THE WOOL ACT OF 1954 IN ”S HiSTORIC SETTING Thesis for the Degree 05 M. S. MICHIGAN STATE UNIVERSITY Alfreda Abeii 1957 THESIS LIBRARY Michigan State University -_.._..._......_. Asa-I ‘AAA‘An— ‘6‘ 't 4!. THE WOOL ACT OF 195h IN ITS HISTORIC SETTING by Alfreda Abell A THESIS Submitted to the College of Agriculture of Michigan State University of Agriculture and Applied Science in partial fulfillment of the requirements for the degree of MASTER OF SCIENCE Department of Agricultural Economics 1957 WWW We: WM I ’ 7 ~— 5‘53" 5"}? 6—0? ACKNOWLEDGMENTS The author owes her heartfelt thanks to Dr. Lawrence Witt of the Department of Agricultural Economics for his unending patience and constructive suggestions. Thanks are also due to Miss Ruth Jackendoff of the Department of Economics and Statistics of the Wool Bureau, Inc., for providing important source material, and to Jean and Richard Nicholas, and the author's mother, Marcelle A. Abell, for their reading of the manuscript. TABLE OF CONTENTS CHAPTER PAGE I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . 1 II. FACTORS WHICH DETERMINE SUPPLY . . . . . . . . . . . . S III. FACTORS WHICH DETERMINE DEMAND . . . . . . . . . . . . 29 IV. THE WOOL TARIFF . . . . . . . . . . . . . . . . . . . 14.2 V. THE COMMODITY CREDIT CORPORATION AND THE PERIOD OF THESECONDWORIJDWAR00.000000000000063 VI. THE NATIONAL WOOL ACT . . . . . . . . . . . . . . . . 71 VII. SUMMARY . . . . . . . . . . . . . . . . . . . . 83 APPENDICES . . . . . . . . . . . . . . . . . . . . . . 87 BIBLIOGRAPHY . . . . . . . . . . . . . . . . . . . . . . 106 LI ST OF FIGURES FIGURE 1. Number of sheep in the United States, 1880-1955. 2. Shorn wool production, 1955 ...... . .. . .. 3. Distribution of quality in a merino fleece,zud skirtingthefleece eeoeeeeoeeeeee PAGE . . 7 . 12 . . 19 h. Shorn wool production and farm wool prices, 1909-1955 . 2h 5. Output per man-hour in sheep and wool production compared with.agriculture as a whole . . . . . TABLE TAEEE 1. Estimated Receipts of ”col Growers under the . . 26 1955Program....................75 APPENDIX A TABLE PAGE 1. Sheep and Lambs in the United States, 18h0-19Sh . . . 88 2. United States Sheep and Wool Production, l9h9 . . . 89 3. Size of Flocks, by States, l9h9 . . . . . . . . . . 90 h. Official United States Standards for Grades of Wool . 92 S. The Production and Consumption of Wool, 192h-l956 . . 93 6. Principal Reasons Reported by Sheep Growers for their Reductions in Numbers of Sheep between 19u3 and 1948‘”; 7. Per Capita Consumption of Wool, and a Comparison of the Prices of Wool and Synthetic Fibers, 1930-56 . 96 8. A Comparison of American and Australian Wools . . . . 98 9. Price Differentials of Australian and Territory Wools, 1930-56 0 O O O O O O O O O O O O O O O O O 0 O O 10. Consumption of Domestic and Foreign Wool, 1930-52 . . 100 ll. CCC Acquisitions and Levels of Support, 1938-55 . . . 101 APPENDIX B The National Wool Act of 195h . . . . . . . . . . .102 CHAPTER I INTRODUCTION The National Wool Act was passed by the House of Repre- sentatives on 17 August, and by the Senate, on 18 August 195u. The Act became operative at the beginning of the 1955 marketing year. An annual domestic production of 360 million grease pounds-~roughly an additional 50 percent of, or about one hundred million pounds above, current annual production—-is established, by the Act, as its goal.. The Secretary of Agriculture is authorized to support shorn wool prices at whatever level-~up to 110 percent of parity--he believes necessary to encourage production to reach 360 million pounds. The difference between the prices re- ceived by growers on the open market and the support levels annually established by the Secretary of Agriculture, is paid, by the government, directly to wool growers. Why did Congress decide to grant high rigid price supports to wool when, for all other agricultural products, flexible and lower level supports seem.to be more in fashion? And, why, once it was decided to support wool, did the Wool Act adopt direct payments to growers as a method of unple- mentation? The answer to these questions is to be found in an analysis