Hearings

Now, if we make this buy at that time, Senator, before the shearing has hardly begun, I am informed, and I believe reliably, that from ninety to one hundred million pounds of wool has been sold because of this large buy which is going on, in addition to the other purchases. And there was so little of last year's crop left in any area, that otherwise we would have gotten a very small amount of domestic wool on this offer. Now, had we waited until the American clip was all available before we went out for this buy, it would have passed into the hands of the dealers, and we would have been in the same position we were last year. But this was so large a buy that if we had to make it exclusively domestic I do not know what we would have had to do. It would have forced contracting with them directly in order to bring it in.

BIDS ASKED FOR ALL-DOMESTIC, ALL-FOREIGN, AND MIXTURE OF FOREIGN AND DOMESTIC

Senator ADAMS. In your advertisement for bids, it was an open bidding, regardless of the source of the wool?

Colonel HARDIGG. We advertised for the three points: All domestic, all foreign, or any mixture of domestic and foreign. We then gave preference to domestic wool.

Senator ADAMS. The figures you gave are on each one?

Colonel HARDIGG. That is the way it was set up-to buy on both. Senator THOMAS of Idaho. What preference did you finally have? You told me.

Colonel HARDIGG. I have this preference.

Senator THOMAS of Idaho. Yes.

Colonel HARDIGG. If I may take a moment of time, I would like to go into the method of determining this preference. Senator ADAMS. All right.

METHOD OF DETERMINING DOMESTIC PREFERENCE

Colonel HARDIGG. Over a series of years from 1924 to 1939, 8 cents, 6 cents, 5 cents, and 5 cents are the approximate amounts applied. Duty-paid foreign classed wools average higher in price than graded domestic and territorial wool, and fine off-average, three-eighths and one-quarter average combing grade.

Now, the wool duty was fully effective in raising the domestic price. In other words, the domestic usually sells below the foreign, because it has not the same working qualities; so the amount of the duties made the domestic and the foreign cost the same amount.

Now, the prices on March 1 of these four domestic grades averaged $1.09, $1, 89 cents, and 84 cents; and the territorial fine combing averaged $1.06.

The reason that price is given, sir, is because that is what our serge usually comes from.

Now, similarly classed foreign wools will quote equivalent to dutypaid prices of $1.07, 9912 cents, 90 cents, and 84 cents; and South African short French combing, $1.03. Now, the South African sells at slight discount below the Australian, and the comparable prices to our $1.06 on our serge; that is, on the domestic, would be $1.04 to $1.05.

The basis on which this was made was to maintain the present prices of wool, which we believe to be fair. So, in order to do that, we took 8 cents off those and added to the difference in price of approximately 1 cent, and we gave a preference of 9 cents per pound on the fine wools; that is 64 grades in each yard. Now, you will notice

Senator ADAMS. That is, the differential was 9 cents?

Colonel HARDIGG. Yes, sir; that was the basis to maintain the present prices as of March 1, which we believe to be fair to everyone. Senator MCKELLAR. Are they equal to parity prices or greater? Colonel HARDIGG. Senator, I do not believe I am expert enough; I would like to ask Mr. Marshall that question.

Senator BYRNES. You are not figuring on the price of the goods? Colonel HARDIGG. No; on the pound of clean wool it takes to make the goods.

Senator BYRNES. Oh.

Colonel HARDIGG. Yes. We had it on a price basis, and it was not entirely fair, because they bid on the manufactured goods and not on the wool.

Senator BYRNES. I think that is right.

Colonel HARDIGG. So this time they bid right on the wool itself.
Senator BYRNES. Well, that is fairer.

Senator MCKELLAR. You do not have the comparative figures?
Colonel HARDIGG. No, sir; we have not worked that out.

Senator MCKELLAR. We can get it from someone.

Colonel HARDIGG. I believe I can say that the $1.09 is equivalent to 37 or 38 cents; but Mr. Marshall knows so much more about it than I do, sir.

Senator MCKELLAR. All right.

Colonel HARDIGG. Now, the next lower grade, 60, was 6 cents; so the 99-cent foreign wool to average up with the American wool had 7 cents added to it. And those below 60, the lower grades of wool, was 5 cents, and with 1 cent made it 6 cents a pound on the lower grades. Senator THOMAS of Oklahoma. Mr. Chairman, I want to clear up one point.

Senator ADAMS. All right.

WAR DEPARTMENT DOES NOT BUY WOOL AS SUCH

Senator THOMAS of Oklahoma. It was testified yesterday the War Department has used, I think, 131,000,000 pounds of wool. I want to know if the War Department buys wool, as such, or do you take that much wool to make the cloth that you purchase?

Colonel HARDIGG. We have not bought any wool as such.

Senator THOMAS of Oklahoma. You do not buy the wool?
Colonel HARDIGG. No.

Senator THOMAS of Oklahoma. You just buy the finished product for so much, and the product cost is on the basis of what the wool cost? Colonel HARDIGG. That is right; and those estimates vary, and they are bid on according to the way they are made.

If you would like, I have a table made up by the Tariff Commission that I would be perfectly glad to leave with the committee.

Senator THOMAS of Oklahoma. If it would be agreeable, I suggest that be placed in the record for those who make a study of this matter. (The table is in full, as follows:)