Government has become a sort of broker for cotton. The Commodity Credit Corporation now owns more than 11 million bales of cotton. The cost of taking this cotton under price support loans, or of taking ownership when the loan matures, and the cost of storing each bale of cotton for approximately 20 months until it is disposed of, come to in excess of $25 a bale, or 5 cents a pound. This is the cost for the handling and deterioration of the cotton. It does not include losses due to selling for less than the Commodity Credit Corporation investment in order to dispose of the cotton. During the past 13 years, more than 61 million bales of cotton have been placed under loan. Some of this has been redeemed, of course. But, more than 45 million of these bales of cotton came into CCC ownership. The Government should not be in the business of buying, storing, shipping, and selling cotton. The only way to take the Government out of this business, where it does not belong, is to let cotton into the market at its real competitive value. We must let cotton compete in the marketplace both with foreign produced cotton and with competitive synthetic fibers. The only way to do this is to make the price support loan level somewhat more comparable with the world market. Mr. President, Congress is concerned with cotton because production is outrunning utilization by a steadily widening margin. The obvious course for restoring stability in the cotton industry is to encourage farmers to bring their production into better balance with demand, and to encourage increasing consumption of cotton at home and abroad. In changing cotton policy to achieve those objectives, it is just as desirable to retain and strengthen those parts of the present program that work as it is to replace those which have proved inef fective. The record of the past year indicates that one-price cotton has been a plus factor, making cotton available Mr. SALTONSTALL. Mr. President, will the Senator from Georgia yield at that point? Mr. TALMADGE. I am delighted to yield to the Senator from Massachusetts. Mr. SALTONSTALL. The Senator just said that the consumption of cotton has increased. Do I correctly understand that this increase amounts to 600,000 bales? Mr. TALMADGE. The Senator is correct-600,000 bales. This is making cotton available, as the Senator has pointed out, increasing domestic consumption of cotton by 600,000 bales. Added to that are 28,000 jobs in the textile industry which will bring the industry to the highest level of its eco nomic history. Mr. President, in that connection, since we have had one-price cotton, those who work in the textile mills have had three wage increases in the past 18 months, totaling one-half billion dollars with each increase. Mr. SALTONSTALL. Mr. President, will the Senator from Georgia yield at that point? Mr. TALMADGE. I am delighted to yield. Mr. SALTONSTALL. The Senator has stated the increase in the number of bales and the increase in the number of textile industry workers. Has it not also stimulated investment in new textile also stimulated investment in new textile plant and machinery which is an important factor in our domestic industry being able to compete with industries being able to compete with industries abroad? Mr. TALMADGE. My information is that the textile industry at the present that the textile industry at the present time is spending over $1 billion in modernization and plant improvement. Mr. President, we must bring the cotton industry into a more competitive ton industry into a more competitive position with manmade fibers and halt the decline in the per capita cotton consumption. We must boost textile industry investments in new plants and equipment over the average for the previous 5 years. We have improved the wage structure of the textile workers. me emphasize the word "helped" in relation to the role of cotton in this encouraging record, to the action taken by Congress since 1961, to strengthen the total economy, which naturally reflected the benefits to agriculture and the industry. Let I would not assume the role of an expert on the mechanisms required for an effective farm program. However, the national interest demands that they be directed toward the goals of a reasonable directed toward the goals of a reasonable balance between commodity supply and balance between commodity supply and demand, the maintenance of the State demand, the maintenance of the State rural economy, and by a structure that encourages maximum consumption at home and abroad at minimum Federal cost and control. A basic step toward A basic step toward achievement of these objectives in the cotton area is the construction of a program around the one-price principle. The income of producers has been maintained in these other commodities by allowing them to seek their value in the marketplace while complementing them with direct payment to the farmers. Mr. ERVIN. Mr. President, will the Senator from Georgia yield at that point? Mr. TALMADGE. I am delighted to yield to the Senator from North Carolina. Mr. ERVIN. Does not the Senator's observation apply equally to rice? Mr. TALMADGE. Oh, yes, indeedalso to rice. I appreciate the Senator's calling my attention to that fact. We have found that we can vastly increase the export of any farm commodity by reducing the loan level to around the world market price, and then make up the difference with direct payments to farmers. In doing that, we can raise farmers' income and we can relieve the Government of the cost of warehousing and storing, and we can broaden the base for future farm sales by expanding the export of those commodities abroad, also increasing the utilization of those commodities domestically. Therefore, it makes sense from every