of the forces which currently determine the supply of, and the demand for, domestic wool. Accordingly, chapter ;; of the present thesis is devoted to an analysis of the factors which determine American wool production, and chapter III,te those which determine domestic consumption. The interpreta- tion by Congressmen and Senators of these economic forces also influences the choice of measures adopted. The Wool Act is the direct descendant of a long line of governmental measures pertaining to wool. It is, as it were, a summary of their failures and achievements, and an attempt at new solutions. The second part of the present thesis traces the historical antecedents of the Act and ends with a detailed discussion of the Act itself. Since economic forces have historical origins and since some parts of history deal with economic questions, there will, unfortunately, be some overlapping between the "economic” land ”historical” sections. It is hoped that these contradictions and complexities will be satisfactorily resolved in the con- cluding chapter which will bring together, briefly, all the forces which have combined and conspired to make the National Wool Act of l95h. The discussion will be limited largely to the ques- tion of shorn wool for the following reasons. The coarsest wools are used in making carpets; finer, apparel wools for the purpose that their name implies, and in the making of blankets. Carpet wools are not grown in the United States and are imported duty free. The National Wool Act, in addition to providing price supports for shorn wool, provides supports for mohair and for pulled wool. Support prices for mohair and pulled wool are to be established at levels which will maintain "normal marketing practices.“ No attempt at increasing their pro- duction is contemplated in the Act. Mohair, the hair of Angora goats, is blended with sheep's wool in the manufacture of fabrics, whenever its luster, superior reaction to dyes, strength, and other quali- ties, are especially desired. Angora goats are raised, to- gether with sheep, in Texas, Missouri, Oregon, New Mexico, Arizona and California. In total pounds clipped, annual mohair production is about two thousands of shorn wool production. Pulled wool is wool pulled from.the pelts of slaughtered animals. It is inferior in quality and more brittle than shorn wool. The supply of pulled wool obviously depends on the amount of domestic lamb and mutton consumed. Pulled wool is a by-product of the slaughtering and meat-packing plants in Chicago, New York, and other centers. Packing houses gener- ally sell their wool, under their own names, or through subsidiaries which handle wool, directly to wool mills specializing in pulled wools. Pulled wools are neither pro- cessed in the same manner, nor marketed through the same chan- nels, as shorn wools. About 8h percent of domestic wool pro- duction is shorn wool; 16 percent is pulled wool. Carpet wool, pulled wool and mohair have been mmitted in this presentation. One or another is mentioned, from.time to time, only when it is such an intimate part of shorn wool policy, or included in available statistics or other material in such a manner, that not mentioning it would give a biased picture. CHAPTER II FACTORS WHICH DETERMINE SUPPLY l§heep_Raisigg and It; Reguirementg Wool growing is economic only where land--large tracts of cheap land--is available in abundant supply. Where land is not abundant, sheep are raised primarily for mutton, or are replaced by more intensive enterprises, capable of profit- ably absorbing high land costs. In the United States, the historic progression from.a pastoral to an industrial society is reflected in the rise and decline of the sheep industry. As long as the United States was only partly settled, sheep moved westward with each new frontier and sheep numbers increased steadily with.the developing economy. Since the turn of the century, with the closing of the last frontier, the long temm trend in sheep numbers has been downward except during the 1930's when a sharp increase in sheep numbers occurred. Since the 1930's, anumbers have again declined. The