Hem ^atk HnU QfoUege af ^^gricultutc At Cfncnell IntaBtatts Strata, N. 1. Cornell University Library HD 9890.4.U5 1921 The wool-growing industry. 3 1924 013 868 645 The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924013868645 UNITED STATES TARIFF COMMISSION WASHINGTON THE WOOL-GROWING INDUSTRY WASraNGTON GOVERNMENT PRINTING OFFICE 1921 UNITED STATES TARIFF COMMISSION WASHINGTON THE WOOL-GROWING INDUSTRY WASHINGTON GOVERNMENT PRINTING OFFICE 1921 UNITED STATES TARIFF COMMISSION. Office: Eighth and E Streets NW., Washington, D. C. Commissioners. Thomas Walkee Page, Chairman. David J. Lewis. William S. Cxjlbeetson. Edwaed p. Costiban. John F. Bethuhe, Secretary, CONTENTS Paga Summary 13 PART I. Chapter 1. — Introduction : Fundamental facts concerning the industry 28 Wool question one of the leading tarifC issues of the past 32 The Tariff Board Report on Schedule K 34 Scope of this report 38 Chapter 2. — Survey of the World Production and CoNsuiiPTioN of Wool : Production of wool suitable for clothing 40 Australia 42 New Zealand 42 Argentina 43 Other South American countries 44 South Africa 44 Great Britain 45 Continental Europe 46 The Dominion of Canada 48 Mexico 48 The United States 48 Production of carpet wool 4^ World trade in wool 49 Wool imports of the United States • 51 Ports of entry for wool 53 Imports of important substitutes 54 The wool trade of Great Britain 54 Prices — Prices of wool from 1860 to 1914 65 The price of wool during the war 56 Prices since the armistice 58 Chapter 3. — Wool Control During the War : Great Britain ^ 59 Australia 65 British South Africa^ 68 South America 73 The United States 76 First period 77 Second period 79 Third period , ^ 83 Stocks of wool in the world 84 Relation between our method of control and England's 88 3 t CONTENTS, Chapter 3. — Wool Contkol During the War — Continued, Page, The United States Government wool auctions 87 Marketing of 1919 domestic clip 88 Australian wools 89 Depressed state of wool market, 1920 - 89 PART II.— WOOL GROWING IN THE UNITED STATES, Chapter 4. — The Sheep Industry in the East : Historical background 91 Competition with other farm enterprises — Change in type of sheep kept 92 Lack of tariff influence 92 Present status of sheep husbandry 93 Flock management 93 Hothouse lamb production 94 Kecent numerical changes 94 Types involved 95 Outlook for permanence of recent increase, local d:c!ine probable 96 Sheep versus dairying 98 The fencing problem 97 Kealization of sheep values 97 Conclusion 98 Chapter 5. — The Sheep Industry in the South : Historical backgiound 100 Evolution of primitive types — Partial lack of tariff influanee ^ 101 Development of the early-lamb section 103 Effect on other parts of the region 104 Improvement in early-lamb types 104 Flock management 105 Recent numerical changes 106 Outlook in mountain sections 107 Outlook in piney-woods areas 108 Changes in management 109 Outlook in early-lamb sections 109 Conclusion , 111 Chapter 6. — The Sheep Industry in the Middle West : Historical background — tar.ff influence 112 Change in type of sheep kept 113 Development of the Delaine 114 Present status of sheep husbandry 115 Flock management 116 Eecent numerical changes 117 Types involved 119 Outlook for permanence of recent increase 120 Kealization of sheep values 121 Cut-over land developments 122 Conclusion 123 Chapter 7. — The Sheep Industry in the Ohio Region : Historical background 125 Decline of sheep industry in the nineties , 125 Competition with farm enterprises 126 Cross breeding developments 127 Further replacement of sheep by other enterprises 128 CONTENTS. 5 Chapter 7. — The Sheep Industry in the Ohio Begion — Continued. Pagn. Necessity for sheep In more rugged areas 129 Recent numerical changes ];-51 Cows versus gheep 132 Flock management 132 Cost data o.f flock management 137 Importance of receipts from .wool 140 Conclusion 141 Ghaptek 8. — OuB Land Policy in the Eange States and the Sheep Industry : The development o.f the western sheep industry on the free range 145 The effect of settlement on the industry 146 The effect of the national forest policy 147 Efforts toward stabilization of the industry 150 The effect of the present homestead movement 154 The need of a stabilized range policy 156 Possible methods of stabilization — Establishment of grazing homesteads 158 State control 353 Sale of remaining public domain to present users 159 Leasing the range to present users 161 Extension of the present permit system '. 162 Chapter 9. — The Organization and Financing of the Sheep Industry in the Range States : Organization and capitalization 164 Methods of financing the industry 167 Possible weak point in range financing 170 Breeds and types of sheep used 171 Operating expenses — Labor 173 Feed : 174 Flock replacement 175 Loss of sheep 176 Breeding expense 177 Shearing 177 Interest 179 Taxes 179 Other charges 179 Flock management 179 The central range area 180 Lambing 181 Summer ranges 181 The Idaho district 182 The Pacific Northwest 185 The Eastern high plains area 1S6 The California district 187 The Arizona district 187 The New Mexican district 189 Southwest Texas :-, , 190 Farm flocks 192 Mohair production : 193 New Mexico 195 Willamette Valley 195 Other districts 196 6 CONTENTS. Chaptee 10.— Cost of Producing Wool and Mutton in the Range States : Paga. Summary ^ 197 Introductory 199 Details of expenses 200 Treatment of significant items of expense 204 Interest 205 Replacement and depreciation of the flock 208 Sheep losses in relation to costs 211 Methods of recording replacements, depreciation, and sheep losses on the books 212 Division of expenses between wool and mutton 213 Chaptee 11. — The Maeketinq and Handling of Wool in the United States : Types and grades of domestic wool- Wool grades 215 Types of domestic wool 218 Characteristics of eastern wools 218 Improvements in preparation 219 Characteristics of southwestern wools 220 Characteristics of northern range wools 221 Territory wools 221 General character of western wool 222 Effects of climatic variations and shrinkage 222 Crossbreeding and effect on clip 226 Preparation of Territory wools 228 Grading on the range 228 Limited adoption of Australian system of fleece preparation 230 American grading versus Australian classing . 280 Methods of sale on the range 231 Sale on contract ; 231 Sale at sheds after shearing 231 Sale by consignment 232 Associative sales 233 Growers' disadvantage in marketing 234 The range-market price spread 235 Basis of prices at range points 236 Buying technique on the range 236 Marketing of fleece wools ^ :. 238 Previous neglect of the wool clip 239 Associative selling or pooling » 239 Speculative character of the wool trade 241 The wool dealers' place in the trade 241 Marketing agencies competing with the dealers 242 Pulled wools 243 Conclusion 245 Chapter notes — I. Intermediate grading : 249 II. Origin of blood terms used in wool grading 251 III. Characteristics of southwestern wools 252 IV. Characteristics of northern range wools 255 Oregon wools . 255 Territory wools ^ 255 COKTENTS. 7 Chapteb 12. — The Marketing of Shisep and Lambs: Page. Development of the market (or mutton and lamb 259 Relative importance of wool and mutton sales 260 Methods of disposal — Local butchering and farm slaughter 261 Disposal through the live-stock markets 261 Local buyers versus cooperative shipping associations 262 The movement to market from range and country pdints — Fed lambs 264 Spring lambs and southwestern lambs and sheep 265 Movement of range lambs 265 Disposal of range ewes 266 Autumn farm states movement 267 Fattening sheep for market 267 Fattening in cornfields 269 Open-yard fattening :___^ 269 Barn feeding 271 Shipping procedure 272 The market centers — Development 274 The market organization — grades and classes 274 Market procedure 275 Market receipts of sheep and lambs 275 Stocker and feeder shipments 280 Local slaughter at market points 281 The early lamb markets 283 Market prices — efEect of seasonal supply and quality — Quality of the mutton supply 284 Market prices 285 Early lamb prices 286 Price average and variations 286 Weight as a factor in price 292 Pelt wool as a factor in price 292 Imports of frozen lamb and mutton 293 Conclusion 294 PART III.— WOOL GROWING IN FOREIGN COUNTRIES. Chaptee 13. — Wool Growing in Australia : Summary 300 Climate and physical features 302 Development of the sheep industry in Australia • 304 Competition with other industries 306 . Land situation 307 Freehold and leased areas 308 Holdings by States 308 Size of holdings 309 Number of sheep per holding 309 Value of land 310 Land rents .: 310 Flock management 312 Character of the flock 313 Mutton and lambs 314 Expenses of running sheep 315 8 CONTENTS. Chapter 13. — Wool Gbowing in Australia — Continued. Page. Pests 3ie Marketing 317 Market prices — Prices of wool 320 Prices of mutton and lambs 321 Distribution of Australian wool 322 Current conditions 325 Chapter 14. — Wool Growing in British South Africa: Summary 326 Physiographical features 329 Land situation — Private holdings 332 Crown land 334 Value and carrying capacity of the land 337 Development of the sheep industry 337 Flock management — Types of sheep 341 Typical sheep farms 343 Cost of establishing sheep farms 347 Cost of production 348 Diseases and pests 352 Marketing and prices ' 354 Distribution of South African wool 355 Marketing during the war 356 Chapter 15. — Wool Growing in New Zealand : Summary 360 Physiographical features 362 Climate and rainfall 363 Importance of the sheep industry in New Zealand - 365 Land situation 366 Land laws 367 Size of the holdings 369 Rentals and prices of land 369 Land values 370 Carrying capacity of the land 372 Flock management — History 374 Size of the flocks 375 Typical stations 376 Shearing 376 Breeds of sheep 378 Diseases and pests 380 Labor 381 Investments, expenses, and receipts 381 Prices 383 Marketing 385 Markets for wool and mutton 386 Chapter 16. — Wool Growing in Argentina: Summary 388 Climate and physical features 390 The land situation . 393 Public land 397 CONTENTS. 9 Chapter 16. — Wool Growing in Argentina — Continued. Page. Development of the sheep industry 399 Competition with other industries 401 Flock management 403 Cost of production 405 Methods of marketing ' 409 Prices 412 Distribution of Argentine wool 414 The present situation 415 PART IV.— TARIFF PROBLEMS IN THE WOOL-GROWING INDUSTRY. Chapter 17. — History of the Wool Tariff in the United States : Early tariff acts 416 The Civil War period 418 The Syracuse Convention of 1865 419 The tariff act of 1867 420 The tariff act of 1883 423 Tariff discussions, 1884^1890 426 The tariff act of 1890 428 The tariff act of 1894 429 The tariff act of 1897 430 The tariff act of 1909 434 Chapter 18. — Classification of Wool and Basis of Import Duty : Characteristics of wool 437 Merino wool 438 Territory wools 439 English wools ._ 440 Wools of Scotland 440 Crossbred wool 440 Pulled wool 444 Scoured wool 444 Washed wool 444 Mohair 445 Alpaca, vicuna, and llama hair 445 Camel's hair 446 Miscellaneous definitions 446 Classification in United States tariff acts 447 Systems of wool classification 449 The "Bradford" system 450 Other systems 450 Equivalent grades 450 Old method of levying duty 451 Tariff Board's investigation of shrinkage 452 Form a duty should take, if levied 455 Appendix. — Public conferences with the United States Tariff Commission on the wool-growing industry in the United States 460 In the preparation of this report the Tariff Commission had the special and ■equally helpful services of Mr. Mark A. Smith, Mr. George P. Comer, and Mr, 3L,ouis G. Connor of the Commission's staff. In addition, assistance was rendered :in field investigations and in the preparation of the test by Mr. J. S. Cotton ;and Mr. Harry Petrie in the United States, and of Mr. and Mrs. Albert Scho- feld in South Africa ; Mr. W. I. Carney and Consul General Alfred A. Winslow an New Zealand ; Mr. A. W. Ferrin, trade commissioner of the Department of •Commerce, in Australia ; and Consul General W. Henry Robertson in Argentina. 11 THE WOOL-GROWING INDUSTRY. SUMMARY. The war period was one of important change in woolgrowing, as in many other industries. This report deals with the development during the war years, but it also contains the elementary facts neces- sary to understand the industry in its economic relations. It deals with the problems of domestic woolgrowers, and with the funda- imental tendencies in the industry at home and abroad. Domestic production costs of at least suggestive value are included, and some foreign cost figures also are presented. This report may be regarded as a continuation of the study of the industry made by the Tariff Board in 1911, the results of which were published in 1912 as " The Report on Schedule K." This volume deals, however, only with the raw material and not with the manufactures of wool. CURRENT SITUATION. The end of the war found large stocks of wool in the world, •especially in Australasia, South America, and South Africa. There was an immediate fall in price of domestic wools, the result of can- cellation of Government orders which had monopolized the mills. However, with the exception of medium and low wools, prices had Teturned to approximately the November, 1918, level by June of 1919. Then an extremely active demand for fine goods, one of the Temarkable economic facts of the period, sent the price of Merino wools to new high levels. On the other hand, after midsummer of 1919, the price of medium wools at first sagged slowly, that of low "wools, more rapidly. On the whole, it may be said that the clip of the United States was marketed to good advantage in 1919, and marked changes in demand became noticeable only in the fall, after ihe wool was mainly in the dealers' hands. A pronounced slackening in demand for medium wools then oc- -curred, attended by decreases in price, and it soon appeared that low wools were difficult to dispose of at all. Accurate knowledge con- cerning the large stocks of wool in existence, information which had previously been lacking, was one of the chief factors in depressing i;he world market for medium and low wools during the latter part -of 1919. At the same time, heavy imports of such wools, a part of which represented speculative purchases, continued during the late fall of 1919 and the winter of 1919-20. This, in addition to some kOther factors, soon to be mentioned, but which did not yet have very ;great effect, added to the stock of such fiber already on hand in the XTnited States and further checked the demand for it in this country. 13 14 THE WOOJC-GROWING INDUSTEY. By the time buyers of the 1920 range clip began operating north of central Arizona, the market for wools below half blood was virtually dead. Few of the buyers would take the trouble even to inspect three-eighths blood and lower clips. They were competing sharply^ however, for half blood and finer wools. Then the domestic market for all wools, whether fine, medium, or coarse, collapsed. Kange buying stopped very suddenly, and growers^ who had refused 60 cents or more for fine clips could rarely consigm their wool and get an advance on it of half that much. The growers, dealers, and bankers conferred with the Federal Reserve Board on June 21-22 to ascertain whether some way could be found to finance, the wool in order to hold it until a normal market, reckoned on at an- early date, could be restored. It was decided at this conference to- try to meet the situation by the use of bankers' or trade acceptances.. However, the western banks and their correspondents had already used up practically all their rediscount privileges with the reserver banks. As the real value of the wool was with difficulty ascertain- able, the only safe advance which could be made was that which pre- vailed in the trade. No more money could be secured by the new, and to the grower, cumbersome use of acceptances than by the familiar- consignment method; therefore, acceptances were little used. The- bulk of the wool which moved from range points was shipped on., consignment, either to wool dealers or to wool commission houses. In the farming States the growers pooled an unprecedented amount, of wool and either consigned it to commission firms or held it at- country points. On September 30 it was estimated that probably 175,000,000 pounds out of the clip of approximately 250,000,000- pounds was still in the hands of the growers. The entire summer and fall, therefore, was a period of waiting and uncertainty on the> part both of growers and of the wool trade in general. The steady decline in the market for medium and low wools, as already suggested, was the result chiefly of the world " surplus " of" those grades. The situation with reference to the sudden collapse of the market for all wools was only in part the result of this surplus. There were several additional factors, all of which were more or less closely related. They were (1) the so-called consumer's strike, i. e.^. the refusal of the public to continue paying the high prices de- manded for clothing; (2) the consequent cancellation of orders placed with the mills; (3) an insistence on stricter limitation of credit to> nonessential industries, and particularly to speculative holders of commodities, which reacted disastrously on the wool trade and led to more cancellations; (4) a part-time schedule or total stoppage of" the mills which followed the cancellation of orders; (5) the world "surplus" of wool. The consumers' strike, which was appreciably felt by a few mer- chants in the middle of 1919, became more evident by the following- winter, and resulted in cancellations reaching the mills earlier and. in much larger volume in the early summer of 1920 than the sea- sonal cancellations customary under normal conditions. Cancella-^ tions from Japanese customers, soon followed by similar action on the part of continental and American buyers, were reacting unfavor- ably on British mills almost as soon as the domestic cancellations be- gan to affect our own. xxir. wL»jjL.-wituwiJ>rG INDUSTEY. 15 The policy of the Federal Keserve Board as to credit curtailment was not directed against essential industries, and yet for several reasons the wool trade was unfavorably affected. Unable to secure money with which to buy the 1920 clip, the dealers could only take it, on consignment at very low advances, and even these were made primarily in order to take care of their old customers on the range. Because of these low advances cancellations increased because buy- ers of cloth saw a chance to reorder from the mills at lower prices later on. During this time the consumers' strike was spreading. By the mid^ die of June it was estimated that 50 per cent of the orders previously placed with the mills had been canceled. That this estimate was ap- proximately correct is shown by the failure of the mills to consum«i more than three-fifths as much wool per month after July 1 as waa averaged during the preceding 12 months, despite some new ordersi and some renewal of former orders. Only the carpet mills have been, operating at anything like full time. The rest have been running part time or not at all. For the fiscal year ending June 30, 1920, the consumption was 749,600,000 pounds of grease wool or grease equiv- alent, i. e., 62,500,000 pounds per month. From June 30 to date the monthly consumption has averaged approximately 38,000,000 pounds. The world " surplus " of wool has been an important factor in the wool situation of the past season. The world stocks on hand as of" September 1, 1920, which are reckoned in the trade as " surplus " at the time when active shearing of the clip for 1920-21 began south of" the equator — amounted to approximately 1,250,000,000 pounds. This, included the reported total stocks of Australian wools in the hands, of the British Government on July 1 (revised to the probable stock as of September 1), and the reported stocks on hand in South Amer- ica and South Africa. The probable average of monthly sales by the. British Government from July 1 to December 1, 1920, was 100,000- bales of 330 pounds; and there was a monthly movement from South America and South Africa of approximately as much.