Mr. LINDSEY. How is that? Mr. JOHNSON. You are not getting enough of the type of tobacco that you want now? Mr. LINDSEY. No, sir. Mr. ABBITT. Did I understand you to say you had some people over in Rhodesia trying to find a substitute for Virginia tobacco? Mr. LINDSEY. Yes, sir. I have some friends over there now that buy tobacco on that market. Of course, if we can find a substitute for Virginia tobacco and they do not grow it in Virginia, we have to look somewhere for it. Mr. ABBITT. We certainly thank you for your fine statement and appreciate you coming up, Mr. Lindsey. I see Congressman Harrison is here. Mr. LINDSEY. Thank you, gentlemen. Mr. ABBITT. He asked for time to make a statement yesterday. He had some people out of his district that wanted to testify. Mr. Harrison has always cooperated with the committee, and he understands this problem. Congressman, we appreciate your coming around here and we are glad to hear from you. STATEMENT OF HON. BURR P. HARRISON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA Mr. HARRISON. Mr. Chairman, I have a statement that I would like to read, if the committee will permit me to do so. It is very short, sir. I am grateful to the subcommittee for the privilege of appearing briefly in support of H. R. 5002, introduced by my distinguished Virginia colleague, Mr. Abbitt. It cannot be denied that there is a good demand for type 21, but the growers of this type are placed at a distinct disadvantage, from the standpoint of acreage allotments, because of the bracketing of type 21 with type 22 and 23. Amherst and Nelson Counties, in the Seventh Congressional District of Virginia, produce approximately 13 percent of the State's production of type 21. This is a type of tobacco which has been in strong demand for many years, particularly for export. Because of the acreage restrictions, which have forced supply well below demand, longtime customers abroad have been obliged to seek substitutes in other markets. They admit these substitutes are not as good for their purposes as Virginia dark-fired tobacco, but they point out that a reliable, consistent supply is necessary to their manufacturing operations. There is no question that substantial differences in characteristics and in utility in the tobacco trade exist between type 21 on the one hand and types 22 and 23 on the other. What we have in the present situation, therefore, is that acreage allotments are set on the basis of production records and market demands for 3 types of tobacco considered as a unit, whereas the demand for only 1 of the 3 substantially exceeds the supply. This is type 21. The inevitable long-term effect will be the extinguishing of the demand for our type 21. Buyers are getting tired of insisting on the best when the availability of the best is so uncertain, and when repeated acreage cuts reduce instead of increase the supply. It might be like a Florida orange being forced to being sold under a California label, which naturally would be very disastrous to that State. It is my understanding that there have been instances of improper labeling, with a commingling of type 21 with types 22 and 23, described as "a blend of Virginia tobaccos," when such could not be the case, as only type 21 is a Virginia tobacco. The growers of Virginia dark-fired tobacco take pride in their product, Mr. Chairman, and they are asking here only that it be permitted to stand on its own feet, in order that it might protect its place in the specialty tobacco market without damaging the interests of any other domestic tobacco. I do hope this distinguished subcommittee will see the justice in their plea and report favorably on H. R. 5002. Mr. ABBITT. We do appreciate your appearing before the subcommittee, and thank you for your very enlightening statement. We deeply appreciate the interest you have shown in all the problems of this committee, and you have cooperated, not only with the subcommittee, but with the full Committee of Agriculture in the House of Representatives. Thank you so much. Mr. McINTIRE. Mr. Chairman, I do want to join with you in commending the expression of Mr. Harrison's very fine statement before the subcommittee. I would like to ask one question of Mr. Harrison: Do you think, from an administrative standpoint, that we are complicating the problems within the total commodity of tobacco by attempting to constantly refine, and in this instance, lay aside the type within a general type? Do you think administratively we are running into any complications doing that type of thing legislatively. Mr. HARRISON. My answer to that would be that a product should not be made to suffer by being grouped with a less popular product, unless the administration problems were such as to constitute a very, very serious problem. As