sold loose and tobacco which has been graded and tied. We urge you to investigate the possibility of collusion on the part of the tobacco companies to depress prices on the South Carolina markets. The Georgia market closed the week just ended with an average of $57.33 per hundred; the highest average in the history of the Georgia tobacco market. South Carolina closed the week ending with an average of $53.26 per hundred. All surveys indicate South Carolina has the best quality of tobacco it has had in 10 years. Where is the differential for grading and tying. The conduct of the tobacco companies leads us to think there is collusion. Certainly there is discrimination. We urge you to look into the reason for the depressed prices in South Carolina. Ed Spivey, J. Lide Huggins, Victor H. McRae, J. C. Reaves, Jr., Hon. JOHN L. MCMILLAN, Washington, D. C. MULLINS, S. C., August 2, 1957. DEAR SIR: I am a tobacco grower with 40 years experience growing, handling, selling; and also I have followed the sales of tobacco for 9 or 10 years. I don't claim to be no expert, but I do know that the farmers of South Carolina and North Carolina are not getting what they should for all the extra trouble and expense that we have to go through with. I sold tobacco at Vidalia, Ga., Monday, July 29, for $60 average. I sold 11 piles ungraded and untied for $63 per hundred. The tobacco was graded C-5-L; the support price was 58 cents. The same grade of tobacco was selling in Mullins, Tuesday, July 30, for 64 cents. I sold several piles P-4-L and P-4-F for 54 cents to 60 cents; that same tobacco was selling in Mullins for around 46 cents. By the way my average on the Georgia market was net above warehouse charges and commission fees and $1.25 hauling charges; South Carolina tobacco averaged $54.46 gross on opening day. Also I would like to say that the tobacco on Georgia warehouse floors looked like scrap beside the tobacco on South Carolina floors on opening day. As you probably know the farmers income has dropped 33 percent since 1951 and what he has to buy has increased practically that much. I am hoping you all can do something about the matter that will help the tobacco growers out of this price squeeze. You are at liberty to use this letter in any way you see fit. One other thing and I will close; I had a tobacco grader or inspector to tell me that the tobacco on South Carolina markets was not properly graded as it should be. What should be C-2-L they were grading it C-4-L. Let me know if I can be of any help to you in your fight for the farmers. Yours respectfully, D. B. STANTON, Sr. OLANTA, S. C., August 2, 1957. Hon. JOHN L. MCMILLAN, Washington, D. C. DEAR SIR: I read your article in the paper today about the unwanted tobacco that was being put on the market. I don't think it is unwanted by no one but the Stabilization. I think they want it to speculate on. They will sell it to the company, so why not let the farmer sell it. I was by your office July 30 to see you but your secretary told me you had to go go back to Washington, and I am sorry I did not get to see you. I am a farmer and I live in Florence County and they say I have some mixed tobacco and they want me to take a "blue card." I don't mind taking the blue card but don't label my tobacco different from the rest of it. If the buyers can't tell the difference, I don't think they should be buying tobacco. The buyers will buy it if the Stabilization will take the striped card off of it. When the Stabilization warned the farmers not to plant the unwanted variety, they didn't say anything about putting a different card on it, on the floor. They said you would have to sell it on a blue card and take one-half the support price. They didn't mention anything about what the buyers would pay for it. Put the same card on all tobacco and if the Stabilization gets it then give the farmer one-half support price for what they get. I think the farmers are getting a rotten deal and we got to have some one to help us and I think, Mr. McMillan you are the one that can do it. I don't know whether to sell my tobacco or wait and see what will be done about it. Please inform me what to do if you have time. I really hope you can do something about it real soon. They have all my other cards held up until I sell the mixed tobacco. I don't think the graders are doing us any good this year. They will grade a pile of tobacco 25 or 30 cents and it will bring 60 or 65 cents and that will happen with the mixed tobacco. They will grade a basket 40 cents and I will get 20 cents and they will sell it to the company for 60 or 65 cents and that is not right. Hoping you can be of some assistance to me, I am, Yours very truly, Hon. JOHN L. MCMILLAN, House Office Building, Washington, D. C. WILBUR A. DEFEE. DILLON, S. C., August 5, 1957. DEAR MC: Here in the border belt we are very much dissatisfied with tobacco prices. I am sure you have heard this story many times in the past few days. I am loyal to the Dillon tobacco market and believe we have just as good market in Dillon as you will find in this belt. Grade for grade I think tobacco sells just as high here as it does on any other market. But the plain fact is that for some unknown reason major tobacco companies for 2 or 3 years have discriminated against us in favor of Georgia. Both last year and this year-in order to make a test-I divided some barns of tobacco, selling one-half tied in South Carolina and the other half loose leaf in Georgia. On both occasions the loose