standpoint. Mr. SALTONSTALL. Will the Senator from Georgia yield right there? Mr. TALMADGE. I am delighted to yield to the Senator from Massachusetts. Mr. SALTONSTALL. The Senator just mentioned a number of situations which could be improved. Has the Senator mentioned how a one-price cotton program affects our workers who make apparel-the clothes we manufacture and wear in this country? As I understand it, in New England alone, there are over 86,000 people employed in the apparel industry. We also have a textile machinery industry. In Massachusetts over 10,000 persons are employed in the manufacture of textile machinery. If we have one-price cotton, we are going to continue to stimulate the textile producers, the apparel industry, and the manufacture of textile machinery. We hope to increase the number of people who will be employed in these industries and stimulate further investment in The pricing provisions in the cotton proposal reported by the committee to proposal reported by the committee to the Senate appear to provide a 3-price tier-one for foreign buyers, another for domestic buyers, and a third for the U.S. Government which would, in effect, beGovernment should be the referee, the come the biggest buyer and seller. The Government should be the referee, the mediator, the guideline builder, in contributing to the stability of agriculture modern textile plant and equipment. not be the major cotton buyer, warehouseman, domestic salesman, and exporter. and industry. The Government should The cotton program created by Congress should revolve around a one-price this, Mr. President, and maintain farm cotton program. There is a way to do this, Mr. President, and maintain farm income at the same time. But, do not income at the same time. But, do not misunderstand me. price supports at the highest practicable I am in favor of level for our farmers. In that connecprice supports at the highest practicable tion, at the present time, the farmers of America enjoy an income approximately only half the average of the nonfarmers of the country. It is high time that we did something to try to improve the income of our farmers. Certainly, there is every justification in the world for maintaining cotton farmers' income. Certainly, We have found acceptable ways to do this in the case of wheat and feed grains, this in the case of wheat and feed grains, and wool and sugar. Why not cotton? Am I not correct? Mr. TALMADGE. The Senator is correct. I appreciate the Senator's bringing forth that message. He is making a valuable contribution to cotton policy. Mr. President, the cotton farmers are no different from the producers of other agricultural commodities. We should not continue to drive these farmers out of the cotton business, neither should we drive out our cotton merchants, our cotton ginners, our cotton warehousemen, of our cotton seed crushers. Cotton is the best of our natural fibers. We should not force textile manufacturers to turn from cotton to synthetics in order to hold and build their markets. However, we would be wrecking our cotton industry if we were to pass the com mittee bill. The cotton surplus would continue to pile up in all our warehouses. The Government cost would be raised to an intolerable level. Our cotton could not compete in the world market without Government manipulated subsidies. Our cotton farmers eventually would be ruined. What must we do, Mr. President, to keep this destruction of our cotton industry from taking place? First, we need a new approach to our cotton problem, a new program which would make cotton fully competitive in the world markets and at home with synthetic fibers. This could be done by means of price support loans based on the world market price. Second, we must maintain cotton farm income on equal terms with other agricultural commodities through direct payments, supplementing the price support loans. Third, we must reduce the surplus of cotton to reasonable levels through payments to farmers who participate in the program by reducing their planted acreage. Fourth, Fourth, we must reduce the Government cost. This can be done through increased consumption of cotton on a free market and a reduction of cotton stocks through a program of reduced production. Mr. President, the cotton provision of the bill approved by the committee utterly fails to accomplish any of these needed objectives. The committee bill would take us back to the ruinous twoprice system. The committee bill would continue prices under the loans at levels that would be wholly unrelated to the world market price. It would involve the Government deeper and deeper in the business of buying, storing, shipping, and selling cotton. The committee bill would not allow cotton to move to market on a free, competitive basis. Instead of that, one subsidy rate would apply to domestic production and a higher rate would apply to exports. Our domestic mills would have to pay more than would the foreign mills for the cotton. This would speed the shift by domestic mills from cotton to synthetic fibers. Another bad feature of the committee bill is that it would force the export sale, on a competitive bid basis, of 6 million bales of cotton a year. This would disrupt the world cotton market and create serious international problems and force the Secretary of Agriculture to dump large stocks of cotton in foreign markets, at staggering cost to our Government. Mr. PASTORE. Mr. President, will the Senator yield? I believe that one of the mistakes that has been made is that we are talking about this problem in terms, I fear, that the man on the street does not understand. We talk about the one-cotton price Fundamentally, that is the problem. In the past 10 years we have closed has been rising astronomically. It