^ The. surplus of old wools on hand December 1, therefore, amounted to, approximately 1,050,000,000 pounds. However, the 1920-21 Austra- lian clip is estimated to be 20 per cent (400,000 bales) short, i. e. 1,600,000 bales instead of the 2,000,000 in the 1919-20 clip. Quite aside from the fact that the 1920-21 clip has less length and a higher shrinkage in scouring than normal, and contains an unusual propor- tion of tender wool, all the result of the recent drought and all lower- ing the desirability and the value of the wool, the shortage in the- Australian clip reduces the real surplus to about 917,000,000 pounds. This amounts to a normal Australasian clip, and represents about nine months normal prewar net annual imports of wool into the European countries south of Scandinavia and Eussia and west of Turkey. Probably two-thirds of this surplus consists of wools below half blood, as graded in the United States, i. e., those qualities which the above countries usually imoort most heavily. As a matter of fact, the above amount is not really a surplus, if the people of Central Europe are to, be warmly clad in the near future. The exchange situation and the refusal of wool-holding nations to • Shipments of new Australasian wools bought by foreign buyers at 1920 Australasian, auctions neglected, as offsetting possible error in estimated movement from South Africa, and South America. 16 THE WOOL-GROWING INDUSTRY. sell to central European countries on long credit,^ however, bring it about that these " surplus " stocks now on hand, outside of the United States, are too large a quantity for the wool markets of the world to absorb for some time. If recent developments in contemplated credits to central Europe by foreign capital bear fruit, they may bfe absorbed with relative rapidity, but this as yet is hardly more than a possibility. In the meantime, these stocks of old wool are a- drug on the world market. Moreover, at the present time the clip of the Southern Hemisphere for 1920-21, practically 1,450,000,000 pounds, lias been shorn, a circumstance which accentuates the marketing difficulties. Table 1.— World surplus of old wool, Dec. 1, 1920 (approximate). (Exclusive of the United States.) Australasian wool in Australasia, Great Britain, afloat, and at Pounds. foreign ports, owned by British Government Sept. 1, 1920 893, 000, 000 Stocks in Argentina 275, 000, 000 Stocks in Uruguay 30, 000, 000 Stocks in South Africa 49,000,000 Total 1> 247, 000, 000 Shipments from other than Australasia at 33,000,000 pounds per month, 3 months 99, 000, 000 Sales of British-owned wools at same rate 99, 000, 000 198, 000, 000 Surplus of old wools on Dec. 1 1,049,000,000 Shortage in new Australian clip 132, 000, 000 Real surplus, Dec. 1 917,000,000 In the United States the stock of wool on hand on December 1 amounted to 650,666,000 pounds, consisting of wool in the grease and its equivalent in pulled and scoured fiber and in tops and noils. This amount included 521,000,000 pounds reported on hand September 30, as well as 175,000,000 pounds estimated at country points, 11,666,000 pounds of wool pulled in October and November (grease equivalent) and imports during October and November of 21,000,000 pounds, with the deduction of 78,000,000 pounds for October and November consumption. The stock on December 1 is about 20 per cent above the prewar normal for that time of year, when usually not more than a year's supply is in the hands of dealers and mills. A year's supply, or the annual consumption, averaged 517,322,000 pounds in the con- dition reported, or the equivalent of about 535,000,000 pounds in the greascj during the five years ending July 1, 1914. The stock on hand on December 1, therefore, is by no means alarming in itself and varies little from that of a year ago. But there has been a marked decrease in the rate of consumption; the mills from July 1 to De- cember 1 were using only three-fifths as much wool per month as during the 12 preceding months. In view of this, and also the fact that there may be an appreciable interval before the mills accelerate present consumption, any surplus at all is disquieting. The range woolgrowers can not yet dispose of their wool. Their sheep values have diminished by 50 per cent, thus reducing their ' Advices of Jan. 7, 1921, Indicate that wools have been sold to Poland by the British Government on a credit extending over 10 .years. This may indicate that similar sales and credits to other central European nations may occur in the near future. to THE WOOL-GEOWING INDUSTRY. 17 assets. They need further loans to carry them through the winter, but they are heavily in debt after the trying season just closed, and their assets are already pledged to the limit as security for their present debts. The drought of 1919, followed by a hard winter and a late, cold spring, caused high feed costs and other operating expenses. There were severe sheep losses during the winter, a light lamb crop and heavy lamb losses during the spring. The wool clip was rather light and very little was sold— virtually none north of central Arizona. Expectations of high prices for the lamb crop were not realized, in part at least, because of heavy and unexpected imports of frozen lamb and mutton' from Australasia and South America. The severity of the blow resulting from failure to get money for the wool shorn, which is normally counted on to pay ex- penses of the previous winter and spring, was increased by the shrinkage in the money receipts expected from the sale of lambs. The sheepmen have generally been unable to liquidate old indebted- ness for newer loans placed just before their wool money failed, as the receipts from lamb sales have gone largely to pay operating ex- penses up to December 1. The result of this condition is likely to be serious and far reaching. Table 2 shows the decline in wool prices since the market broke in May, 1920. The data presented are for fairly comparable grades and are as complete as can be procured at the present time. It is especially significant in that the decline in prices of Argentine wools is so closely paralleled by the percentage of decline for comparable American grades. Many of the New Zealand and American figures are merely nominal quotations. The Argentine growers have cut prices freely to dispose of their surplus, and have forced down do- mestic prices at the same rate. The fact that the British Govern- ment, by far the largest owner of similar wools, has refused to meet the world price on medium and low wools, has held up the price of New Zealand and Australian crossbreds. The price of fine wools was so high last spring that a large percentage of decline was to be expected with the subsequent curtailment of mill demand. Tabu: 2.- -DeoUne in prices of wool. Stay to January, 19Z1 — Scoured basis, sea- ioard markets, UrUted States. Three-eigliths blood. Quarter blood. Low. On or about— Argentine.' New Zealand.! Argentine.' New Zealand.' Argentine.' New Zealand." May 6 Cents. 75-80 45-50 35-45 28-30 28-30 28-30 20-22 20-22 73 Cents. 75-85 70-75 50-60 46-50 4,5-50 45-50 40-45 46-45 47 Cents. 50-52 30-35 25-30 20-22 20-22 20-22 16-17 16-17 68 CenU. 60-60 35-45 30-40 30-40 30-40 30-40 35-40 35-40 32 Cents. 35-40 25-30 20-25 16-18 16-18 16-18 13-13i 13-13i 66 Cents. 30-45 Ane 26 20-35 Scf 7. - 20-30 jirov.4. 20-30 Deo. 16 20-30 Jan. 6 20-30 Mar.3 17-23 Uar.Sl 17-23 38 »B.A. !N. Z. 50s. « B. A. 4s. * N. Z. 46s. •B.A.! «N. Z.36-40S. •Up to Dec. 2 imports since April had amounted to 95,000,000 pounds, afi.d ^bont balf of the total imports since April were stored for future disi>osal. . 1842°— 21- 18 THE WOOL-GEOWING INDUSTBY. Table 2.— Decline in prices of ivool, May to January, 19S1, etc. — Continued. On or about- Fine. Australian.' Territory, United States.' Three-eighths blood, territory. United States.* Quarter blood, territory, United States.* Low, terri- tory. United Mav 6 Aug.ae Oct. 7 Nov. 4 Dec. 16 Jan. 6 Mar.3 Mar.31 Percentage of decline ' Aus. 64s, $2.20-J2.40 1.65- 1.70 1.10- 1.20 1.10-1.15 .85- .95 .95- 1.00 .95- 1.00 . 95- 1. 00 58 |2.00-$2.05 1. 45- 1. 65 1.25- 1.35 1.00- 1.10 .80- .80- .85- .85- $1. 15-11. 25 .90- .95 .70- .80 .68- .73 .52- .80 .50- .65 .55- .58 .55- .68 53 tl.00-Sl.05 .65- .70 .60- .60 .60- .55 .40- .45 .40- .45 .45-" .48 .45- .48 55 $0.50-10.65 .25- .30 .18- .25 .18- .22 .15- .18 .15- .18 .15- .18 .15- .18 n 8 Fine staple. • Combing. WOOL CONTROL DURING THE WAR. The importance of wool for military uses led to a large amount of governmental regulation of the industry during the war. Measures of control were taken by Great Britain soon after the beginning of hostilities. The requisition of goods for the army raised the question of the price to be paid for such goods. When the British Grovern- ment set about ascertaining costs of production in the woolen indus- try it encountered difficulty owing to the continually rising price of the raw material, and this led to fixing the price of wool. Then the purchase of the home output of wool and the control of imports and expoi'ts led naturally to the purchase of the Australasian clip. The British Government did not exercise control over the South . African wool clip, but the sheep industry of that country was con- siderably affected by the Imperial control over the Australasian product. South America, also, which was the principal open wool market during the war, was affected both by the British and by the American regulations, and later by postwar developments in the wool trade. The steps taken by the American and the British Govern- ments had a far-reaching influence on the wool situation throughout the world. The British wool control of the war period and the months following strongly influenced the accumulation of stocks of wool in the world at the close of hostilities. The control exercised by the United States Government had a close relation to British con- trol and also was an appreciable factor in the accumulation of sur- plus stocks. The entire output of frozen mutton and lamb available for export from Australasia was also taken over by the British Government. Inability to ship the frozen meats as fast as they were produced re- sulted in the accumulation of a large Australasian surplus, which now is affecting American meat prices through the shipment of a part of it to this country. Some benefit has probably resulted from governmental control of wool in the dissemination of knowledge about grades and the prepa- ration of wool for the market. For example, the Central Wool Com- mittee, which administered the Imperial purchase in Australia, pub- lished a list of about 850 types and grades of wool — ^the most com- plete catalogue ever compiled. In South Africa the interest in THE WOOL-GEOWING INDUSTEY. 19 sheep and wool caused by high prices was followed by an attempt to improve the marketing methods. Purchase of the domestic clip by the United States Government was accompanied by a careful grading of it. In many cases the grower was furnished with a list of the grades he produced, the shrinkage, and the price. This was of con- siderable educational value. THE WORLD WOOL CLIP. The high price of wool during the war tended to increase the output, but other factors, such as the devastation in Europe, the high price of meats, and the Australian drought, prevented any perma- nent increase in the world's clip. In fact, the 1920 clip is somewhat below that of the years just preceding the war. The following tabu- lation shows in millions of pounds the comparative world produc- tion.* Table 3. — World production of wool. [In millions of pounds.! Prewar. 1920 Prewar. 1920 United Kingdom 120 288 11 264 143 70 90 75 100 300 15 330 150 30 70 60 Russia.:. 380 158 570 200 400 SO United States. South Africa j 172 Canada Australia 528 Uinguay. Othftr (i(iiiTitn*^R 360 60 Mediterranean Europe France . Total 2,817 2,585 THE TREND TOWARD CROSSBRED SHEEP. Prior to the war there was a slow but steady gain in the produc- tion of crossbred wools relative to fine wools, resulting from increas- ing reliance on crossbred sheep instead of on Merinos in areas where mainly finewool sheep had formerly been kept. The change in Australia had been progressing slowly but steadily for many years, but it was accelerated by the demand for wools of medium and lower grades for military use. Slightly over one-third of the Australian clip is now composed of such wools. In New Zealand this movement had already progressed practically as far as it can go. In South Africa the country is best adapted to finewool sheep, and changes have been in the direction chiefly of improved Merino types. In Argentina, as other live stock and crop production has displaced sheep in the more favorable northern districts, virtually nothing but crossbreds have survived. They often have displaced Merinos in less favorable and more distant, sections, and they have largely displaced the finewools in the southern Provinces save in areas where the en- vironmnet has strongly favored Merinos. The same is trucj though to a somewhat less extent, in Uruguay. In Europe, except m a few areas, finewool sheep have been of negligible importance for many years. *A8 published in the Bulletin of the National Association of Wool Manufacturers and the London Times Trade Supplement, modified slightly for 1920 in the light of latest advices. 20 THE WOOL-GROWING INDTJSTEY, In the United States, outside of the Southwest and Texas, and scattered areas on the northern ranges, the tendency for a consider- able period has been strongly toward crossbreeding, notwithstanding a pronounced preference for finewool bucks during recent years. The recent increased use of Merino (largely Rambouillet)_ rams was deemed necessary because of a too general loss of characteristics OYer- looked for a time, but desirable in range sheep and procurable only with a strong Merino foundation. The bulk of the sheep on north- ern ranges continues to be crossbreds, but with more Merino blood. In the farming States — east of the Rocky Mountains — Merinos have been almost completely eliminated from the flocks, except in the old finewool section of the upper Ohio Valley and a few other areas which are no longer of much importance. The Ohio area has been considerably restricted since 1910. FUNDAMENTAL CHANGES IN THE INDUSTRY. Fundamental changes, only slightly due to war conditions, have been taking place in all countries. The general, though not uni- versal, trend has been an approach toward the apparent maximum sheep-carrying capacity of the land. This does not mean that many countries have not the territory for more sheep, but that, Qpnsidered in relation to other industries, sheep raising is approaching a static condition. The big estates in the older sections of Australia are steadily being broken up by taxation and land purchase laws. Many small clips have often taken the place of one large clip, and the result has frequently been a deterioration in the quality and preparation of the wool. Some expansion of the industry has taken place in the " outback " country, but that development has been slow because of poor transportation facilities. Future growth of sheep raising in Australia will be to a considerable extent in the form of smalle'r flocks, as a part of diversified farm or ranch operations. It is not expected that the flocks of Australia will again soon reach the nmnber (106,421,068) recorded in 1891 in the Tariff Board's report published in 1912. The sheep industry also has probably nearly reached its maximum growth in New Zealand, and the rapid growth of dairying during late years will probably prevent further increase if it does not cause a decrease in number of sheep in the future. Sheep raising is on the decline in the populous northern Provinces of Argentina, but there is still some room for expansion of the in- dustry to the south and west. The check of immigration into the country during the war retarded the growth of agriculture some- what and favored the sheep industry. The Uruguayan census of 1916 reported a decrease in the number of sheep in that country. The clip of all the other South American countries remains small, though there has been a large increase in extreme southern Chile, largely the result of an influx of shepherds from the Faulkland Islands. Much improvement has been made in the grade of wool grown in South Africa during the past few years. Purebred stock has been imported from Australia, and the Union Government has carried out educational measures which have resulted in better sheep husbandry. THE WOOL-GKOWING INDUSTBY. 