lllllil l|l| ll ii'l li! . I 1 I l.l||l f: \ HD 9890.6:W91 ""'""'''"•*' '■"'™^ ^SSlZSJiJ-l;!??.?-" o, the meeting of ^tate College of Agriculture at Cornell Mntticriiitp aittjata, iS. |9. iCibrarp 7 i< ■' Wool Marketing AN INFBRIOB PACK OF WOOL. Putting' fleeces of one kind tosrother or aeparatlngr groups of different fleeces means better prices. The fleeces In this bag reading from left to' right are: % combing; fine black; braid; coarse black; fine staple; tags; ^ blood; braid; flne cloth- ing; fine black; bucks. -y#' in Mo:. 'vVv-^, -I ^4 ilk /tM- ■ ",V. :^'"^.^ tdi'Ci^ Report of the Meeting of Wool Growers, Represen- tatives of Bureau of Animal Industry, Bureau of Markets, State Marketing" Organi- zations and Wool Dealers Held in Columbus, Ohio, March 6, IQIQ Statistics presented at this session regarding the present world's stocks of.wool; and their character lead us to the belief that there is no cause for alarm regard- ing the future' of the sheep and wool industry. Wool stocks at present in this country are ' characterized by large supplies- of grade wools of a kind not normally coming into competition with the best grades., of domes- tic wools; and a comparatively small supply of choice"; wools. . ■ ■:^ . • '-.: -'■■' - . ■ Fiirthermore, the prospective derriand of manufac- turers appears sufficient to absorb all supplies of good wool now in sight. There appears to be nothing in the situation to cause growers to be hasty in selling their wools. It is our understanding that any reforms to be brought about in wool marketing methods must be inaugurated and conducted by growers themselves, for they will benefit first and chiefly from such reforms. It is strongly urged that wool growers form and support community organizations for marketing their wool and improving their production; and it is further urged that these community organizations federate as rapidly as possible with the state and national organiza- tions. Loyal support of the local organizations is deemed essential to success. — Extract from the final report. WOOL MARKETING CONFERENCE COLUMBUS, OHIO, MARCH 6, 1919 MORNING SESSION PRESIDENT J. F. WALKER: I certainly feel complimented that such a representative bunch of men are here today. I am not speaking for myself personally, but for the business. I think the sheep and wool interests are to be congratulated that at this time the interest is such that such a number of men, representing different parts of the United States and different branches of the industry, can gather here together to discuss some of the phases that seem to be essential at this time. , Last spring, when the wool industry was operated on and the chloroform of patriotism was administered to us, it was found when we had partially recovered from the operation that the job had not been successfiilly done, and that they had removed more than seemed necessary at the time. Other industries of similar character did not receive such a severe operation as did we. The purport of their intention at that time was that wool was scarce and was needed. We agreed to that. We have fulfilled our part of the contract. At the present moment they tell us that wool is over-abundant and, therefore, prices must materially drop. The situation, as the wool grower sees it, is briefly this: Last Wool Growers' ^.P^^"^' "^^ ^°°^ ^ potential drop of 30 per cent p^ , J below what normally would have been the mar- ket, had no one manipulated it or taken it over. We believe that no one will dispute the statement that dollar wool was in sight, yet we took from 60 to 65 cents a pound at the very highest. I am not kicking on that; that is past history. But we do maintain that other interests must drop 30 per cent or more before they begin to consider the reduction of wool along with other commodities. Fifty cent wool means the men are going to get out of the business; SO cent wool is strong in certain circles, today. The reason that this confeirence has been, called here today, is to find out whether or not it is worth the while of the men who are actively engaged in wool production, the men who are directly or indirectly engaged in the handling of wool products— whether it 3 is worth their while at this time to make such recommendations and work in such manner as to stabilize the wool market and make it fairly remunerative to the grower, because if this is not done, it means the production of wool is bound to decrease in the United States. Decreased production, they have told us for some time, means increased scarcity. Agitation has been started to increase and promote the sheep and wool industry, particularly in the eastern states. Whether it is worth while to foster this movement or not, or to tell these men, "We have encouraged you and started you along, now you must take just what yo;i can get out of your product." We believe, in order to act intelligently at this meeting, we must know somewhat of the available wool stocks in the world, somewhat of these wool stocks that may be handled, the stocks that may come within the period of eight or ten months into the United States and those already here. As near as we can determine, we must know the probable consumption^ the outlets of these wools, and also what are the best means of marketing these wools, and getting them into the trade channels. That covers the pur- pose of the meeting. It is not my intention to go into the details at this time, and we will ask that any person that rises to the floor will be brief as possible, in order that all the interests might be heard and that we may get to the point more quickly. I assure you that there is no feeling of animosity on the part of the wool grower toward any of the other interests here repre- sented. We realize that our problems must be your problems, because if you get no wool you have no business. On the other hand, if you have no business, it does not mean very much if we have the wool. And so our interests are mutual. We want to approach each other in the spirit of get together and see what we can do to help each other. The first on the program will be Mr. Willingmyre of the Department of Markets of Washington. MR. GEO. T. WILLINGMYRE: Mr. Chairman and Co-worker, I am glad of this opportunity to meet the mem- bers of this organization — an organization thalt represents one of man's earliest callings and one which has recently taken its place in the struggle for democracy. The nation is proud of the American wool producer and the manner in which he has responded with unselfish patriotism to the appeal to produce and contribute in the hour of need. Wool was of fundamental impor- tance in winning the war, because soldiers must be kept warm if they are to fight winning battles. 4 pursuits and are greatly interested in problems affecting the near future of industry. Upon the entrance of the United States into the world con- lij . . . flict, it was quickly seen by those who controlled Renu" t *^^ nation's affairs that, from a military stand- point, it would be necessary for the Government to take over the entire wool stocks of the country. This step was an absolute necessity, due to the inadequate supplies of donaestic wool and our dependency upon foreign sources for future supplieis. In peace times, the United States requires about 600,000,000 pounds of wool. Of this amount, only about 300,000,000 pounds is pro- duced in this country, which makes if necessary to import an equal amount. This question of imiports increased the perplexity of the situation, which was further aggravated by the shortage of shipping. To equip 2,00,000 soldiers and clothe them for about one year, would require the entire quantity of wool grown in this country, providing it was all suitable for military requirements, This situation and control of wool was handled by the War Indus- tries Board, who on May 21st issued a decision whereby the Gov- ernment assumed control of this commodity. Upon the signing of the Armistice with the enemy on Novem- ber 11th, the military demands for wool ceased, and steps were taken by the Government to return the wool industry to the pre- war or normal basis. The Quartermaster's Corps, upon estimat- ing their holdings of wool, found that their stock at that time consisted of about 320,000,000 pounds, together with about 90,000,000 pounds, which had been purchased abroad. This stock represented the military reserve and comprised the available stock for civilian purposes which had been considered up to this time of secondary importance. "Much concern was manifested by those connected with the . . wool industry as to what method the Government would assume in guiding the industry to a civilian basis and ^ what procedure would be adopted to dispose of the Gov- ernment holdings. After mluch deliberation on the part of com- mittees and officials, it was deemed advisable to release such quan- tities of wool as the market would readily absorb at stipulated intervals. Hence wool auctions rapidly followed in Boston and Philadelphia. The perplexing problem now facing all branches of industry, and more particularly the American wool growers, is the future situation with regard to wool prices. 5 At the close of the war, it was believed that the wool stocks of the world were abnoi'mally large. This was found to be untrue and that there was no excessive accumulation, though it was evi- dent the stocks, owing to *war conditions, were very badly dis- tributed. The Statistical Committee submitted a preliminary statement and estimate of the stocks, production, and consumption of wool during the next two years, to the General Purposes Committee of the Wool Council at Caxton House, London. This committee is working in conjunction with the British Government in trying to bring about normal conditions in the wool and textile trade in England. They estimated that the present stock of wool in the world ., is 1,265,000,000 pounds; to this is added the estimated ^°^, production of the world for 1919 of 2,673,000,000 pounds. „ , They have also estimated the consumption of wool for ^ 1919 as 2,620,000,000 pounds and the world stock of wool at the end of 1919, 1,318,000,000 pounds.' The world's "produc- tion for 1920 is estimated at 2,700,000,000 pounds, and the world's consumption for 1920 is estimated at 3,094,000,000 pounds, and the estimated stock of wool in the world at the end of 1920 as 924,000,000 pounds. This would show a decrease in the amount which was estimated for the end of 1920 and the present world stock of wool of approximately 341,000,000 pounds. It was pointed out that no accurate information appeared to be available as to the stocks of wool held in ordinary times, so that it is impossible to make comparisons. Sir Arthur Goldfinch makes the statement that at the end of 1920, the world's stocks of wool would be reduced to less than four months' consumption. Stocks of wool in this country at this time are not excesSjive, according to the Bureau of Markets Quarterly Wool Stock Report of January 1, 1919, and anjounted to approximately 461,397,423 pounds, including grease, scoured and pulled wool. The Quartermaster Corps advises us that on December 28, 1918, the total stocks in their possession on that date was 313,746,024 pounds, and further stated that they estimated the amount of wool which they would receive at 70,000,000 pounds. This 70,000,000 pounds was, no doubt, in dealers' hands or in transit to them on December 31, 1918. We concurred with Mr. Elliott's suggestion that by taking the total quantity in the possession of the Wool Purchasing Quar- termaster, the 70,000,000 pounds which they expected to receive, and the 58,601,058 pounds of grease, 13,816,519 pounds of scoured, 6 wool in the United States on that date. I'his compares with the 408,597,872 pounds of grease, scoured and pulled wools on hand on December 31^ 1917, according to our reports. While Australia, South Africa, and South America hold large quantities of wool, this has been due partly to the inability to obtain transportation facilities. The stock on hand of grease, scoured and pulled wool, on . . December 31, 1917, was 477,153,360; the stock on Woor&tocks ^^"^' ^^^^' "^^^ ^^°^^ 461,000,000 pounds. That includes the stock that the Government was hold- ing at that time. That 461,000,000 pounds is arrived at in this way: the Government reported that they were holding approxi- mately 313,000,000 pounds. They expected that they would receive an additional 70,000,000 pounds; to this was added the stock sold by manufacturers, because it was practically all the wool in dealers' hands that would be turned over to the Government. By addi- tion to stocks held by the Government, estimated at 70,000,000, they expected to receive and stock held by manufacturers totaled 461,000,000. In normal times wool prices in this country are influenced by the prevailing market prices in those countries. In connec- tion with the fact it may be noted that the British Government controls the greater part of the wool abroad in her colonies, therefore, it has been pointed out that the British Government's issue prices greatly affect the world's market prices on the bal- ance of the wool supplies. This may be accepted as a sign of strength, when it is understood that the British Government will control the wool values for some time. Large quantities of wool will be needed to supply the return- -. , . ing soldiers and rehabilitate the civilian population of Europe with much needed clothing. The four. years of the war on the Continent has not spared the textile industry, so that woolen material has become quite scarce, and with the shortage of tonnage, it was impossible to obtain new supplies. In France, Belgium, Germany, Austria and Russia, the textile industries were disrupted and disorganized. Much of the machinery has been destroyed or dismantled ■ and its parts used in making munitions. It has been estimated that it will be years before the textile organizations of these countries can be restored to their former efficiency and manufacturing capacity. Mr. Hoover states that: "The people of Belgium have had no textiles during a period 7 of four years, except for the meager imports by the Commission for the Relief of Belgium, which imports have always been devoted to the destitute. The population is underclad, and the one direc- tion in which Belgians are in need of charitable help, is in the large clothing supplies." South America is also very much in need of woolen and worsted goods. They previously had imported much of their requirements from Germany, but will now be obliged to look to a new source to obtain these supplies. What efifect this unprecedented demand will have on the American wool grower, will be reflected in the prices that will prevail during the next few years. In connection with this, it may be pointed out that the United States produces only one-half of her consumption. United States ^j^^ United States consumes yearly approximately Consumption goo^oOO.OOO pounds of wool according to' the report issued by the Bureau of Markets. On December 30, 1918, the total quantity of grease, scoured and pulled wool was 605,158,021 pounds. It is estimated that the combined totals of the grease, scoured and pulled wool is equivalent to about 740,000,000 pounds of grease wool. However, the year of 1918 was an unusual one, and the consumption for last year is, no doubt, the highest actual consumption in the history of the country. In order that the wool marketing of the country may be greatly improved, and that the growers may receive the fair prices for their wools, it is highly important that all should know what the Bureau of Markets, Department of Agriculture, is doing for the American wool grower. This bureau has a staff of trained wool experts to advise the growers on matters pertaining to the marketing of their wool; and, in addition, has inaugurated a market service report system which makes it possible for the grower to receive vital market information. This report service consists of three reports, which are issued regularly to all persons interestePI in wool, and it is hoped ultimately to have every wool producer receive these mar- ket reports. The Wool Consumption report is issued monthly and contains the actual amount of wool which has been used during each cal- endar month. The Wool Stock report is issued quarterly and contains information of the amount of wool stocks, which may be taken as an indication of the supply. The Active and Idle Machinery report is issued each month and contains an accurate record of the wool machinery in operation 8 These reports have been issued in order that accurate informa- tion may be furnished to all connected with the wool industry in an effort to stabilize market conditions, to maintain more even distribution, to promote commercial efficiency, and permit the universal law of supply and demand to regulate prices. Anyone who will closely analyze the information contained in these reports, will have little difficulty in anticipating a lack or over-supply of certain classes and grades of wool, and the market trend. While the Consumption report gives the definite information regarding the amount, class, and grade of woof entering into the process of manufacture, the Active and Idle Wool Machinery report shows what proportion of the looms, cards, combs, and spindles of the country are in operation, which should clearly indicate the extent of production of tops, yarns and manufactured goods. This informa- tion in the past has been available to the wool trade and manu- facturing interests through private sources, and has, no doubt, been used as a guide to future operations. The figures for any month should indicate or confirm - the current market conditions, while the comparisons should show the trend of the industry and be a guide to future conditions and trade prospects. It is obvious that at first the reports will be more readily understood and appreciated by those who furnish data for them than by those less closely connected with wool manufacture. Though a technical knowledge of manufacturing, or even a familiarity with the terms used, is not essential to read- ing" and understanding the reports. It is the aim of this Bureau to disseminate this information to the producer so that he may enjoy the same advantage and use this information in marketing his wool at the most logical time. During the last few years efforts have been made by this Bureau to assist the producer to market his product, and much progress has been made in this work under centralized or co-operative selling methods. This work also received added impetus during Government control, when millions of pounds were shipped to the East on a co-operative basis, which has brought home in a more forcible manner to the grower the advantage of unified efforts in the marketing his wool. Wool growers will be interested to know that prices have been established on wool for the current Wool Auction Sales now being conducted by the Government at Boston and Philadelphia. 