GENERAL FARM PROGRAM 1141 



ly in accordance with a long-3stablished pattern of consumption. It 

 does not have the competition of synthetics and it is a finished product 

 as it moves into the area of support or governmental concern or in- 

 terest. Wool has many steps to go through in between. I do not 

 know whether those are valid differentiations or not. 



I would like to say to you that if you would like to have us sit down 

 and try to work out a wool scheme using the form and method that 

 has been applied to sugar, we would be happy to try it. I say to you 

 that the sugar program is one of the most complicated to operate. 



Mr. Hope. I realize that and, of course, the thing that might have 

 some appeal is that we are supporting sugar without its costing the 

 Treasury anything. That is a matter that I think we must consider 

 in connection with all these programs. 



Secretary Brannan. Mr. Hope, you are not overlooking the sugar 

 payments that are made to the American producers, are you? 



Mr. Hope. They are financed by the tax on all sugar so it does not 

 actually take any money out of the Treasury that does not come in as 

 a part of the program, as I understand it. In fact, we make a little 

 bit on it, I believe. The Treasury takes in more than it pays out. 



I would like to have some consideration given to a program that 

 we might be able to finance without cost to the Treasury. 



(A memorandum as to possible application of the provision of 

 the Sugar Act to wool follows:) 



Possible Application of Provision of Sugar Act to Wool 



This report is an analysis as to whether it would be practicable to administer 

 a wool price-support program under a wool act similar to the present Sugar Act. 



There are several basic differences between sugar and wool which would make a 

 program for wool much more difficult to administer than the sugar program if, in 

 fact, they would not practically preclude the operation of such a wool program. 

 The major differences creating possible difficulties are listed below with a brief 

 explanation : 



1. Contravention of trade agreements. — The general agreement on tariffs and 

 trade which was negotiated at Geneva in 1947 provides in volume 1, article XI, 

 that no prohibitions or restrictions in the form of import quotas shall be instituted 

 or maintained with certain minor exceptions which could not be applied to wool. 



In addition, other provisions of the general agreement provided an exception for 

 any quotas then in effect. The Sugar Act was then in effect and therefore is not 

 m contravention of the agreement. However, as we understand it, any quotas 

 on wool would be in contravention of the general agreement on tariffs and trade, 

 as well as trade agreements with individual countries which were in effect before 

 the general agreement. 



2. Grades involved. — While sugar is imported generally in two forms, either 

 refined or raw, and in either case the commodity can be processed to an end prod- 

 uct which is nearly universally substitutable, wool involves a great many more 

 variations. There is an entirely different demand between the uses for different 

 grades of wool. We may have a shortage of fine wools and at the same time a sur- 

 plus of coarse wools. If imports of wool were restricted, the reduced imports 

 could be offset by imports of a processed product such as wool fabrics or the 

 finished wool articles. This would tend to make it necessary to set up quotas 

 not only for wool but for each important grade category of wool and for each wool 

 product developed by the different stages of processing. Obviously this would 

 make the program very complicated. 



3. Number of countries involved. — While sugar is imported largely from two 

 foreign countries, Cuba and the Philippines, wool is imported from a large number 

 of producing countries and products produced from wool are imported from another 

 sizable group of countries. Wool quotas would have to be established for Aus- 

 tralia, New Zealand, Chile, Argentina, Uruguay, South Africa, and others, while 

 quotas for materials processed from wool would have to be established for the 

 United Kingdom, Belgium, France, Italy, and others. The large number of 



