Mr. WHITTEN. And what total payments have you made out of the Treasury at this point? Mr. BEACH. In the fiscal year 1956, we made no program payments, but had administrative expense of $2 million. In the 1957 marketing year we made payments of $57,657,229-in the fiscal year 1957-and the estimate for the fiscal year 1958 is $53,100,000. Mr. WHITTEN. Why does it run around $50 million for 2 of those years, yet you didn't have to make any in the other? Mr. BEACH. The program didn't get started. Mr. WHITTEN. Well, I thought you said you did make payments in 1956. Mr. BEACH. No, sir. Expenses were incurred in the fiscal year 1956, but no payments were made in that year. Mr. WHITTEN. I see. Again, is the basis for that act to maintain the income of those engaged in wool growing, or is it for the purpose of promoting a permanent supply? What is the basis for the legislation? Mr. MCLAIN. I think we can quote from the act itself, Mr. Whitten. It is pretty clear. Go ahead, Bob. Mr. BEACH. Basically it is to increase the supply of wool to an annual production of 300 million pounds and to provide for national security and general welfare by assuring a domestic supply of a commodity that is in short supply here as far as domestic production is concerned. Mr. HORAN. How short is the supply of wool? Mr. MCLAIN. Near a third, domestic production is just right in the neighborhood of a third of total needs. Mr. WHITTEN. Those that point to the Wool Act and point to the Sugar Act as being the basis of justifying compensatory payments need to point out that these are commodities where we are in short supply and we have a source of these funds. Mr. MCLAIN. That is right. Mr. WHITTEN. Now, with regard to the Wool Act, what is the payment rate? Mr. BEACH. For 1957, 62 cents per pound is the support price. Mr. WHITTEN. Do you operate this through a capital fund, a revolving fund, or anything of the sort? Mr. BEACH. We pay these costs out of the Commodity Credit Corporation funds and set up receivables against the National Wool Act. Mr. WHITTEN. And that Wool Act is based on import duties on wools coming into this country? Mr. BEACH. The limitations on payments are based on wool import duties on wool coming into this country. There is another limitation that restricts the amount that CCC may be reimbursed. Mr. WHITTEN. What is that limit? Mr. BEACH. $30 million; that is the reason for this. Mr. WHITTEN. In other words, you lack about $20 million of collecting as much as you pay out next year? Mr. BEACH. That is correct. Mr. WHITTEN. Is that the limit? Do you have a table showing what our collections have been as well as our payments? Mr. BEACH. Yes; we have a table that summarizes that. Mr. WHITTEN. We would like to have that included in the record at this point. (The information requested follows:) Actual and estimated incentive payments compared with limitation 70 percent of customs receipts on wool: Jan. 1, 1953, to Dec. 31, 1955 (actual) Total through calendar year 1957. Payments in fiscal year 1957 (actual) _ _ _ Balance of limitation available after 1955 marketing year Jan. 1, 1957, to Dec. 31, 1957 (estimate) (available for reimbursement to CCC in fiscal year 1959). Jan. 1, 1956, to Dec. 31, 1956 (actual) (available for reimbursement to CCC in fiscal year 1958) $90, 977, 826 29, 671, 679 30, 000, 000 1955 marketing year: 150, 649, 505 -57, 621, 059 93, 028, 446 32, 000, 000 -53, 100, 000 71, 928, 446 8, 000, 000 -28, 500, 000 70 percent of estimated customs receipts on wool-calendar year 1958 (available for reimbursement to CCC in fiscal year 1960).. 1956 marketing year: Payments in fiscal year 1958 (estimate). Balance of limitation available after 1956 marketing year 70 percent of estimated customs receipts on wool, Jan. 1 to Mar. 1957 marketing year: Payments in fiscal year 1959 (estimate) - - - Balance of limitation available after 1957 marketing year 1958 marketing year: Payments in fiscal year 1960 (estimate) Balance of limitation unused___. Mr. WHITTEN. Briefly, tell us how they compare. 51, 428, 446 -36, 000, 000 15, 428, 446 Mr. BEACH. In the period January 1, 1953, through December 31, 1955, 70 percent of the customs receipts on wool amounted to $90,977,000, and then during the calendar year 1956 they amounted to $29,671,000 and the estimate for the calendar year 1957 was $30 million. Mr. WHITTEN. Now by paying to the wool producers more money than you can recover, in effect isn't that a set-aside of section 32 funds to wool? Normally on import duties, 30 percent would be set aside. Mr. BEACH. This is the other 70 percent of the duties on wool. Mr. WHITTEN. It does not affect section 32. Mr. BEACH. No; it does not affect section 32. Mr. WHITTEN. Mr. Marshall. PROGRAM PROMOTION Mr. MARSHALL. I notice that in your justification that for the 1955 wool program there was deducted for promotion purposes $3,098,904 and in the 1956 program there was $3,052,070 deducted. What happens to these funds? Mr. BEACH. Those funds are deducted for the conduct of an extensive advertising sales production and promotional market development program for wool, mohair, sheep, and goats. This deduction was made in accordance with a referendum that was held among the producers in August 1955. More than two-thirds of the producers voted to have this deduction made from the payments due them under the Wool Act. Mr. MARSHALL. Who are these payments made to? Mr. BEACH. Well, they are paid to the agreement is entered into with the secretary of the American Sheep Producers Council, Inc. Mr. MARSHALL. Does the Department audit these funds in any way? Mr. BEACH. I am sure they will be audited. I can't say whether they have yet been audited for the year. Mr. MARSHALL. What is the balance of the funds at the present time? Mr. BEACH. The total amount of the deductions would be made available to Mr. MARSHALL. No, no; the balance. Mr. GRANT. Mr. Marshall, we don't have that balance available but I will be glad to get it and insert it in the record. In response to your other question these accounts are audited by the Internal Audit Division of the Agricultural Marketing Service. Since that is under the Agricultural Marketing Service I would have to get the balance from them. (The information requested is as follows:) The American Sheep Producers Council was organized pursuant to section 708 of the National Wool Act to conduct advertising and sales promotion programs for lamb and wool. The accounts of the council are audited at the close of the fiscal year, such audits having been made as of June 30, 1956 and 1957. A cash audit was made as of fe ruary 11, 1958, which disclosed that cash of the council on hand as of that date was in the amount of $36,130.08 and that investments in United States securities were valued at $2,975,558.23. The audit, however, did not disclose outstanding commitments in terms of advertising contracts. IMPORTS OF LOW GRADE WOOL Mr. HORAN. What effect will the new bill we passed here about 2 or 3 weeks ago providing for imports of low-grade wool for carpet manufacturing have on this program? Mr. BERGER. I don't think it will have any particular effect. Mr. HORAN. That is all, Mr. Chairman. |