9 These prices have been based on the British Government Issue Prices. According to market opinion which has been received, the establishing of the minimum prices has had the desired effect to stabilize the wool market and the bulk of the offerings are being purchased. Recent advices which have been received from abroad, indi- cate that the London Wool Auctions will be resumed about April, 1919. This Bureau hopes to be of greater service in the future by further assisting the wool grower iij marketing problems. While the present, with its difficulties to overcome, may appear as an obscure cloud which may seem somewhat difficult to pierce, it may be in keeping for us at this time to consider the words of our President, when he addressed the Italian Chamber of Deputies this year, and said in part: "BRAVE MEN CHALLENGE OBSTA- CLES" ; and that "The only use of an obstacle is to be overcome. So that it ought to be our pride to overcome anything that stands in the way." PRESIDENT WALKER: May I ask Mr. Willingmyre, has the Bureau any data on the chances or availability for foreign and for domestic use during the next eight or ten months? MR. WILLINGMYRE : We have no figures. Of course, the quantity imported will depend on shipping facilities. PRESIDENT WALKER: Are you in a position to know how these shipping facilities are working out? We were informed that the shipping facilities were limited. MR. WILLINGMYRE: According to the imports of wool .^^ ^ ' the last eight or ten months, they ran about 42,145,000 J pounds. I am not sure about that figure. It seems to me wools are being brought into this country suitable for manufacture, that is, especially in competition with your wools. A MEMBER: Mr. Chairman, in view of the fact that this gathering here will necessarily have to come to some concrete point where something can be done, I move that a representative committee of ten be appointed at such time as the chairman may see fit, who may be able to get together in order to work out the ultimate plans of this conference here. Motion seconded. Thereupon the above motion was unanimously adopted. PRESIDENT WALKER: It has been suggested that some- body be appointed to keep the records of this meeting, aside from the stenographer. What is your pleasure? Do you think that would be advisable? 10 Thereupon Mr. Gould was elected as secretary. PRESIDENT WALKER: The question has beep raised regarding the program of today's meeting. We felt that it was ■advisable, in order, to act in a logical order, to find out somewhat of the wool stocks. We have heard from Mr. Willingmyre and other gentlemen who will follow him, somewhat on the wool con- sumiption, if we have representatives of those interests here ; also the attitude of other organizations, affiliated farm organizations toward the wool grower, the report of some of the work being done at the State Colleges along this line; also from the press, and the afternoon session will be largely taken up with the prob- lems of the wool-growing industry, marketing problems, organ- ization problems, etc. We are glad to have with us Mr. Sherman, also of the Markets Department of Washington. We will be pleased to hear what Mr. Sherman has to say. MR. SHERMAN : If I may, I will ask to be excused until the latter part of the conference. PRESIDENT WALKER': We will be glad to hear from you later, Mr. Sherman. We have with us Mr. Leland, representing one of the largest commission houses at Boston, the firm known as Adams & Leland. We will be glad to have a word from Mr. Leland. MR. LELAND : Mr. Chairman, this pleasure is unexpected. Along what line would you like to have me speak? PRESIDENT WALKER: We feel, Mr. Leland, you are in a position to tell us sonjething about the wool situation. MR. LELAND: If you ask me questions, I will be glad to answer them. Mr. WilHngmiyre has given ias the statistics. PRESIDENT WALKER: Has anyone here anything they want to hand out to Mr. Leland? He is on the job and at your mercy. Don't hesitate to spare him. One question I would like to .ask: What is the attitude of the wool trade at the present time; your opinion of the market; how business stands today in the wool industry ? MR. LELAND : Of course, in the old line houses, there is „ , . • absolutely no business at all. The Government ,,, , has this tremendous supply of wool to sell and Wools ,,. . , , , . . IS selling it through the auction. Any man can go in there and buy wool at those auctions, just as a dealer can, so we are tied just at present. The South American markets are open, but there isn't very much inducement to go in there, because the great volume of wool raised in South America is 11 rather of low grade and our Government has quite a quantity of that on hand, and it has not been taking very well at the auction, so far. PRESIDENT WALKER: May I ask this question: What is the demand, in your mind, at the present time, for high grade domestic wool, the market for these wools, and what is the tenor- of the market on these wools? MR. LELAND : Very good. Most all the grade wools put up Dem d ^^^^ been taking at the sales, and they sold somewhat in Grade advance of the withdrawal prices; not very much, but Wools ^^^^^ ^^^^ have sold at a little better price. That is where the manufacturer seems at present to see his opportunity to do business. Of course, on the other hand, the bulk of the domestic wool left unallotted by the Government during the war period was the finer grades in the United States. The demand for army goods did not take any of the finer grade of wools; the navy took it, but the army very, very little. So when the Armistice was signed, probably 75 per cent, I don't know, but a greater percentage of the delaine wools were unalotted.^ PRESIDENT WALKER: Then the wools moving most readily today are the wools of 'which we have the most abundant stocks? MR. LELAND : Yes, in a sense. Of course, when it comes down to percentage, I do not know whether the percentage of delaine wool is the great bulk of the holdings in the United States. So there is a chance for little discrimination. PRESIDENT WALKER: I wasn't particularly interested in delaine wools. The point I tried to bring out, is there a surplus of domestic wool in the United States at the present time? Is there a surplus of delaine wools, and do these wools seem to be moving most readily on the market at the present time? MR. LELAND : The surplus of domestic wool raised east of Mississippi was in delaine. PRESIDENT WALKER: That is moving most readily? MR. LELAND : Moving very well. The surplus west of the Mississippi lies in New Mexico. PRESIDENT WALKER: If there was a great surplus of wool on hand in the United States, in your judgment, wouldn't it be very possible the delaine wool would be dragging along with the others? MR. LELAND: Of course, manufacturers are just feeling Business ^™""*^ ^°^ business. There is no snap to the manu- Slow facturing end and they are, most of them, making some stock goods in the hopes of developing some business. They feel if they are going to put money in stock goods, they 12 would rather put it in good fabric than inferior fabric, because of the cost of labor. So, I think, they are taking chances on fine goods going out of style. The same situation developed, in for- eign wool, the demand has been for the better qualities of Austra- lian wool. Those have been very readily taken. MR. SNYDER: I would like to ask Mr. Leland if he has any idea of what share of the Government stocks are low grade; any idea about that and how largely they will come in competi- tion with the wools used in this country, whether it will be absorbed here or exported? MR. LELAND: The general impression of the trade is, the stock of wool left of foreign import is very large, especially in South America and also in Australia. A MEMBER: What does' the trade think about it, will it be absorbed here and come in competition with American wools ? MR. LELAND: We are afraid it will go very slowly, and will be here for quite a while. I can only refer back to the expe- rience when the McKinley bill went into effect and we all bought at that time wool without much attention being paid to the out- lets for it, everybody anxious to get hold of wool. We brought in a lot of wool at that time and it proved out that our manufac- turers hadn't very much use for it and it hung around until four, five, six or seven years. Eventually at that time we got a market. The supplies of iniported wool had been worked off a 'little and gradually absorbed, but it was not shipped abroad. It had to eventually be consumed in the United States. We rather feel that will be the case here, unless something develops from the German end. Of course, they have a consumption power there about equal to that of the United States of 600,000,000, although I am a little critical of that 600,000,000 in the United States. That includes a certain amount of wool called carpet wool, for carpet mills. It doesn't interest the producer ; low grade of stuff. While it appears in the computation of consumption, it is a little confus- ing. A MEMBER: What share of the total is it? MR. LELAND : We figure the carpet mills import over 100,000,000 pounds. MR. WILLINGMYRE: The average consumption for Ger- many for the pre-war average was 464,000,000 pounds. Note : Mr. Willingmyre later submitted the following : Upon referring to records of wool imports into the United States annually, which may be taken as an indication of the amount of wool that had been consumed yearly, I find the following data, imports for years indicated below : 13 Carpet Wools 1913—87,688,260 pounds. 1914—85,310,760 pounds. 1915—93,782,305 pounds. 1916—76,166,548 pounds. 1917—73,002,602 pounds. 1918—69,291,858 pounds. While the amount, above may be the actual amount of carpet wool imported, yet it does not take into consideration the quan- tity of domestic wool that may have been entered into carpet also. As you know, all of our wool contains a certain amount suitable only for carpets, while a large portion of the clip of Arizona and New Mexico is used in the manufacture of carpets, also quite a number of carpet mills that I know use large quantities of wool ranging in grade up to quarter bloods for the finer grades. MR. LELAND : I was stating that when we considered our consumption 600,000,000, that included the consumption of the carpet mills, which did not enter into our production, because it is a different class of wools. MR. LELAND : So our normal consumption of similar grades we raise in the United States is about 500,000,000 a year? But you see these figures that the Government has compiled for stock on hand do not contain the estimate for the wool of cai-pet mills brought in mostly for the domestic mills to consume. MR. WILLINGMYRE: Isn't it true, Mr. Leknd, when the large percentage, especially the carpet wools in the country, are being utilized for clothing purposes, that there will be no call for them? MR. LELAND : No call for low grades. MR. WILLINGMYRE : In other words, the wool being pur- chased at auction is only choice lots? MR. LELAND : Only choice lots, an attempt to force busi- ness to a large extent. MR. WILLINGMYRE: That would mean, at the end of a certain period, most choice wools would be taken and inferior wools left? "MR. LELAND: That is" true. MR. WILLINGMYRE: What effect would that have on the market? MR. LELAND: Leave a good market for the better grade and the market over-supplied with inferior wool. Some- D ^"^ ^ d ^^^^ '^ &oi"g: to usethis inferior stuff. Of course, today we are protected, as in Europe, with withdrawal prices As soon as that prop is removed and, it will be removed as soon as 14 somebody gets an excuse to remove it, then this- stuff will come in. England really controls the situation today. As soon as she gets away with her present allotment prices, some change will develop all over /he world. You men in Washington are in a little closer touch with that than we are, and when it is likely to happen, we would like to know. A MEMBER: How about the labor situation in regard to the manufacturers? MR. LELAND: Locally, in Lawrence at the present time, they have a strike. The mills were only running five days, any- way; with the strike, they only run three or four days. The labor situation is bad everywhere. PRESIDENT WALKER: We have with us Mr. A. C. Bigelow, president of the Philadelphia Textile Association and president of the "More Sheep, More Wool" movement, a double- barreled man. We will be very glad to hear from Mr. Bigelow. MR. A. C. BIGELOW: I was rather hoping possibly I might absorb wisdom rather than give it out to you. I think there isn'# anyone connected with industry in the United States, whether it be wool or leather or cotton, but that is up against the extraor- dinary situation caused by the sudden termination of the war and the present variant condition in all lines of business and industry, not only here, but abroad. Down our way, as Mr. Leland remarked, I think our position has befen the same as yours for a long time. We have been facing a great big interrogation point. In other words, we would like to know the answer to a great many things. We can't discover what the answer is today, and neither you, nor I, nor anybody else, can get a definite answer to all these questions, because it , has to come out with the gradual evolution of all the biggest influences at work today all over the world. However, with regard to the very distinct question you are considering today, I have a few thoughts that I would present to you. You will have to take some of the matters that I do present as I see them, and then you will have to do your own thinking and own guessing as to what is the real significance of the situation on these things which are now existing. Mr. Leland has brought up, to some extent — but it is a very _, ^, , important consideration, as it applies to the relation Central , , , ., . , , . . , , p , of wool and textile mdustry, what is going to be the _ J situation and position of theXentral Powers, Germany and Austria, in regard to their abi'ity to consume wool and wool products. In the past they have been large consumers of wool. I believe your statistics only applied to Germany. Aus- 15 tria is also a big producer of wool and big producer of goods. They are not only big consumers of wool, which applies to the question of absorbing the wool supply, but they are also pro- ducers of wool for their own domestic consumption atid also largely for export. Their situation applies not only to their absorb- ing capacity, but also applies to the question of their being a competitive factor in the world's market for woolen goods. So far as we can learn, there are utterly chaotic conditions existing in Germany today. I don't have to tell you what it is, but it would seem that we can assume the German people are not in position to absorb goods to their usual capacity or previous basis. You will notice, also, in the papers, that their use of substi- tutes has given them quite a new experience, and it would appear that some of that substituted material is going to continue to be in use in connection with goods on the other side. Of course, in connection with the German situation, disorgan- kation of industry, etc., it is a question of what the Allies, espe- cially England, are going to do in allowing her to bring in raw material. Now, all those conditions apply to a great big factor in the world market and the world's market's production ot woolen goods. I cannot answer that question coming out of the situation of the Central Powers. I am simply telling you that that is some- thing to be considered in the world situation. ' Also, another great factor in the world's market which is, to a large extent, disorganized today, is France and Belgium. Their great textile centers have been disrupted by the German invasions, their machinery taken away or damaged. How soon, or to what extent, they will be able to have their machinery placed in operation again, nobpdy knows. They are a factor in the world's market There is another consideration worthy of attention — the out- Cloth ^^* ^°^ manufactured wool. It would appear from Demands *^^ ^^^ conditions that the world must be in a posi tion to need a very large quantity of goods. That applies, I think, all over the world>— even in the United States, and that is a factor on the favorable side of the proposition that as we get readjusted, there is going to be a very large increase in the demand for woolen goods which must be made somewhere. There seems to be such a prospect opening for export business from the mills of the United States. Germany is undoubtedly not in a situation to supply goods at the present time, nor will she be for some little time. Ultimately, we do not know what will happen. , 16 In order to obtain a supply of woolen goods, South America must go to these, places that produce goods today, and