western ranges are saidto 1 The census of 1900 have reached their capacity around 1902. reported 61.ndllion sheep and lambs, the highest number re- corded; that of 1950 reported 31 million.2 The decline in lfialdor a. Mohat, The Tariff on Wool, p. 11;. zAppendix Table 1.. sheep numbers per capita has been steadier and more pronounced than that in total sheep numbers. It provides a more accurate measure of the declining importance of sheep. (See Figure 1.) Sheep are raised for meat and for wool. But the best meat and the finest wool have so far been found to be geneti- cally antagonistic traits, that is, no one sheep, or breed of sheep, produces fine wool and, also, good meat.3 Due to the inbreeding, crossing and recrossing of different strains, there has come to be a wide range in the quality of the mutton produced by different sheep and an even greater variety in the qualities of different wools. Continuous, and sometimes hap- hazard crossing, has led to considerable variation within breeds as well as among the different breeds. Within this multiplicity of types and traits, the merino, which can be traced back to the Spain of Roman times is the wool sheep pgg_excellence and the poorest mutton producer. It stands at one pole. The English ”mutton” breeds--the Cotswald, the Shropshire, the Lincoln, etc.--stand at the other. Intermediate between the two basic types, the so-called crossbred breeds, first developed in the nineteenth century, are attempts at finding the perfect dual-purpose sheep. Perhaps the Corrie- dale, developed in.New Zealand, comes closest to achieving this goal. Crossbred sheep were developed to--and, in fact, do--produce a meat superior to that of the pure mutton 3H. C. McPhee and D. A. Spencer, ”Breeding Problems with Sheep,” Yearbook of Aggiculture: 1236, p. 913. name name» hoped sou span .aonpsm on» he oopwano FMS . om m a munch on» mom .Ho .Q .cOppsz and maom no mundane one nevndxoad .x .o «condom M62 emf 32 39 own. 29 cool on». 32 col 4 isnalnfla_ a a; fin nails flan i has; _n_i .ian fill __iai lamina s . fl H A # _ . a . _ _ _ QOlellwwn/-l .,.llllwl l - , .; -- - l --: lllll;llllzzllrl-lllz--llho~ x// / can ”I .l l- .lll-r l - l.l L --,Ly.--l;- 9 ll tom // 93:52 it? QQV . ll -thlllfll\l..l/.Il\ ..... lllll l--ll|JoV och l Ill l \L? 3. 8w I ll ll- lil l ESE QWQVI ll/lLllux, -- l; l - llllloe s3 l 1. ll - - l+lllll ll . 2 com .gl-l l ;-l- l +ll [I ,-\ -,,/, on cam - slllllllllllllllallll -;l-frllll.ls:l;: .l-lLll lxw too can lllllll5llllr - .llllll:llll-l-l,.lllll;- ll-- lxixll as. oo: fl-.. lllll llll-llll o: coma ll llll - Ll- l -ll ll -1 l l l g- lllllll l -l llllhowl F Magma SE qua amnsSz Wm... .0.._ low? Q‘mt >633: b mutuqhm omtz: 2.2. 2. dMDIw mo mum—>52 NERVE breeds.h Their wool is much finer than that of the mutton breeds, but no crossbred type yet equals the merino in fine- ness, uniformity, and quality of wool. Sheep may be grouped into eight main types according to the nature of the return secured by the breeder . . . in the merino zone occur sheep, chiefly wether, which are kept as wool producers only (type 1), and breeding sheep which return profit by the sale of their castrated male offspring as potential wool pro- ducers (type 2). These are succeeded largely within the I'come back? and quarterbred zone by animals which are bred for the purpose of producing wethers' off- spring as potential wool and mutton producers (type 3) and which have a greater rate of increase (or higher . fertility . . .) and so supply surplus stock, of both sexes, for breeding and for wool and mutton production (type R). In all these the production of wool is the main issue and the stock is predominantly of merino kind, but successive crossing with Long Wool and then Down Stock (mutton breeds), leads gradually to the higher developed mutton forms, such as wool-producing "half-bred" ewes, whose offspring are largely used as a basis for mutton production (type 5); wool-producing ewes whose wether lambs are sold for early mutton and fat lamb, and whose ewe lmmbs are kept to breed fat lamb (type 6); and cross-bred ewes themselves finished for mutton after their useful life