Mr. MARSHALL. Yes, sir. Senator BYRNES. The only way the Department then could buy elsewhere would be to say that they could not procure in the United States clothing in sufficient quantities as and when needed. Mr. MARSHALL. That the necessary quantities were not available; yes, sir. Senator BYRNES. That is the language, "sufficient quantities as and when needed." Mr. MARSHALL. That is my understanding. Senator BYRNES. And they would have to make that finding? QUESTION OF COMPLAINT UNDER THE BUY-AMERICAN ACT Senator MCKELLAR. Now, may I ask you a question? Have you or your association any complaint of what has been done by the Army and Navy and by the Government in the procurement of woolen articles under what is known as the Buy American Act or law which is now in existence? You have been operating in this crisis for more than a year under that law, and during that time wool has advanced and woolen clothing has advanced, and advanced considerably, but not inordinately, perhaps. Have you any complaint against the departments or the Government under the operation of that buy-American law? Mr. MARSHALL. I have just stated the only thing that could properly be called a complaint. I have said that ever since that act was passed the War Department and the Navy have adhered strictly to the policy of buying goods made only of American products until November 6. And when they abandoned it we did not complain and are not complaining of their having abandoned it at that time. But the complaint does come into the situation when our clip comes on the market and there is an abundant supply. But the only complaint-to specifically answer your question—is that when these recent bids were submitted, the War Department said there would be a differential in favor of domestic wool, but the mill bidders could not know or have any conception of what that differential would be. Therefore, as I understand it, they did not bid on such a large proportion of domestic wool as they reasonably could have been expected to do if they had had some idea of what that differential was to be. Senator MCKELLAR. As I understand you, your argument depends upon what the attitude may be with respect to the incoming clip of wool which will come in the spring of the year? Mr. MARSHALL. Yes, sir. Senator MCKELLAR. If wool continues to advance reasonably, or even if it doesn't go down, wouldn't it be better for you to make your contest about changing the law after you are hurt? It seems that everything that has been done by the Department, even the announcing of the pronouncement that they were going to buy foreign woolsas they did in November, I believe you said-even that didn't make the price of wool go down; but it has gone up some under the operation of this law. It does seem to me that perhaps you are complaining before you are hurt. Mr. MARSHALL. I think I can give you a further fact which I think you will find may be worth bringing to the attention of the other members of the committee. Senator McKellar referred to the prospect of continued improvement in the price of wool. But today there is no open competitive market. The British Government has in its possession all the wool of Australia and New Zealand. South America is a free continent as to its wool market, in theory only. The British shipped into this country in January 40,000,000 pounds, and larger quantities all through last year. The British Government has changed its prices only once since September 1939, the price at which it was selling wool, which is 90 cents to a dollar, and they have never raised it. The British Government has put a ceiling on the American market for wool, and you don't need to be afraid of any running-away prices as long as the British Government continues that policy. They are controlling the market in this country. Senator MCKELLAR. And you are getting a proper price and even an increased price under these circumstances. All I want is to be certain that we don't spiral the price, to the detriment of the consuming public, and especially the Army and Navy, at this time. Mr. MARSHALL. Well, John Bull has that thoroughly in hand for you, Senator. Senator MCKELLAR. We are trying to do the job here, ourselves, and not depending upon John Bull or anybody else. Mr. MARSHALL. Thank you. PARITY PRICE OF WOOL Senator OVERTON. What is the parity price of wool under existing law? Mr. MARSHALL. Twenty-three cents, to which I don't agree. Senator OVERTON. And what is