leaf brought just as much or a little more than the tied and graded tobacco brought in Dillon. I do not know what steps we should take to sell looseleaf tobacco in South Carolina, but we have now reached the point, it is a must if we continue to operate markets at home. I am sure you have often heard that expression, "We are in the hands of the Philistines." This is literally true on the kind of deal we are now getting. Another thing that is very noticeable this season is the fact that Government graders are not putting a true grade on tobacco. I have known of instances where tobacco was graded to sell for 30 cents to 35 cents a pound and the companies paid 55 cents to 60 cents. While it is true that practically no tobacco is going into Stabilization Corporation this year it does seem that the Government is obligated to grade this tobacco at its true value. I have heard much complaint on this score. Frankly speaking there is so much dissatisfaction with tobacco prices, dictatorial controls, etc. I doubt if an election was held today that farmers would again vote for the program. Maybe Washington is trying to kill the whole control program. Certainly they are going to succeed if some changes are not made. I just thought that I would pass my views along to you. STEED STACKHOUSE. Mr. ABBITT. Thank you, Congressman McMillan, for that statement. I know that the officials of the Department are glad to hear that, so they will have something that they can go into when we call on them. It had been my idea that we would call on the officials of the Department first, but we are honored this morning that the Senator from South Carolina, Mr. Thurmond, could come by and meet with us. Senator Thurmond, we shall be glad to hear from you at this time. I know you represent so ably the State of South Carolina and all of our people, and we are indeed privileged to have you with us. STATEMENT OF HON. STROM THURMOND, UNITED STATES SENATOR FROM THE STATE OF SOUTH CAROLINA Senator THURMOND. Thank you very much, Mr. Chairman. I am glad to be here. I shall have to leave after a while and go over to the Senate, but I hope to get back to hear as much of the presentation today as possible. Mr. Chairman, I appreciate your courtesy, and I want to thank you for the opportunity of appearing here this morning to testify on some of the major problems confronting our tobacco growers in South Carolina. I hope the subcommittee will give most careful attention to the testimony which will be presented by the representatives of our South Carolina tobacco growers during the hearing while our officials are here. Incidentally, there may be others here, but I have noticed in the room this morning: Mr. Hugh Agnew, the capable president of the South Carolina Farm Bureau and one of the best informed men on agricultural matters, I think, throughout the whole country. Mr. J. M. Lewis, our tobacco specialist in South Carolina. Mr. Robert Coker, a plant breeder, whose father was also a very distinguished and able plant breeder. And Dr. C. Hoyt Rogers, who has had tremendous experience in plant breeding and research, and in extension, and is one of our agricultural leaders of the Nation. We are fortunate in having with us these gentlemen who have been in close touch with the situation in South Carolina and who will be able to furnish us with firsthand information on the effects that these problems are having on the individual tobacco growers. Congressman McMillan, a distinguished member of this subcommittee, represents South Carolina's largest tobacco-producing district. He has been representing this district for approximately 19 years, and he is, therefore, most familiar with the problems of our tobacco farmers. He has always manifested a deep interest in the welfare of these farmers and the tobacco industry in South Carolina. I am sure he will have some enlightening facts to present to the subcommittee during this hearing. Tobacco markets in South Carolina opened on Tuesday of last week; since that date I have received a number of strong complaints from growers who feel they are being discriminated against by the tobacco companies. These growers are greatly concerned about the lack of a price differential between tied and loose tobacco. They have reported to me that for a period of several years they have been encouraged to tie their tobacco, with the general understanding that they would be compensated for this additional expense. I have also been told that the tobacco companies could not handle the entire South Carolina tobacco. crop unless a substantial portion of it was tied. I feel, therefore, that it is grossly unfair to these farmers to be encouraged and practically required to go to the additional expense of having their tobacco tied, and then arrive at the market to discover that no price differential is being shown between tied and loose to bacco. Many South Carolina tobacco growers have been hauling their tobacco more than 200 miles to Georgia markets where they receive the same price for loose tobacco that is being paid for tied tobacco on the South Carolina markets. It has even been reported to me that in some instances loose tobacco on the Georgia markets has brought 6 cents more per pound than has tied tobacco on the South Carolina markets. The Department of Agriculture informed me yesterday that historically tobacco prices have reflected a differential in favor of those farmers who incurred the additional expense of tying their tobacco. In fact, the support