21 Dairy herds have been increasing of late in Great Britain while the number of sheep has decreased. There was a considerable reduc- tion in the flocks of continental Europe during the war, the losses being set at 7^500,000 by the American agricultural commission which visited the belligerent countries in 1918. Wool growing in Spain increased during the war ; in the Scandinavian countries the industry has been losing ground. The number of sheep in Canada increased considerably during the war but in 1920 was only about as large as in 1871. THE INDUSTRY IN THE UNITED STATES. The wool clip of the United States has averaged about 300,000,000 pounds a year for the last 35 years. While the clip has varied only a little, the location of the industry in this country has shifted con- stantly westward, until now two-thirds of the wool is grown in the Eocky Mountain and Coast States. Ohio is the only State east of the Rocky Mountains which continues to be important in wool pro- duction. The northern range States, aside from areas where the char- acter of the country is such that finewools must be kept, concentrate on crossbreds for market-lamb production, and some progress has been made toward the fixing of a dual purpose, crossbred type of sheep. In this region mutton and lamb are usually somewht^t more important than wool in the flock receipts. Locally — as in the Idaho section — they are much more important than wool. In Texas and a large part of New Mexico, finewools are kept largely for wool production, but in parts of New Mexico and most of Arizona good market lambs and desirable feeder lambs are bred from dams of Eambouillet type. Where feeder lambs are grown, wool usually is slightly more important than mutton in flock receipts, but when crossbred market lambs are produced the ratio is reversed. East of the Eockies lamb production from the Down breeds or their grades prevails virtually to the exclusion of fine- wools, and mutton and lamb sales are about twice as important as sales of wool. The only exception of moment is the Ohio region, where wool has been of somewhat ^eater importance in flock receipts than sheep and lambs. Sheep raising has never been of much im- portance in the South, except in the portions of Kentucky, Tennessee, and the Virginias, referred to in this report as the "early-lamb" region, where the production of early market lambs has been found profitable. Recent gains in number of sheep east of the Rocky Mountains were entirely the result of high prices for wool and other favorable factors, but these gains appear to nave been lost as a result of the unprofitable season of 1920. The Elconomic Justification of Delaine Sheep in Ohio. The keeping of Delaine sheep in the Ohio region, with wool pro- duction as the chief aim of the shepherd, has been severely criticized in the past. There are parts of the Ohio region, however, where dairy farming is not practicable, and where the topography is such that beef cattle can not make maximum use of the large areas which must be kept in pasture to prevent destructive erosion. Resistance of De- laine sheep to parasite infection, their ability to grow heavy fleeces and 22 THE WOOL-GROWING INDUSTRY. produce good lamb crops on pasture and roughage with much less grain than mutton breeds or crossbreds, and to produce more wool and in the long run as much or more mutton to the acre, have enabled the Delaines to hold their own against mutton breeds. The methods of flock management in this region are changing, however. Wethers are kept in much smaller numbers than formerly, and shepherds are depending more and more on lambs for their profits, particularly when they can fatten them for sale at about 1 year of age. The Land Question in the Far West. One of the chief problems confronting the range sheepmen prior to 1920 was the land question. Immigration and agricultural settlement have greatly restricted the area of public range and caused serious de- terioration in carrying capacity, through overstocking. The creation and extension of national forests, later opened to sheep, have helped the industry, particularly by regulation and protection of the summer grazing areas. In order to stay in the business, however, sheepmen have had to make heavy investments in range land, particulariy to protect their spring, and fall range. Also where available winter range was lacking sheepmen have often been forced to make large purchases of farm land in order to raise winter feed. However, inability to protect owned or leased land, because of the necessity for leaving interspersed public lands open to all comers, has been a serious detriment to the industry, and continued settlement has caused over- grazing and management difficulties. Special bills providing for ad- dition to various national forests of certain lands adjacent thereto, lands with some forests but no agricultural value, but necessary for the permanence of the industry, have helped solve the range problem in certain areas and doubtless will be of greater use in the future, although they will probably prove only a partial solution. With the application of the stock-raising homestead act after the close of the war the land problem became acute. This was due to, the rapid disappearance of spring range in critical areas. Sheepmen be- lieve that in the long run the act will work to the benefit of the industry through sale of the homesteads to those stockmen able to sur- vive, but it will be at the expense of many operators unable to stand the pressure, particularly of the smaller ones. This solution, more- over, will not affect large areas which are unsuitable for settlement and primarily fit only for winter range, but which are now entirely uncontrolled and often seriously damaged by overgrazing. Organization and Financing. Eesulting to a considerable extent from the land question is the problem of organization and financing. With the range steadily cur- tailed, the total number of sheep run on it had to be cut down, often to below the most efficient size of outfit, which appears to be about 6,000 head. At the same time the size of the bands had to be con- siderably reduced, and usually more herders had to be used per band. Eestriction of the range also necessitated expensive winter feeding in most areas north of the Southwest, and generally required ex- pensive equipment in areas where it was possible to specialize in early lamb production. In the Southwest, where the land question. THE WOOL-GEOWING INDUSTEY, 23 in general has often been less pressing, it was necessary to make ex- pensive improvements in the form of wells and reservoirs. The steadily rismg investment charges, operating expenses, and sheep values, although paralleled by rises in lamb and wool prices, have been by no means an unmixed blessing. The effect of heavy and un- preventable losses resulting from adverse seasons has been greatly accentuated, the climax having been reached in 1920. Wool Marketing. Owing to the wide range in grade, shrinkage, and character, the marketing of wool lacks the normally stabilizing influence of future trading, and hieing also subject to foreign competition, partakes of a decidedly speculative nature. Growers have lacked accurate in- formation as to the market and the value of their clips, while they have been selling to buyers who are fully informed as to values, market conditions and probable trend, and the desirability of local and regional wools. For these reasons growers have been at a decided disadvantage when negotiating with buyers in the marketing of their product. Wool marketmgj therefore, has been a contentious problem for many decades. Owing largely to inade- quate knowledge, growers have usually sold their wools at range points (or contracted them before shearing) in the years when buyers were most anxious to secure the fiber and were competing strongly for it, but have had to ship it on consignment in the years when a declining market was most probable. All persons in the wool trade, whatever their connection, agree that growers should sell their wools either at the shearing shed year after year, or consign it (year after year) in order to get the oest price. During comparatively recent years relatively few of the sheep- men have been making consigiiments. On the whole they have not been willing to assume the risks of market fluctuations or the cost of carrying their wool until called for by the mills. Those who have sold on consignment have profited by the spread between prices at shearing shed and market center — a spread which explains why the dealers have remained in the business. In the fleece-wool iStates growers are handicapped by the small size of individual clips, fre- quently also by the very scattered nature of the production, and until very recent years few have sold cooperatively and to the best advan- tage. Shepherds of both range and fleece States have aimed in selling to make a quick turnover with a minimum of effort' on their own part. Eecent developments in the way of pooling county or State clips appear to have taught a valuable lesson to growers in the fleece States. Sheep and Lamb Marketing. The marketing of sheep and lanibs, aside from the complication arising from competition with imported frozen carcasses during the past season, presents a problem which involves a reduction of the autumn glut as far as practicable, elimination or marked diminution of the flood of mediocre to cull lambs which reach the markets from the fleece States during the fall months, and if practicable a stimula- tion of consumption. The autumn glut can never be entirely re- moved, but it can be considerably relieved. Where local Conditions make it practicable, sheepmen on the ranges can aid in this (1) by an 24 THE WOOL-GROWING INDUSTRY. earlier marketing of lambs from areas where the producers now tend to overstay the market and ship a month or more later than really is necessary; (2) by an extension of winter lambing on farm land in parts of the Southwest and shipping the lambs during the period of lowest receipts; (3) by a more general adoption of shed lambing by; northern sheepmen and earlier readiness for market; (4) by more complete use of local farm refuse to facilitate holding back at range points a larger percentage of thin lambs until the marketing crest has been passed; and (5) by shipment, so far as possible, of feeder lambs direct from range points to the feed yards — a practice which prob- ably will increase in any case with the recent rise in freight rates. No one of these, with the possible, exception of the last, can be carried, very far or in itself accomplish a great deal, but in the aggregate they would accomplish an appreciable improvement. Shepherds of the farm States can help in reducing the fall glut (1) by the adoption of minor changes in flock management necessary to produce more lambs to be marketed before midsummer, and (2) by holding at farm points until December or January the lambs too thin for ad- vantageous shipment earlier in the fall. The holding up of lambs at farm points is inextricably bound up with elimination of the flood of mediocre and cull native lambs which depress the market each year from the latter part of August until about the middle of November. The docking of all lambs and the castration of the males, will undoubtedly improve their quality although it will not relieve the fall glut. Failure to follow this prac-, tice is a costly oversight and demands immediate correction. It is im- probable that early or midsummer marketing of enough lambs will occur to cut down the normal midsummer price premium. A per- ceptible switch of autumn receipts to midsummer or earlier, and elimination of the market breaking flood of mediocre natives, will do much, however, to stabilize prices. Cost of Production. This report presents the results of cost of production studies in the range States, the Ohio region, and some cost figures for South Africa and Argentina. It must be noted that conditions under which the wool was grown were abnormal, especially in the United States, ^ and the readjustment from war conditions has been pronounced; dur- ing recent months. The data for the United States have a strong suggestive value with reference to the rise in costs since 1910, indi- cating the wide range in costs between different areas for differenti years. The Ohio data have a similar value when contrasted with; range costs and profits and with estimated costs and profits under general farming conditions in the Middle West. The foreign costs are based on data too limited to be conclusive, but they illustrate general conditions. The facts ascertained indicate that the competi-,. tive positions of the main producing countries have remained prac- tically unchanged during the past 10 years. Tariff History. There were various duties on wool and woolens in the tariff acts before 1861,' but the modern system of duties really begins in 1867 at the time of the division of wool into three classes, "clothing," THE WOOL-GROWING INDUSTBY. 25 "combing," and "carpet wool." Provision was then made for levying different rates on the different classeSj and for doubling the duty on washed wool of Class I and for treblmg it on scoured wool of all three classes. The rates which were imposed in 1867 were kept in force until 1883, with the exception of a short period under the act of 1872, when they were reduced by 10 per cent. In 1883 the duty was reduced slightly, and the compensatory duty on manufactures was rearranged on the assumption that only 3^ pounds of wool were used in making a pound of cloth, instead of 4 pounds as under the act of 1867. In 1890 the rates were restored to what was practically the scale of 1867, although in this year the duties on carpet wools were made ad valorem and the trebled duty on scoured wool of that class was dropped. Some alterations were made in succeeding tariff acts, but with the exception of the period of free wool from 1894 to 1897, the rates of 1890, which were substantially those adopted in 1867, remained in force until 1913. There has been a great deal of controversy over the actual effect of the duties, and also over the results of their removal in 1894. The Compensatory System. The adjustment of the compensatory duties has been one of the controversial points. Another important question has been the com- parative effects of the duties on the different branches of wool manu- facture. A duty levied on the grease pound has naturally discriminated in favor of the light-shrinking wools. To the extent that the worsted manufacturer used more of these wools than the woolen manufac- turer he was given a competitive advantage. Ad valorem duties have been discussed at various times, being favored by some as eliminating the discrimination which has just been mentioned, and being opposed by others on the ground that no adequate system of compensatory duties could be framed with an ad valorem duty on raw wool as its basis. Whether the imported carpet wools came into competition with domestic products, and if so, to what extent, has been another moot question. The history of these controversies is given in this report. The Tariff Board in 1911 came to a definite conclusion on some of these points. It showed in a report on Schedule K that the "4 to 1 " ratio of compensation was more than adequate, and that some additional protection was thereby granted to wool mjinufacturers. The Board also pointed out that there was no longer any good reason for distinguishing between Class I and Class 11 wools, because im- provements in combing machinery now make it possible to use much shorter staple wools than formerly in the manufacture of worsteds. It favored levying the wool duty on the basis of the scoured con- tent, and maintained that this would be superior to any ad valorem method or to any method of specific duties levied on grease wool at rates varying with the estimated shrinkage. The Board also reached the conclusion that imported carpet wools were competitive with domestic wools only to a very limited degree. The Tariff Board after an extensive investigation found that the average shrinkage of imported wool was less than 66f per cent in scouring, this shrinkage being the basis on which the treble duty was assessed on scoured wools- The average shrinkage of wools im- 26 THE WOOL-GROWING INDUSTRY. ported from Australia and South America was about 48 per cent, while the average for domestic wools was between 55 and 60 per cent. The Tariff Commission does not take issue with the Tariff Board on any of these findings, but rather in the light of its own investiga- tions reaffirms the wisdom of all of them. Classification and Basis for Duty. The distinction between Class I and Class II wools seems particu- larly unnecessary. The amount of wool of Class II now imported is comparatively small. Improvements in machinery are constantly bringing about a greater interchangeability in the use of different kinds of wool and the case seems clear for doing away with the dis- tinction. Furthermore, no matter which branch of the industry is inore adversely affected by discrimination against the heavy shrmk- ing wools, conditions will be equalized by imposition of the duty upon the scoured content. This would do away not only with dis- crimination between heavy-shrinking and light-shrinkihg Wools, but also with the discrimination against scoured wool which resulted from the triple duty on it. This has been cited as discrimination against the woolen branch of the manufacturing industry, which bought more wool in the scoured condition than did the worsted branch. The Tariff Board objected to an ad valorem duty, not only because of the difficulty of administering it, but also because when prices in- crease and protection is less needed, the ad valorem duty rises, while a specific duty when prices are high becomes in effect a lower duty. When prices fall the converse of this proposition applies. In this way the ad valorem duty on wool gives the domestic woolgrower less protection when he needs more, and vice versa. Some manufac- turers have, however, opposed this reasoning on the ground that the situation is entirely to the woolgrower's interest, while from the manufacturer's point of view, an ad valorem duty would tend to equalize conditions for them in competition with foreign manufac- turers. Inasmuch as their criticism is directed against the duty on wool, their reasoning seems illogical, as the compensatory duty is intended solely to ofeet their higher costs for raw material. A duty on the scoured content of imported wools could only raise domestic wool prices by the amount of the duty, and a proper compensatory levy on importations of manufactures of wool is all that is necessary to offset this, irrespective of the rise or fall of world prices for wool. To make a specific duty on the scoured content absolutely fair, cognizance should be taken of the different values of wool. One rate on all wool suitable for making wearing apparel, and another rate on what were formerly Class III wools would do much toward this result. However, within the limits of each class there would still be variations in value. If it were desired to take cognizance of this, instead of assessing different rates according to the declared value of the wool, it would be better to establish certain standards for fine, medium, and coarse wools, with a different specific duty for each on the scoured basis. Although it would be possible to establish equivalents for many grades, it would be very difficult to make a classification which would cover all possible cases, because of the almost infinite variations in THE WOOL-GROWING INDUSTBY. 