the actual market price today? Mr. MARSHALL. Thirty to thirty-five cents. But don't let me be committed to any degree of acceptance of that period of 1910 to 1914 for parity on wool. If it were doing as the Department of Agriculture has been doing with other products, the price today would be 37 cents. Senator BYRNES. It would be near parity, if changed as you think it should be changed? Mr. MARSHALL. Touching it. Senator BYRNES. Of course, I know there is always a difference about parity. Cotton was 1512 cents, and when that was established, the cotton farmers wanted another period. It is all so debatable. Mr. MARSHALL. Also I want to say this, Senator, that they have tobacco not only in Kentucky and other States, but I believe Tennessee has some of the tobacco; and the parity price has been changed twice from the original act of 1938. Senator MCKELLAR. But they don't have parity, while the wools do have parity. Mr. MARSHALL. I don't know about that; but the base period for tobacco has been changed twice by Congress, as we want to do with wol. I will talk parity with you if you will give me that period. 303230-41 DISCRETION IN PURCHASING FOREIGN GOODS Senator OVERTON. The only discretion vested in the Army and the Navy to purchase foreign goods under this provision of the House bill is when they are not grown or produced in sufficient quantities? Mr. MARSHALL. That is the way I understand it. Senator BROOKS. And that is the way you want it? Mr. MARSHALL. Yes, sir. Senator OVERTON. You don't want any limitation, or to give them any discretion or authority when prices are unreasonable? Mr. MARSHALL. If and when that time arrives, we will talk about it. Senator OVERTON. I am not talking so much about wool, but about cotton or any other product. Mr. MARSHALL. I am satisfied with that provision the way it is. Senator OVERTON. Regardless of price? BRITISH GOVERNMENT HOLDING CEILING OVER OUR WOOL MARKET Mr. MARSHALL. Knowing that only half of the domestic clip, or less, can go into the Government requirements, and that the British Government is holding a ceiling over our wool market. Senator ADAMS. Why should the British Government hold a ceiling over our wool market? Why shouldn't they be interested in having the price going up? Mr. MARSHALL. Well, Senator, I had a visit with the Australian Commissioner last Saturday on that question, and they are very fearful. Somebody has shifted them off along the old, mistaken idea that if the wool goes too high, the mills will turn to rayon. And I asked, "Would the difference between $1.10 and $1 at Boston make them do that?" But somebody sold them on that--and I know who it was-but I am sorry they did it. AMOUNT OF DOMESTIC WOOL IN HANDS OF PRODUCERS AND MANUFACTURERS AT PRESENT TIME Senator BYRNES. Colonel, have you ever found a condition in this country when you couldn't find wool produced in sufficient quantities for Army purposes? Colonel HARDIGG. I understand there were not more than 40 to 50 million pounds of domestic wool of all kinds left in the country when we started to ask for both, and the price had gone just a little wild before that. When you would get down to buy the last few million pounds of domestic wool, I don't know what you would have to pay for it. Senator BYRNES. You advertised for the wool? Colonel HARDIGG. Yes. Senator BYRNES. And you could not get anyone to bid on that cloth? Colonel HARDIGG. The prices had been a little unruly in the domestic wool market on the last buy, sir, and the best information we could get was that there were not more than 40 to 50 million pounds of domestic wool left, of all grades, in the United States. And since we had further large orders, it was necessary that we take foreign, or else the price would go entirely out of line. Mr. Marshall, is 40 to 50 million pounds a fair figure for what is left? Mr. MARSHALL. I think that is about what it is in the hands of dealers. But, if I recall rightly, there was a considerably larger amount already in the hands of manufacturers. Senator BROOKS. Senator Byrnes, as to your question, as I see it, when it got to that point when they called in the representatives of the American wool growers-they were perfectly willing to cooperate with you, Colonel? Colonel HARDIGG. I think Mr. Marshall stated a while ago, no objection was made. Senator BROOKS. And I think that is evidence of our good faith here in this country. I don't see why the British should be putting a ceiling on our