price on tobacco provides for a 5-cent-per-pound differential between loose and tied tobacco. It appears, however, that under the present circumstances the price differential is working in reverse on our South Carolina farmers. In view of these facts, I find it easy to understand why our tobacco growers feel they are being discriminated against. I would urge, therefore, that the earliest possible consideration be given to a complete investigation of this situation. I have several communications which I have received on this subject, and I request that they be included in the record of this hearing at this point in my remarks. Mr. ABBITT. Without objection, we shall be glad to have that done. (The communications referred to follow :) Hon. J. STROM THURMOND, COLUMBIA, S. C., August 1, 1957. The Senate Building, Washington, D. C.: Tobacco prices in South Carolina on all grades are too low. Although opening prices appear slightly higher than 1956 the first offerings last year were low grade. 1957 crop far superior, and quality of this year's crop the best in 10 years. Cost-price index higher and opening prices do not reflect raised support prices. Therefore, 1957 prices no better than 1956. Differential being paid for grading and tying definitely inadequate. Growers not only dissatisfied but are demanding official investigation. At much personal sacrifice farmers are meeting your demands for reduced stocks of special varieties. You are dutybound to recognize this in an immediate price rise and premium for grading and tying. Please advise at once above wire sent to all tobacco companies this date. Senator J. STROM THURMOND, Washington, D. C.: WILLIAM L. HARRELSON, LAKE CITY, S. C., August 1, 1957. Situa Companies not showing differential between tied and loose tobacco. tion here very serious. Strongly urge you to advise companies that unless an immediate differential is shown, you will start an investigation at once. M. H. Mellett, Richard Smith, W. C. Kelly, S. P. McKenzie, Joe Hon. J. STROM THURMOND, United States Senate, Washington, D. C.: KINGSTREE, S. C., August 5, 1957. DEAR MR. THURMOND: Thus far this season the Four Warehouse in Kingstree has sold a total of 927,158 pounds of tobacco for $509,314.45 at an average of $54.92. This is one of the highest averages in the State, but below GeorgiaFlorida average of $56.45. Having farmed all my life, I know the quality is very good this year. Unless we have the understood 5-cent increase over Georgia, I fear that this market will have to go looseleaf or cease operation. personal regards, I remain Sincerely yours, LANUE FLOYD, With Sales Supervisor of Kingstree Tobacco Market. Senator THURMOND. One of these, Mr. Chairman, is from Mr. William L. Harrelson, commissioner of agriculture of South Carolina. His communication is short, and I might read it. Tobacco prices in South Carolina on all grades are too low. Although opening prices appear slightly higher than 1956 the first offerings last year were low grade. 1957 crop far superior and quality of this year's crop the best in 10 years. Cost-price index higher and opening prices do not reflect raised support prices. Therefore, 1957 prices no better than 1956. Differential being paid for grading and tying definitely inadequate. Growers not only dissatisfied but are demanding official investigation. At much personal sacrifice farmers are meeting your demands for reduced stocks of special varieties. You are duty bound to recognize this in an immediate price rise and premium for grading and tying. Please advise at once. Above wire sent to all tobacco companies this date. I shall place the entire communication in the record. Here is a wire signed by 55 tobacco growers from Lake City, from 1 section alone. Companies not showing differential between tied and loose tobacco. Situation here very serious. Strongly urge you to advise companies that, unless an immediate differential is shown, you will start an investigation at once. In the fall of 1955, I received complaints from South Carolina that certain varieties of tobacco were being downgraded for the purpose of Government loan support prices. I immediately conferred with officials at the Department of Agriculture and received assurances that it was not contemplated that any change would be made in the policy of fixing price-support levels on the basis of the grade of tobacco. However, on September 18, 1956, the Department of Agriculture made an announcement outlawing three of the leading varieties of tobacco being planted in South Carolina. Communications received from tobacco growers in my State indicated at that time that this order would result in a serious reduction in their income. They stated also that the order would result in the Agriculture Department's sending inspectors to run rampant over our tobacco fields trying to discover the blacklisted varieties for labeling purposes. You will find that their fears were well grounded, Mr. Chairman, when you hear the testimony of the South Carolina witnesses who will follow me. I am told that tobacco companies have bid on some lots of tobacco, discovering later that the Agriculture Department had subsequently tagged the tobacco as a blacklisted variety. The companies then refused to accept the tobacco and the farmers had to place their tobacco in the Government loan at 50 percent of the price-support level. Additionally, the Agriculture Department has been sending what our people call 3-day inspectors into the fields to snoop and check |