as the mothers of early-maturing lambs is ended (type 7). . . pure-bred muttonsewes producing cross-bred lambs (are the eighth typo e - There are three stages in the evolution of a sheep industry. First, in regions of abundant land, with a low population density, merino sheep are raised only for wool. Since the return per merino is less than the return per sheep raised for mutton and wool, flocks of merino sheep tend to be larger than those of crossbred sheep; their land requirements, “Donald M. Blinken, Wool Tariffs and American Policy, p. 15e 5J. E. Nichols, A Study ofiggpire WOol Production, in Erich W. Zimmermann, World Resources and Industries, p. 352. greater. Wool is a complex and exacting raw material, re- quiring specialized labor. For this reason, also, wool growing tends to be most profitable in large enterprises in regions specializing in wool. Finally, raw wool is a comp modity of comparatively high value, relative to its bulk and weight and can be shipped long distances, at relatively small cost, with little deterioration in quality. It is thus ad- mirably suited to production regions far from.processing and consumption centers. Second, as population increases or population centers move closer to sheep areas, the sheep industry gradually turns away from wool, to meat, and the wool clip becomes a by-product, meat being the main source of income. Flocks be- come smaller, often only one part of a multiple enterprise. The wool is frequently of inferior quality and carelessly handled. 1910 is sometimes chosen as the point at which meat began to be more important than wool in the United States.6 Finally, step three, as population becomes still more dense, sheep are pushed out altogether and are replaced by more intensive forms of agriculture and by industries and towns. In this last stage, sheep do not survive partly be- cause sheep raising does not lend itself to mechanization. Labor costs, taking their one from the industrial sector 6C. K. Alexander, The Tariffs on Pork and Mutton, p. 62. 10 of the economy, become exorbitant, putting sheep at a comp parative disadvantage.7 The Production and Marketing of Wool Since the United States today is a highly industrialized society, it is not surprising that sheep make a very small con- tribution to total national wealth. Even the agricultural seg- ment of the American economy assigns a minor role to sheep. In 1950, 16.6 percent of the total population were farmers.8 In that year, 6 percent of all farms reported sheep, compared to 56 percent reporting hogs and pigs, and 75 percent reporting cattle.9 Most sheep farmers are small producers. Their income is derived principally from.non-sheep enterprises and most of their sheep income is derived from.meat, rather than wool. Sixty percent or the farms reporting sheep snorn had less than 25 head shorn per farm.and 96 percent had less than 300 shorn. Only 1.h percent had a thousand or more head shorn per farm.10 7In certain industrialized areas, a trend counter to the stage three just described may develop. A shift away from the meat intensive to less intensive forms of agricultural exploitation may occur. The part-time farmer who earns a substantial part of his income in town will prefer a type of farm.enterprise requiring a minimum.outlay of capital and labor. Thus, assuming fenced pastures, existing buildings, etc., the part-time farmer will, for example, raise beef cattle in preference to dairy cows. Herein may lie a partial explanation of the slight increase in sheep numbers in the farm.flock area during the past decade. Sgtatigtical Abstract of the United States: 1955, p. 13. 9”Livestock and Livestock Products," U. S. Census of Aggiculture: 1950, II, uoo, A22, and A27. 10Appendix Tables 2 and 3. 