is the If they were to take the raw cotton The result was American mills were shut down by the hundreds and American jobs lost by the hundreds of thousands. We made a salutary move last year when the one-price cotton system was adopted-equal treatment of the American cotton industry with its foreign competitors. That is what we are fighting for this afternoon. We are not asking for a handout. We do not want a handout. All we want is equity. All we want is justice. All we are saying is, Let the American millowners buy the raw cotton which is produced in America at the same price as the Japanese millowner, who would proceed to make the cotton into a shirt and send that shirt back to America to undercut and undersell and undersell American-produced goods, and thereby put Americans out of jobs. Mr. TALMADGE. I yield. Mr. PASTORE. Mr. President, ironically enough, I think it can be said that the committee bill recognizes the problem but does nothing to solve it. Mr. TALMADGE. I share the view We do not want a handout. of the Senator. Mr. PASTORE. Mr. President, if we were to do nothing at all about this problem of the two-price cotton system, one would assume that we do not have such a problem confronting and imperiling the jobs of workers in the United States. However, the committee bill did proceed to recognize the problem. An entire section was placed in the bill to refute what the House had done. Then, as it turns out, the committee proceeded to do nothing to solve the problem. That is how simple the issue is. That is all we are fighting for this afternoon. There is nothing contained in the bill that would require the Government to pay 1 penny to an American millowner. All we are asking is that the money be paid to the cotton producer in such a way that the American buyer will be able to buy the cotton at the same price as the foreign buyer. The issue is as simThe issue is as simple as that. That is what we mean by the one-price system and the two-price system. pound cheaper. We want Americans to receive the same consideration. Mr. TALMADGE. Mr. President, I thank the able Senator for his invaluable contribution. Every word the Senator has spoken is eminently correct. Mr. President, I yield to the distinguished senior Senator from North Carolina. The PRESIDING OFFICER. The Senator from North Carolina is recognized. Mr. ERVIN. Mr. President, I agree in substance with everything that the able and distinguished senior Senator from Rhode Island has said, except to a very slight degree. I believe that the committee bill rec ognizes the problem of the two-price cotton system, and is designed to do just a little about the problem. It is similar to the case of the man who wanted a short-tailed dog. He proceeded to cut off the dog's tail a little bit at a time so that it would not hurt the dog so much. That is the procedure followed in the committee bill with relation to this phase of the problem. Mr. TALMADGE. Mr. President, I thank the Senator. I agree with the Senator. Mr. President, do not misunderstand me. I am heartily in favor of exporting as much cotton as we possibly can. I am in favor of regaining the markets throughout the world which we have lost by virtue of our unworkable program. However, this should be done in an orderly manner, by placing cotton on the market at a price by which the cotton could fully compete with foreign grown cotton and synthetic fibers. The committee bill would not reduce our cotton carryover stocks to manageable levels. At the end of 4 years, the committee bill would reduce the carryover by no more than 3 million bales, which is not nearly enough. Most important of all, the committee bill would result in a much higher cost to the Government. For the 4-year period, the committee bill would cost $762 million more than the bill proposed by my colleagues and myself. Under our present program, our cotton exports will decline, and cotton is not keeping pace with the increased use of manmade fibers. Our present program is plowing under the cotton grower. The program in the committee bill would finish the job of plowing him under. This is intolerable. Mr. President, we must make American cotton competitive once again and put the cotton farmer back on his feet. Mr. President, I desire to offer for the RECORD at this time, and ask unanimous consent to have printed, a document which shows the production of cotton in the United States of America from 1925 to date; also the production of cotton, worldwide, from 1925 to date. Table 2 shows the increase of manmade fibers, production in the United States and foreign countries. two-price eign countries. Table 3 shows cotton pledged for loans and purchases by Commodity Credit Corporation from the years 1933 through 1964. The two-price system allows a foreign buyer to buy cotton for 8.5 cents a There being no objection, the tables were ordered to be printed in the RECORD, as follows: TABLE 1.-Production and acreage harvested of cotton, United States, foreign countries, and world, 1925–64 TABLE 2.-Manmade fibers: Production in United States and foreign countries, average, 1947–49, and annual, 1950 to date Source: The Textile Organon, a publication of the Textile Economics Bureau, Inc. that at which it was placed under loan, CCC costs would be about as follows: Per pound $1.58 1.90 (a) Storage, 20 months___ (b) Interest, 20 months. (c) Loss on final settlement (deterioration in grade). 1.35 .20 (d) Administration of program_----- CCC currently has in inventory from the 1963 and prior crops about 6,642,000 bales and from the 1964 crop about 4,820,000 bales. 3,737 This cotton must be disposed of by CCC and 6,776 its costs will depend on the terms of dis28,950 position. 