I understand it, the best answer I could make to that is the letter which I understand has been inserted in the record yesterday. I have a copy of that letter. It is from the Department of Agriculture in which they indicate that there would be no such administrative problem. They are the ones who would have to administer it. Mr. ABBITT. Thank you so much. We will now hear from Mr. Dunnington. STATEMENT OF J. W. DUNNINGTON, A TOBACCO DEALER, PRESIDENT OF DUNNINGTON TOBACCO CO. Mr. DUNNINGTON. Mr. Chairman, and gentlemen of the committee. for the record's sake, my name is J. W. Dunnington, president of the Dunnington Tobacco Co., buyers of tobacco and exporters of tobacco, not a grower of tobacco. It is a privilege and a pleasure to appear here in behalf of the darkfired Virginia tobacco industry. I have been in the business for 46 years. I have handled all types of tobaccos produced in America, from one time to another. I have operated in Kentucky and Tennessee. I still buy Kentucky tobacco. The sample you saw on the table yesterday was purchased by me in Murray, Ky. The question was raised yesterday about the comparisons. I do not agree entirely with the Government grade that was on the tobacco when I received it. It was graded as a Government B-2F and was bought and shipped to me. The other grade of Virginia tobacco was also purchased as a Government B-2F-45, both of them being of the same length. I would like to talk to you mainly in regard to the quality and the character of tobacco. I think you have cross-questioned all of these manufacturers on exports, rather than the exporter himself, so I will not attempt to go into that too much unless you want it. But, there is a decided difference. There is no way to interchange or intermingle or blend these tobaccos without a change of the brand. All of you know the characteristics of Kentucky tobacco. I think you know the characteristics of Virginia tobacco. Kentucky is heavier, dark-fired, grown on stronger land, smoked anywhere from 2 weeks to 30 days consecutively, giving it a strong and an acid taste, which is liked in some countries, and in some not. It is my honest opinion that the Virginia farmer does not want to get from under the support program. He does not want to produce any more than the normal consumption of this type of tobacco, which last year, according to the Government records, was 12,700,000 pounds. There was no fear, and should be no fear in the hearts of my Kentucky friends, and I have many of them. I operated out there for years. I still do a little business out there through lots of my friends. I deeply regret that Homer Ellis, Clarence Maloney, and Mr. Hammack, and all of them, are not here today, in order that we could talk to each other, rather than be separated. There seems to be some fear on Mr. Watts' part and perhaps Mr. Bass', in regard to doing some harm to the Kentucky situation. If I thought that there was any harm coming out of it, out of this bill, H. R. 5002, I would not be here talking to you gentlemen. I am an old man, although I do not particularly feel it, and I expect to be here for many years to come, but I have tussled and toiled with the tobacco business for 46 years and I believe that I know the answers. I do not see why there is any reason to be much concerned over Kentucky and Tennessee when they are producing from 54 to 55 million pounds combined of types 22 and 23 each year against a total of 10,700,000 pounds of type 21. I do not think you boys in Kentucky-and I told my friend, Senator John Sherman Cooper day before yesterday that I thought this whole thing was largely a misunderstanding, that we were working under a misapprehension. They were looking for trouble and there was not any trouble there. Kentucky had an advantage. When I speak of Kentucky, I mean Tennessee and Kentucky, 22 and 23. They have the advantage. They have had the advantage pricewise. It has been brought out to you by several others prior to my getting on the floor, that they have had the advantage. But, I would like to point out to you and then give each one of you a copy, a matter which I think is convincing as possible, that there can be no harm from a pricewise standpoint, so far as Kentucky and Tennessee are concerned. I would like at this time to read this comparison, and give each one of you a copy. It is headed "A Comparison of Final Cost (When Dried and Packed) of Virginia and Kentucky Types Tobacco." A type of tobacco or grade of tobacco costing on the Virginia warehouse floor $32 with yield of 78 percent, makes the dry tobacco cost you $41.02. Because of the excessive moisture and it has a lot of moisture in it, it costs more to handle. It has to be handled quickly, immediately. A lot of it is dried with steam in order to take this