27 wool fiber. The dividing lines, however, between coarse and medium, and between medium and fine are so clear that not much difficulty would be experienced in establishing them,^ Some inequality in such a system would arise from the fact that wool just above the dividing line between classes would be discriminated against as compared with wool just below it. Thus, under the former law, carpet wool worth 12J cents on which the duty was 7 cents a pound was discriminated against, as compared with carpet wool worth 11^ cents on which the duty was only 4 cents a pound. In practice such discrimination would be of small moment. That a large number of grades would not be necessary is shown by the fact that the domestic price per scoured pound from 1909-1915 did not differ widely for different grades, rarely indeed over 15 per cent. This was not greatly changed during the recent years of high prices until 1919, when finewools were in much greater demand than wool of lower grades. The sur- plus world supply of the lower grades then widened considerably the spread in price. The rather wide difference now existing can be only temporary, though the spread between fine and lower grades may remain wider for a few years than it was prior to 1916. It hardly seems expedient that a simple, easily collected, specific duty per scoured pound should be complicated by variations in rate on numerous commercial grades. It would not be feasible to classify carpet wool according to spinning counts, and the adoption of a single specific rate on a scoured basis would cause less inequality than the reestablishment of different rates on different " value- classes " such as obtained under the law of 1909. Aside from classi- fication, if a duty is levied on wool it should be on the basis of the scoured content. ' The Bureau of Markets has already established tentative standards. THE WOOL-GROWING INDUSTRY. PART I. Chapter 1. INTRODUCTION. There exists a great mass of material of a technical nature, bear- ing on the many varieties of wool and on the details of sheep hus- bandry. Much of this is interesting to one engaged in the wool trade or in sheep husbandry, but irrelevant so far as the tariff is concerned. An effort has been made to eliminate from this report the discussion of all technical details, an understanding of which is not necessary to a consideration of the tariff. The function of the Commission to furnish full information on the industry has not been narrowly interpreted, however, since an understanding of many de- tails is necessary to a comprehension of the situation. The principal objects to be attained by a comprehensive treatment of the wool-growing industry are the simplification and orderly pres- entation of the available information, and the study of recent changes in the industry which, like most forms of economic activity, has been influenced by the war. Many changes not due to the war have also taken place in the sheep industry during the past few years. This report has been prepared only after examination of a great many sources of information. Field work, correspondence, public hearings, conferences with many authorities on various phases of the industry and with those concerned with sheep husbandry, and the cooperation of experts in foreign countries have made possible this survey of conditions in the wool-growing industry throughout the world. FUNDAMENTAL FACTS CONCERNING THE INDUSTRY. There are certain facts which are necessary to an understanding of the subject. These relate either to technical matters or to the broad industrial aspects of the sheep industry. At the risk of repeat- ing facts known to many readers, they are considered at this point because of their fundamental character. Wool is unique, being distinct from hair and from all vegetable fibers. Its peculiar characteristics are the serrations and elasticity 28 WOOL-GROWING INDUSTRY. 29 which make possible the spinning of the fiber into cloth that ab- sorbs moisture and is comparatively impervious to cold. The pos- session of these qualities has rendered it superior, for many pur- poses, to all other fabrics, and no good substitute for it has ever been found. The four leading classes of sheep are : The Merino, which origi- nated in Spain, a small sheep with a heavy, greasy fleece of fine wool ; the various breeds of English sheep, which are larger bodied than the Merino and have longer and coarser wool ; the crossbreds (crosses between Merino and English sheep) ; the "native," unim- proved breeds of many countries, which produce grades of wool inferior for making clothing. There are many varieties under each class. The Eambouillet, for example, is a type of Merino which was developed in France from a parent stock coming originally from Spain. The two main subdivisions of English sheep are the "long wools " and the " downs," and of these there are many varieties under each subdivision. Among the various crossbreds the Lincoln-Merino crosses and the Cotswold-Merino crosses are favorites. The types of " native " sheep are many and various. Sheep raising is carried on by various methods, the principal kinds being (1) the range system, which is adapted to frontier regions or other places where there are great areas of unoccupied land on which large flocks of sheep can graze; (2) the paddock system, in which sheep are run under substantially natural conditions, but within fence; and (3) under farm conditions. There are various interme- diate kinds of sheep raising, but the industry may be divided, in a broad way, into these three different types. Wool was a far more important product than mutton in the earlier days of this country, and the same was true of Australia, South Africa, and South America in the earlier period of the industry. Practically the entire returns to the producer came from the sale of wool. At the present time, in those countries where sheep raising is carried on under the range system or the paddock system, wool is usually (although not always, by any means) the principal product.^ Under farm conditions, on the other hand, the statement that mutton is the principal product holds good in a broad, general way, although exceptions to this statement may also be taken in some instances. Where sheep raising is carried on under range or paddock condi- tions, the Merino or Merino crossbreds are the favored breeds. The Merino has a dense and fine fleece, is very hardy, and has ex- cellent herding (or flocking) qualities. Merino crossbreds have the same characteristics, though to a less degree. England is the home * It should be understood, however, that it Is not the system which determines the product. That is the result of complex factors. In New Zealand the paddock system is the one most in use, and mutton and wool are about equally important. 30 WOOL-GBOWING INDUSTRY. of the so-called " mutton " breeds of sheep, and experts have devel- oped desirable breed characteristics to a remarkable degree. At least one strain of crossbred sheep has been developed to the point where the type is perpetuated from one generation to another,^ but as a rule crossbreeding quickly results in unevenness of type and neces- sitates continued use of pure blood to restore the desired combination of breed characteristics. Under farm conditions, the English breeds are in favor because they are larger, afford better mutton carcasses, and the lambs mature early. As the flocks are kept in inclosures, lack of herding quality is of no consequence. Merinos, and to a less extent the crossbreds, are well adapted to a dry climate. Mutton breeds were perfected in and are better adapted to a humid climate. The ranges are usually found in dry sections, where the sparse vege- tation makes general agriculture unprofitable, while farms are found in the well-watered or irrigated areas.^ Sheep, especially those with a pronounced Merino heredity, thrive on surprisingly barren land. They live on more sparse vegetation than will cattle. Goats are the only live stock which subsist on land more barren than that on which sheep can live. The leading sheep-raising countries are Australia, New Zealand, Argentina, Uruguay, South Africa, Eussia, China, Great Britain, and the United States. The leading wool-manufacturing countries are the United States, England, France, Germany, and Belgium. It will thus be seen that the United States and Great Britain are the only countries which both grow and manufacture wool on a large scale.* The principal difference between these countries, aside from the fact that the United States has produced a much larger propor- tion of the wool required at home for the consumption of mills, is the fact that in the United States the industry is conducted both on the farm and the range basis,^ while in England it is conducted primarily on farms. The western half of the United States maintains flocks of crossbreds with strong Merino characteristics and the eastern half (with the exception of the Upper Ohio Valley) has grade flocks and some pure breeds of the mutton varieties. England has com- paratively small flocks of mutton breeds. The taste of the English public for mutton has been a great factor in encouraging the maintenance of flocks of mutton sheep. Com- pared with the English, the American demand for lamb and mutton has been very small, but of late years the public of this country has been developing an appreciation of this kind of meat, and the con- «Tlie Corrledale, whicli has been developed in New Zealand. » For consideration of dry farming, see Chap. 8, Infra. * Great Britain produces less than one-half as mnch wool as the United States, and no European country except Russia grows one-half as much wool as Great Britain. ' Approximately one-third of the wool clip of the United States comes from farms. WOOL-GEOWING INDUSTRY. 31 sumption of it seems likely to increase at an even more rapid rate than in the past. The British Empire has produced much the greater part of the world's exportable surplus of wool suitable for making clothing. Low-grade wools have been produced in China, India, Eussia, Si- beria, Turkey, the Balkan States, and various other parts of the world. Most of the wool from these sources is not suitable for mak- ing clothing, but is classed as " carpet wool." Some wool is marketed in the state in which it comes from the sheep's back, while some is washed to eliminate a part of the im- Ipurities. Wool which has had all foreign matter removed is called "scoured." The decrease in weight between the wool in; the nat- ural state and in the " scoured " state is its " shrinkage." This varies greatly between wools of different kinds. Merino usually has a heavier shrinkage than crossbred, and crossbred than .English wool. The difference between wool in these various stages has been recog- nized in making tariff rates in the past.* The two great branches of wool manufacturing are the woolen and the worsted industries. The former originally used the shorter and finer wool which had to be carded, while the latter used the wools of longer staple which could be combed.' Through the improvement in combing machinery, short wools (though not the shortest) can now be combed and there is a. great range of interchangeability between tombing and carding wools. Through the growth of the worsted industry, it has come to use a greater quantity of fine wool than the woolen industry. There has been some competition between cotton and wool and between wool and "reclaimed wool" (or shoddy), but, in spite of this, during the years before the war, the outstanding fact in regard to the world situation was that the demand for wool was increasing, while the supply was about stationary. The highest prices ever paid for wool were given during and after the war. The crossbred wools were in great demand for the manufacture of khaki and for a short time the prices of crossbred were higher than the prices for Merino, but the tendency after the armistice was toward the use of the finer fabrics, and, with the stationary production of fine Merino wools, this meant very high prices for high-grade wools of that variety. There was available some of the fine wool accumulated in Australia. Nevertheless, the price rose and remained at a high point for over a year after the London auctions were resumed.* Different systems of grading are used in this country and abroad. The " blood classification " has been used here, i. e., wool has been • See Chap. 17, Infra. . ' For further discussion of the uses of various kinds of wool, see Chap. 18, infra. •In April, 1919. 32 WOOL-GKOWING INDUSTRY. called " quarter blood," " half blood," etc. This originally referred to the proportion of Merino blood in the sheep from which the wool was shorn, but at present it has no such significance. " Quarter blood" may be wool having no trace of Merino, but simply wool showing much the same characteristics as to length and fineness as that formerly found in the wool of sheep of one- fourth Merino blood. In England and Australia wool has been designated as 36s, 40s, etc., according to the " count " or size of yarn to which the wool would spin.* It is often sold, however, under trade names which have no relation to this " count " system. Before the war England led in the exportation of woolen yams and cloth. The European countries, especially Germany and Belgium, used large amounts of low-grade, burry, and seedy wools, eliminate- ing the waste by the process of carbonizing. The export trade of Germany had grown greatly, but was, of course, lost during the war period, while the development of an export business was one of the leading features of the American woolen industry between 1914 and 1919. WOOL QUESTION ONE OF THE LEADING TARIFF ISSUES OF THE PAST. The opposing views as to the desirability of a duty on wool may be stated briefly as follows : , The advocates of protection have maintained that it is necessary to offset, by means of a duty, the increasing disadvantage of this country in wool growing. They have held that the growing of wool is a necessary part of diversified national economy, and that, if other industries are to be encouraged by duties, there is no reason why wool should not receive its share of protection. They believe that, although the production of wool has not increased in this coun- try for the past 30 years or more, the duty on wool has been effective because without protection, production would have decreased. They state that the price of wool is so small a part of the value of cloth- ing that any increase in the price of clothing due to a duty on wool is negligible. The opponents of a duty on wool argue that wool-growing on a large scale is an industry best suited to frontier conditions; that as the country becomes more and more thickly settled the range conditions must give way to farm conditions, and as the profit of sheep raising under the latter form of agriculture usually depends more on the meat than on the wool, it is not feasible to try to maintain the industry by a wool duty. They assert that the prosperity of the wool-growing industry has been governed by conditions ruling in the world market regardless of any duty on wool which has ex- »For full aiscuasion of this subject, see Chap. 18, infra. WOOL-GROWING INDTTSTRY. 33 isted, and that decreases in the number of sheep which have occurred during periods of free wool would have occurred irrespective of tariff changes. They say also that because articles made from wool are objects of general use the wool should be secured at the very lowest possible cost from whatever source obtainable. They deny, moreover, the statement that the price of wool does not affect the price of clothing. There are many side issues which have been discussed at great length, but the above outline covers the general arguments which have been advanced on the opposing sides. The attention which the problem has received in the past justifies extended considera- tion at this time, in order that the tendency of recent developments may be duly weighed. We have just passed through a period which has brought about fundamental readjustments in many lines of industry, and it is conceivable that some of these changes may have far-reaching effects on sheep raising and wool growing. There are many reasons why the question of the wool duties has been one of the leading issues in tariff discussions of the past. One of the principal causes is the fact that it involves an adjustment between two industries of very different nature. When a duty on wool is levied, the difficult question of the determination of fair com- pensatory duties on the manufactured products necessarily commands attention. The value of the domestic wool dip in 1919 was about $150,000,009. The value of sheep and lambs marketed for slaughter was probably considerably more than that, and the value of breeding stock sold annually is large. The ownership of sheep is widely distributed, and the total investment in sheep alone (not including land or improve- ments) is not far from half a billion dollars. The woolen and worsted manufacturing industry ranked seven- teenth, in value of products, among the industries of this country in 1914. It stood second among the textile industries, cotton manufac- turing ranldng first, and silk manufacturing third; among the 16 industries which ranked ahead of it were several which should be classified rather as groups of industries than as single industries, as for example, " Foundry and machine-shop products " and " Cars and general shop construction." About two-fifths of the wool used before the war by the wool- manufacturing industry was imported. In 1918 and 1919 about three- fifths was imported. The only imports of raw materials which exceeded in value the imports of wool in 1914 and 1915 were hides and skins, india rubber, and raw silk. In 1916 the imports of wool were exceeded in value only by the imports of hides and skins and india rubber, and in 1918 only by the latter. Two of these products 1842°— 21 3 34 WOOL-GEOWING INDUSTKY. do not compete with any domestic product, while hides and skins, though somewhat competitive, are of less importance to the cattle raiser than wool is to the sheepman. THE TARIFF BOARD REPORT ON SCHEDULE K. The Tariff Board appointed by President Taft published, in 1912, a report on wool,^° which was the most exhaustive study of the sub- ject ever made up to that time. That report dealt with manufac- tures of wool, as well as with raw wool, and consequently, had a wider scope than this report. The greater part of it, in fact, related to manufactures. One of the features of the document which at- tracted the most attention was its conclusion as to comparative costs of production at home and abroad. Before reviewing its find- ings under that head, it will be well to give at least a partial resume of the large amount of information on the wool-growing industry which was contained in it. Its study of the industry up to the date of its publication was so thorough that the Tariff Commission has concentrated its attention on developments since 1910, The report on Schedule K begins with an analysis, by paragraphs, of the wool schedule of the tariff act of August 5, 1909, and a statistic cal survey of the industries affected. The basis of the tariff on wool and manufactures thereof was to be found in the act of March 2j 1867, the object of which was to furnish adequate protection for both the wool growers and the wool manufacturers, whose interests in the importation of foreign wools were said to be opposed. Sched- ule K remained substantially the same in principle from that time until the revision of October 3, 1913, with the exception of the period 1894-1897. The " compensatory " system was adopted on the assumpi tion that it takes four pounds of raw or " grease " wool to make one pound of finished cloth. ^^ It was recognized that the ratio would not be true for much of the wool imported, but would be more than compensatory in many cases. The argument used in favor of its adoption was, however, that it was necessary to adopt the ■ " four to one " ratio in order to make the heavy-shrinking wools available for the American manufacturers. Schedule K was, therefore, framed on the assumption that the average shrinkage of wool in scouring is 66§ per cent, the rest of the allowance being for shrinkage from scoured wool to cloth. In the tariff act of 1867, wool was divided into " Class I, Clothing wool," wool having any trace of Merino blood ; " Class II, Combing wool," wool from the English breeds of sheep ; and " Class III, Carpet wool," low-grade wool from unimproved or " native " breeds of sheep. In the revision of 1890 the designations "clothing," "Report of the Tariff Board on Schedule K (1911), 62d Cong., 2d sess., H. Doc. No. 342. '' This ratio was first used, in legislation relating to wool manufactures, in 1861. WOOL-GEOWING INDUSTRY. 