would have a support level of some 6 or 7 cents lower than the 1956 and 1957 support level.

Mr. McINTIRE. What would that be in relation to their own parity, percentagewise?

In other words, what I am getting at is this: Let us say this legislation were enacted, so that it were applicable to the 1957 crop, and it had a floor in it of 90 percent of parity, and it was to remove from the burley tie-in. What would the price be in 1957?

Mr. WILLIAMS. Between 4 and 5 cents less.

Mr. McINTIRE. Between 4 and 5 cents less?
Mr. WILLIAMS. Yes, sir.

Mr. McINTIRE. That would have been 90 percent of its own parity?
Mr. WILLIAM. Yes, sir.

Mr. McINTIRE. I just thought it would be good to have that in the record.

Mr. ABBITT. Have we overlooked any witness's testimony? Is there anyone who wants to testify?

Sir?

STATEMENT OF BAILEY GUARD, OFFICE OF SENATOR JOHN SHERMAN COOPER

Mr. GUARD. Mr. Chairman, my name is Bailey Guard. I am in the Office of Senator Cooper.

Mr. ABBITT. We understand that. I intended to call on you but we got to this roundtable discussion.

Senator Cooper, as you know, is vitally interested in all tobacco legislation. He was inadvertently detained.

We are glad to hear from you as to why the Senator could not be here.

Mr. GUARD. That is right. He just wanted me to express his regrets. He wanted very much to come to this hearing this morning, and he did have to attend a meeting of the Senate Labor and Public Welfare Committee, of which he is a member.

Now, the Senator is sending you a letter, Mr. Chairman, which I have with me, and which he would very much appreciate having read into the record, or made a part of the record, and he would also like to have an opportunity to amplify or to supplement this statement after he has had a chance to study the testimony that was given here today.

Mr. ABBITT. We will be glad for him to do that. And we will be glad to have you read it or put it in the record, whichever you prefer, Mr. Guard.

It is not very long.
That will be fine.

Mr. GUARD. I will be glad to do either. Mr. ABBITT. Suppose you read it to us. For the benefit of the people of Kentucky, Senator Cooper was here when we had the proponents of the bill. He did not want to make a statement at that time, until he talked it over with your people, and heard the testimony.

We are delighted to have you make that statement, for the Senator.

Mr. GUARD (reading):

Hon. WATKINS M. ABBITT,

MAY 1, 1957.

Chairman, Subcommittee on Tobacco, Committee on Agriculture,

House of Representatives, Washington, D. C.

DEAR MR. ABBITT: I am extremely sorry that I will not be able to attend the hearing of your committee this morning on H. R. 5002, as I had planned to do. A meeting of the Subcommittee on Railroad Retirement of the Senate Committee on Labor and Public Welfare is being held at the same time. As I am a member of this subcommittee, and also because it is considering a bill in which I have joined, I have no alternative but to attend that meeting first. In any event, you may be sure that I will follow the testimony on H. R. 5002 and that I will carefully study the action of the subcommittee in the event this matter comes before the Senate.

I was able to attend the first meeting of the hearings on H. R. 5002 and heard some of the testimony in support of the bill. It is my understanding thtt the bill proposes to amend section 301 (b) (15) of the Agricultural Adjustment Act of 1938, as amended, by adding the following proviso: "Provided further, That, beginning with the 1958 crop, Viriginia fire-cured tobacco, type 21, shall be treated as a 'kind of tobacco'."

This amendment, if adopted, would permit the establishment of quotas, separate from other types of dark tobacco.

It would also amend section 2 of the act of July 28, 1945 (59 Stat. 506), by adding the following proviso: "Provided, That, beginning with the 1957 crop, these provisions shall not be applicable to Virginia Fire-Cured tobacco, type 21." The effect of the last amendment would be to exclude type 21 from the requirement that its level of price support be related to that of burley tobacco. It is currently fixed at 75 percent of burley supports.