excessive moisture out. Therefore, the charge is likely larger than Kentucky to handle. The charge to handle it is $6.50. That is what is charged by the Commodity Credit Corporation. That makes a total cost of $32 dark-fired Virginia tobacco $47.52. For Kentucky the floor cost is the same $32. Your Kentucky yield on a conservative basis is 95 percent. That makes the tobacco cost you $33.68. They do not have to dry this tobacco, normally. Sometimes it is different. It is mostly packed on the warehouse floor. Their charge is $5.50. The maximum total cost of Kentucky tobacco is $39.18, or a difference in favor of Kentucky and Tennessee of $8.34. Now, if we were to get off of parity, the 75 percent of burley, and Kentucky and Tennessee saw fit to remain, which I think they should not, but that is their business, in my judgment, but, if they did, approximately the overall support of Kentucky and Tennessee would be $39.50; Virginia would be $34.50, if it were on its own parity of the product. Figured on the same basis, the dark Virginia tobacco would cost. although it is supported at less money, $5 less. It would cost $50.73 packed in a hogshead. Kentucky and Tennessee supported at $5 above that would cost $47.08, or still a differential in favor of Kentucky and Tennessee of $3.65. I want to give one of these to each one of you, and let it go into the record, if you will. Mr. ABBITT. It may be filed with the record, without objection. (The information referred to follows:) A comparison of final cost (when dried and packed) of Virginia and Kentucky types tobacco Excess of final cost of dark Virginia over dark Kentucky with same If dark Virginia support price is $34.50, f. o. b. cost is__ Final cost__ 8.34 50.73 47.08 3.6 The final cost of Virginia tobacco will be $3.65 per 100 pounds more than Kentucky tobacco, with Kentucky tobacco supported at $5 more than Virginia. Mr. DUNNINGTON. I would have liked for my friends, Mr. Hammack, Homes Ellis, and Clarence Maloney to have been here and see this. I do not know if there is much else to say, since you have questioned the people, on the exporting of tobacco. Congressman Abbitt there has read to you a letter from one of the big buyers, representing the Austrian Tobacco Monopoly. These tobaccos, as brought out, I think, by Mr. Watts yesterday, are not sold particularly in the same countries. Norway is the biggest user of dark-fired Virginia tobacco on the continent of Europe; and perhaps Austria, Germany run neck and neck. A part of the tobacco purchased for Austria is shipped to a branch that they have in Munich, Germany. So, when you speak of Austria, all of it does not go into Vienna. Prior to World War II there was a considerable business in Czechoslovakia which has not been mentioned, so far as I recall. Some of the tobacco still goes there, though, for cigar purposes; it has to be sent through Holland. That is briefly what it is all about. I cannot conceive of any way that it would hurt Kentucky. I have talked to hundreds of my farmers. They do not want to hurt or harm anyone. I am sure my Kentucky friends do not want to harm or hurt us. All we are asking for is an existence, and I assure you, as much as possible, although I am not a producer, that it is not the intention of the Virginia farmers to vote out any program of support, or to jump the gun or try to get too much tobacco raised. I would say a normal crop of 12,500,000 or 13,000,000 pounds would be adequate and that is what the consumption is today. That is what the need is. As to the question Mr. Bass brought out a while ago concerning stocks, they do have approximately 10 million pounds of tobacco in the pool, but it covers 6 crops of tobacco. It runs 1951, 1952, 1953, 1954, and 1956-I do not want to go into any of this unless it is necessary. I think you gentlemen understand that regardless of whether you be a Government grader or a buyer, there are certain errors made on the floor. And I thank you. If there are any questions that anybody wants to ask, I would gladly answer them to the best of my ability. Mr. ABBITT. Have a seat there. Are there any questions? Mr. MATTHEWS. Mr. Chairman, there is one question I would like to ask: You speak of type 21. Are there grades in type 21? What is the difference when you say a grade and a type 21? Mr. DUNNINGTON. Type 21 simply signifies it is dark-fired tobacco raised in Virginia. There are grades, perhaps some hundred or so— I do not remember now how many the Government does have. Mr. MATTHEWS. About 100 grades of type 21. Mr. DUNNINGTON. Yes; and the same thing of type 22 and type 23. Mr. MATTHEWs. That was my question. Thank you, sir. Mr. DUNNINGTON. Yes. Mr. ABBITT. Mr. Dunnington, has there been some substitution of type 21 tobacco from Rhodesia for the export trade? |