35 ''combing," and "carpet" were dropped, in view of the changing uses of the wools, but the " blood " classification was retained. According to the act of 1909, 11 cents a pound was levied on wool of Class I— "in the grease." Double this amount was collected if the wool were washed, and triple duty was levied if it were scoured. Twelve cents a pound was levied on Class II wool, no double duty in case of washed, but triple duty in case of scoured wool. Four cents a pound was levied on Class III wool, valued at 12 cents or less per pound, and 7 cents a pound on wool of Class III, valued at more than 12 cents per pound. No double duty was levied on Class III washed wool, but a triple duty was levied, on the scoured wool. The elimination of the double duty on washed wool of Class II came about in 1867 as a concession to the worsted manufacture, which was then an infant industry. The worsted industry now uses (and used in 1911, as the "Report on Schedule K" states) more Class I than Class II wools, and also uses more Class I wools than the carded woolen industry. Fashion apparently had much to do with the great growth of the worsted industry. The triple duty on the scoured wool was a discrimination between branches of the industry, in so far as one used more scoured wool than the other. The report states that " some of the small woolen mills, making the lower grades of goods, purchase in the scoured con- dition such wool as they use for blending with wool substitutes." In regard to the use of cotton by the wool-manufacturing industry, the largest increase from 1890 to 1910 was in the hosiery and knit goods branch, while the amount used in woolen goods declined, and that used in worsteds increased much less rapidly than the quantity of raw wool used.^^ The report describes the various kinds of wool, points out the principal localities of production, and gives a statistical survey of the sheep industry in the leading wool-growing countries. It shows that the United States had been producing, up to 1911, about 300,- 000,000 pounds of wool a year, consisting principally of the " fine " and " medium " grades. The so-called " carpet " wools and the " luster " wools comprised a small percentage of the domestic clip. The usual annual requirements of our manufacturers were about 500,000,000 pounds of wool in the grease. The home-grown wool pro- vided for about 65 per cent of the needs of the mills of the United States. The leading foreign sources of supply were Australia, New Zealand, Argentina, and Uruguay. The report, therefore, first com- pared the general conditions surrounding production in the United States with those prevailing in the Southern Hemisphere. This gen- " Cotton, cotton yarn, and shoddy were relatively of less importance as compared witli new wool in producing woolen and Worsted clothing in 1909 than in 1889 or 1899. — Report of the Tariff Board on Schedule K (1911), p. 97. 36 WOOL-GROWING INDUSTRY. eral survey was followed by a detailed analysis of costs of production at home and abroad, and the whole was supplemented by specie reports which described in great detail the conditions prevailing in different localities, both in this and in foreign countries. Most attention was naturally paid to the regions which produce wool competitive with home-grown wool. The conclusion was drawn by the Board that some of the fine wools of Montana, Wyoming, Idaho, and Oregon compete directly with fine Australian 64s-70s wools; that the Delaine wools of the "Ohio region" (said- to be the strongest wools of Merino blood raised in the world) meet with competition from the Merino combing wools of Australia, while " Michigan fine combing " meets the Sydney and Adelaide 64s. They concluded that there was practically no wool grown in this country which equaled Australian 80s, or finer. The situation of the industry in the United States was very dif- ferent in 1911 from that of wool growing in Australasia and South America, our chief competitors. The " paddock " and " range " systems were distinctly the leading types of organization, of the in- dustry in those countries, and there was considerable room to expand, A greater number of sheep were kept under the range system than on the " farm " plan in the United States, but in this country, as the Board says, " at the present time practically every acre of graz- ing land in the West is in use and somewhat overstocked, resulting in occasional heavy losses." ^* The Board came to the following con- clusions regarding the costs of production in this and foreign' coun- tries : That, in the western part of the United States — the " range,',' section — where about two-thirds of the sheep were to be found, the " fine " and " fine medium " wools " cost," on the averagej 11 cents per pound. " Cost " was figured on the following basis : All receipts from sources other than wool were set off against total ex- penses for the flock, and the balance was considered the cost of the wool obtained. The proportion of receipts from wool and mUttoii, respectively, varied over a wide range. The average for the whole country was 57 per cent from mutton and 43 per cent from wool. The report states : ^* " It will be noted that, in general, the higher this percentage is [of receipts from wool] the higher is the average net charge against a pound of wool and the lower is the average net income on capital." The item of interest on investment was elimi- nated in comparing domestic and foreign costs and the actual pro- " Most of the large, free ranges of the early days of western sheep raising, have been broken up by the coming of the homesteader, and in order to utilize the free range remain- ing the flock owner must run his sheep in comparatively small bands. Furthermore, the land policy of the United States has been unfavorable to the holding of large tracts of land, and therefore grazing land belonging to flock owners, or leased by tbem from the State or from private parties, often consists of scattered sections. — Report of the Tariff Board on Schedule K (1911), p. 340. "P. 329. WOOL-GROWING INDUSTRY. 37 duction cost of harvested crops fed to flocks was used instead of their market value. ^^ , The " cost " (i. e., the net charges against wool) , figured on the same basis, for the " Ohio region," was 19 cents a pound, wool being pro- duced in that section at a higher cost than anywhere else in the world. In the States east of the Missouri Eiver (with the exception of the upper Ohio Valley region), where wool production was inci- dental to general farming and small farm flocks were the rule, the receipts from the sale of sheep and lambs ordinarily covered the flock expense, leaving the wool for profit. The Board fixed the average charge against the entire clip of the country, both fine and coarse wools, at about 9^ cents a pound, the corresponding charge in South America at between 4 and 5 cents a pound, and that in Australia and New Zealand as almost neg- ligible ; that is, receipts from other sources than wool were carrying the flock expense in Australasia." It is evident that, according to this method, the cost of wool de- pended directly on the receipts from mutton, decreasing as the latter increased, and vice versa. The defects of this manner of computing cost were readily admitted, but it was laaintained that it was the most feasible course to pursue for tariff purposes." The conclusion of the Board was, therefore, that the difference between the " average cost of production " of wool at home and in Australasia was about equal to the effective amount of protection to raw wool under Schedule K, while the difference between the costs in this country and in South America was less than the effective protection." The Board also came to the conclusion; that the part of the duty, in the act of 1909, on manufactured goods, which was supposed to compensate the maker for his increased cost of raw material, was in reality, in many cases, more than compensatory. A careful investigation was made in regard to the shrinkage of wool. The rates in Schedule K were, as stated above, based on the assumption that wool shrinks on the average about 66f per cent in scouring. It was found that the average was not so great as that. " These matters are discussed In Chap. 10, Infra. »" Report of the Tariff Board on Schedule K (1911), p. 344. " The conclusion, is inevitable that when the woolgrowers' receipts are derived partly from wool and partly from mutton, it is impossible to apportion the costs between the two products, and that therefore we can not obtain a result which can accurately be termed the cost of producing a pound of woo,l. However, this need occasion no concern, since the bearing of the receipts from wool on the returns from flock husbandry, as carried on in the r^on under consideration, can ire ascertained and the object of this Investigation can thus be accomplished. — Report of the Tariff Board on Schedule K (1911), pp. 312-313. " The effective protection was considered to be two or three cents less than the nominal amount, on account of the " skirting " of Australian wool, j. e., the practice of eliminat- ing the poorer parts around the edges of the fleece. 38 WOOL-GROWING INDUSTEY. The average shrinkage of wools imported up to 1910 from Australia and South America was about 48 per cent, while the average for domestic wools was between 65 and 60 per cent." The Board declared defective the method of levying a specific duty on wool in the grease, because on account of the varying shrinkages, it operated to prevent the import" tion of some of the higher grade wools. It held the specific duty to be superior to the ad valorem, how- ever, and favored levying a specific duty based on the scoured content of the wool. It also held that there was no longer any good reason for distinguishing between Class I and Class II wools. SCOPE OF THIS REPORT. When the Tariff Board made its report the tendency throughout the world was toward the keeping of more crossbred sheep.^" Many authorities have concluded that it is to this class of sheep, kept on other than a strictly " range " basis, that we must look for an in- crease in the world's supply of wool. This is one of the leading problems of the industry, and is given considerable attention in this report. The subject of wool is one which has a great many ramifications. It touches international policy in regard to the control of raw ma- terials. It involves domestic policy with respect to the use of our natural resources, control of public lands, relations between pro- ducers, middlemen, and consumers, and development of cooperative methods. It is related to many agricultural questions— use of the soil, management of live stock, choice of crops and other farm and ranch-management problems. It also has a vital relation to the consumers' interests, because of the common use of the products made from wool. Because of this diversity in the lines of thought which are sug- gested it has been somewhat difficult to make of the report a unified whole. This is, however, the object which the Commission has had steadfastly in view. The greater part of the report is, of necessity',' the development of facts necessary to a complete grasp of the direct tariff problem, which has been considered in the later chapters. Part I of the report consists of an introduction, and survey, chiefly statistical, of the world production and consumption of wool and a discussion of wool control during the war period, 1914-1918, and the general effect of Government regulation of the industry upon post-waf , » The average shrinkage of fine western wools was found to be 67 per cent. The average for aU wools from that region was 62 per cent. Of Ohio and other fine domestic fleeces, 60 per cent ; of the lower grade domestic sorts, about 45 per cent ; of imported South American crossbred wools, 33 per cent ; and of Imported Australian crossbreds, 30 per cent ; of Class II (English washed) wools, from 18 to 30 per cent. — Report of the Tariff Board on Schedule K (1911), p. 331. "'Report of the Tariff Board on Schedule K (1911), p. 394. WOOL-GROWING INDUSTRY. 39 conditions. In Part II the Commission has taken up a detailed con- sideration of wool growing in the United States. There is a discussion of the wool-growing industry and its problems in both the farm states of the East and the range states of the far West. Particularly, ques- tions such as the relation of our public-land policy to the sheep industry, the organization andfinancingof wool growing, the cost of production of wool and mutton in the range states, and the problems of the market- ing of both wool and sheep, have been discussed at length. Part III is a discussion, of wool growing in the important competing areas outside the United States. These include Australia, New Zealand, British South Africa, and Argentina. These chapters provide data for comparison with the wool-growing industry in the United States. In Part IV the Commission surveys the history of the wool tariff in the United States and presents certain suggestions and recom- mendations upon classification of wools and the basis upon which an import duty should be levied, in case Congress decides to impose a duty upon raw wools. Chapter 2. SURVEY OF THE WORLD PRODUCTION AND CONSUMPTION OF WOOL. PRODUCTION OF WOOL SUITABLE FOR MAKING CLOTHING. Most of the leading sources of the present supply of wool are in the Southern Hemisphere. The character of the wool clips of the v^arious regions may be described briefly as follows: Australia is the great source of supply of Merino wool. Of late years an in- creasing amount of crossbred wool has been grown there, but the country is chiefly famous for its clips of rather fine Merino of mod- erate shrinkage. New Zealand, on the other hand, grows crossbred wool almost exclusively. South Africa furnishes Merino wool, most of which does not seriously challenge the superiority of Australian fine Merino. Argentina is predominantly a crossbred wool country, and Uruguay is becoming so, although in the past it has produced considerable Merino wool. In Great Britain, where mutton is much more important to the flockmasters than wool, the " luster " and " down " wools are the kinds produced. Continental Europe raises more crossbred and " down " wool than Merino, and the same is true of Canada. In the United States various kinds of wool are raised under the different conditions existing in the different parts of the country. In the far West the proportion of Merino blood is usually large, while in the " farm States," except in the upper Ohio Valley, the common types are crosses of various English breeds, hav- ing little or no Merino blood. The low-grade wools shorn from ''' native " or " unimproved " sheep, and used chiefly for carpets, and to some extent for mixing with the better wools in making blankets and rough cloth, come principally from China, India, Russia, the Near East, and the Balkans, though additional supplies come from almost every part of the world. This gives, in a general way, a view of the kinds of wool raised in the countries which furnish by far the greater part of the world's supply. Before analyzing more care- fully the world's wool output, the following figures, which illustrate the important position of the British Empire in the industry, are given : ^ 1 Report of the Departmental Committee appointed by the Board of Trade to con- sider the position of the Textile Trades after the war. British Blue Book, 1918, Cd. 9070, p. 27. The figures of the Committee have been slightly amended here. 40 WOOL-GROWING INDUSTRY. 41 Table I. — WorWs Production of Wool, 1915. (000 omitted.) Country. Total produc- tion. Merino. Crossbred. Carpet, etc. BRITISH EMPIRE. United Kingdom.. Australia. New Zealand Cape Falkland Islands. . Canada British India Founds. ■ 122,000 670,000 197,000 180,000 4,000 11,000 60,000 Pounds, 484,500 6,000 180,000 Potmds. 122,000 85,000 191,000 Pounds. 4,000 611,000 60,000 Total PRINCIPAL EUROPEAN COUNTRIES. 1,144,000 670,500 413,600 France Bassia Italy Spam and Portugal. Germany Austria-Hungary. . my.. a-Hu Total. 79,000 380,000 21,000 62,000 25,000 42,000 15,800 76,000 15,750 31,000 5,000 8,000 63,200 5,260 31,000 20,000 34,000 304,000 609,000 151, 550 163,450 304,000 United States... South America.. Other countries. 304,000 404,000 338,000 174,000 73,000 130,000 331,000 338,000 Total Oiand total. 1,046,000 247,000 461,000 338,000 2,799,000 1,069,050 1,027,950 702,000 a English long and dqwn wools. 6 Crossbred and English wools. Table II. — World's Production of Wool, 1919."' (000 omitted.) Country. Total' 1 production. Merino. Crossbred and English. Carpet etc. BRITISH EMPIRE. Pounds. 653,000 60,000 15,000 3,000 228,000 100,000 118,000 Pounds. 457,000 Pounds. 196,000 Pounds. British India 60,000 6 15,000 3,000 219,000 New Zealand ' 9,000 97,000 3,000 cll8,000 Total 1,177,000 663,000 551,000 63,000 PRINCIPAL EUROPEAN COtJNTRIES. 42,000 50,000 26,000 16,000 35,000 7,000 320,000 52,000 91,000 8,000 10,000 5,000 34,000 40,000 21,000 16,000 Italy . . ., 26,000 3,000 20,000 25,000 9,000 3,000 Portiigai 1,000 300,000 25,000 2,000 Turkey and the Balkan States 91,000 Total 639,000 97,000 132,000 410,000 South America 480,000 314,000 281,000 80,000 157,000 360,000 157,000 40,000 TJnitpd Statp^ 281,000 Total 1,075,000 237,000 517,000 321,000 2,891,000 897,000 1,200,000 794,000 <» This table is constructed mainly on the basis of wool figures from the Bulletin of the National Association of Wool Manufacturers for January, 1920> p. 114. The figures for Australasia are from Dalgety's Annual Wool Review, 1918-19, pp. 58-60; for Canada, from the report of Vice Consul Robertson, Ottawa, made for the United States Tariff Commission, transmitted through the State Department. Where better informa- tion is not available, the proportions of the various kinds of wool are accepted as given in the British Blue Book, Cd. 9070, op. cit. The output is given in round numbers, as the object is to present the general situation. 6 About one-half of Canada's output is English combing wool. 'English wools— "long" and "down." 42 WOOL-GROWING INDUSTRY. Australia. Many diiferent types of wool are grown in Australia. The conti- nent is large and has wide climatic variations. The variety of Australian wool which has been preferred in the United States is the fine quality Victorian, western district wool. This is exceptionally fine, light shrinking, and of long staple. " Port Phillip " and " Gee- long" wools, popular in the United States, are grown in Victoria. The wool from the Tasmanian Merino is much like the wool from the western district of Victoria, but is of heavier shrinkage. Another section of Australia which is famous for fine wool is the Mudgee dis- trict of New South "Wales. In South Australia, where pasturage is more sparse, the wool is of a "bolder" type — that is, it is longer and' coarser. On the hot and dry plains of the " out-back " country, coarser wool is grown, because the fine Merino, containing much grease, retains more dirt than the coarse wool. Queensland, which is not thickly settled as yet, is predominantly a Merino section. The western part of that State is especially well suited to growing Merino wool on account of the dry climate. Defect in these wools is fre- quently caused by scarcity of vegetation, which robs them of sound- ness of fiber. The clips coming from the central and northern parts are usually dry and of " light condition." The more moist areas, especially near the coast. Darling Downs in Southern Queens- land and Peak Downs in Central Queensland, are adapted to lamb raising and grow more of the crossbred wool. The increase of mixed farming is usually accompanied by a greater output of cross- bred wool.