The proposal raises several questions which I believe should be considered very carefully by the committee. One of them relates to the effect the passage of the bill would have upon other types of dark tobacco. If the amendment should be adopted, I understand that the price support level of Virginia type 21 would fall approximately 4 cents under price support levels for other types of dark tobacco-such as those grown in Kentucky. As other dark-fired and air-cured tobaccos would continue to be related in their price support levels to burley tobacco, at percentages fixed by law, the practical effect of H. R. 5002 would be to place Virginia fire-cured tobacco, type 21, in an advantageous competitive position in relation to other types of dark tobacco. This would be so because the price support level of type 21 would be 4 or 5 cents lower, and presumably the market price would also be lower. Further, if there should be an increased demand for type 21, because of its price advantage, it might result in larger production quotas for this type of tobacco.

I do not believe the committee should recommend the passage of this bill without full consideration of the effect that it would have upon other types of dark tobacco. Whatever might be the advantages for type 21, the passage of the bill would seriously affect the price and production relationships of all types of dark tobacco. It seems to me that it would also be an opening wedge or means of breaking down price supports for dark tobaccos, for other types might then be forced to seek competitive advantages, to the detriment of the tobacco growers.

We recognize that there are factors existing today which affect unfavorably the export of tobacco of all types. A study of the export problems of dark tobaccos is neecessary, and I do not believe that H. R. 5002, relating to only one type of tobacco, should be passed without consideration being given to its effect upon the export problems of other types of dark tobacco.

The consequences of the passage of this bill on price supports would be far reaching, and deserve the most thorough consideration of the committees of the Congress and all groups of tobacco growers.

As the committee well knows, tobacco is the only farm commodity which enjoys a fixed support price. It has been able to maintain this unique position because of the success of its program and the unity and cooperation of tobacco growers. I do not believe the tobacco growers of whatever type want to take any step which would endanger this position which they enjoy without the fullest consideration. It might be an opening wedge to affect the price support structure which has helped the tobacco grower so much.

I do not think it is necessary for me to add that legislation which affects one type of tobacco usually affect others as well. This principle is well recognized. In approaching problems facing one or several of the types of dark tobaccos, I know your committee will take pains to arrive at recommendations that will not give any one type unfair advantage in the market place at the expense of growers of other types or other areas.

Permit me to thank you again for your kindness in extending me an invitation to meet with your committee while H. R. 5002 is under consideration. I expect to continue to keep in close touch with tobacco growers of my own State regarding this legislation and I thank you again for the invitation to make a statement to your committee.

With kindest regards, I am

Sincerely yours,

JOHN SHERMAN COOPER.

Mr. ABBITT. I wish you would thank the Senator on behalf of the committee.

Without objection, he may state his remarks, or file any further statement, or, if he prefers, appear before the committee.

Thank you for coming here.

Mr. GUARD. Thank you.

Mr. ABBITT. The committee will stand adjourned.

(Whereupon, at 1:45 p. m., Wednesday, May 1, 1957, the subcommittee recessed, subject to the call of the Chair.)

TOBACCO-VIRGINIA FIRE-CURED AND SUN-CURED

WEDNESDAY, MAY 22, 1957

HOUSE OF REPRESENTATIVES,

TOBACCO SUBCOMMITTEE OF THE
COMMITTEE ON AGRICULTURE,
Washington, D. C.

The subcommittee met, pursuant to notice, in room 1308, New House Office Building, at 10 a. m., Hon. Watkins M. Abbitt (chairman of the subcommittee) presiding.

Subcommittee members present: Representatives Abbitt (presiding), McMillan, Watts, and Matthews.

Staff members present: Mabel C. Downey, clerk, and John Heimburger, counsel.

Mr. ABBITT. The committee will please be in order. The committee meets this morning to consider H. R. 7259, a bill relating to marketing quotas and price supports for fire-cured, dark air-cured, and Virginia sun-cured tobacco.

(H. R. 7259 is as follows:)

[H. R. 7259 (supersedes H. R. 5002), 85th Cong., 1st sess.]

A BILL Relating to marketing quotas and price supports for fire-cured, dark air-cured, and Virginia sun-cured tobacco

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 301 (b) (15) of the Agricultural Adjustment Act of 1938, as amended, is amended by adding the following new proviso at the end thereof: "Provided further, That with respect to the 1958 and subsequent crops, type 21 (Virginia) fire-cured tobacco shall be treated as a 'kind of tobacco' for the purposes of all of the provisions of this title, except that for the purposes of section 312 (c) of this title, types 21, 22, and 23, fire-cured tobacco shall be treated as one 'kind of tobacco.'"