that is a prospect for foreign business that has appealed to American manu- facturers to such an extent that they have formed an American Manufacturers' Exportation Association. I think it has a capital of $6,000,000, and they are now engaged in surveying and arrang- ing and endeavoring to obtain an export business for American manufacturers. As I say, the fact that the leading textile factors in this country have formed an organization would appear to prove quite conclusively that there seems to be a favorable pros- pect for export business. There is another factor in the situation as regards world's wool, and that is Japan. Her textile industries have been increas- ing rapidly, and she is becoming quite a large consumer of wool. There is every prospect that she will increase that consumption. The next most important thing, and that which I presume is . in your mind mdst largely is the question of wool sup- c y ply- We are somewhat vague on that matter in some ™ sections, but within the last few days there has come out a definite report on the authority of the British Government, which gives us pretty thorough information as to colonial wool. The report is of December 31. It indicates that the Australian clip on hand in the colonies and afloat is 1,500,000 bales, which, on the average of 350 pounds to the bale, is 526,750,000 pounds. In New Zealand, on hand in the colonies and afloat, 485,000 bales, 350 pounds to the bale, 169,750,000 pounds. That is a total of Australian wool on hand in the colonies and afloat of 696,500,000 pounds. Added to that is the stock of colonial wools in England, amounting to 195,802,000 pounds, which gives you, therefore, a grand total, as of December 31st, of all Austrian wool in colo- nies, afloat and in England, of 892,302,000 pounds. Now, of course we have heard a great many guesses and prophecies running as high as 1,250,000,000 pounds of wool. This seems to be definite and conclusive, a total of 892,000,000 pounds. The normal Australian clip, based on 1917, is 547,972,000 pounds. The normal New Zealand clip is 193,830,000 pounds, so the total normal clip in 1917 amounts to 741,802,000 pounds. To make a little comparison of what this means, take the Australian and New Zealand clips, you have a total as of Decem- ber 31st, 892,000,000, normal 741,000,000. Now, that is wool on hand as of December 31st. You know that clipping time in these countries is such that these clips generally come on the market about the first of November, and they keep coming on continu- 17 ously as shipping is provided from November over into the fol- lowing September. So that the vsrool clip that started November 1st goes into consumption gradually throughout the year. Now, we have here, apparanently, a surplus over the normal quantity in these places of aljout 150,000,000 pounds, if I am coritct in my figures. That does not appear to be such a tremendous surplus quantity by itself. ■' The normal Cape clip is 197,761,000 pounds. Approximately, today they estimate 300,000,000 pounds in the Capes, which- would be about 100,000,000 more than the normal stocks at this time of the year. Of course, there is in the two great big sections clip- ping wool a surplus at the present time. It isn't by itself such a tremendous surplus, in my opinion, as to be very alarming. The most important question in regard to the supply of wool, is the question of absorption capacity. Unfortunately, the Gov- ernment dumped our manufacturers out into the cold pretty rap- idly and they didn't have time to organize, and the consequences are that you are not running to capacity, and the tendency today is a subnormal consumption. We are not working today to absorb this excess quantity as we would if our machinery was all running to full capacity. Another point being considered: The matter of Australian Ch t wool as bearing on the immediate present. What is , the character of the large portion of Australian wools now in the colonies ? I don't know, but I guess from what information I have, a large part of that is poor, defective wool. The necessity of the biggest possible production from the English mills during war time would compel them to bring for- ward the best wools, those wools which go through the machines quickest. Belgium has been a big factor in the use of shorter wools which had to be carbonized. There is no way they could use these defective wools of Australia and, in my opinion, this large portion of those wools in the colonies is poor, defective stuff. In regard to the supplies of our own wools. There is, no doubt, a very large portion, I don't know how much," but a pretty large portion of the wools the Government owns today are not what you call choice, and you will notice at the wool auction sales that the choice wools were taken very quickly and the infe- rior wools were not taken. From what information I have, I don't think that the stock of Government-owned wools in the United States consists of such a large quantity of choice wools, but that they will all be absorbed by the time the new clip comes around. Another point, is the demand at the present time, 18 ^rherefore, the class of goods put on the market has been very inferior, made out of a rougher class of stock, and our people have been obliged to content themselves with that class of stock and didn't say much, but a big element in this country want good stuff and they have the money to pay for it and demand it, and the mills are going to make it. Now, in connection with the wool situation and the surplus ■ supplies which still exist in the colonies and Cape, I think the most important consideration is the point of location of these supplies and their availability. The bulk of them lie away off in Australia, away off in the Cape. The shipping facilities are very much restricted at the present time. They are going to continue to be restricted. The volume of shipping will not increase to any great extent for some time to come. Therefore, there is a practical damming up back there and this wool cannot break through the dam to come on the mar- ket to affect it until shipping facilities are in such shape that the wool can come on in any volume. In ordinary times the Austra- lian wool comes on ordinary shipping' vessels, which come and go, each ship bringing in a cargo, which in turn goes into the London market and goes into consumption. My firm impression is based on what I have been telling you that the supply of good wools available for immediate demands of consumption in the immediate present centers which are prepared to consume, is not going to be any more than adequate for the demand. I believe that there will not be any material decline in the prices of good domestic wools for the next six months or more. I am guessing, understand, simply guessing. I don't think that the wool producers of this country need to worry very greatly over any great catastrophe overtaking them this season. ^ There is another point, however, that you must recognize as the availability of these reserve stocks coming on and as the Euro- pean countries are able to "obtain them and place their goods in competition with the world, the whole thing is going to operate to make lower prices for wool just the same as other commodi- ties. Lower prices on wool are inevitable, but it is to your advan- tage, and it should be so in the iinal analysis. The value of a pound of wool to the producer does not depend on whether he gets 60 or 75 cents. It lies altogether in the exchange value — what you can take that pound of wool and go to the shoe shop or clothing store and buy with that one pound of wool. In the final readjustment of this economic°proposition you will find that pound 19 of wool — when you go out to exchange it for other commodities — will pay you for your wool production. In connection with this question of wool prices, and as a part of the proposition which you are considering today is the ques- tion of wool marketing. From what study I have made, and I have been pretty closely in touch with it all my life, if the wool producer- Improved J ^^ speaking of the average throughout the county, roduc ion ^^^ speaking to some of you Ohio men who have kept up high standards of your production, but I am speaking of the average producer throughout the country — if the average pro- ducer throughout the country will pay more attention to the proper production of his flock, raise it to the highest standard of efficiency at the least cost of production, which he is not doing today, he need not worry about the price of his wool. That applies to the question of marketing, the whole marketing proposition, to the question of price of wool and profit and loss on sheep account. I have graded quite some wool, I have seen a good many sheep, been around amongst a good many farmers and even without any knowledge of sheep, with just knowledge of wool. A man stand- ing over the grading table day after day with it staring him in face, knows the farmer is not producing the wool he should pro- duce and can produce. When our farmers, as they are being brought to understand it today, just as it applies to the dairy busi- ness and hogs, and all forms of live stock — if they understand the opportunity and necessity as a business proposition of raising the standard of their production and decreasing the stock, as I said before, I don't think anybody here needs to worry about the price of his wool. (Applause)^. PRESIDENT WALKER: Has anybody any questions? A MEMBER: One point that was not touched upon. What about the amount of unused cloth for clothing as regards the nor- mal year? MR. BIGELOW : I should say the stock of woolen goods in the country of good class is very low. In fact the Government , allowed no wool for civilian goods. They were _, , compelled to use a lower class of goods. If you want to know, look in the clothier's windows and see what class of goods they are ofifering. I would not want to go out and buy a suit of clothes. The stock of what you call in normal times cut manufactured goods, I believe is very low, and I don't think at the present time we are going to be threatened with imports. England is a tremendous exporting country, but 20 she is restricted at the present time in regard to wool supplies and she is not going to be in the same position she was in regard to labor. England is having her own trouble with the labor situa- tion. They are demanding and are going to get shorter hours, and that will reduce competition, which we have experienced from the other side. That is going to apply all over the world. There isn't going to be the difference in labor on this side and the other side. PRESIDENT WALKER: I am sure we have been very much interested in the report of Mr. Bigelow, particularly regard- ing the available wool supplies of Australian and New Zealand clip. We have with us Mr. Herman Ritter, ex-president of the Retail Clothiers' Association. Mr. Ritter represents the opposite end from us growers, and I am sure we are very glad to have him here to speak concerning the present conditions of the retailers. MR. RITTER : Mr. Chairman and gentlemen : I feel a good deal like many of you. I came here rather to be enlightened from a retail standpoint and mix with the fellow who gives us the ingre- dients of wool and other fabrics we have been taking from time to time. I will, as far as I know, give you a little outline of the con- ditions, and before I do so, I want to say to you that if ever I attended a meeting that I felt personally I was getting as much benefit, it is this morning. In exchanging your ideas — the wool manufacturer and the retailer — some good ought to come. I am going to enlighten you in regard to the fabrics Mr. Hill ! spoke about this morriing. It is an absolute fact that today we are going through a transformation, the same as the United States is going through a constructive period. I find by experience that the American Woolen Company opened up certain cloths some weeks ago for the purpose of creating business, figuring if they lose a million dollars, they were having the looms working and keeping up the work, with nobody laid off and disorganized. Imme- diately after the market opened up, I believe three . or four days, the prices went up on merchandise, because some of the manufac- turers were buying, which showed the tenor of conditions. With regards to the best goods being shown- this spring, I Flim-Flaming absolutely agree with Mr. Bigelow. I plead guilty, th P hV *^^* ^^' ^^ ^^^^ way, a man can give you a poison to drink, but you don't have to drink it unless you want to commit suicide. Now, the majority of the merchants who figure they want to live their part in business, as they characterize their every-day life, don't want to flim-flam the public, and conse- 21 quently we didn't bite. And I want to explain that to you, because from time to time the manufacturer of c)oth instilled into the minds of the clothiers they ought to buy a season or two ahead, and those men who had the ample capital to finance the business took advantage of old fabrics and they carried them instead of new ones. But that at the present time is a thing of the past. Now, I am going to get down to the wool grower. Personally, gentlemen, I say to you in due frankness that the time is here for you, and I also, to go through a constructive period of all woot fabric on an all wool basis. (Applause). I want to say what I mean. You men who raise your wool and come into a store in Columbus or Philadelphia or New York, and if you get 50 cents for wool and you have to pay $30 or $35 for a suit of clothes, which is not the cleanest wool, the very first thing you say that is not fair. We are only getting SO cents for wool. That is the basis of opera- tion. I don't think any of you know how many pounds it takes to make a suit of clothes — most of them five or six, some four pounds. Whether wool is high or low, is, after all, the basis of opera- tions. But it isn't fair to you, and we are going through a trans- formation season throughout the United States, especially the clothing end of it. Labor is shooting up and wool is on the wane; one way or the other. It is not a fair thing. I want to say to you the time is here, and this committee you appoint ought to work out a feasible plan so the farmer will be protected, the retailer who buys the fabric will be protected, and the whole country be protected, so that when you say to a man this is an all wool fabric, the mill puts its stamp on it and stands back of you and back of us. (Applause). Another thing that will encourage the better wool fabrics in p. , this country, and that is this : I agree with you, the ,», . . wool clips the United States Government has is probablv Weights ... . . ° inferior clip. Did you ever stop to realize in less than ten or twelve years that the fabrics were lighter in weight and prices going up, which has, in a way, conserved the using of less wool. I will tell you what I mean : For instance, when I was a boy, some years ago, we used to think in the fall of the year fabrics weighing 16, 18 or 20 ounces were fall fabrics. Today 16 or 18-ounce fabric is a curiosity, and I don't know whether you have it on this side of the water. I know England and Scotland do at the present time, hold up the present standard of weights. 