^ The Merino wool of West Australia is usually of the " bold " or " strong " type.^ , • The English breeds which are most popular in Australia are the Lincoln, Leicester, Border Leicester, Eomney Marsh, Shropshire, Southdown, Hampshire, Suffolk, and Dorset Horn.* New Zealand. The climate of New Zealand is much like that of England and is particularly well adapted to the raising of crossbred sheep. Many grades and qualities of wool, suitable for almost all classes of worsted yarn, come from that country. The new type of sheep, the Corriedale, which is the result of crossing Lincolns and Merinos, is a product of New Zealand. These sheep have a mutton frame covered with a long staple fleece which resembles the " comeback " (3/4 blood Merino) type.° The small amount of Merino wool grown in New Zealand resembles the Victorian wool. » Hawkesworth, Alfred : Australasian Sheep and Wool, Sydney, 1911, p. 245. ' Queensland Sheep and Wool Industry, published by Government of Queensland, 1918, pp. 45, 78. * Smith, H. B. . The Sheep and Wool Industry of Australasia, Chap. 2. ° Hawkesworth : op. clt., p. 246. WOOL-GEOWING INDUSTRY. 43 The following table shows the relative position of the Australian States and New Zealand in wool production : Table III. — Production of Wool in Australasia, 1918-19." State. Production. Net weight. Saks. 952,471 426,135 314,348 169,618 130,981 37,363 Pounds. 306,209,901 136,998,141 101,060,738 54,530,490 42,109,081 12,011,820 Victoria Qiie^nslATid , , Wftst Australia.. Commonwealth , 2,030,916 627,831 652,920,171 227,521,228 New Zfiftlanrt... , . Australasia ^ 2,658,747 880 ia 399 f From Dalgety's Annual Wool Eevlew (Australia), 1918^19, p. 60. Argentina. About 75 per cent of the wool grown in the Argentine Republic comes from crossbred sheep. Lincoln, Leicester, and Romney Marsh are the favorite sheep for crossing with Merino in that country. The crossbred Argentine wool grades principally medium and coarse, cor- responding rather closely with " domestic quarter blood " and " do- mestic common " of the United States. The fine crossbred of Argen- tina corresponds with domestic tjiree-eighths blood. About 20 per cent of the Argentine clip is Merino, while the remaining 5; per cent is from blackfaced sheep and from the p,ative or " crioUa " sheep. The last named class of wool comes largely from the Provinces of Mendoza and Cordoba. The northern part of the Province of Buenos Aires was formerly a source of supply of Merino wool from Ram- bouillet sheep, but as agriculture has increased the number of sheep has been reduced.* This Province still has by far the largest number of any section of Argentina, and crossbreds make up the greater proportion. The southern part of Argentina, however, is the place where the number of sheep is expected to increase. The following table gives the number of sheep and the wool out- put in the principal wool-growing Provinces of Argentina in 1914. The number of sheep has been placed as high as 81,000,000 in some estimates, but judged by the quantity of wool exported, this is gen- erally considered much too great. ' This is not always the result of an Increase in agriculture as will' be' noted from other parts of the report, but it has been the case in Argentina. 44 WOOL-GROWING INDUSTRY. Table rV. — Sheep and, Wool in Argentina, 1914.' Province or territory. Number of sbee^. Annual production of raw wool, in pounds. 18,785,957 4,304,305 3,940,616 2,802,282 2,348,584 2,282,823 2,047,037 1,410,488 5,303,362 136,386,800 31,248,800 28,608,800 20,345,600 17,050,000 16,572,600 14,861,000 Cordoba 10,241,000 All others 38,504,400 Total 43,225,452 ., 313,819,000 a Consul General Robertson, special report of August 19, 1919, made in answer to iiiquiry of the Tariff Commission, transmitted through State Department. The number of sheep in Argentina increased only slightly in the years succeeding 1914. It was estimated at 44,855,000 in 1917.'' The output of wool is estimated at present as about 330,000,000 pounds a year.* Other South American Countries. The number of sheep in Uruguay, according to the census of 1908, was 26,286,296, and the output of wool in 1914 was 143,293,000 pounds, chiefly Merino.^ The clip of 1919 amounted to 90,000,000 pounds. According to the Uruguayan census of 1916, the number of sheep had declined to 11,472,852. This figure is so low as to cause doubt of its accuracy. There has, however, undoubtedly been a great decrease in the number of sheep in that country. The wool production of other South American countries in 1919 was as follows : Table V. — Wool Production in Several South American Countries, 1919." Pounds. Brazil 35, 000, 000 Chile 26, 000, 000 Peru Q, 420, 000 Falkland Islands 3, 200, 000 South Africa. A large amount of good Merino wool comes from South Africa, but a considerable quantity of low-grade native wool is also grown there. Much improvement has been made in the wool in the last few years." Pure-bred stock has been imported from Australia. The leading breeds of the country are the Kambouillet, Wanganella (Australian) , ' Robertson : op. clt., July 9, 1919. » Ibid. •BuUetin Imperial Institute (London), Vol. XVI, No. 4, p. 478. »» Bulletin Nat'l Assoc. Wool Mfrs. (Boston), Jan., 1920, pp. 111-114. "Bulletin Imperial Institute (Xiondon), Vol. XVI. No. 4, p. 487. WOOL-GROWING INDUSTRY. 45 and Tasmanian,^^ and there are a few Karakuls and a small number of English sheep. .The English breeds are mostly Komney Marsh, Lincoln, Leicester, ' Shropshire, and Suffolk. In addition to these the wooUess sheep in the country number from 5,000,000 to 7,000,000. The wool clip in 1918 amounted to 157,761,470 pounds, but fell to about 125,000,000 pounds in 1919." Table VI. — Number of Wool-hearing Sheep in South Africa, 1911-1918." 1911 (General census figures) 21,842,215 1912 (Department of Agriculture) 27,331,167 1913 (Department of Agriculture) 28,327,907 1915 (Department of Agriculture) 25,943,806 1916 (Department of Agriculture) 26,490,524 1918 (Census of agriculture) 25, 058, 718 Great Britain. The "English" wools are of two principal varieties — the "long wool " and the " down wool." The leading varieties of the long wools are the Leicester, Lincoln, Cotswold, and Eomney Marsh or Kent. The Leicester wool is long, lustrous, and curly, sometimes 12 inches in length. It is used for braids, linings, bright serges, and sometimes for women's dress goods. The Cotswold is much like the Lincoln and Leicester, but not so lustrous. The down breeds are the Southdown, the Hampshire, the Suffolk, the Oxford down, and the Shropshire. These sheep are among the best producers of mutton and wool. The wool is finer and shorter than that of the long- wool breeds. The downs usually have brown, gray, or black faces and brown or black legs. They are rounder and plumper than the long wools, and therefore are better as mutton producers. The Southdown is one of the best mutton sheep in the world and has been much used for crossbreeding with other varieties of sheep to produce better mutton qualities. It is not a favorite breed where wool is the principal consideration, because of its light fleece. The Hampshire is a large-boned, squarely built sheep, with black head and legs. It is found in south-central England. The more rapid growth and early development of the lambs of this breed have made it popular with sheep raisers who produce lambs to be marketed at five months of age or less. The Shropshires are proba,bly the most widely distributed of the English breeds. They are good farm sheep, as they are prolific, easily fattened, and bear a fairly heavy fleece of good and moder- ately fine down wool. » Bnslin, Gen. G. B. : Special Report on South Africa to the U. S. TariflC Commission. " Bulletin Nat'l Assoc. Wool Mfrs., Jan., 1919, p. 66. '^ Enslin : op. cit. 46 WOOIi-GKOWING INDUSTRY. Among the many sheep in the Scottish highlands, in the Cheviot Hills, and along the border between England and Scotland, are the black-faced Highland breed, the Cheviot, and mixtures of Cheviot and Leicester blood. The pure-bred Cheviots, which are found in southern Scotland and in the northern counties of England, are medium sized, hardy, fairly good mutton sheep, and producers of soft wool of 3 to 4 inch staple which is used in making Cheviot cloths. The number of sheep in the British Isles gradually decreased dur- ing the war. In 1918 the number was 27,063,000,^^ as compared with 31,164,587 in 1910." TABX.B VII.- — Wool Production in the United Kingdom, 1916-1918." Year. Fleece wools. Year. Skin wools.!" 1916 Founds. 94,990,000 96,652,000 92,182,000 1916 Pounds. 38,873,601 40,075,857 25,937,04! 1917 1917. . . ... 1918 1918 •N. Y. Daily News Record, Aug. 19, 1919. ' Wools pulled from the skins of slaughtered sheep. Continental Europe. During the war there was a considerable reduction in the flocks of Europe. The American Agricultural Commission, sent over in 1918, estimated the losses at about 7,500,000 sheep. This was partially off- set, so far as world production is concerned, by an increase of 4,750,000 in non-European countries. ^^ France suffered very severely. Her flocks decreased about 40 per cent from 1914 to 1919. (From 16,213 j030 to 9,463,315.)" In Germany there was a decrease from 28,000,000 in 1860 to 7,907,173 in 1904 and to 5,504,195 in 1913,i» but the number remained about stationary, or increased a little during the war. France and Germany developed two famous Merino breeds— the former the Eambouillet and the latter the Saxony Merino. Both countries now raise mostly the crossbred and down wool. Russia, at present, grows chiefly low-grade crossbred and carpet wools. Although formerly the output of Merino wool was large^ the number of Merino sheep has been declining since the eighties. « Bulletin Nat'l Assoc. Wool Mfrs. (Boston), Jan., 1920, p. 112. "TariflE Board Report on Schedule K (1911), p. 199. " Report of American Agricultural Commission to Europe. (Washington), Jan. 16, 1919. "Bulletin Nat'l Assoc. Wool Mfrs. (Boston), Jan., 1914, and Jan., 1919. "Monthly Notes on Tariff Reform (British), Jan.-June, 1914, vol. 20, p. 290. WOOL-GROWING INDUSTRY. Table VIII. — Number of Sheep in Russia, 1881-1913." 47 European Russia. Caucasia. Central Asia. Siberia. Year. "Thick" wool (crossbred or carpet). "Fine" wool (Merino). "Thick" wool (crossbred or carpet). "Fine" wool (Merino). "Thick" wool (crossbred or carpet). "Fine" wool (Merino). "Thick" wool (crossbred or carpet). "Fine" wool (Merino). 1881 17,800,000 36,063,000 40,000.000 41,599,000 38,000,000 39,634,000 17,034,000 13,900,000 7 148,000 6,909,000 2,790,000 2,474,000 1887 1897 1904 1909 1913 10,540,000 10,714,000 2,166,000 1,515,000 21,200,000 20,247,000 220,000 425,000 6,005,000 5,741,000 4,000 51,000 o N. Y. Daily News Record, Aug. 26, 1919. From official Report of Boon, and Textile Admn., in Moscow. Wool-growing in S'pain was on the increase during the war, owing to the stimulation of domestic manufacture and the difficulty of getting wool from abroad. Within recent years Oxford and Shrop- shire sheep have been introduced into Spain and crossed with Span- ish sheep with good results.^" Considerable Merino wool is still raised in that country, however. The Provinces of Leon, Segovia, and Estremadura produce Merino wool- which is used in making fine worsteds. Burgos and Navarre furnish varieties peculiarly adapted to making cloth for civil and military uniforms, while in Andalusia and Aragon there is grown a long and strong Merino wool called " entrefinos." In Andalusia some very fine Merino wool is also raised. The number of sheep in Italy before the war was 9,150,000, while in 1919 it was about 14,000,000." In the northern part of Italy, especially in Apulia, there are some Merino sheep whose wool is short and fine.^^ The Pinerolo sheep of Piedmont also produce a valuable wool. The average weight of wool clipped from Italian sheep is light. Austria, which had from two and one-half to three million sheep before the war, and Hungary, which had eight and one-half to nine million sheep,^' have lost large numbers, although the precise amount of the losses is unknown. These countries produce considerable " carpet " wool. During the quarter century before the war, breeding sheep for mutton became more common. Purebred mutton sheep were imported into Hungary from England. There was some pro- duction of Merino wool also. The Merino sheep of Hungary are known as the " Eacka " sheep.^* M> Bulletin Imperial Institute (London), Vol. XVI, No. 4, p. 480. »ilbid., p. 479, and Bulletin Nat'l Assoc. Wool Mfrs. (Boston), Jan., 1920, p. 112. «Int. Inst, of Agric. (Rome), Apr., 1913, pp. 616-617. 2» Canada Agric. War Book, 1915 ; cf . Bulletin Nat'l Assoc. Wool Mfrs., Jan., ' 1920, p. 112. " Int. Inst, of Agric. (Rome), May, 1913, pp. 680-688 ; Rovacsy, Dr. Bela : Sheepbreedlog in Hungary. 48 WOOL-GEOWING INDUSTRY. Denmark had 877,000 sheep in 1913." Cooperative sheep breeding has been carried on there successfully.''" Iceland and the Faroe Islands have about one hundred thousand long-wool sheep."^ The number of sheep in Norway has been decreasing somewhat — from 1,326,850 in 1914 ^« to 1,281,000 in 1916.^' Sheep-breeding has been increasing in Sweden, where there were in 1917 ^o 1,344,000 head. Merinos used to be numerous, but only a few hundred are now found in the whole country. Cheviot rams from Scotland have been used in late years. Oxfords, Shropshires, and Southdowns are found in southern and central Sweden.'^ The Dominion of Canada. Canada produces a good grade of long-staple combing wool. The English breeds are better suited to the climate than the Merinos., Crossing of English and Merino sheep has been practiced to some extent, but the sheep of Canada are predominantly of the English breeds. There are only about 200,000 sheep kept under range or ranching conditions (in southwestern Saskatchewan and southern Alberta). The rest are scattejred about the country on farms, in flocks averaging about 25 head. Canadian wools may be divided into eastern and western " domestic " wools and range wools. Fort Wil- liam, Ontario, is the point which is designated as the dividing line between east and west for the purposes of classification. The num- ber of sheep in Canada in 1918 was 3,052,748, about the same as in 1871.=" The wool clip was 14,000,000 pounds in 1917 and 16,000,000 pounds in 1919.== Mexico. Mexico is unimportant in wool production. Its sheep shear an average of only about 2 pounds of wool, and its output of 6,500,000 pounds is largely used at home. The United States, however, fre- quently imports over a million pounds a year from this source. The United States. The quantity of wool produced annually in the United States has remained practically the same for the past 35 years. The domestic product amounted to about 300,000,000 pounds in 1883, and it has since not usually varied from this figure by as much as 20,000,000 =^ Haggard, Henry Eider: Rural Denmark and its Lessons (New Yorlj), 1913, p. 183. '"Faber, Harold: Cooperation in Danisti Agriculture (London), 1918. « Great Britain, Consular and Diplomatic Reports, 5382 (1914) ; and Bulletin Nat'l Assoc. Wool Mlrs., Jan., 1919, p. 64. 28 Great Britain, Journal of the Bd. of .4.gric., 1916-17. ™ Bulletin Nat'l Assoc. Wool Mfrs. (Boston), Jan., 1920, p. 112. «> Ibid. •"Int. Inst, of Agric. (Rome), Agric. In Sweden, 1914, p. 1278. s2 Report of Vice Consul Robertson (Ottawa), Sept. 25, 1919. i» Bulletin Nat'l Assoc. Wool Mfrs., Jan., 1920, p. 114. WOOL-GROWING INDUSTRY. 49 pounds. The smallest annual product during that period was in 1897, when the total clip amounted to only 259,000,000 pounds, and the largest was in 1893, when 348,000,000 pounds were secured from domestic sources. In most years the output has been very close to the 300,000,000 mark, which was reached nearly four decades ago. The following figures show by five-year averages the annual do- mestic production of raw wool since 1885 : Table IX. — Wool Production in the United States by Five-Year Averages, 1885-1919. Years. Pounds. 1885-1889 310, 491, 000 1890-1894 324, 669, 000 1895-1899 272, 967, 000 1900-1904 297, 343, 000 1905-1909 306, 349, 000 1910-1914 306, 064, 000 1915-1919 295, 400, 000 The western ranches and the Ohio region still produce mainly the wools in which the Merino characteristics are strongly marked. In all other sections of the country the blood of the English mutton breeds has had the greatest influence. PRODUCTION OF CARPET WOOL. Eussia, Turkey and the Balkan States, India, and China produce two-thirds of the world's output of carpet wool. The rest comes in limited quantities from many countries.'* Table X. — Output of Principal Carpet-Wool Producing Countries, 1919.^* Pounds. Russia in Europe j " 320, 000, 000 Russia in Asia '. " 113, 359, 000, Turkey in Europe and Balltan States 90, 500, 000 Greece 16, 000, 000 Turkey in Asia 90,000,000 British India 60, 000, 000. Cliina ; 50, 000, 000 Persia 12, 146, 000 Algeria , 33, 184, 000 Tunis - 3, 735, 000 Total 788, 924, 000 WORLD TRADE IN WOOL. Although almost all countries produce some wool, the surplus for ? export (of wool suitable for making clothing) is found chiefly in « Bulletin Nat'l Assoc. Wool Mfrs., Jan., 1920, p. 114. "Not iiU carpet wool. 1842°— 21 4 50 WOOL-GEOWING INDUSTRY. Australasia, South Africa, and South America. This surplus went, before the war, principally to the United States, Great Britain, France, Germany, Austria-Hungary, Belgium, Italy, and Japan. Australia, South Africa, and Uruguay supply the bulk of the Merino wool ; Australia, New Zealand, and Argentina crossbred wool ; Asia, southeastern Europe, and northern Africa the carpet wool. London was before the war the greatest world market for wool, and the auc- tions in Coleman Street had an influence on prices the world over.