1134 ■ GENERAL FARM PROGRAM 



Mr. Pace. You would estimate a drop in the market of 20 percent? 



Secretary Brannan. Yes, sir. In other words, Mr. Chairman, I 

 want it clear here that I am using the high figures in each case. Our 

 suggested support level for wool is higher than 90 percent of parity, 

 and we did indicate that there might be need for adj ustments in some 

 areas. I have not made any of those arbitrary adjustments, but have 

 taken the high figure all the way across the board. 



Mr. Hill. Mr. Chairman, just a moment on that wool. Let us get 

 that $19,000,000 straight. Is that exactly the amount of money that 

 you lost from July 1, 1947, to June 30, 1948, 1 year's loss on wool? 



Secretary Brannan. That is correct. 



Mr. Pace. Just a moment, Mr. Hill. I have concluded the pre- 

 liminary questions on wool. If it is the pleasure of the committee, I 

 would like to direct that we will stay right on wool for a few minutes 

 before we get on the next commodity. Is there any objection to that? 

 Are there any questions for the Secretary? 



Mr. Hill. Mr. Chairman. 



Mr. Pace. Mr. Hill. 



Mr. Hill. I cannot understand that $19,000,000. I thought wool 

 stayed up fairly well, up to, if not above, the parity price all through 

 this last year. Now, you say we have had a loss of $19,000,000. That 

 is beyond my understanding. 



Secretary Brannan. Mr. Hill, maybe we ought to work out a fuU 

 statement for you here which, if you would like, we can put in the 

 record. The wool program is a continuing program. 



You take in stocks and you sell out stocks over the course of several 

 years. Some of these commodities we have carried 1, 2, or 3 years. 

 Wlien we give you the figure of $19,000,000, it is the losses on the 

 wool program durmg that fiscal period. It is not confined exclusively 

 to the amount of wool which came into our possession on June 30, 

 1947, and extended up through the balance of the fiscal year. It 

 covers all of our operations in wool during that period of time. 



Mr. Hill. Then it means the wool you had in supply and the wool 

 you sold and accumulated in the year of 1947-48? 



Secretary Brannan. Yes, and remember, Mr. Hill, we have just 

 moved out of a reasonably favorable marketing period for wool. 

 During the war and immediately subsequent to the war was a reason- 

 ably favorable marketing period for wool. 



Mr. Hill. I still cannot understand how we have that great a loss 

 with the market staying where it is. What would happen if the 

 market really dropped? This has been a rising market and you have 

 been in a good market. Still you lost $19,000,000. 



Secretary Brannan. I am not certain that this has been a rising 

 market in the last 2 years in wool. As a matter of fact, it has been 

 reasonably weak. We have been quite successful, however, in moving 

 out a good part of the Commodity Credit Corporation stocks during 

 these past few years. Again I want to point out to you that the com- 

 parison here is the actual operation. We are talking about all the 

 factors which go into handling the wool from the time we take it 

 from the producer, which is an active disposal campaign, an active 

 storage operation. It is the grading and the downgrading. 



The difficulties which we have in moving the wools which are most 

 desirable at a particular time for a particular cause are also included. 

 The buyers of wool know the Commodity Credit Corporation's stocks 