'When you buy the finest Australian wool you get something, but you pay the price. I think, • for the protection of the average consumer and the retailer, some action should be taken by retailers, wool growers 22 and manufacturers to demand that these mills make fabrics they can stand by, not only in wear and color, but so far as keeping their shape is concerned. Gentlemen, you have your troubles and we have ours. Men come and pay $65 or $70 for a suit and complain about the weights. You have to stand by this fellow if you stay in business But we have to go through a different pursuit of things in the future than in the past. Now, as to what Mr. Bigelow says, if we offer an encourag- ^Ij ing outlook that will get up something that will encour- Wool ^^^ °^^ ^^^ American farmers to raise better wool, why not give the American farmer the first chance ? Why allow other goods to come in here if we, in a way, can produce the right quality? Today we ought to reconstruct on every line, and I want to say to you, gentlemen, the time is here for you and for myself and everone else who wears clothing, to demand, when you get clothing, that you get a dollar's worth when you pay a dollar, and not fifty cents' worth. As far as the spring fabric is concerned, we had to take what we could get, unless we had it on hand. The major- ity are overstocked. I don't say profiteering, but they bought them, didn't know the war was going to end, jaig stock on hand. As far as the mills are concerned, they are trying to force them, but the men won't bite. There won't be much change in the price of clothing sold from the retailer's standpoint. Say, for instance, wool has advanced 10 or 15 cents, the workmanship has gone up 40 or 50 per cent. Here is the point: Why should we allow shoddy clothing at any time? Today, when this country is pros- perous and men not used to buying $12 clothes, why allow them to be sold? I would taboo any cheap clothing made for anybody to wear. People are educated to the fact of paying the price and getting good clothes. I contend they haven't been getting what they paid for. We are all good soldiers in war. We are in a new era. I don't think we have anything to fear. We are going through this reconstruction period. When the war was going on, every man with two legs was getting $5 to $8 a day; men taken from the stores made $5 to $7 a day. As soon as the war is over, these men will be let out. We must get to an all-wool basis and, gentle- men, I will^ever rest until we accomplish it. MR. BIGELOW: I don't want to assume that I have any great knowledge of woolen fabric, but at the same time this ques- tion of use of shoddy opens up a tremendous big proposition and it is one which you ought to kno-^ absolutely what the real facts of the matter are. 23 It strikes me, from what little knowledge I have, that if we pursued the course outlined by Mr. Ritter, the use of Shoddy ^j^^^^jy should be prohibited in goods entirely. I would ^^*" like to ask what would become of the by-products of the mill or factory from which the shoddy is made, and how many garments would be made from absolutely pure virgin wool, which I assume is your position, and what would be the price of garments made from such wool, and in connection with the price, how are we going to provide woolen goods, goods that do contain the ele- ment of wool for a large part of our population would be absolutely prohibited from buying virgin wool at the prices? I want to sub- mit to you this one fact, that the value of wool lies in the essential quality of that fiber that it is a non-conductor of heat. Otherwise cotton would be as valuable as wool. Wool is a non-conductor of heat, that is why it keeps you warm. Now, that quality lies in the re-worked fiber, the same as it does in the pure fiber. I have a suit of clothes at home that I bought for a knock-about suit over a year ago. I don't know its entire construction, but I would say, from my little knowledge, it is practically all shoddy. I think I paid at that time $15 for that suit of clothes, where a good suit would have cost me $30. I got a year's hard wear out pi it. Another serious question in this matter, which I think is a rather extreme proposition, that we eliminate all these re-worked fibers, that is, are we going, therefore, to allow them to go to waste? The real essential feature of the packing industry which has established it, not only as a big agency for the distribution of products, but as a real wealth-saving factor in the Union, is it saves the by-products. You know, as they say, they save every- thing but the squeal of the hog. We certainly would not want to waste all those by-products. MR. RITTER : I don't want to be misinterpreted. I realize as you stated, there are some fabrics for working clothes, but what I wanted to instill into-^a man, when he goes into a store to buy a suit of clothes, that the price demanded he should not be flim-flammed with a lot of shoddy when he should demand for that price all wool goods. I mean when you pay $30 or $35 you have a right to get, under normal conditions, all wool fabric. MR. BIGELOW: Even there let me say, yo« can go into any of our warehouses and you can get hold of some wool and I will tell you that I would rather have it made out of waste than I would some of your virgin wool. I mean at any time, very inferior wool, that hasn't any wear to it at all, and some waste, you call shoddy, we call it waste, which is most excellent mate- 24 rial. I would rather have a suit of clothes made from that waste material than all wool. I say this is a great big question, and it does not do to condemn the waste of a very valuable material. It must be used in order to provide garments that have wool in them for certain people. There is one way. It is on the basis of the United States army, have a strength test. PRESIDENT WALKER: May I ask Mr. Bigelow what per- centage of woolen clothes are shoddy? MR. BIGELOW : Pretty nearly all of them today. MR. LINCOLN: I believe Mr. Ritter sounded a keynote to , the solution of our problems here, when he sug- ,„ , ,,, ', gested the standards from fleeces to consumer. I Wool as Wool ^ ,. vc ^1 ^ ■ J A ^ ^ u believe if that is done, we need not wori^ or be afraid of our products. Mr. Bigelow comes back with the asser- tion that we must not forget the by-products, uses that illustration of the frugality of the packing company. That is very good, but they don't make fertilizer and sell it for pork chops. All we wool growers ask for is that our by-products sell for what they are. (Applause) . PRSIDENT WALKER: It seems to me right, that this would be a good time to appoint a committee that will look for- ward to the work of the day. I will appoint the following: Mr. R. L. Munce, president Pennsylvania Sheep and Wool Growers' Association of Pennsylvania. Mr. R. A. Satterly of Iowa. T Mr. E. S. Hill, treasurer. New York Federation of County Co-operative Wool Growers. Prof. W. C. Coffey of Illinois. Prof.. F. R. Marshall of the Department of Agriculture, Wash- ington. Mr. L. L. Heller, National Wool Growers' Association. Mr. L. J. Horlocker of Kentucky. Mr. C. F. Snyder of the National Stockman and Farmer. Mr. A. C. Bigelow, president Philadelphia Textile Association. Mr. Herman C. Ritter, ex-president Retail Clothiers' Associa- tion. PRESIDENT WALKER: Have we a representative of the State Federation of Farm Bureaus here this morning? There is possibly no other class of men that has done more for the wool grower in the last few years ; no class of men had the interest of the wool grower on their heart more than have the men of the state colleges. This is not only true of the -^ool industry, but 25 all other branches that pertain to the animal husbandry depart- ment of the state colleges. I am well pleased that these colleges are represented here and it seems to m that a message from each of these branches as to the situation of the sheep industry in each state — the progress that has been made in the industry — would be appreciated. PROF. COFFEY: I was particularly struck by what Mr. P J. Bigelow said relative to the necessity of our farmers _. ^ ^ paying more attention to the grading of their product. When we have a high class product, then has come the time when we can demand a high class price, and if we are going to get out of our wools what we ought to get out of them, we must aim at producing a high class product. That possibility lies within the reach of the farm wool grower. There is no good reason why any wool grower in the state of Ohio or Illinois or Indiana should grow a poor product, and if we all had in our hands today a good product to sell, I am frank in my belief to say I believe we could hold our own in the markets, and I believe that my co-workers in the various agricultural colleges realize this point fully. We need, then, to institute a large campaign -of education. My friend here to the left whispered to me as to the advisability of placing in the hands of county wool growers' associations samples of wools, these samples to be studied so that the farmer himself could appreciate the intrinsic value of his property, and one of the things I see growing out of this movement is the education of the farmer to the realization of the fact that the wool is the important consideration in the sheep-raising process. Now, I think I am talking far afield when I talk to Ohio people about this, but I know what I refer to when I refer to Illi- nois. I come from a state wherg^ the sheep population is very sparse, where the people have developed the attitude that sheep growing is a mutton proposition, and they forget the important part of the revenue should come from the wool, and if we get what we hope to accomplish, we will get better market conditions, and back of that we will get better growing conditions. (Applause). MR. LELAND : There are two things in marketing wool. While the absolute fiber, of course, is the essential thing, so far as the manufacturer is concerned, its appearance also has a great deal to do with its selling. PRESIDENT WALKER : There is only one trouble in the proposition at the present time. That is grooming our wool. Grooming our wool ever so well, ever so good a job of grooni- 26 ing, has never paid the cost of getting the job done. There has never been enough discrimination made in the market to justify a man in putting up his wool. I speak advisedly. I got a cent a pound more once or twice after hauling in a 3,000 pound clip, and I think the only way to work ou^ that problem is for the man who wants to produce good wool to get a better price than the man who don't want to produce good wool. That is where the wool dealers can co-operate, paying a price and premium to the man 'who has good stufif. There is always a flat price in the com- munity. They didn't dare to discriminate. PROF. COFFEY : I would like to support you in that state- ment. I frankly agree with President Walker. If the wool deal- ers hold out, it will help us materially. PROF. CLAUDE HARPER of Purdue University: There are two things that come to my mind in my travels throughout the state of Indiana. One is, the farmers in Indiana certainly need „. . to grow better wool than they have been growing and . putting that wool tip' in a better package. The wool dealers in Indiana tell me 60 to 75 per cent of the wool is tied with sisal twine. There is no excuse for that. We have some burry wool, also. So I think we need to grow better wool. And, in the second place, I think we need a better method of mar- keting, a standardization of the wool as it goes from the farmer to the dealer. In other words, I would like to see the farmer paid for the package he puts up hirnself. If he puts up good wool, good strong wool, good quality, strong staple, I would like to see him get what that wool is worth. If he puts up a wool that is burry, tied with sisal twine, personally, I am in favor of seeing him paid for what that wool is worth, and I believe a farmer can be edu- cated as quickly as any way by having standardization of the market classes and grades, so that he will learn something about those market classes and grades. Those two things come to my mind that we need in Indiana; one is better methods of growing wool and putting up wool, and the other is standardization of the growers and the farmer paid for the grade that he actually puts up and the package he puts up. PROF. W. H. TOMHAVE: As representing the Pennsyl- , .^ ^. , vania State College, I want to say that we are Agitation and , , , , i , ■ ,,_ , „ . back of the gool grower and want to interest him Wool Prices . ., , , . ,, i .. c in every possible way to improve the quality of the fleece that he produces and help him in his marketing condi- tion. We feel we are making some progress in Pennsylvania. We are getting our counties organized. The people appreciate the 27 fact that in order to get the most out of the business, they must give some attention to wool growing and the sheep business. We are making an effort to educate the people to produce a better quality of wool and at the same time putting it up in a manner that will bring a better price. I cannot help but feel that the agita- tion that is going on with reference to selling wool on its merits goes a long way toward solving that problem. I have always felt that the men handling the clip felt that phase of the work should be given more attention and more attention will be paid to that phase in the future than in the past. In other words, the wool will go to the market on its merits, instead of a fiat price. I feel that by a system of education, such as is being conducted prac- tically in every state through the county agent, through the local wool association, that that is going to be accomplished. We are doing some experimental work along the lines of rais- ing better fleeces, better method of feeding and so on. I simply raise the question here. I hope -that it will never become a serious question, namely, that of paying a better price for the better fleece. Just as an illustration, our clip went to market last spring and we found that a good share of the wool was sold low ; the shrink- age was estimated on a comparatively high percentage. I raised the question. The commission firm that handled the fleece, in placing valuation, said: "That our sheep were kept under favor- able conditions, well fed, and there was naturally somewhat higher shrinkage than you get from the fleece that came from flocks kept under more unfavorable condition. Naturally, we could produce more wool than where they are not so well cared for. I raised the question whether wool from sheep kept under conditions that were favorable was not of greater value than wool produced under unfavorable conditions. Am I right or wrong? I believe that is one phase of the wool condition that should receive considera- tion. I believe if the large wool dealers and producers work together, that problem can be solved. I believe that will encour- age the grower to take care of his flock in order to produce a bet- ter fleece, and the people will pay a better price for wool of that kind. I was surprised when the commission firm that handled this wool came back and said they didn't want to discourage the bet- ter handling of the farm flock, and they appreciated the work of the college. I haven't anything further to say, except that we are back of any movement to improve the market conditions _or anything that will tend to get the better fleece from the farmers of the state of Pennsylvania. (Applause). 28 PROF. E. L. SHAW of West Virginia: During the past eighteen months or two years, I Lave had an- " " opportunity to travel over West Virginia. You ^ all realize West Virginia ought to be a great sheep state. At the present time it is the twenty-first sheep state in the Union. We are not encouraging the farmer to raise more, but better sheep. You would be surprised at the loss of lambs and sheep over our state. I think that is due to lack of care. That is the biggest problem in West Virginia, and probably a good many other states. We tried to encourage the farmers to give them better care. We realize the situation. We are going to produce better wool in West Virginia. We are going to have the farmers give the wool better care. The other day I went to visit a farmer who had 100 head of sheep. Instead of having 100 sheep, he ou.ght to have had a pet lamb. He didn't know how to take care of them. It is true, in our state, and a good many states, that the farmers are not giving the sheep good care and then they wonder why they are not producing better wool. That is our present problem, to get the farmers to give better care. We are, at the present time, try- ing to get them to use better methods, put the wool up in better shape. But we can't do anything with the farmers putting the wool in better shape until they give the flock better care. PRESIDENT WALKER: I think it is useless for the Chair to introduce to you Prof. Plumb. He is well known to all you men. We would like to hear from Prof. Plumb. PROF. PLUMB: Mr. Chairman: I don't know as I have any special message from Ohio, but I would like to say one thing, and that is this : that at the meeting, which was held at Wheeling, there seemed *o be a great deal of uncertainty as to the wool situa- tion. That meeting was well attended, ISO people there, a wonder- fully fine meeting. It was thought at that time something really ought to be done to help the wool producers, at least of the fleece wool states, to find himself in disposing of his clip for 1919. As a result of the conference there, held on the subject, it was decided to hold what you might call a national conference here at Colum- bus of a certain class of men, naturally leaders, who might get together and formulate some device or some plan for the fleece state producers. This meeting, so far as attendance is concerned, is a very fine representative one. There are a dozen states repre- sented by men that have come here for this purpose, in addition to the representatives of the Government. The Government is taking an interest in it. I have a big batch of letters, expressing a great deal of interest in this meeting, and I hope the committee 29 that is to be appointed, if not already appointed, will be able to come to a unanimous opinion as to something to report to this conference that may be adopted and spread broadcast among the papers of Eastern United States, east of the Mississippi river, so that a great many producers of wool may be able, perhaps, to market their wool more intelligently. The other day I had a letter shown to me from a man in New Jersey, a very prominent man in the East in live stock matters, and the manager of a big farm, in which he said wool ought to be sold for 40 cents. On the other side, people think wool ought to bring 65 or 70 cents a pound. There is the wide extreme. What cannot a group like you help do in a problem of that sort? As I understand it, this conference is not called here to dis- cuss the care of flqcks, but rather to help the great bulk of wool producers to find themselves in selling their wool clip. PRESIDENT WALKER: We will not hear from Prof. Marshall of the Department of Agriculture at Washington, who has charge of the sheep department there. PROF. MARSHALL: This meeting recalls to fny mind a meeting which was held in Washington four years ago last summer, 1914. Rather an ambitious under- taking at that time, but was subsequently realized. The Bureau of Markets, in which I am interested particularly, and some wool growers' organization held a conference there in June of that year, which was participated in by growers, manufacturers and dealers. The main question then was to what extent the department or other agencies should agitate certain attempted reforms in western wool. They had been working on it for a good many years, but it had taken on a new phase. "There were a lot of questions threshed out and a lot of opinions given. And ought it to have stopped there? I just want to say this, regarding the outcome of the discussion _ . . of the western wools, so far as we ourselves were Commission j • im^ j i ■ r ,, ■ . concerned in 1914, and our conclusion following that was what was needed and what could be clearly given was, first of all, more education. The warehouses of Chi- cago had been doing that as a private enterprise for some time, and from that time until the war interrupted things, we were trying to lay a basis for what would come later on, education on general wool questions. From observing this and the general wool situation in the West, and