market at the present time, with their supply landed here, and we are spending $7,000,000,000 to help them, to give them something for nothing. Senator BYRNES. The effect of the ceiling goes not only to the Army and the Navy, but to the buying public. Senator BROOKS. The effect is to keep their market open. Senator BYRNES. And it affects John Smith as well as John Bull. Senator ADAMS. All right, Senator Butler. Senator BUTLER. Senator, you have had a little longer session this morning that was anticipated; so we will endeavor to make our appearance extremely short. I have nothing to say myself, but I am sponsor for a couple of witnesses I would like to have you put on for a few minutes-Mr. E. A. Kelloway, of Omaha, secretary of the Omaha Livestock Exchange, a farmer and a producer; and Dr. E. W. Sheets, secretary of the United States Live Stock Association. Senator ADAMS. Do they want to testify in reference to the wool or the beef? Senator BUTLER. It will be mostly meat products. Senator ADAMS. Then may I ask Mr. Marshall, before leaving the wool, did Mr. Wilson or anybody else want to add anything on the subject of wool? Mr. MARSHALL. Nothing more, Senator; thank you very much. Senator BROOKS. May I ask a question of Senator Butler? The other day, when the controversy arose, Senator O'Mahoney read a wire, I think from the American National Live Stock Association, and you were speaking as having received a communication from the United States-and what is the rest of it? Senator BUTLER. The United States Live Stock Association, and that will be the next gentleman who will appear, Senator. Senator BROOKS. Thank you very much. I wanted to get the names correctly. Senator BUTLER. His name is Dr. E. W. Sheets, who is secretary of the association. Senator, this is Mr. Kelloway. QUARTERMASTER CORPS CLOTHING AND EQUIPAGE, ARMY FORBIDDING THE PURCHASE OF FOOD OR CLOTHING NOT GROWN OR PRODUCED IN THE UNITED STATES STATEMENT OF E. A. KELLOWAY, REPRESENTING THE OMAHA LIVESTOCK EXCHANGE Mr. KELLOWAY. I am secretary of the Omaha Livestock Exchange, but primarily a feeder of livestock-cattle and hogs, principally. I own farms and am a producer of beef. In the feed lots in the Corn Belt territory today there is a larger than normal supply of meat-producing animals, cattle especially. There is a large supply of hogs, but a larger than normal supply of cattle. These cattle were put into the feed lots, first, because of the large available supply of feed in the Corn Belt States, and, second, because of the desire on the part of the Corn Belt farmer to cooperate in the defense program. The price the Corn Belt feeder pays for his stocker and feeder cattle to put in his feed lot is determined by the value of fat or beef cattle. at the time he makes his purchase of stocker and feeder cattle, and the prospective value of the cattle at the time they are marketed. Most cattle are in the feed lot from 6 months to a year. I think you will agree these are abnormal times, and as the result of these abnormal times the feeders in the Corn Belt territory put their stock and feeder cattle in the feed lot at a higher price than normal. As a matter of fact, today with the present stocker and feeder market, the cattle coming from the range and going into the feed lots for the purpose of fattening for beef are $1 to $2 a hundredweight out of line with the fat-cattle market. But anyone who buys stocker and feeder cattle today is forewarned on the condition which might exist. But I am interested in the man who under what was to be normal conditions put into the feeder lot a large supply of stocker and feeder cattle at a price he thought was reasonable. PRICES OF STOCKER AND FEEDER CATTLE OUT OF LINE WITH FAT-CALF MARKET Senator BROOKS. How much out of line, do you say? Mr. KELLOWAY. At the present time the stocker and feeder cattle are $1 to $2 out of line with your fat-cattle market, and any lowering of the present fat-cattle market would create a catastrophe and would be the ruination of the feeders of cattle in the Corn Belt territory. It would bring bankruptcy to your feeders of cattle in that territory. It would result in a condition equivalent to 1920 and 1921. And that is the reason that I am here today, appearing on behalf of that group of individuals. ALL STOCKMEN IN CORN BELT WANT IS REASONABLE PROFIT We in the Corn Belt do not ask that we be paid prices out of proportion with the cost of production. All we ask is an opportunity to |