28, 320 4,833 6,853 7,341 If a bale placed under loan is not redeemed it will be taken into CCC inventory upon maturity of the loan. If it is sold by CCC 10 months later at a price equal to Mr. SALTONSTALL. Mr. President, will the Senator yield, if he is in a position to yield at this point? Mr. TALMADGE. I am glad to yield the distinguished Senator from Massachusetts. to the Mr. SALTONSTALL. What the Senator from Georgia, the Senator from Rhode Island, and I wish to emphasize is that we do not want to hurt the farmers who produce cotton. What we want to do is protect production and jobs available in the United States from competition abroad which we think is unfair to the citizens of the United States. What we want is to have the jobs available in the United States and to have the textile industry grow in this country-not to the injury of the farmers producing the raw cotton, but in a way that will benefit all of us. Is that correct? Mr. TALMADGE. The Senator is eminently correct. This amendment would increase the status of the industry in America. It would give the producer a better market, both domestic and abroad, and at the same time provide a healthier textile economy, so that more people can be employed in mills. Finally, it would help the product itself, cotton, which is the finest material in the world, so that it could be sold to consumers at reduced prices. Mr. President, I ask unanimous consent to insert in the RECORD tables prepared by the Department of Agriculture, which show the cost of the committee's 1 Does not include miscellaneous expenses of about $2,000,000 primarily for cotton classing. Mr. KUCHEL. Mr. President, will the Senator yield? Mr. TALMADGE. I am delighted to yield to my distinguished friend the acting minority leader. Mr. KUCHEL. Mr. President, I am pleased to support the amendment offered by my friend the junior Senator from Georgia. It is infinitely superior to the Senate committee amendment. I am very glad to have my name on the amendment as a cosponsor. I come from a State where the cotton economy is important to my people as well as to this country. The cotton industry in America is sick. With all my heart, I regret the product of the Agriculture Committee. I am persuaded that it would not cure the sickness, but, alas, make it worse. The fact is that I support the position which the administration has taken with respect to cotton legislation this year. It seeks to go forward to a free, competitive system of American enterprise, on which our country has grown to great There is a tendency in the amendment, which I support, toward freedom for the American cotton farmer, if he desires to exercise that freedom, unfettered by Federal governmental restrictions and unchecked by Federal soporifics and, in the old-fashioned American way, use his ground and till it to produce as much cotton as he, and he alone, decides to raise and sell on the open market, here and abroad, in competition with his neighbor. If the question were asked in the Senate, "How much does it cost to grow cotton in the United States?" no one could give a precise answer. No one knows. The Government does not know. Only if we find a way in which the American cotton farmer can do that which he alone desires, spurred on by his own initiative and daring, unhampered by any type of governmental restriction, free of any subsidy-then, and only then, will we here have taken a step toward elimination of what some people have called the mess in Washington. I salute the distinguished Senator from Georgia for sponsoring the amendment, which I wholeheartedly support. Mr. President, I received a letter from a friend of mine in California the other day. He is a fine citizen. He is a farmer. He raises cotton. Let me read only a part of that letter: As far as the West is concerned a further restriction of acreage means a slow strangulation of a crop that is our No. 1 cash crop in California and possibly worse than that acreage now growing cotton must find its way into other crops thereby injuring the eco nomic position of those crops. What an important point to ponder in this debate. The hundreds of thousands of acres in my State, and the hundreds of thousands of acres of cotton in other States, would be confined and restricted and punished by Government fiat, under the committee proposal, to bring into being surplus lands in American agriculture which would then be compelled to grow other crops and produce a deleterious or debilitating effect which could finally provoke a general, acrossthe-board type of Federal control, which could compound the mess, and make it worse. Beware, Mr. President, of such a I repeat that Second, it could mean the disappearance of the entire cotton industry. At this point the entire 16 million acres would have to find its way into other crops. In either event a Senator cannot be unconcerned about the fate of cotton because that 16 million acres is in an area that can grow crops competing with the great Middle West or any other section of the Nation. The economic impact of this diverted acreage on those crops would mean one of two things: Either economic chaos or a Government support program on all crops. This would probably cost more than any farm program we have had. Should we not need the advice of this American? Should we not take some small step toward unshackling the American cotton farmer? Should we not desire for our cotton economy a greater and more realistic share of the world cotton market? Is it not more in the interest of this Nation to follow the best, long-range goal of raising the cotton industry back into a vigorous, competing industry here and abroad, rather than to spend additional billions as the committee amendment would do? I say to the distinguished Senator from Georgia that he does a service