fleece states as well, it has struck me for some years, and most people with whom I am associated, that the ultimate and most logical system or way to get woo] from the 30 growers' hands to the mills is on the commission basis. I do not mean to say there won't be any speculation. Talce the wool situa- tion in Australia, which is held up as a type of commission basis, there naturally is more or less speculation there. We have thought of the commission basis largely as a means of getting this thing we have been talking about, and that is individual appraisement of each man's wool for what it is worth. The knowledge of the wools is the basis of all you can do on this, and on that basis we were undertaking educational work in the West when the war cut us short. I feel, in regard to the fafm production of wool, the biggest and wisest education that can be gotten on this is through organized selling, such as New York and Nebraska and other states, and that is the system by which the farmers see the wool graded by qualified men. I simply want to refer to that here, thinking I may not have a chance later. There is an education in that system of having the wool graded where the consignor can see it, that you cannot get in any other way. Our office at the present time has co-operative relations in about twenty states in which they jointly support and contribute to the work of sheep extension work. Their work is greater production and better pro- duction. They are called in by state officers, more or less, in con- nection with this undertaking i^i a marketing way. I am not going to take your time telling what they are doing, because there are some of them here at this convention who have experience and they will give the best possible basis for getting down to busi- ness as you propose to do this. , One point, however, which I feel very strongly on, which I am going to put over at some risk. That is, regard- Who Wants ■., t. r ■ ■ ^ t. ^ • u ■ mg the part of various interests concerned in bring- ing about the reform. I don't think the dealer or the middle man is going to object to any system that will penalize a man for not putting wool up right, but I think there is room for wide difference of opinion how that should be brought about. I want to bring this idea in that connection. The manufacturer is in a peculiar attitude. He takes what he can get and puts up with it. The warehouse men and dealers, it is their business to make transfer. They have rendered a service there. I don't join in the hue and cry "To hell with the middle man." I think what we should aim at is the elimination of speculative profits in between. Up to this time we haven't been in shape to facilitate any system like that. The man who is going to benefit from the change — it is coming, I don't think there is any question about it — is the grower; the man who needs more information, and he 31 thinks he has a grievance. He thinks he has a grievance against the dealer and, to a considerable extent, that is true, but they should not demand that the dealer or manufacturer should estab- lish this new system. It is his business to take the commodity on one hand and get it on the other side. The man who needs the change and who wants il and is going to benefit by it, is the producer, the grower of wool, and, therefore, it is up to him to make the change. Something has been said about the attitude of the dealers and manufacturers, whether they should support the movement and buy these wools or not. That is their business. I don't think there is much room for doubt about buying good wools ; buy them at value and put them where they can do something with it. But to expect them to establish this reform or take a leading part, when the only man to benefit from it is the grower, I think that is mis- leading ourselves. It is the grower's undertaking and he has to see it through, and there is no reason to suppose when he does see it through, takes steps in that direction, that the outcome is going to be anything but satisfactory. Professor Plumb spoke about the uncertainty in the country and wanted an expression to come from this meet- ®. ing. Of course, we have all been thinking about wool nee ^^^^ since talking.more wool when the war started. We realized a situation would develop after the war that would be perhaps more critical to see it through than during the war. We are now face to face with that. I am not going to take time to express an opinion as to probable wool prices until peace is signed, except to say when you look back into the situation, supply and demand before the war, and what it . will undoubtedly "be when normal business is restored, there is no room for any pes- simistic, ruinous bottom prices of wool. I was impressed with Mr. Bigelow's remark about the exchange value of a pound of wool. You cannot separate wool from the different business con- ditions and different commodities. It has to go up and down with them according to the financial condition and purchas- ing power of the country. I feel that when this war condition has been passed over, that wool is certainly in as strong relative position, as compared with other products or with relation to what they will buy, as it was before the war. I think the world wool production reached a point where the farm production is an entirely new factor when the farm flocks are relied on for the increased production in the very near future. And whatever may happen, and it doesn't seem like anything calamitous will hap- 32 pen until the normal basis is reached, there Is every reason to have confidence in our flocks, every inducement and every promise of reward for breeding them better and caring for them better, and every promise, I believe, through steps being used here — every promise for better putting up of wool. The system which the growers can establish and as a result of steps being made here will see to it. I am entirely an optimist on the sheep busi- ness. While in the sheep work, I have as much interest in other stock as sheep, and I don't think there is any justification or anj' excuse for any backward step in better breeding and in staying by the sheep business. (Applause). PRESIDENT WALKER: We have with us Mr. Holliday of the National Wool Warehouse and Storage Co. of Chicago. MR. HOLLIDAY: Mr. Chairman and gentlemen: It is rather a curious anomaly to have a western man come into a farm state to discuss the sheep and wool. However, we have arrived. We hear a great deal about increased production. If that is to be done, it must be done in farm states. Problems arising in wool preparation for the market and mar- ^ keting are very difficult ones. They seem very easy „ . until you get into them. One of the problems which is inseparably connected with wool marketing is that of distribution. That is something that is very rarely given attention by producers of wool. As one of the directing ofiScers of the National Warehouse and Storage Company of Chicago, which is an organization controlled by men who are wool grow- ers themselves, I have had much to do in the initial work in dis- cussion of better preparation of wool and distributing it, and along that line we have always been very optimistic, feeling that patience and industry in tihe determination of those problems would finally win out, and in coming over here today, it was not the purpose of contributing anything to the solution of your problems, or anything to the interest of your meeting, but rather to observe with pleasure how far those problems have made progress. I find that you are now up to the problem of distributing your produc- tion. It is of no consequence if you have a gold mine in the Rocky Mountains without the means of getting the gold out. I am told by old prospectors there are gold mines of fabulous wealth, but you can't get it out. The problem we are facing today, which is the major problem in the commercial world today, is to know the value of things. For the first time in the history of the world, gold has lost its value. Nobody knows how much it costs to pro- 33 duce gold. We find the British government had to pay a bonus for mining its gold in the mines of South Africa. For the first time in the world, it cost more to take a certain amount of mined gold to the mint in the wages of food and clothes than the gold was worth. We hear a good deal of talk about what wool is going to be worth. No man on earth today knows what wool is going to be worth. If there is, I would like to meet him. He would be a most desirable person to meet. We deal offhand on statistics, how much wool the British have got and where it is concentrated. I have my pocket full of memoranda and I think the wisest thing to do is to keep it in my pocket. Now, the problem which you meet today, I think one of the most apt problems, one of the most necessary things — and I heart- ily agree with Mr. Plumb, that sonae simple businesslike method should be arrived at for the distributing and marketing of your wool. There may be many suggestions made about that, but my experience is this : The first thing to do is to get your wool together, concentrated in some marketable place. Too much wool in one concentration, without you have ample reasons of financing or distributing it, is rather a handicap. That may seem strange to you. Take our farm states and it is really to the educational work, both technical and commercial, that we must look to the solution of these problems in large measure. It is for your county elements of production to concentrate their local production and know what they have and to educate the people and have them see that well bred wool will bring a better price' than ill-bred wool. The Government, I think, in its administration for the last twelve months has done more to smooth out some of the difficulties which we encounter in marketing wool than all the years of the history of wool growing. They classified the .wool, choice, aver- age and common. As a market agency, some of the clips from my own state — and, pardon me, I live in Montana — there was 40 cents a pound difference paid by the Government for individ- ual clips of wool in that state, the clean contents of the wool, the character of its breeding and condition, and it was entirely honest and fair. It is extremely difficult to make the wool stand- ard, largely because the two men don't know their wool. Clean contents of the wool to the average wool grower is Need for ^" unknown factor, and as an agency, my observation Education '^' ^* '^ ^^^ "^°^* difficult thing, almost impossible thing, to handle a man's clip as a selling agent when he doesn't know the fundamental value of his wool, whether 34 cdtnbing wool or clothing wool. They are strange terms to him. WhjCther it is choice bred wool, or whether it is floating clips, and it is the most difficult thing to receive a shipment of wool from a remote place like New Mexico or Colorado, for they will always insist, it is a stereotyped statement, we must have hundreds of them, "My wool was bred on the same ranch over the divide from so and so, and his wool brought so and so," something rotten in Denmark, assuming everybody is a thief. Over and over again, since I have been a directing officer of the company, we have paid the fare of these people to Chicago, and even to Boston, to con- vince him he didn't know what he was talking about. Some of them were nice enough to apologize, but some of them would say they would ship to somebody else the next year. We should carry forward our educational lines on what the p, wool is worth, based on its quality and clean contents. . Those are the contributing factors in merchandising wool. A maliufacturer always figures what that wool is going to cost him clean, and what its spinning qualities are. Those are the things that are the controlling factors when wool is bought at public auction. When going through Ohio and Indi- ana rounding up wool, they buy the averages. They know that for some of the wools they pay too much, but they are going to keep their average to protect them. Don't find fault with the wool buyer, he is the commercial factor in the life of your coun- try. The middle man is as necessary as the distributor. Our only objection is, don't have too many middle men doing the work of one man. That is the fault. All of you would make a good bargain if you could.- You would not hesitate to buy hay at $5 a ton and sell it in Columbus at $15 a ton. Don't expect those impossible . things. Business is not built on that sort of founda- tion. Now, if that man doesn't know the quality or condition of his hay and the market price of it, he ought not to be raising hay. Now, that is out of line, coming here from the far West where we are not judges of much but whiskey. You gentlemen get together and get your wool in your county, and in your state, and put them into commercial grades. Just one suggestion along that line, the question of clean _, J. contents, the quality and condition of wool will Grading , ' ... , . , . always be controllmg factors in the grower get- ^^ ting the value of his wool. For instance, take a grade of half blood. One man's half blood may shrink 50 per cent; another man's half blood of equal quality may shrihk 55 per cent; another man's half blood may shrink 58 per cent. Dpn't 35 * / put up one line of half blood. Make two or three lines of half blood combing wool. Then all your shipments, however small, will be fairly well protected, if properly handled, because one of these three lines will catch every shipment of half blood — each shipment, however small, will be perfectly protected. We are assuming that all business is handled properly, because that is the foundation of big business. It is the basis of sound busi- ness. It is not brilliancy, it is common sense and common hon- esty. If you can't bring yourself to these fundamental policies, you are out of the game. It is not a particularly scientific thing, it is a commonplace, business, practical proposition with the wool in your hands. ■ Get your wool together and the final thing, get it strongly financed. Borrow your money; don't mortgage your wool; bor- row your money on your commercial paper, get it from your Fed- eral Reserve Bank, at- the open market value of the money. Always have your prciduct strongly financed, so when your com- mercial paper comes due, you can renew it. Don't overlook that. Another thing, cease to be constantly speculators. I might use the term we use out West, "manipulators." It isn't all con- fined to. the wool trade. Don't get your wools here in concen- tration in large bulk, and because the market seems dull, withhold that wool until next spring. That is not a good plan of distribut- ing essential raw materials. Distribute it on the market. I think the outlook of wool is good. I think the farm and „ , ranch production when yoU are creating something new every year is the safest sort of future. There seem- ingly is too large an amount of greased wool and scoured wools in the great concentrations of the world's center markets today, at the present time, but when you analyze this in former and prospective requirements, they are not excessively large. The problem is one of international credits whereby one country can trade with another without actually putting up cash, which has the reputation of making good its promise to pay. That is an illustration of the broad channels of trade, which will- cover distribution. Don't expect any dollar a pound wool. That is out of line with the comparative value of other things, and as the gentlemen well said to you, the value must have a certain relation to other things, one should not be too high and another one too low, and with safeguarding your own interests with a certain amount of importation and concentration in distributing, I don't think you have any more difficult problems with your neighbors or. anybody else in the country. (Applause). 36 AFTERNOON SESSION PRESIDENT WALKER: The afternoon is passing, gentle- men, and it is time that we get to work on some of these things in which we are vitally interested as growers. It was thought best that this afternoon session should be devoted to the inter- ests of the wool growers in the matter of marketing wools and what success they have had in the co-operation among the growers. We have with us Professor Smith of New York state, who has been one of the leading men behind the movement of pooling wools in New York, and I am sure that their experience there will be of much interest to you men here. I take pleasure in introducing Professor Mark Smith of New York. PROFESSOR SMITH: Mr. Chairman and gentlemen: I „ , , am not the ofificial delegate of the New York Feder- Ncw Yorks . ated Sheep Growers' Association, but I am an ^ extension sheep specialist over there in connection with the College of Agriculture. We have been working seven days a week and sixteen hours a day in our organization among the sheep me'n, and last spring and summer we did manage to consign something over 500,000 pounds of wool co-operatively under the Government wool regulations to the seaboard. We have now thirty county Sheep Growers' Associations in New York state, and I want to say at the start that the Govern- men,t wool regulations, although, no doubt, a detriment to the sheep industry as a whole, still they did have a great beneficial educational effect on the sheep men, for the sheep men that saw their wool graded last sun^mer, realized that there was a difference in the grades of wool, difference in wool, and also realized that there was a relationship between methods of breeding, feeding and management and grades of wool. I know I can say today that the farmers of New York state are producing better wool than they , did a couple of years ago. The consigning of wool is not entirely new in New York state, and before the wool regulations went into effect, four or five counties had been consigning wool. Nineteen counties consigned this half million pounds of wool last year, and consigned directly to the seaboard, Boston and New York. That necessitated that the official grader be sent to the point of ship- ment by Jeremiah Williams & Company of Boston, and the John E. McCurdy & Company of New York. They had a schedule made out and the grades went from one county to another on successive days and followed the matter right up. In some cases where a county did not have' a carload, a half carload was shipped to the next county. 