11 A very crude estimate of the annual income from shorn wool, of farmers having sheep, is given below. In 1950, the average farm price per grease pound of wool was 62 cents and the average wool yield per sheep was 8 pounds. In that year, the annual average income of farmers, fromlwool, would there- fore be: Nwmber of Sheep Annual Gross Percentage of Sheep Shorn per Farm. Wool Income Farmers Represented (in dollars) up to 25 12h or less 60 25 to R9 12h - 2&3 21 50 to 299 2&8 - l,h83 15 300 to 999 1,h88 - n.955 2 1,000 to 2,h99 h,960 - 12,395 1 2,500 and over 12,h00 or more .5 Sheep and wool are of varying regional meortance, but every state raises at least some sheep (See Figure 2). American sheep raising comprises two, or three distinct "systems." The relative economic importance of sheep, the scale of operations and, in consequence, the size of flocks, the marketing structure, and the types and quality of wool produced differ in each of the systems. Texas, sometimes grouped with the other important wool- producing states of the West, deserves separate mention. It produces more wool than any other state and, on the average, 12 emfl .a .omoa .AH Hausa .eoapsspam Hooz one "ooeeom .3 god» 2:: 3.3 s .m._ ..:<< Inn.“ Adhoh .m .3 .8238 do ”203:2 z: ... wwo. ioFoaoomn— .503 szIw N 339... 13 grows about 20 percent of the annual domestic clip. Almost all Texas wool is merino wool. Montana, Idaho, Wyoming, Colorado, New Mexico, Arizona, Utah, Washington, Oregon, Nevada, and California are considered the center of the wool-growing region and are collectively designated as the "Territory" or "Range" states. About 70 percent of the sheep raised in the United States are raised in the Territory states and Texas. In other areas, sheep raising is a secondary industry. These smaller flocks are called ”farm" or ”native” flocks. WOols not grown in Texas or in the Territory states are called fleece wools. The division of American wool-growing into the com- partments, "Texas," "Territory,” and ”farm" or "native" is valid only within limits. If states are classified according to the size of their annual clips, a slightly different picture emerges. Some of the Territory states are omitted and a few MideWestern states included, in such a list. In l9h9, the following states produced 5 million or more pounds of wool: Texas .... hl Colorado .... 10 Ohio .... 7 Wyoming .. 15 N. Mexico ... 9 S. Dakota 6 Montana .. 11 Utah .... 8 Missouri. 5 California 11 Idaho .... 8 Iowa ... 5 United States ... 179 million 11"Livestock and Livestock Products," op. cit., p. h33. lit The Western states, with Texas in the lead, most closely resemble the merino zone, previously described, and produce most of the ”fine" or merinb wool. Dual-purpose sheep are raised in the rest of the country. But the dividing lines are not clearly drawn. A considerable amount of crossbred wool is grown in the territory states and fine wools, in small amounts, are grown outside the West. Moreover, wool's compara- tive disadvantage is beginning to make itself felt, even in the West. Beef cattle, requiring less labor than sheep, are increasingly pushing sheep off the Western ranges. Together with a certain regional concentration, history has left behind wool-growing pockets of various sizes, widely scattered across the country. Roughly half of the domestic clip is fine wool. Half, also, of the clip is produced by the l.h percent of all growers who own flocks of a thousand or more head. It seems reasonable to suppose that these two halves are approximately one and the same . United States sheepmen derive about 60 percent of their gross income from the sale of lambs for slaughter.12 From the above discussion it is obvious that the national average is deceptive since it groups merino and mutton enterprises under a single heading. The majority of growers derive much more than 60 percent of their income from meat whereas growers of merino flocks derive much less. 1zBlinken, op. cit., p. 13. 15 Sheep are generally shorn once a year. In parts of Texas and a few other areas in the Southwest, sheep are shorn both in the spring and in the fall, producing a shorter staple. The shearing season begins sometime in Febru- ary in the Southwest and, during March, April, May, June and July, moves east and north, depending on the climate, the weather, and local custom. Large ranches, especially in the West, have their own shearing sheds. Smaller flocks are driven to a contractor’s, or other central shed where the sheep are shorn at so much per head. