, in my section of the country there is great complaint because up until this year spotted cotton had been classed at a given grade which led to price supports at a certain level. This year, because of change in the classing, cotton with spots was downgraded to the point that it resulted in a price support loss to the farmer of approximately $30 a bale.

Are you familiar with that?

Mr. McLAIN. Yes, sir.

Mr. WHITTEN. What was the occasion for that change in the Department's policy?

Mr. MCLAIN. I am acquainted with the complaint because I have seen some letters on it, but I think the people that are familiar with why, ought to respond to this and we will put it in the record. I do not feel capable of doing it myself, Mr. Whitten, but we will be glad to furnish it for the record and for you personally.

(The following information was subsequently supplied:)

There has been no change in the cotton standards since 1953. During all of this period the classers have been operating under instructions to class strictly against such standards.

Mr. WHITTEN. That is all on a general basis.

Mr. Marshall.

DISPOSITION OF COMMODITY CREDIT STOCKS

Mr. MARSHALL. Mr. Secretary and gentlemen, we would like to have placed in the record a table that would show the disposal of the Commodity Credit stocks upon the domestic market, showing, in the various categories, the inventory value and the amount received and whether it was sold at a profit or loss.

Mr. MCLAIN. Yes.

(The table referred to is as follows:)

Domestic dispositions of price-support commodities by fiscal years, July 1, 1952, to Dec. 31, 1957

COMMODITY SUPPORT LEVEL, SUPPORT PRICE AND PRODUCTION

Mr. MARSHALL. Also, how many commodities do we have direct price supports for?

Mr. MCLAIN. We have the basics and all the feed grains and oil seeds, honey and tung nuts, dairy products, which is not a basic, in No. 17 I think it is.

Mr. MARSHALL. Since there is always quite a lot of discussion as to the effect of lowering price support, I am wondering if it might not be possible to place in the record the production of these commodities at the time that the price support was lowered and what the experience was in ordering that price support, say at the time and thereafter. That should give a person an opportunity to

Mr. MCLAIN. We will be glad if you tell us what' years you want. Mr. MARSHALL. Well, you have various times that you have lowered price supports.

Taking the production of that year and then the year following and see what the production was.

Mr. McLAIN. We will be glad to do so.

You indicated-wheat for instance, we lowered the price support to $2. What was the year before. It was over $2. You just tell us which years you want and

we will be glad to furnish the record.

Mr. MARSHALL. You did not lower the price support on these commodities all the same year?

Mr. McLAIN. No, that is right.

Mr. MARSHALL. And what I was requesting would be the first time they were reduced.

Mr. McLAIN. All right.

Mr. MARSHALL. Then what the experience was after a year.

Mr. MCLAIN. We will be glad to furnish that.

It will be different for different commodities.

Mr. MARSHALL. That is right. And that with varying supports. Mr. MCLAIN. Yes.

(The information referred to is as follows:)