^' During the war these auctions were suspended, but they have been renewed and bid fair to regain a large share of their old importance. The dominance of the London aiictions had been considerably les- sened, however, before the war, by the auctions in Australia. In Syd- ney, Adelaide, Melbourne, Geelong, and Brisbane, the leading auction cities of the Commonwealth, more Australian wool was sold than in England. These auctions also ceased during the war on account of the purchase of Australian wool by the British Government. Liverpool is a great market for India carpet wools. Before the war Antwerp, also, was one of the great wool markets. The imports at that center came principally from South America and Australia, and a large proportion was sold to Germany." A large amount of wool was retained in Belgium to be scoured, combed, and carded be- fore reexport. The center of the wool manufacturing district in Belgium was Verviers and in France the Eoubaix-Turcoing district. Mazamet, France, was famous for the preparation of skin wools. Boston is the leading American wool market,^^ while Philadelphia and New York are prominent carpet-wool centers. ^ The sale takes place in one large room In the wool exchange on Coleman Street, some distance from the warehouses where the wool Is stored. Selling begins at 4 o'clock precisely. The room is constructed similar totan amphitheater, all the seats facing the auctioneer's desk and rising abruptly toward the back, so that each row of Intending buyers may see and be seen distinctly. Auctioneer, broker, and clerk take their respec- tive seats at the desk, while press reporters are also seated at the front in the extreme right aoad left corners. The densely packed audience is as quiet and sober as a church congregation, with the exception of a keen, eager look in their eyes indicating the in- tensity of suppressed excitement within. The moment the first lot is called out, they burst forth in one wild chorus of yells and howls, and may continue shouting and gesticulating in u. frantic manner until that particular lot Is knocked down. For a fraction of a minute there is dead silence again until you can almost hear your heart beat. In that brief moment the buyer's name and the price of the lot has been re- corded. Suddenly the subdued but clear metaUic voice sounds the next number from the desk and Immediately a dozen or more excited bidders leap to their feet, shouting louder than before and continue those hideous yells and frantic movements for about 20 seconds until that lot is knocked down and so on. Excitement on the stock exchange is tame comjMired with it, whilst the excitement at a heated election meeting is mere child's play compared with the terrific eagerness displayed here. We met an Australian coming out one afternoon and he said, ' We call our wool sales in Sydney the dog fight, but this Is the world's menagerie turned loose.' — Description of London Auction. Report on The Sheep Industry in Canada, Great Britlan, and the United States, Dominion of Canada, Dept. of Agric., 1911, p. 105. "Bulletin Imperial Institute (London), Vol. XVI, No. 4, p. 511. =« Four hundred and eighty-seven million pounds of wool were received in Boston in 1918. WOOL-GKOWING INDUSTRY. 51 Great Britain was the leading exporter of manufactures of wool before the .war. The United States made great progress in this respect during the war, but trade wiU no doubt be to some extent re- adjusted. The German exports of wool manufactures had increased greatly in the years just before the war. Woolen mills have been established in Canada, Japan, Australia, New Zealand, South Amer- ica, British India, and China. These supply part of the home de- mand, or have even exported a little, as did Japan during the war. In Kussia, the Balkan States, the Turkish Empire, Persia, India, and China the hand-loom industry uses large quantities of wool.^° Table XI. — World Trade in Manufactures of Wool, 1912." Country. United Kingdom. Germany France Austria-Hungary - Italy Switzerland Netherlands Belgium Russia Sweden Norway Denmark Spain Portugal Boumania Bul^ria Serbia Greece Turkey Japan China Persia Imports. 333,452,321 13,669,998 041,957 066,289 903, 196 358, 148 898,330 212. 153 389,846 681,441 932, 132 455,347 459,950 630,277 436,012 226,358 783, 505 703, 275 273,050 866, 600 866, 500 343. 154 $126,840,456 69,347,625 37,121,662 13,645,666 2,684,111 1,946,600 8,404,445 2,248,323 Exports. 97,330 768,907 447,718 2,919,900 "4,'467,'447 Country. Dutch East Indies Other eastern countries. . . French colonies Morocco United States Argentina Brazil Chile Peru Mexico other American countries. Egypt British India Hongkong^ South Africa Australia New Zealand Canada , other British possessions. Total. Imports. S554, 781 973,300 1,946,600 486,650 15,115,350 9,017,625 2,919,900 6,314,218 559, 648 1,528,081 3,406,550 4,379,850 8,273,050 2,433,250 5,839,800 14,599,500 3,211,890 21,704,690 2,919,900 254,834,273 Exports. $1, 635, 144 1,070,630 273,545,964 •Bull. Imp. Inst. (London), Vol. XVI, No. 4, p. 498.) The United States exported manufactures of wool to the value of $19,928,071 in the calendar year 1918 and $47,832,768 in 1919. Manufactures of wool imported for consumption in those years were valued at $22,725,011 and $18,530,450, respectively." In 1918 Great Britain exported manufactures of wool to the value of $195,683,436, while imports were unimportant. The figure for exports does not include the value of woolen manufactures for the use of the British expeditionary forces.*^ WOOL IMPORTS OF THE UNITED STATES. Except during the war, imports of wool have not fluctuated a great deal for the past 15 years. In 1908 the business depression following the panic of 1907 caused a decrease, and in 1911 there was a drop caused by a stagnant condition of the market which has '"Bull. Imp. Inst. (London), No. 4, Vol. XVI, pp. 496-497. *° U. S. Commerce and Navigation Eeports for calendar years 1918 and 1919. "Annual Statement of the Trade of the United Kingdom with Foreign Countries and British Possessions, 1918 ; cd. 342, 1919. Table 17. 52 WOOL-GKOWING INDUSTRY. been ascribed to a fear of impending tariff changes. Before the war imports were somewhat in excess of 200,000,000 poun(^ a year. A year of small importations has usually been followed by a year or two in which the excess was large enough to make up for the previous deficiency. Tables XII to XIV permit a further analysis of the wool imports of the United States. In studying these tables it should be borne in mind that before the war somewhat more than one-half of the imports of " Class II wools " consisted of mohair from Turkey and the Cape of Good Hope, and camel, vicuna, and similar hairs from' Asia and South America. Reexports of these hairs made up the major part of the Class II products which came from the United Kingdom. The remainder was real "English wool." The Class I wool, which came from the United Kingdom, consisted, of course, of reexports of Australian and South American wool, while the Class III wool imported from the same source came originally from Asia and eastern Europe. It will be seen that prior to the war Russia, Turkey, and China were the principal sources of Class III wools. During'' the war imports of this kind from the first two countries greatly decreased, while China became the principal source of our imports. Increased quantities of Class III wools have also come from the United King- dom and Argentina. Table XII reflects the normal or prewar state of affairs. It should be compared with Table XIII, showing the situation in 1919. Table XII. — Imports of Wool into the United States — Average, 1912-191^. [Calendar year.] Country. Class I, ■Clothing." Class 11," 'Coinbing." Class III, "Carpet.'' Total. Total. Argentina Australia Canada China France New Zealand Bussia in Asia Bnssia in Europe. . Turkey in Asia Turkey in Europe.. United Kingdom.. All others Pownd.s. 87,843,602 Pounis. 17,666,668 PofLndn. 106,603,-709 25.004,768 14,137,023 117,133 36,353 1,841,186 4,647,050 442,364 78,629 1,808,038 2,408 7,036 83,304 4,072,948 52,311 10,287 32,627,091 4,116,804' 2,950 35,173,516 6,874,024 89,163 7,167 1,101,810 12,791,848 1,255,151 ■ 6,328;625 16,975,623 6,851,809 2,1S2,(106 22,042,858 11,333,347 Paunis. 212,114,OT9 29,520,080 14,267,863 1,935,508 32,666,852 5,965,026 4,730,354 6,328,625 17,067,736 6,868,575 3,293,916 70,008,222 19,462,522 a Includes hair ol the Angora goat, etc. WOOL-GROWING INDUSTEY. 53 Table XIII. — Imports of Wool into the United States, 1919. [Caletidar year.] Country. Total., Argentina Australia British South Africa Csnada Chile China Ecuador France Iceland and Faroe Islands. . Japan New Zealand Peru Russia in Asifi Spain rtiited Kingdom Uruguay All others Class I, "Clothing." Pounds. 334,099,638 118,854,446 46,034,615 61,466,180 12,066,667 11,959,417 8,528,802 175,600 379,377 266,215 390,855 14,234,386 2,273,308 77,220 164,750 14,704,025 49,931,366 2,592,319 Class II, 'Combiug."l Pounds. 14,844,972 2,087,101 31,798 3,997,177 660,924 636,746 642,970 1,109,053 252,900 22,046 3,382,806 340,625 1,690,827 Class m, "Carpet.'' PoUTids. 96,948,324 14,045,112 2,386,257 98,310 13,274,467 29,813,744 408,221 377,723 705,800 118,534 1,540,691 1,129,031 915,031 19,044,860 7,030,790 6,059,673 Total. Pounds. 445,892,834 134,986,669 46,066,413 57,849,614 12,815,891 25,870,619 38,985,616 583,821 757,100 972,015 509,389 14,234,386 4,923,052 1,469,161 1,101,827 37,131,691 67,302,781 10,342,909 " U. S. Commerce and Navigation Report, 1919. 6 Includes hair of Angora goat, etc. Table XIY.— Imports of Wool into the United States, July 1, 1919, to June 30, 19Z0. Pounds. Class I, " Clothing " 337, 212, 109 Class II, "Combing" 9,956,344 Class HI, " Carpet " 72, 225, 748 Hair of Angora goat, etc_ 419, 394, 201 8, 183, 837 Total 427, 578, 038 Ports of Entry for Wool. Boston is the leading port in the importation of wools of Classes I and II, but more of the Class III wools are landed at New York. Philadelphia is the port of entry for about as much of the Class II wool as is New York, and nearly as much of Class III wool as Boston. In 1915 and 1916 considerable wool brought directly from Aus- tralasia was landed in San Francisco, which in 1915 was ahead of Philadelphia, and only of less importance than Boston and New York as a port of entry for wool ; in 1916 it stood second to Boston. The woolen and worsted mills of the United States are concentrated largely in New England and the Middle Atlantic States, and it is partly on account of their proximity to the manufacturing sections that Boston and Philadelphia are the two great wool markets of the country. The leading States in wool manufacture were, in the order of their importance in 1914, Massachusetts, Pennsylvania, Rhode Island, New York, New Jersey, Connecticut, Maine, New Hampshire, Ohio, and Vermont. These 10 States produce about 95 per cent of the manufactures of wool in the United States. Massachusetts alone. 54 WOOL-GEOWING INDUSTRY. in 1914, produced nearly one-third, $141,329,858 out of a total $464,249,813 and New England produced about one-half of the total. Imports of Important Substitutes. Before the removal of the duty in 1913, the importations of wool substitutes were very small. Since then they have been much larger although they are small when compared with the total imports of raw Avool. Table XV. — Imports into the United States of Rags, Mungo, Flocks, Noils, Shoddy, and Waste, 1912-1918. Year. Quantity. Value. Year. Quantity. Value. 1912 duiiable.. 1913 do Pounds. 362,307 345,394 6,797,237 101,845 $168,007 162,848 1,049,716 56, 091 1915 1916 1917 1918 free.. do.... do.... do.... Pounds. 4,620,534 4,569,621 4,612,443 3, 184, 169 1847,694 1,216,207 ^Q^.fFree.. 1,668,333 ^'''^DutiaWe 1,289,400 THE WOOL TRADE OF GREAT BRITAIN. The following tables furnish data for a more careful analysis of the wool trade of the British Isles : Table XVI. — Imports of Wool into the United Kingdom, 191S-1916 (000 omitted.) Country of origin. Port. 1913 1914 1915 1916 Grand total Pounds. 800,580 Pounds. 712,617 Pounds. 926,379 Powttdg. 618,946 158,970 115, 307 87,924 FriTicipal foreign sources. Asiatic Turkey 8,773 2,316 2,582 9,657 65,456 24,286 55,901 3,823 1,277 4,726 1,729 46,906 18,007 39,839 866 1,155 2,372 1,122 60,968 15, 278 6,163 2 703 China '4I8 United States 879 31,782 8,115 9,836 Argentina Chile From British possessions (total) . . 541, 610 597,310 838,455 Port Elizabeth, East London. .. Durban , Delagoa Bay Principal British sources. 92,813 40,410 54,946 265,078 181,181 6,150 1,032 81,870 39,792 46,982 239,233 184,607 4,454 372 9,466 41,898 65,432 426, 163 200,031 3,045 92,420 62,811 27,280 64,793 241,722 167,852 4,352 6,134 Natal British India Sydney, Melbourne, Brisbane, Adelaide. New Zealand Falkland Port Stanley. All others WOOL-GROWING INDUSTRY. 55 Table XVII. — Exports and Reexports of Wool from Great Britain, 191S-1916. (1) EXPORTS OF WOOL GROWN IN GREAT BRITAIN. (000 omitted.) Country of destination. 1913 1914 1915 1916 Grand total Pounds. 335, 142 Pounds, 333,533 Pounds. 154,935 Pounds. 68,488 Total exports 28,662 38,458 32,002 13, 114 United States 8,689 2,307 4,161 8,051 5,454 20,768 2,330 6,906 2,900 6,554 22,554 3,660 1,126 3,146 3,779 Canada Russia 1,407 Germany all others 4,662 4,782 (2! REEXPORTS OF WOOL FROM GREAI BRITAIN. 306,480 295,075 122,933 45, 372 Principal places. 383 93,197 86,073 925 44,536 2,566 78,800 154 80,785 59,646 806 85,842 2,467 65,385 7,328 6,879 Germany 20,738 8,857 77,207 4,614 4,189 13,136 4,221 12 140 Italy United States Canada 3,448 5,548 Allothers .... PRICES. Prices of Wool from 1860 to 1914. As a result of changing industrial conditions, the general tendency in wool prices was to fluctuate greatly during this period of more than half a century. The average price of wool was comparatively high at the beginning of the period./ At that time the resources of the wool-growing regions of the Southern Hemisphere were just be- ginning to develop. Eighteen hundred and sixty-nine was the first year in which as many as 500,000 bales of wool (of 330 pounds each) were sent from Australasia to Europe and Ametica. During the Civil War period the demand for wool to clothe the Army caused an increase in the price in this country to more than a dollar (currency) a pound. In 1867 there was a sharp break in the price, and there ensued a low level of world prices for wool until 1871. The 20 years 1871-1890 was an era marked by a great development of sheep raising in our far West, where there were two periods of high prices. The first was during 1871 and 1872, and one'of the principal causes seems to have been the Franco-Prussian War. In addition, however, the world supply was expanding less rapidly than the de- mand during the years just preceding 1871. Prices for wool in the United States declined from 1873 until 1879, the panic of 1873 helping the downward trend. In England the price declined from 1875 until 1879. The next period of high prices, beginning in the latter part of 1879 and lasting only until 1880-81, was caused by 56 WOOL-GROWING INDUSTRY. the revival of business in this country. There followed a high do- mestic price which was reflected by a rise in the London price. The supplies of wool from the SoutherniHemisphere were increas- ing very fast during the eighties and prices took another downward turn in 1891. In 1893 came the panic with results which lasted for some time. With the revival of business in the closing years of the nineteenth century wool prices rose somewhat, but from 1901 to 1910 the average price was below that for the years 1840-1890, if the Civil War period be left out of consideration.*^ Even the drought in Australia (1902) did not raise the price very much. This may be ascribed partly to the rapidly growing competition of cotton with wool during these years. The Price of Wool During the War. During the late war the price of wool reached the highest point ever attained either in this country or abroad. The tendency of the price in this country was slightly downward in December, 1913, after the removal of the duty on wool became eifective on December 1. Most of the decrease had been discounted, however, during the two years preceding the passage of the act. The price recovered early in 1914, and upon the outbreak of the war in Europe showed an immedi- ate upward tendency. Complete control of the situation was reached in England in 1916 by the purchase of domestic and colonial clips and control of the use of wool. Although the prices of the various grades of wool reached a high point in this country in 1916, and were accompanied by the largest imports which we have ever experienced, the entry of the United States into the war was an even greater stimulus to prices. " Territory fine medium scoured " reached $1.82 per pound. In 1917 there was a great deal of speculation in wool. Many of the western woolgrowers sold their clip much in advance of the shearing time, and the future supplies often changed hands several times, with an increase in price each time. The wool dealers of Boston offered their stocks to the Government at the current prices soon after the entry of this country into the war, but the Government did not avail itself of the offer. During all of 1917 prices were climbing steadily, but the Government was slow in assuming control of the wool market. The British Govern- ment took control of wool stocks at a much earlier stage than did our Government, with the result that the level of prices became much higher in this country than abroad. 12 'vyright, Chester Whitney : Wool-Growing and the Tariff, Harvard Economic Studies, Vol. V (Cambridge, 1910), p. 276. WOOL-GROWING INDUSTRY. 57 The War Trade Board was empowered to limit the importation of wool by licensing it, and the Government was given the option of purchasing the imported wool. It did not exercise its option for several months, but finally did so in the spring of 1918, and in May of the same year commandeered the domestic clip and fixed as the purchase price of the several grades the market quotations for July 30, 191Y. This price was nearly, although not quite, the highest level that was reached. Table XVIII. — Valuations of Domestic Wool, July 30, 1917. [Prices at Boston, scoured basis.] TERRITORY. Choice. Average. Inferior. Fine and fine medium staple. . Fine and fine medium clothing * blood staple iblood clothing High I staple 66/58S High i clothing 66/58s I staple S6s I clothing 56s Low I staple 50/56S Low I clothing 60/56S High i staple 48/50S High? clothing 4S/60S 1 blood staple 46/48S i blood clothing 46/48s Low J staple 44s Common and braid 40s tl.80 1.70 1.68 1. 60/1. 62 1.45 1.42 1.40 1.37 1.35 1.32 1.32 1.30 1.28 1.26 L17 1.07 J1.76 1.65 1.63 1.58 1.42 1.39 1.37 1.34 1.32 1.29 1.29 1.27 1.26 1.24 1.15 1.05 11.70 1.62 1.60 1.53 1.40 1.37 1.35 1.32 1.30 1.27 1.27 1.25 1.24 1.22 1.13 1.03 TEXAS. Twelve months Eight months. . Six months {1.65 1.4S 1.40 So-called coast wools and border Mexicans must he scoured in all cases. Medium Texas to be classified as Territory according to the character of the lot • CALIFORNIA. Choice. Average. Inferior. $1.70 1.50 1.40 tl.65 1.45 SI. 60 1.40 Fall 1.15 Medium California to be classified as Territory according to the character of the lot. OHIO AND SIMILAR. [Including New England States, New York, Pennsylvania, West Virginia, Michigan, New Jersey, Delaware, and Maryland. Choice. Average. FineDelaine Flneolothing Iblood staple 58/60.. bloodclothlng staple bloodclothlng bloodstaple bloodclothlng lOWj Common and braid . SI. 75 SI. 85 1.70 1.68 1. 60-1. 62 1.45 1.42 1.32 1.30 1.17 1.07 58 WOOL-GROWING IBTDUSTBY. Table XVIII. — Valuations of Domestic Wool, July 30, 1917 — Continued. MISSOURI, INDIANA, ILLINOIS, AND SIMILAR. [Including Iowa, Wisconsin, Minnesota, Kansas, Nebraska, and Arkansas.] Choice. Average. Fine Delaine Fine clothing , i blood staple i blood clothing I staple I clothing J blood staple I blood clothing Low i Common and braid . $1.70 1.63 1.60 1.40 1.37 1.28 1.26 1.17 tl.80 1.65 1.60 1.57 1.37 1.34 1.2S 1.24 1.15 1.07 £E1II-BRIGHT. Semi-Bright is to be classified as Territory of Fleece according to the character of the lot. GEORGIA AND LAKE WOOLS. Choice. AveragelotSjlargely I Averagelots, largely J blood. $1.25 1.20 Prices Since the Armistice. It was expected that the price of wool would decline rapidly after the signing of the armistice. And this occurred, as the Government quickly canceled its contracts with the mills, 909 of which had their machinery working on war contracts. The market soon recovered, however, following the resumption of the London sales, in April, 1919. The price of fine Merinos advanced rapidly ; that of medium wools was fairly strong ; the lower grades declined in price and did not sell readily even at the reduced prices. The same tendency was observed at the auction sales of Government-owned wool in this country. There were periods when the general level of wool prices fell, but the market for fine wools, on the whole, remained exceedingly active and prices were good until the spring of 1920. Chaptei! 