37 Each grower, when he brought his wool in, was given a sheet of paper. There were three copies of that sheet. County rj.^^ grower had a sheet, the house to whom the wool Grading ^^^ consigned had a sheet, and the local Association had a sheet. All of this business was done by the Sales Committee of the County Association. It has never been done as a state- wide proposition in New York. A big line of wagons and autos and so on would be waiting, and the ofhcial grader was there and the wool was thrown to him and it was weighed up in the grades conforming to the wool regulations, and a statement was made out for each man and two carbons made. I happened to sell a little wool through the Tompkins County Sheep Growers' Asso- ciation, and they handled 45,000 pounds of wool there in two days. It might be a good illustration of this system to go over my own little personal business. Tompkins County Sheep Growers' Association, M. J. Smith. Account of wool consigned to Jeremiah Williams & Company for United States Government, 201 pounds of Account ^^j^ ^j^^^ staple, 24 pounds of three-eigths blood blood staple and nine pounds of tags. The advance on the half blood and the three-eighths was 67 cents a pound, $155.25. The advance on the tags was 15 cents, $1.35, a total of $156.60. After that wool went to Boston and was looked at by the Government Valuation Committee, they, of course, only estimated the shrink- age, that was all they had to do. They decided that my half blood wool was worth 75j/2cents a pound and the three-eighths blood was worth 76j4. and the nine pounds of tags were worth 45 cents a pound, making a total of $174.22. Now, the expense for moisture shrinkage was 1.3 per cent; loss, due to regrading, 1.8 per cent. They put a little something over us there on the regrad- ing. I do not think that was necessary, but it was done. Seven tenths of 1 per cent for local expenses and .6 of 1 per cent of the expenses for freight, making a total of 4.4 per cent total of the selling price. That equalled $7.66. So we have a total advance of $156.60, plus expenses of $7.66, making a total of $164.26 to be taken from the total sales of $174.22, leaving a final check of $9.96. Now, that was very typical of all our sales. PRESIDENT WALKER: What did that average you? PROFESSOR SMITH : Averaged a little over 70 cents. PRESIDENT WALKER: What would wools of similar grades, unconsigned, average? PROFESSOR SMITH : They brought from 60 to. 65 or 66 cents. It is figured that the nineteen County Associations saved 38 around $26,000 over what they could have received if they had sold separately. This much is true, that the sheep men of New York state are never going to be willing to go back to the old haphazard meth- ods under which they sold wool in the past, where everything was thrown in the same sack and went at the same price. They are going to demand in the future that wool be sold on its merits. And although our wool selling last year had its vicissitudes, it will go down as a very successful year in wool selling in New York state, and practically all the farmers are satisfied they have received more than they could have received if they had sold through the other channels. But outside of that, no man knows how much money was made for the men not in the Association, because just as soon as thiey found out we meant business and were going to consign our wools, wool went to 65 and 68 cents, and in some cases 70 cents. So that there was more money made by people who were not mem- bers of the Association than by those who were members of the Association due to the raising of prices as a result of this co-opera- tive action on the part of the organized sheep men. I want to say right now, I am feeling very optimistic in regard to the sheep business in New York state. It is on a good, solid foundation. The men are taking better care of their sheep. It is surprising to learn hoy many men know what three-eighths wool is, and half blood wool and so on, where a year ago they did not know what it was. There has been a great demand on the part of sheep men for knowledge regarding the wool grades. Are there any questions you would like to bring up? PROFESSOR PLUMB : You spoke about this grader; where did you get him? PROFESSOR SMITH: He was furnished by the wool houses, John E. McCurdy agreed tc do the wool that he bought and Jeremiah Williams Company sent Alexander Livingstone, the son of the Alexander Livingstone of the American Woolen Company. PROFESSOR PLUMB: What did it cost you per pound- to sell, your freight, commission and everything? PROFESSOR SMITH: One and one-half cents a pound. The commission came out of the Government. In this way the sheep men received every cent there was in the wool, with the exception of taking out the expenses of the freight and legal expenses, about Ij^ cents a pound. 39 MR. HAVENER: Can you tell how many pounds were han- dled in New York? PROFESSOR SMITH : About 500,000 pounds. MR. HAVENER: How many different counties were involved in the half million? PROFESSOR SMITH: Nineteen; you see we only have about one-sixth as many sheep as you have here in this state. We figure we have 350,000 sheep represented in our Federation now. Five counties in the state have 33 1/3 per cent of the sheep in the state. •MR. HAVENER: What are your plans for marketing this present year? PROFESSOR SMITH: To use the counties as the mar- keting unit and to aid them in every way we can, but we feel the county is the most practical unit, because we are composed of a lot of small growers and they had to have their money and we had to deal with the human nature feature of it. MR. HAVENER: You tollect it by counties and then con- sign it? PROFESSOR SMITH : Yes. Each county has its own sales committee and attends to its own affairs. We aid -them iri what- ever way we can. MR. STONE : Did you have the men bring their wool to one central place in the county? PROFESSOR SMITH: Sometimes one, sometimes two, sometimes three, according to the amount of wool and the size of the county. Very often when there were two railroads run- ning through a county, they will have a day at each point. We had one po"int in Tompkins county where we brought in 45,000 pounds. MR. STONE: And this grader went to different places- three days in the county or something of that kind? PROFESSOR SMITH : Yes, and every shipper had a paper showing the number of pounds in each car he had. MR. STONE: Did your State Association have representa- tives there? PROFESSOR SMITH: No, 'there was no State Association last year. The business was done by county units. MR. STONE: Will you have a representative of that sort this year? PROFESSOR SMITH : The business will be done through the counties this year, 40 MR. STONE: And aided by the state? What relation does your state have to the County Association ? PROFESSOR SMITH : Just the aid, to do what they cannot do in opening up markets and so on. MR. GOULD: How will the expenses of the State Associa-* tion be met? PROFESSOR SMITH: Twenty cents per member of the County Associations. MR. GOULD : What was the smallest amount of wool you had consigned at any one place? PROFESSOR SMITH : Half a carload. MR. GOULD : Do you propose selling your wools at public* auction or do you propose consigning them? PROFESSOR SMITH: That has yet to be decided. All of the Associations are, more or .less, waiting. They wanted to see the results of this meeting. I was with the Wayne County Asso- ciation this week. They were not ready to take any definite action. They wanted to know about the future, what information as to the future they could get. It is a little early to make definite plans. We do not know what the developments are going to be. MR. STONE: Did you have trouble getting buyers to come to get this wool? PROFESSOR SMITH: No, we are having no trouble this year. Plenty of them are very anxious now to have " . our wool, either by purchase or consignment. They Interested a *■ u- u ,do not care which. MR. HOLLIDAY: Suppose, Professor Smith, you had an offer for wool there, somebody wanted to buy it, what would you ask him for it? PROFESSOR SMITH: We could not do that. Ye leave that with the county. MR. HOLLIDAY: I mean, whoever does it. PROFESSOR SMITH : Well, they haven't any basis. MR. HOLLIDAY : There is going to be a difficulty right now. PROFESSOR SMITH: One buyer has offered to advance 40 cents and have it consigned to him. But they feel like all sheep men, that the wool market is not high enough. The do not like to talk about 40 cent wool or 50 cent wool. Mr. WILLINGMYRE: Do you propose having your grader go around? 41 PROFESSOR SMITH: Probably not. Probably the man that buys the wool will furnish the grader, but the plans Ura ing ^^^ ^^^ ^^^^ ^^^^ outlined for this year. You see, hith- ys em ^^^^ ^^^ ^^^p j^^^ been graded, number one, clean, bright wool; number two, slightly burry; three, burry wool; four, tags. The representative of the Association has been there to see that the Association got a square deal when it was graded. This past year there were very few men that were competent to pass on the grading of the official grader. It does not make so much differ- ence whether wool is sold on those commercial grades or whether it is sold on simpler grading systems, ust so it is sold on its merits. But we are here for information, too, to know the best way to handle the proposition this year. PRESIDENT WALKER: One of the most successfal co-operative Associations on the continent possibly, has been the Canadian Co-Operative Wool Growers' Association. We are cer- tainly glad that we have with us this afternoon a representative of that Association, Mr. Stansfield, who will give us something of the work in Canada. MR. STANSFIELD: Mr. Chairman and gentlemen: I feel it a great honor to be asked to speak to you this afternoon, and I am sure you will feel it a very great honor if I am very short in my remarks. (Laughter). In order to give you some idea of what is being done up there, I shall have to go back into what is almost his- . tory now, something that happened in 1911. In " 1911, the Government at last realized that the sheep industry in Canada was worth taking notice of. They appointed a commission consisting of two men, who toured the whole of Canada and a considerable portion of the United States and Great Britain. The general findings of this commission were that in Canada, the sheep industry was regarded in some parts as merely a mutton proposition, and in other parts as a wool proposition, and that, generally speaking in what we call the domestic parts, that is, where the small farm flocks are kept, the wool was not being placed on the market in a marketable conditiofi. It was not salable. It was simply being put onto the market in a worse condition than it was taken off the sheep's back, which is quite possible when it is in the hands of some of the sheep raisers. They gave as their opinion that in order to promote the sheep industry in Canada, it was necessary to meet the market condi- tions and the method of marketing that wool. That was their chief recommendation. So it was decided that, in order to meet the marketing condi- 42 tion, it was necessary to sell wool on a quality basis. That was the chief drawback. Manufacturers and dealers rightly said that in the past they had been unable to give a decent price for wool, for the simple reason that they had to buy everything on a flat basis. It was largely a matter of speculation. Some men put horseshoes and bricks and all sorts of things inside of the fleece. They had to buy that stuff at a flat rate and they had to protect themselves. They claimed they could not buy on that flat rate and give the man who was producing good wool its full value. These co-operative sales were developed and at the same time selling on a quality basis. A certain number of grades were evolved, ranging from the fine to the coarse, both for the domestic wools and the range wools, similar to your territory wools. Local associations were formed throughout the country. I , . might digress here and sa^y that we are a very . . small population up in that country, but a very large country. We put less wool on the market than the whole state of Ohio. Therefore, you can see that the question of distances counts with us. We formed small organiza- tions. The. first year we sold 5,000 pounds of wool. It was small and the dealers laughed at us, and a good many of the farmers "did, too. However, that was the starting point. In different provinces throughout the whole Dominion, sm^ll associations were formed, local associations. The Dominion gov- ernment decided that this was a movement that should be fos- tered, and the difficulty these mep were having was that they could not grade their wool on an equal basis. So the Dominion government provided graders for them. They still provide the graders. Last year, 1916, the graders were supplied by the Dominion government for these local associations. In 1917 the government went further. They rented a wool warehouse in Toronto, which is in the center of the manufacturing district, and a certain number of the larger western associations consigned this wool to this warehouse and put it up there. It was then sold. It was then decided that it was not the government's part to accept financial responsibility. Therefore, last winter, last Feb- ruary a year ago, representatives of all these local associations were called together in a convention, and they formed a center selling agency, which is now known as the Canadian Co-Opera- tive Wool Growers, Limited. This central selling agency is a growers' organization, financed with growers' money, and acts for the interest of. the growers. It is purely a co-operative associa- 43 tion. It was capitalized at $20,000, and $102,000 were placed on the market. Practically all of that has been subscribed by the growers themselves. This central agency acts chiefly and abso- lutely as a selling agent. Local associations scattered throughout the country collect their wool at certain central points, have it graded there and then notify the central selling agency that it is there, a certain number of pounds of each grade, and send samples, and the wool is sold on sample either to the manufacturer, in- case it is sold in Canada, or in case, as some of it was last year, shipped to Boston through a broker there. This organization, as I said before? is purely co-operative. It _ . . charges a commission of 3J4 per cent for its services as a selling organization. This 3j^ per cent is divided up as follows : Six per cent interest is paid on the paid up capital, and the remaining difference, after paying all expenses — operating expenses — is returned to the grower through the local association of which he is a member or through which he sells. It is returned to the local association on the basis of business which that association does with the central selling agency, not whether he is a share holder or not, but on the amount of business that he does. In that way, everything except the cost of selling is returned to the wool grower. Last year approximately 10,000,000 pounds of wool was placed on the market in Canada. Considerably more than that is produced, but it never gets to the market, because in certain parts of Canada they still make a lot of homespun. That com- pany, in its first year, which ended February 6th, last month, sold approximately 4,500,000 pounds of wool, which was 45 per cent of the total wool placed on the market in Canada. It was easy to sell wool last year, because we had fixed prices. One of the difficult times to sell wool will be this next year when the price may be anything. The local associations, when they first started, graded their _, , ,. , . wool in very small quantities at every little jerk- Establishing , , -^l.- .7 J- ^ . ^ T- -J water place withm the district. Expense was not considered then, because it was regarded as edu- cational work, educating these men up to selling on a quality basis, but after these men would drive into a small center and bring their wool in and see how it was graded, and at what price it was set down, and when it went on the scales, they began to see the benefit. After it had been graded for a time, these wool growers gained faith and trust in it, so that they were willing to send their wool to a central point. They did not want that local 44 grading; they were willing to trust it and have centralized grad- ing, which, by the way, is the only way in which you can get absolutely standardized grading, because if you get men travel- ing from one point to another — that is our experience anyway — you will find they do not keep their mind on the work — they do not get the same grading at one place as they do at another. The human -factor enters into it and you cannot help it. The strength of that association was such that last spring .... , there was a movement to place an embargo on all . . .