to the peo ple of the United States in offering the amendment. The Senator from Georgia has made an unassailable argument. The senior Senator from Rhode Island, made graphically clear the necessity for the Senate to adopt our amendment. It is in the interest of the cotton industry. It is in the interest of the American people. Mr. TALMADGE. I thank my esteemed friend and distinguished acting minority leader for his invaluable contribution to this discussion. Mr. President, at this point I ask unanimous consent that the name of the senior Senator from South Carolina may be listed as a cosponsor of the pending amendment. in the markets of the world. They would be assured that they would be able to obtain United States cotton and move it at prices competitive in a world market whereas in recent times, other nations have been gaining an alarming advantage over us. I remind Senators that we have had similar experiences with feed grains. If we look at the history of dollar exports of corn and wheat, we find that when we moved to a program of price support loans at or near the world level, we exported more of the commodity, even though the Government's role in pushing exports was reduced. That, I contend, was due at least in part to the freedom with which private traders were able to The PRESIDING OFFICER. Without function in the world market, and the objection, it is so ordered. Mr. TALMADGE. Mr. President, the point has been made that the cotton program proposed by the House would more nearly reflect the realities of today's world than does the substitute program proposed by the Senate committee. And I do not think this can be overemphasized. Under the House proposal, cotton prices would be supported at levels based on the world price. Payments to producers would augment this as far as grower incomes are concerned, so that the return to producers would be maintained. This would make it possible for cotton to move into export without a subsidy and without the need for the Commodity Credit Corporation to take any special action to make it competitive. There would, as a result, be no need for equalization payments to domestic users of cotton. To put it simply-U.S. cotton could compete freely in the world market. There is an additional point I should like to emphasize, however. And it is this: With the price support loan rate at the world market level. I am convinced that private traders would work harder at moving U.S. cotton overseas. And the private trade, after all, is the key to the movement of dollar exports abroad. Mr. President, we delegate to the Government the direct sale of cotton, and expect them to succeed. We should remember that the Government of the United States is engaged in business just one floor below us. one floor below us. The only thing for which the buyer must pay, which the Government does not furnish, is the food The Government furthat he eats. nishes the building, the heat, the air conditioning, the lights, the waiters, the linen, the cooking utensils, the uniforms-everything is furnished by the Government. What happens? Hamburgers, for a simple example, sell for 80 cents each, and the Senate Restaurant operates at a deficit. If the Government of the United States cannot operate a little restaurant, selling hamburgers at 80 cents each, without losing money, how can we expect the Government to dispose of the more than 11 million bales of cotton in CCC warehouses without incurring a deficit? Freed of the redtape and complications implicit in an export subsidy operation, United States cotton exporters ation, United States cotton exporters would be able to function aggressively encouragement given to private traders to move grains into that market with a minimum of Government participation. Take corn for example. With the 1963 corn crop, we instituted a program with a loan level which substantially reflected the domestic price and world price. Additional payments were provided to maintain grower income, so that the farmer would not suffer. The effect on exports is apparent from the figures. In the preceding marketing year, beginning Octower 1, 1962, we had had corn exports of 416 million bushels-not a bad export year. But in the very next marketing year, 1963-64, we had corn exports of 500 million bushels, which reflected that lower loan level. This was an increase of 84 million bushels, almost a fifth, above the exports of the preceding year, which had reflected a higher loan level. In the 1964-65 marketing year, the one now drawing to an end, corn exports have risen still further. They are expected to amount to about 510 million bushels. Or consider wheat. Beginning with the wheat crop of 1964, the wheat loan rate has been roughly at the world price level. In the 1964 crop marketing year, wheat exports totaled 730 million bushels, as compared with the 1958-62 average of less than 596 million. The 1964 exports were the highest on record, except for the one year that the Russians bought heavily. During the first 2 months of the present marketing year, wheat exports are again going well, with exports for dollars running four times what they were in the same period a year ago. I yield to my distinguished friend the senior Senator from Massachusetts [Mr. SALTONSTALL]. Mr. SALTONSTALL. Mr. President, what the Senator is emphasizing is that exports will increase if the exporting is done through private trade channels and not by the Government. Mr. TALMADGE. That is exactly the point the Senator is attempting to make. Mr. SALTONSTALL. Am I not correct in saying that cotton exports by the Government in the past couple of years have decreased rather than increased? Mr. TALMADGE. Exactly so. I remind my friend the able Senator that, as he knows, when something is stocked |