3. WOOL CONTROL DURING THE WAR. GREAT BRITAIN. Great Britain has been the leading wool market of the world for many years. In considering the control of wool during the war, it is of prime importance to know what measures were adopted in that country. The wool clip of the United Kingdom averaged about 125,000,000 pounds a year, before the war, less than one- fourth the consumption of its mills.^ Sheep had been decreasing in numbers for several years, chiefly because of the greater profit of keeping dairy cows. Of more importance than the effect of the war on the domestic clip is the influence which the British Government exerted on the disposal of the colonial wool. When communications were blocked at the out- break of the war, large stocks of wool which were intended for European mills were kept in .England.^ The price dropped and wool trading and manufacturing were temporarily at a standstill. The spinning branch, in particular, was disturbed, as the exports of yarn to Germany had been large. It was not long after the war be- gan, however, before orders placed in England by the Governments of France and Russia, as well as by the home Government, acted as a great stimulus to business.' During the summer and autumn of 1914, rigid restrictions were placed on the exportation of wool and woolens from England, and on wool, especially crossbred, from the colonies, to prevent supplies from coming into possession of the Central Empires.* An embargo was placed on the shipment of wool from Australia to the United States,^ but in March, 1915, wool was made contraband of war, instead, and American buying in the colonies was thus again allowed.* During 1915 about 900,000,000 pounds of wool were retained in Great Britain, whereas normal prewar consumption had been about 650,000,000 pounds.'' The Army demand had risen to great pro- » Bulletin Nat'l Assoc. Wool Mfrs., 1915, Vol. XLV, p. 59. 2 London Statist, Sept. 26, 1919, pp. 639-640. •British Trade Review. Jan. 1. 1915. 'London Statist, Sept. 26, 1919, pp. 639-640. » British Trade Review, Mar. 1, 1915. p. 145. •Ibid., Feb. 1, 1915. p. 82. 'British Blue Book, Cd. 8447, p. 13. 59 60 WOOL-GKOWIWG INDUSTRY. portions and the exports of woolen and worsted manufcactures to France to eight times the prewar amounts.' By the end of 1915 the price of wool, which had fallen during the first two months of the war, had risen to a level much higher than that of prewar times. The enormous war orders and the great civilian demand due to the increased prosperity of the working classes rapidly reduced the surplus of 1915, and in 1916 a shortage began to threaten.^ The British Government placed its contracts at first through com- petitive bidding of wool-manufacturing concerns. The advantages, of this method disappeared when the orders placed were greater than the amounts which manufacturers could agree to assume. Moreover,, when manufacturers were willing to forego high profits on war work,, their competitors in the civilian trade were able to offer greater in- ducements to labor. In February, 1916, the Goveri^ment undertook one of the im- portant measures which were gradually to bring it into entire con- trol of the wool situation. The War Office was empowered to requisi- tion the whole or any part of the output of a firm," and this imme- diately raised the question of the price to be paid for the requisitioned goods." The Government set about determining costs of production; and found that it was faced with very difficult problems, because of the great variety of goods and the different conditions existing in the various branches of the trade. The steadily rising price of raw material was also one of the chief difficulties. In figuring cost,, current prices of wool had to be used, since varying prices had been paid by manufacturers. In a rising market, this put the Government at a disadvantage." The first stage, therefore, that of requisitioning goods from the manufacturers, led to the second stage, which was fixing a price for the raw material. The threatened shortage of the raw material was another excellent reason for assuming control of the supply. Accordingly, in May, 1916, it was decided to purchase the whole of the British clip which was then being shorn. ^' The price of the British clip was fixed at 35 per cent above the level of prices prevailing in July, 1914.^* The purchase was car- ried out under the direction of a body called " The Central Advisory Wool Commission," which had various local boards under its direc- tion. The Government advanced 75 per cent of the value of the- wool as soon as it was inspected and passed, and the rest of the pur- chase price was paid when the wool was sorted and the original 'Economic Journal (London), March, 1918 (article by Dorothy Zimniern, The Wool Trade in War Time). » London Statist, Jan. 22, 1916, pp. 155, 156, and Apr. 22, 1916, p. 735. " British Order in Council, Feb. 15, 1916. " British Blue Book, Cd. 8447, p. 13. « Ibid. " U. S. Commerce Reports, June 12, 1916. " London Statist, Jan. 13, 1917, p. 79. WOOL-GEOWING INDUSTRY, 61 estimate of value confirmed.^' This wool was distributed to spinners and manufacturers to use for Government orders, so far as it was suitable, at fixed rates based on the price of the wool. The portion which was not suitable for military cloth was sold for civilian use at somewhat higher prices.^" Restrictions had again been placed upon exports in the spring of 1916," but it was evident that partial control of the wool supplies, even with restriction of exports, would not be sufficient, as the British clip amounted to only one-ninth of the 1915 consumption." In November, 1916, the Imperial Government made an arrangement with the colonial Governments to purchase the whole of the Austra- lasian clip." The first proposal of the British Government was to buy the crossbred wool only, but the colonial Governments main- tained that it was not practicable to differentiate between the grow- ers of Merino and of crossbred wool and so the Government agreed to buy the whole clip. To complete this control of the supply of raw material the war office took possession, during the spring of 1917, of all stocks of crossbred and Merino wool in the United Kingdom except those which were already held for the purpose of manufacture by the holders.^" It was also provided by an order in council of April, 1917, that any wool which was imported must be offered for sale to the director of army contracts." The clip of the Falkland Islands and part of that of Iceland were purchased.^^ In 1916, arrangements were made with the Government of India whereby East Indian wool, practically the whole of which is nor- mally sold in the British market, was distribftted under Government control at a schedule of prices agreed upon between the Government of India and the war office. All export from India, save to the United Kingdom, was prohibited. By the request of the Indian Government this arrangement was discontijiued in 1919.^' Another radical move was the cessation of the London wool sales by order of the Government in December, 1916. This was not so revo- lutionary, however, as it would have been a few years previous, be- cause during the 20 years preceding 1916 the wool sold at auction in London decreased from 70 per cent of the whole amount imported to 30 per cent, most of the wool at the later date going directly from « London Statist, July 8, 1916, pp. 78-79. "Economic Journal (London), Mar., 1918, p. 16. " Gray, Howard L. : War Time Control of Industry, p. 107. "British Blue Book, Cd. 8447, p. 14. '» British Trade Review, Jan. 1, 1917, p. 41. ™ Economic Journal (London), Mar., 1918, p. 17. " Gray : op. cit., p. 112. " British Board of Trade Journal, July 4, 1918. ** The London Times Trade Supplement, Saturday, Jan. SI, 1920, p. 519. 62 WOOL-GEOWING INDTJSTKY. the colonies to the manufacturer." For about three months the pro- cedure followed was for the Government to take over all its require- ments of wool at a fixed price, leaving the balance to be offered to the. public by auction, but in March, 1917, all auctions ceased and wool was only issued at fixed prices.^^ Several committees, representing all sections of the trade, had assisted the Government in arranging the details of purchase of the Australian clip. These committees were combined with the Central Wool Advisory Committee in the spring of 1917. This committee recommended to the Government the adoption of a more stringent policy of conserving supplies, even to the extent of rationing manu- facturers or consumers. This recommendation was made necessary by the shipping situation.^' Only 593,000,000 pounds were retained in the United Kingdom for consumption in 1916.^' It was necessary to supply the Army and it was also desirable to maintain the export trade, as far as possible, to bolster up the foreign exchange situation. In order to maintain both these branches of the trade and also to keep a safe reserve of wool, the civilian home consumption had to be curtailed. All the wool was issued to the manufacturers by the Government. For Government contracts, the price was fixed at a small margin above the cost; the wool for civilian uses was issued at the price prevailing in January, 1917, which was about 20 per cent above the military issue price.^* This discrepancy was maintained because the Government did not want to upset the trade, preferring to take a profit on the sale of raw wool. In order to save handling, the policy of direct delivery of wool to manufacturers was followed; and to stabilize trade, issue prices were fixed for periods of six months. The Government also took over the function of top making and sold tops to the worsted spinners just as it sold wool to the woolen manufacturers.''* The entry of the United States into the war meant a widening of the demand for wool for military clothing. It was necessary to extend, by an order of April 14, 1917, the priority scheme which gave preference to the military orders of Great Britain or the Allies. This order was followed soon after by an Army council order of May 24, 1917, reducing the working time in woolen and worsted manufacture to about 35 hours per week.^" There was not much objection to the 45-hour-week schedule, but when it was found that not enough wool could be secured to keep the industry busy, even for ^ Manchester Guardian, Nov. 28, 1916, p, 9. 2= U. S. Commerce Reports, Feb., 1917, p. 745. " British Trade Rerlew, Mar., 1917, p. 122. "British Board of Trade Journal, July 4, 1918. « British Blue Book, Cd 8447, p. 15. 2» British Board o£ Trade Journal, July 4, 1918. " Ibid. WOOL-GROWING INDUSTRY. 63 that length of time, there was considerable protest." The discontent in the industry grew, and led to a reorganization, in August, 1917, of the Government machinery for handling both the raw wool and the manufactures of wool. All arrangements for the purchase and transport of the wool and the making of tops were centralized in London in the hands of the Controller of Wool Supplies and under the immediate supervision of the Director of Kaw Materials. The I'overnment kept the ultimate decision regarding the p-ice, necessary reserve of wool, and the allocation of Government contracts.^'' The Government had, meanwhile, continued the policy of pur- chasing the domestic and colonial clips. The price paid for the 1917 clip of the United Kingdom was 50 per cent,^^ and for the 1918 clip 60 per cent above the 1914 level.^* Payment was more prompt in 1917 than in 1916, and the growers were much better pleased. The Australian clip was bought for the same price as that paid in 1916, i. e., 55 per cent advance over the price of 1913-1914. The Imperial Government offered to buy the South African clip on the. same terms as the Australian, but there was considerable opposition in South Africa where the matter became a bitter political issue. The Government had, therefore, by the middle of 1917, extended its control until all branches of the wool trade were under rigid supervision. The principal features of wool control, as established under the reorganization scheme, lasted until the armistice was signed. The military needs had been steadily increasing and the surplus wool stock growing smaller up to the end of hostilities. The shortage of wool for the civilian trade was acute in the summer of 1918, and there was considerable unemployment in the industry.^* The Government, so much criticized in 1917 for restricting hours of employment in the industry, was vindicated.*^ The reduced amounts of wool which it was possible to assign to civilian needs were insufficient' to meet the demands of the trade, and consequently provision was made early in 1918 for standard cloth, flannel, and blankets. The leading feature of 1918 was the great pressure of military needs.^' Many firms in Yorkshire, which before the war had never used the home-grown British wools, resorted to their use for military cloths.** The output of home-grown wools was somewhat smaller in 1918 than in 1917.*' "London Times Trade Supplement, Sept., 1917, p. 132. " British Board of Trade Journal, July 4, 1918. " Brltisl) Blue Book, Cd. 8447, p. 14. « British Board of Trade Journal, Apr. 4, 1918, p. 401. "London Times Trade Supplement, May and June, 1918. "Ibid., October, 1918. "Textile World Journal (New Torl£ City). Jan. 11, 1919, p. 335. »tT. S. Commerce Reports, Jan. 16. 1918, p. 2ao. "Textile World Journal (New York City), Jan. 11, 1919, p. 336. 64 WOOL-GEOWING INDUSTRY, In November, 1918, as the result of trade conferences called by the War office, a British wool council was formed in place of the board of control, to prepare plans for the gradual relinquishment of control by the Government.*" This wool council consisted of 41 trade mem- bers, 23 of whom were representatives of the employers and 18 repre- sentatives of employees. The Government departments were given 12 representatives, but these did not have the right to vote. The board of control, which had charge of clothing the military forces, kept on with its work and equipped each demobilized man with a civilian suit. After this work was finished, it was merged into the wool council.*^ The representatives of all branches of the wool trade, with the ex- ception of the labor group, urged the speedy relaxation of Govern- ment control. *2 This was not an easy matter, however,*^ after the years of Government activity which had intervened since the begin^n; ning of the war. It was decided early in 1919, however, that the next British clip would not be purchased.** The London wool auctions began again on April 2, 1919. Feeling in the wool trade during the early months of 1919 was distinctly appre- hensive, so that the result of the first series of auctions was a great sur- prise. The better grades of wool sold for 10 per cent more than the new Goverimaent schedule of prices which had been put into effect on April 1. The new schedule of prices effected a reduction of 7^ per cent and this scale was maintained for eight months.*^ At the first auction, good Merinos were as much as 15 per cent higher. " Come back " and fine crossbred brought high prices, some choice Geelong fleeces selling from 78 to 88 cents, which was 15 per cent more than the Government prices. Medium crossbreds did not show as much advance, being about 7| per cent above Government prices, while coarse qualities were only 5 per cent above schedule prices.*' The London wool sales continued and prices rose on all the better grades of wool almost throughout the summer and autumn. There was something of a check to the increase during the middle of the summer owing to labor troubles in the combing department of the industry, and to strikes in the coal fields and on the railways.*' These circumstances at the opening sale of the fourth series on July 14 caused prices of fine Merinos and crossbreds to show a loss of 5 per cent and prices of inferior qualities a loss of 10 per cent. This drop- in prices led to the opening of the next series of sales to neutral •" New York Journal of Commerce, Jan. 13, 1919. •' U. S. Commerce Reports, Dec. 18, 1918, p. 1057. « Ibid., Sept. 25, 1919, p. 1609. " New York Daily News Record, Jan. 2, 1919. " London Economist, Apr. 5, 1919, p. 589 «Ibid., Mar. 15, 1919, p. 465. "Ibid., Apr. 5, 1919, p. 589. " London Times Trade Supplement, Aug. 16, 1919, p. 589. WOOL-GEOWING INDUSTRY. 65 countries as well as to the Allies.*' The amounts which each country could buy were limited and export licenses had to be obtained in the usual way. The transportation difficulties had caused large stocks of wool to pile up in the storehouses and the capacity of the London sales for disposing of stocks was being taxed, and so, beginning in August, wool was sold on description. The use of Hull as a port of importation for wool was also adopted to ease the transportation situation.*' The labor trouble in the wool-combing branch of the industry was finally settled by an agreement, which was to remain in force until August, 1920. There was continual pressure on the Government to bring forward more of the high grades of wool, but the Govern- ment refused to include in the auction offerings more than the ordi- nary percentage of such wools. To do so would leave them with a large stock of the undesirable grades — a disaster in the current state of demand, which was for the finer quality of cloth.^° The leading feature of the latter part of 1919 and the early months of 1920 was the rise in the price of the fine Merino wools. The prices of medium crossbreds declined, and the lower grades of wool were almost a drug on the market, but the large stocks of fine Australasian wool owned by the British Government sold surpris- ingly well. The price of Australasian 64s, scoured, in the London market in July, 1914, was $0.57 per pound ; the British Government issue price, April 1 to November 30, 1919, was $1.24 to $1.32; while the London auction price, December, 1919, was $2.81.°^ Beginning in May, 1920, prices began to decline. Bradford manufacturers received many cancellations of orders, and dullness marked condi- tions in the wool and woolen business throughout the summer of 1920. AUSTRALIA."' During the first two years of the war the wool clip of Australia was marketed in the usual way; that is, principally through auc- tions held'in the leading cities of the Commonwealth. There was a decrease in the exports in 1914-15 on account of the drought, and the falling off in the number of sheep caused an even greater de- crease in the exports of 1915-16. During the early weeks of the war the market was depressed, but after the war orders began to be executed there was unprecedented activity. When sales com- menced, at the end of October, 1916, crossbred prices advanced 15 "U. S. Commerce Reports, Aug. 6, 1919, p. 737. *> Standard Dally Trade Service, Oct. 24, 1919, p. 171. " O. S. Commerce Beports, Sept. 25, 1919, p. 1609. " The Market Reporter, U. S. Department of Agriculture, Bureau of Markets, June 5, 1920, p. 367. " The same method was followed by the British Imperial Government In handling the Australian and New Zealand wool clips. Therefore no separate account of the New Zealand purchase Is given. 1842°— 21 5 1