^ Canadian wool, preventing it leaving the country. That, in view of the fact that a considerable portion, 30 per cent, of the Canadian clip today cannot be manufactured economically in Canada, would have had the effect of reducing the price. This association then got to work and they prevented that, showing that such an association is not only valuable as a selling agency, but it is very valuable in looking after the inter- ests of the sheep raiser. Later on the importation of foreign frozen mutton from New Zealand and Australia came onto the market last fall, and In western Canada, in Alberta particularly, caused a drop of 2 cents a pound in the lamb that was being mar- keted then. They have taken that question up and they have asked the government and legislation is being placed before the house to the effect that all frozen mutton shall be abandoned to state just exactly the contrary of origin. That mutton was being brought in there at a reduced rate, the price being very little over the price of live lambs in Canada, h.ut it was being sold on the market in precisely the same manner as Canadian wool. There was no difference, no distinction in marketing, and it was bring- ing the same price. The consumer was getting no benefit and, therefore, the sheepmen hold that if they were going to get no benefit from it, the consumer ought to have the benefit of know- ing what he was going to eat, having it branded Australian mutton. They have also asked that the grades, recognized unofficially as standard for wool during the past few years be legalized as the legal and standard grades. That is the way in which this organization is taking care of the interests of the wool growers, besides acting as a central selling agency. When a man sends his wool into one of these local associa- . J tions, he is advanced 75 per cent of the approximate value of that wool. The wool is graded and the weights of the wool put on a proper grading" sheet, such as Mr. Smith described, very similar to that. If there is any glaring 45 defect in that wool, it is written across in bold, red ink, stating what is the trouble with that wool. So that the man gets docked in price and he gets a reason for it, and it is up to him the next season to alter that or stand the docking again. And he does not like to be docked any more than you or I like to lose a dollar or five dollars. So he usually improves it. Now, if there is any question which you would like to ask me before I sit down, I would be only too glad to answer it. PRESIDENT WALKER : This year, in marketing the wool, do you propose to handle it as in the last year, through a recog- nized wool house, or do you deal direct with the manufacturer? MR. STANSFIELD : Any wool that is sold in Canada will be sold direct to the manufacturers, but wool which is sold in the United States will have to be sold through a broker in Boston, MR, LELAND : Does that 3j4 per cent guarantee credits? Does the farmer stand the risk of the man to whom you sell, or not? MR. STANSFIELD : No. MR. LELAND : It is a guaranteed credit? MR. STANSFIELD : After the wool is collected by the organ- ization, it is sent to the central selling agency and the expense of that local organization was paid by the central association. MR. LELAND : That 3^ per cent covers all expenses from the arrival of the wool to the return of the money ? PRESIDENT WALKER: If you have any further questions do not hesitate to ask Mr. Stansfield. MR. WILLINGMYRE: Suppose that the association sells a bad account and there is a loss sustained, does the grower have to stand that loss? MR. STANSFIELD : No, it is guaranteed credits. The grower gets his money and it is up to the central association to make good that deficit if there is one; but it is up to them to sell to reliable people. MR. LELAND : It being a co-operative association, it would really be a loss to the growers. MR. STANSFIELD : Eventually it will be but it will not be a direct loss. They would, of course, have to bear it in the last analysis. MR. TOMHAVE: You make the statement that 75 per cent of the price of the wool, or approximately that, is advanced to' the seller. In what way do you get your capital with which to carry on that sort of an operation? 46 MR. STANSFIELD: The central organization is able to .yjfj , finance that. They have a big account with one bank which has branches throughout the whole Dominion and they advance to the local organizations, they place to their credit at the local bank the amount of money they wish. MR. TOMHAVE : What is the cost of your money? MR. STANSFIELD : General money was 6}^ per cent. They were fortunate enough to get it at six. And the final payment for this wool is made after the sale is made. MR. TOMHAVE: Do they make their advance when they ship the wool? MR. STANSFIELD : Suppose I am a wool grower ; I ship woel today and it arrives tomorrow at the collecting station, the grading station. They immediately weigh it and send the check out that night for the advance amount. MR. DENNIS : After all the expenses were paid, what per- centages went back to the farmer? MR. STANSFIE;LD : Last year it was found that the cost of operation, selling and everything, ran a cent and a quarter a pound. MR. DENNIS : The rest of it was prorated back to the farmer on the amount of business he did? MR. STANSFIELD : Yes, sir. MR. FREEMAN: How did this central exchange get its financial credit to draw from? MR. STANSFIELD : Well, they went to a bank and produced a statement showing that they had so much subscribed capital and the wool was practically collateral. The money was put in the bank. It was still in their bank until the check was made out and the check was made out after the wool had been received at the local association's warehouse. MR. HOLLIDAY: Do you use a warehouse receipt? MR. STANSFIELD : Yes, sir, it is all done on a warehouse receipt. PROFESSOR PLUMB : You have some other literature rela- tive to your methods of doing business that might interest some of these people. MR. STANSFIELD : Yes. For instance, we have at Ottawa, at the department of agriculture, a number of small bulletins on various phases of the sheep industry. I would only be too glad to send them. One bulletin in particular I think would interest them. It is entitled "Wool and Its Manufacture." It deals considerablv with the preparation of wool for the market. If you wish to fur^ 47 nish those names I would be only too glad to take them back with me. MR. HOLLIDAY : Suppose you would be asked to ship to a central point ten bags of that wool for the purpose of scouring it and working it. into a test, how would you proceed to do that after you got it under government warehouse receipt? MR. STANSFIELD : Well, that is a question I shall have* to answer this way. The banks up in Canada are looking for busi- ness. All the banks have Dominion charters which spread from one end of the country to the other, and there are three or foun banks which are particularly striving for agricultural accounts, farmers' accounts, and this organization happened to get hold of the bank which was striving hardest, and they allowed them to do a few things which good banking does not permit. PROFESSOR SMITH : Can you satisfy the small grower ^ P , , without the wool graded at the point of ship- TiTt- 01- • J ment? You can, I believe you said. When Shipped ^^^ STANSFIELD: Oh, yes. You take the Province of Ontario, about four hundred to five hundred miles- in length. The wool has never been graded except at one point in that Province, and last year there were three quarters of a million pounds graded at one point. You get some men who are dissatis- fied. You always get them. PRESIDENT WALKER : I would like at this time to hear from Mr. Horlocker of Kentucky. They have had a system of pool- ing wools for many years that resulted in advantage to the grow- ers. We. would like to hear from him as to what Kentucky is doing this year. How it is working out will probably be the burden of his talk. MR. L. J. HORLOCKER : Mr. Chairman and Gentlemen : I did not come prepared with any figures today because 1 -p 1 I ^'^ ^^^ know I was to speak about the work of the Kentucky Association. But at best, about all we have done in Kentucky is to have several county organizations, some of which last year pooled a great amount of wool. There is one organization up close to Cincinnati that pooled all of the wool in the county and returned good profits to the owners and every- body was satisfied. I do not know how much wool they pooled or what the price was, but everybody was satisfied. We had other organizations throughout the state in different counties that did not work on such a large scale but just pooled small amounts of wool, and we got very good satisfaction from those. This year we have been holding back on account of influenza and everything 48 else and as yet we have not considered anything definite, anything further than we had last year, but we are planning to have more pools this year than we ever had before. We are going further. We are going to have men out in the field this year that will help the farmers put up their wool clip in the right manner, showing them how to put it up, and we are going to give them a few les- sons on some of the problems of grading so that they will have an idea as to what the grades mean. There are very, very few farm- ers that know the difference between one grade of wool and another grade of wool. They hardly know that such things exist, and they cannot see why the difference in the price of their wool. This year we are getting ready to let these farmers know what the difference is in these grades and what makes the difference in price, and we are also going to help them to put this wool up in a proper man- ner. A great many Kentuckians do not tie their fleeces up at all, just throw them into the sacks loose. That may be better than tying them with sisal twine. We are going to teach them to do better this year, tie it up with paper twine. We are going to teach them to put the separate grades separately if we can. We~ do not know how those plans are going to work out this year. In fact, we are waiting for this meeting before doing anything definite. PRESIDENT WALKER : How did you do your selling last year? MR. HORLOCKER: Most of the selling was done through the county organization simply getting their wool together. They had one man at the head of it and they just shipped it in to one of the commission houses. PROFESSOR MARSHALL: Was it graded before it was shipped ? MR. HORLOCKER : No. sir, it was got. Nobody knew any- thing about it. PROFESSOR SMITH : Did Kenton County use the same old system ? MR. HORLOCKER : They pooled all of the wool. I do not know the system. PROFESSOR SMITH : They used to have four grades. . PRESIDENT WALKER : Mr. Hill, who is the accredited rep- resentative of the New State Federation of Farm Bureaus, has just come in. He did not' hear Mr. Smith talk. We would be very glad to hear frotti Mr. Hill on the work over in New York. MR. HILL : I think the professor has covered our state organ- ization. Certainly he is in very close touch with it. I would say 49 that we have loaded him down with letter writing until I wonder that he can carry the load. Our own county sold its own wool or consigned it to a commis- . J . sion house. In my own county the contract called Advances in . ... for 69 cents advance on medium wools, with rejects and black and burry wool at SO cents. Of course you know the government guaranteed the full government prices with the percentages out. Then this wool was gathered at a cen- tral place in the county and the buyers sent a wool grader who did the grading right there on the ground and he also had the power to pay the 50 cents or 69 cents, whichever it was, and the balance I think we received in October. I will say our own wool netted us a little better than 70 cents. As you know, we could sell wool to mills direct that were located within fifty miles. We happened to have one mill which used J^ blood, delaine and fine. To this mill we sold all of those classes of wool at a flat price of 74 cents net. In Wayne County, which is not my county, but I have the figures here, the q^uarter blood brought 76j4 cents; the %, 78% cents; % clothing, 75>^; ^ blood staple, 77%. cents; J4 clothing, 71>i; 55 cents for rejections. That was the Boston price and gave them a net price of 73.8 cents. That in short was the way Wool was handled. PRESIDENT WALKER: Mr. Satterly, of the Executive Committee of the Iowa Sheep Growers' Association, is with us. Mr. Satterly. MR. SATTERLY : Mr. President and Gentlemen : The con- , ditions in Iowa, I will try to tell you in a few minutes. P oblem ^^ organized an Association January 14th of this year and we have between 600 and 700 members now in a few of the counties, probably eight or ten of the counties are organized at present. We had a Farm Bureau in every county in the state, there are ninety-nine counties. Of course in the southeastern part of the state, where the better wool and most of the wool is pro- duced, is where we expect to have our strongest organization. We figure Iowa produces between 5,000,000 and 6,000,000 pounds of wool. They do not ship quite all of it. We have an average of 6.7 pounds per head in Iowa according to the statistics. We got to figuring there that the Ohio fellows on % combings got around 78 cents, -and the New York fellows 76 cents. There was something wrong when the average in Iowa on all w6ols was around 61 1^ cents or 62 cents. When we got to talking to the growers we found there wasn't one man out of a hundred that knew the different grades of wools that. were being produced. Mr. Leland showed 50 that the demand for better wools was good, that the big surplus in this country is the poor wools, the wools that there is a poor demand for. If that is a fact, the grower ought to know it. Mr. Bigelow told about a six millin dollar crporation for exporting the goods out of the country. If they are going to go out anything like that, they see the demand for the manufactured article. If there is a demand for the domestic clips and we can produce them and can teach the fellows in Iowa what the better grades are and get them to producing them, we have a good proposition. That is what we want to do, is to build up the industry in Iowa. You see we have land selling from $100 to $400 an acre. The fellow that buys this land now and tries to produce corn will look at the variations in the hog and cattle market. The sheep fellows do not do it that way. If we can get the agricultural colleges and the county agents throughout the country in these fleece wool states to educate the farmers what to produce look at what it will mean to us. It will mean millions of dollars in these states for us. We cannot stay in the business if we do not. That is what the organization is for in these states. That is what we are trying to do in Iowa. That is what the Ohio fellows are doing. We have got to work at p. profit if we are han- dling $100 or $300 an acre land. If the demand is good for % stapled' more than % clothing, and a better price, why shouldn't we pro- duce it? 'Somebody said the Iowa wools are poor. Some of it is. I will admit that. The fellows in Iowa do not know what they are producing. Why shouldn't they know? I have been here and listened to what you say. I believe when Mr. Walker goes there he will find there are some men in lowia producing just as good wool as anywhere in the United States. But why they ,do not produce more of it is because they have not been encouraged to. They do not get any more for the good than the poor. They have sold wools there that would have brought 30 cents a pound dif- ference on the market. If there is a difference of 26 to 40 cents between the good and the poor wool, why should we be produc- ing the poor stuff? We might as well be producing better stuff and then have a market for it. And that is why we re-organized our Iowa Association. If we are producing between 5,000,000 and 6,000,000 pounds of wool every year — the better grade sheep in Iowa are worth $25 and one fourth of that is the fleece^ — some of those sheep averaged 10 pounds — with that situation working the way it is, we will never get anywhere. We want to get paid for 51 what we produce if we produce a good article. That is what the growers themselves must do. , PRESIDENT WALKER: I think Mr. Satterly .touched the keynote when he said it was the growers' business to look into this. It has been covered once or twice before today, and we are anxious to know what action is being taken in the different states. Is Mr. Munce, representing the Pennsylvania Growers' Association with us ? We would like to hear from him. MR. MUNCE : While we have had an organization for years, p . . and been growing sheep for years, we really _ „ . . haven't done very much. We are now organizing By Counties , -^ . . • r^ ^ /^ our state by counties and are proposmg to try to market our wool in a co-operative way, but just exactly the plan or how, we have not worked out. We are like a good many of the others. We are hunting ourselves for what seems to be the most feasible plan, and we realize the many difficulties that there are, although we do tell them that we cannot do as a good many have done, you cannot eliminate at one strike the middle man and the commission man. We feel that he will have to be used and that we can use him to advantage as soon as we get on a work- able basis. PRESIDENT WALKER: Mr. Freeman, of Michigan, is here representing the Michigan Wool Growers. MR. FREEMAN: Mr. Chairman and gentlemen: I came here as a representative of the Michigan Wool Growers' Associa- tion, probably because our president of our Michigan Sheep Breeders' Association, rather than the Wool Growers' Asso- ciation, is too busy pushing through his dog law. Ye have been working for a dog law a long while. Mr. Reed has a good one before the legislature, and he has been working on it steadily for two days, since it has been reported back from the committee, and we are pretty sure it will go through, if we can finally subdue the Detroit city fellows, who are bound they are going to have their dogs handled the same way they always have been. In Michigan we have had a sheep breeders' organization a long time. It was one of these organizations that didn't have much of anything to do. They have never done any marketing. They have lived along in sort of a dormant way. We have not had a very