SEC. 2. Section 2 of the Act of July 28, 1945 (59 Stat. 506), is amended by adding the following proviso: "Provided, That, beginning with the 1958 crop, the levels of support for such kinds of tobacco shall not exceed the higher of (a) the level applicable to the 1957 crop or (b) 90 per centum of the parity price."

Mr. ABBITT. Mr. Bass, member of the committee, communicated with me and stated that he could not be present but would like to be recorded by proxy and vote for H. R. 7259. Mr. McIntire, member of the committee, informed me that he had an appointment in his office and thereafter had to appear before another committee. Mr. Tewes, member of the committee, stated that he had to be present at a Dairy Subcommittee meeting.

Without objection we will insert in the record a copy of the report submitted by the Department of Agriculture on H. R. 7259.

123

(The report referred to is as follows:)

DEPARTMENT OF AGRICULTURE,
Washington, D. C., May 22, 1957.

Hon. HAROLD D. COOLEY,

Committee on Agriculture,

House of Representatives.

DEAR CONGRESSMAN COOLEY: This is in reply to your request of May 9, 1957, for a report on H. R. 7259, a bill to amend section 301 of the Agricultural Adjustment Act of 1938, as amended, so as to make Virginia fire-cured tobacco, type 21, a separate kind of tobacco except for referendum purposes and to amend the act of July 28, 1945 (Public Law 163, 79th Cong., 59 Stat. 506), so as to provide that price-support levels for fire-cured, dark air-cured, and sun-cured tobacco shall not be increased above the level prevailing for the 1957 crop by reason of provisions of Public Law 163 which tie the support levels for these tobaccos to the burley support level.

As we understand it, this bill is intended to supersede and replace H. R. 5002 upon which we reported March 29, 1957. As we indicated in that report, the separation of Virginia fire-cured tobacco from other fire-cured types for marketing quota purposes, while undesirable from an administrative standpoint, poses no significant administrative problem. The change incorporated in H. R. 7259 under which the separation would not be applicable for referendum purposes is a desirable one. Section 2 of H. R. 5002 provided for reduction of the support level for Virginia fire-cured tobacco to 90 percent of parity rather than a percentage of the burley support level. We indicated in our letter of March 29 that we would consider this a desirable corrective measure provided it was made applicable to other types of fire-cured, dark air-cured, and sun-cured tobacco. H. R. 7259 does not provide for this same degree of correction in that the 1957 support level is above 90 percent of parity, with the result that the prospects of placing the dark tobacco support program on a sound basis and of maintaining the export market for these kinds of tobacco will be reduced.

Although we believe that establishing the support level for these kinds of tobacco as a percentage of the burley support level is inherently inconsistent with the modernized parity concept, this bill provides a partial correction in that the possibility of further increases in the support levels because of unrelated supply and demand factors and market conditions is eliminated. Accordingly, the Department would favor passage of the bill.

The Bureau of the Budget advises that there is no objection to the submission of this report.

Sincerely yours,

TRUE D. MORSE, Acting Secretary.

Mr. WATTS. Mr. Chairman, I have received a telegram from Mr. C. W. Maloney, president, Stemming District Tobacco Association, and have also received joint resolutions endorsing H. R. 7259, adopted by Eastern Dark Fired Tobacco Growers' Association, Western Dark Fired Tobacco Growers Association, and the Stemming District Tobacco Association. I ask unanimous consent to insert in the record the telegram and the joint resolutions.

Mr. ABBITT. Without objection the telegram, letters, and joint resolutions will be made a part of the record.

(The material referred to is as follows:)

Congressman JOHN WATTS,

Washington, D. C.:

HENDERSON, KY., May 20, 1957.

The Dark Associations met in joint session in Hopkinsville, May 17, and endorsed H. R. 7259. Will send copy of resolution in detail. Please convey our action to Congressman Abbitt. Thanks for your help in our behalf.

C. W. MALONEY,

President, Stemming District Tobacco Association.