lively meeting until this one, but some of the men have been keeping track of what the other states are doing, and one of the men claimed at our meeting this winter that Michigan lost $1,500,000 last winter by their system of marketing, consid- 52 ering the figures reported by some of the other marketing asso- ciations. They are up on their ears for information with regard to marketing associations. That is one of the chief reasons why I am here, is to echo back some of the things I may get here today. PRESIDENT WALKER: We have a representative of the National Wool Growers' Association. We have felt sometimes the National Wool Growers did not like to travel with us, but we believe the time has come when all wool growers should stick together, and we feel pur western brothers are realizing more and more that on the East depends their market for the West, and also a great many other things that are essential to the welfare of the business, and I am very glad to introduce Mr. Heller, assist- ant secretary of the National Wool Growers' Association. MR. HELLER: I had not expected to say anything, but Mr. Walker has brought out a point that I think _ . could be emphasized more strongly, that is, that our Education . , , . ^ j ^u * mterests are common m many respects, and that possibly some of the misunderstanding there has been, has been because we did not appreciate that fact. There have never been any very serious difficulties. They have been talked of more than there was any occasion for. But we feel that there are some problems, a lot of them, that involve the wool growers of the e'ntire country. The National Wool Growers' Association is only too well pleased to see this movement in the East. Some time ago there was a movement made to get the states in the East organized, but it was not successful. But any help we can give, we are only too anxious to give. We have gone through some- thing of the same experience that you have here on putting up your wool. One thing is that sisal twine plan, for instance. The Wool Growers' Association has been active in discouraging the use of that twine, which is now a problem of the past. There is very little sisal twine used in the West. I won't take up more of the time. There are too many of the men here who have more to say than I have. If our association can give any assistance, we v^buld be glad to do so. We think it is just as important a prob- lem to the eastern sheep men as it is to the western sheep men and the sheep men from the South. . That is only one of the many things that we can work together and bring about better condi- tions for the sheep industry all over the country. PRESIDENT WALKER: I do not think that anybody ques- tions the advisability of looking after the mutton end of the game 53 as well as the wool industry. The wool industry at the present moment may seem paramount, in view of the fact that the dip will soon be going to the market. We realize the mutton end must be taken care of, and the stronger organization we get, and the more publicity we can give these matters, the better we can take care of it. Let me speak briefly of the work of the Ohio Association. We -., . , organized the middle of last year with fifteen members. Tw, At the present time we have some 8,000 members, with Plan . ^ . . , . , -.^T , active county organizations numbering forty. We have been very fortunate in effecting our organization in having the hearty co-operation of the State Farm Bureau. Practically every county has an agency, a Farm Bureau Agency, their county agent has been enthusiastic in getting behind and pushing the move- ment for the wool growers. So that to a great extent our suc- cess has been due, the rapid increase in membership has been due, to the instrumentality of these men, and I want to publicly give them credit for it. The association marketed around 200,000 pounds of wool last year. We secured for the members an advance of fully 5 cents per pound more than they had _been able to secure on the open market or through the authorized dealers. We did more, as was remarked by one gentleman, Mr. Smith, T believe. We immediately strengthened the tone of the entire wool market in the state. In some counties wool advanced 5 cents per pound over night. The Government had instructions that they could pay S cents more, and as soon as they found that out, the price of wool immediately advanced. We have a strong suspi- cion that that fact could be laid largely to the door of organiza- tion in the counties. At the present time, we are incorporating as a collecting Stock agency, as a selling agency, in order to handle our p wools this year. We are making every member of the Ohio Sheep and Wool Growers' Association a stockholder in this corporation, and he is liable 'to the extent of his one dollar share which will be issued to him in lieu of his membership. These articles of incorporation, I presume, will come off very shortly. I don't know whether Mr. Wilbur has them or not, but we are organized so that y/e can control these wools as coUactingx^agents. We can appoint whom we please as selling agents and handle them in any way that the association feels best, after they leave the hands of the grower. There is one thing that we want distinctly understood, and that is, so soon as these wools start toward the market, they are out of the hands 54 of the producer and in the hands of the association, to be dealt with in the manner they deem best. We expect to handle wools through some organized wool house to act as selling agent. We are in hopes, in a very few hours to have this thing definitely mapped out as to whom we will handle it through and as to the location. We believe that we canhandle these wools through Columbus, that we can secure sufficient wools that can be han- dled at a sufficient margin, and we are interested primarily in seeing Columbus made a wool-distributing center, because we are the largest wool-producing state in the East. So we feel ulti- mately it will mean a large' handling of wools through our own distributing center in the state, which is very centrally located and gives every man easy access to see these wools handled, and also furnishes excellent shipping facilities. One thing is abso- lutely positive, inside of the next forty-eight hours we will have definite information to go out through the state of Ohio as to just exactly how these wools are to be handled. I mean by that, under whose jurisdiction, and what commission will be allowed "for the handling of these wools as a selling agent. That means that back to the grower will go every cent, less this expense of handling the wools, with the commission on them. We are elim- inating the item of speculation. We are going to assure to the growers an individual grading on their clip, so that the man who is producing good wool, the man who has t»ken pride in getting up his wool in good shape, is going to get credit for it. The careless man is the man- who is going to suffer, and he is the man who should suffer. We expect the individual grading and the consignment propo- sition will be the means of raising the average of Ohio wools. Ohio has a reputation of producing good wools, and yet you men would be surprised to see how many poor wools — even in a good WDol state — can be found, and I presume in the states which have a reputation for having poor wools, there must be an alarming amount. That can be remedied by a better system of feeding, better care and better preparation of the clip for the market. ] regret that we are not in shape to say positively just exactly what commission will be given, but we have not got that far along. It will be out in a few days, so that we will know some- thing definite, more than we do at the present moment. We were in hopes to have had this practically arranged at this time. Are there any other state associations that have not been called on represented at this meeting? Mr. Sherman, if you are ready to take up the proposition that 55 yott wanted to put before the committee, we would be glad to hear from you at this time. MR. SHERMAN: I have rather imposed myself on your committee and discussed with them one of the points I had in mind, but I presume the meeting will be interested to know what progress is being made toward the winding up of the affairs of the domestic wool section of the War Industries Board in regard to the handling of the wool clip of last year. I will give you just briefly a report of the progress on that by saying that the wools are now supposed to have been all taken over by the Govern- ment, with the exception of a few odd lots. They have all been appraised, but they have not all been taken out of the hands of the dealers in the distributing centers, so that these men are not all in position to make their reports on the year's business finally. There were some 3,400 approved dealers in the country dis- tricts to whom permits were issued to handle wools, ^^ that is, to buy in the fleece wool territory. We find that a good many of them, after getting the regula- tions, wisely decided that there was no money in it and did not do any business. There may be as many as 3,400 from whom reports should be received. We have received reports from 1,700, about one-half of the total number from which we expect to receive reports. Many of those were in bad shape and had to be sent back for correction gnd amendment, but we have checked over something over 500 of these reports and find that a vast majority of those show that the local country dealer operated at a loss. He did not even make the cent and a half that he was allowed to make, and the largest excess profit that anyone of the 500 made above one and one-half cents a pound, which the regulations allowed him, was a gross excess profit on his year's business of about $1,000. As a matter of fact, there are not more than twelve reports out of the 500 that we have audited that' show arty excess profits above the cent and a half that was allowed, and most of them have neglected to credit themselves with the inter- est on the money involved, to which they were entitled and if we assume — I am not certain this is what we should assume — but if we assume on the average, a local dealer's money was invested in the wool for four months, if there was an average of four months, taking it all through the season, it brings the interest on the money at the average price of wool last year, up to about another half cent a pound. So that really if a man's gross income on his year's business as gross profits amounts to two cents a pound, it just about covers the cent and a half to which 56 he is entitled. We have just twelve reports out of the first 500 of these which show excess profit. Some of them are wringing their hands to know who is going to make good losses to them, because they honestly tried to give the farmer all the wool was worth. One man is $1,500 behind on his year's business. He has been to Washington to try to find somebody to help him out. So far as the evidence before us goes, there have been other losses made by the local dealers, more than there were profits. If. we should try to equaliz'e that thing and make good the losses the men have incurred in an effort to live up to the regulations, there would not be any. The amount of money lost was more than the money made. (Remainder of Mr. Sherman's talk on this subject was not taken, at his request). MR. SHERMAN : Now, I understand, action was taken in connection with the International Live Stock Show. PRESIDENT WALKER: There has been a committee appointed to wait on the Bureau of Markets, consisting of Mr. Munce, Mr. Tyler and myself. MR. SHERMAN: You know better than I how representa- tive you are. You know whether you really represent a large majority of fleece wool growers or whether only a minority of them were represented in Chicago. When we come to consult you, we will have to take up the question whether this committee ought to be enlarged or whether you do cover the whole territory, because you must remember this point, that so far as we can now guess, the largest excess profits — certainly this is true with reference to the dealers in country districts — the largest excess profits have been made in the territory where the wool is of least importance — for instance, the one dealer that made a $1,000 excess profit is operating in one of the Gulf states. PRESIDENT WALKER: We had two representatives from the Gulf states at .that meeting in Chicago, I think a call had been issued to all of the state representatives, the extension men, to have some accredited representative of their state at this meeting. I am not prepared to state how many were there. Do you know, Mr. Hill? MR. HILL: There must have been seventy-five men there. PRESIDENT WALKER: There must have been seventy- Fleece Wool ^^^ ™^" there representing twenty-five or thirty Representatives ^^^^^^^^ states, and a delegate was appointed from each state, and I have been in conference with these men from time to time since then, regarding ;the 57 re-distribution of this money, as to their position on it. The posi- tion invariably, not only of these men, but every grower that I have met so far, is that they should be returned to the state's Fleece Wool Growers' Association to be distributed either in state funds or held as a fund in trust for whatever we may feel best for the betterment of the sheep industry of the country. That seems to be the sentiment expressed. There might be some differ- ence as to whether it was held as a state or a trust fund. (At his request, the remainder of Mr. Sherman's talk upon this subject is eliminated). MR. GOULD: Mr. Sherman, is there any reason why men in the West should not have received full payment for their crop? MR. SHERMAN : I understand there are a few houses that have not been able to turn the wool over to the Governnient. The valuation committees have appraised it. But it has not been turned over. There is another subject, after the Government's valuation has been placed on it, it must be physically weighed up and turned over to the Government. The Governnient pays for the weight which is there after the committee has appraised it. I understand that work is still going on in a few houses that were seriously congested, but the Government theoretically has appraised and put a value on all the wools except a few scat- tering ones. The railroads are picking up lost shipments, and so forth. PRESIDENT WALKER: I am certainly very glad to know, not that the local dealers sustained a loss, but that the business has been so unremunerative to them that they have displayed such an anxiety to get out of it. We find the local dealer very- much alive on the job and' fighting for every pound of wool in his county as yet. If he took a loss last year, he might be tempted to break even this year by taking a greater profit. Is there anything else to come up before the Committee on Recommendations files their report? ,' MR. BIGELOW : I think probably you gentlemen know that for the past three years I have been very busily engaged in an endeavor to encourage and promote the sheep industry of the United States, especially the farm flock industry. My interest in the farm flock has been based on the conditions which indicate that the limit of the western range has been reached, that an increase of sheep must be looked for in our farming sections, and on the fact that there is a very great opportunity to promote that industry and increase it to the advantage of everybody in the sections East, especially, of the Mississippi river. 58 Now, in the early days of the work which I was doing, there seemed to me from various and sundry sources the complaint which has been voiced here very generally today, in regard to marketing conditions, the unsatisfactory methods oi marketing wool. I did not need to be told myself that such conditions existed. I bought wool quite generally throughout the United States for a great many years. I have driven amongst the farmers and slept with them and bought their wool and shipped it to market and graded it. And I know that conditions are just as has been stated here today. As a matter of fact, the marketing of wool in the United States has been utterly unscientific and utterly uneconomic and utterly to the disadvantage ■ of every industry connected with it. I made a pretty thorough study of the proposition and let . me say one thing right now, emphasizing Standardization somewhat the statement . which I made this and Competition ^^^^^^^^ ^^at there is one imperative necessity for the farm flock producers; in fact, for all the wool producers practically of the United States, and that is to develop the most efficient production. That we have not been doing for years, as a general thing, and are not doing it today. The one great important factor to promote better marketing of your products, your wool product or your lambs, is to obtain the standardiza- tion of what you are selling. In other lines of agricultural pro- duction, you find that the standardization of the product is recog- nized and it is being paid for when it is done. You take the Oregon apple, which comes packed in a box, every apple is per- fect, and every apple wrapped in a piece of paper, as I showed to the farmers in Burlington, Vermont, where I went out and bought an apple for 8 cents. Every one in the box was the same. And L bought another apple, a Vermont apple for 2 cents. And the 2 cent apple was the best one. You find it in fruits and a great many other lines of production. But it is absolutely a SO-SO proposition between the farrrier on the one hand and the market on the other. The higher you raise the standard and the more uniform you. make your production, the more profit you are going to make and the less difficulty you are going to have in selling your products. I have gone in year after year and bought wools in certain sections, and in one man's clip I will find everything xi/lixcd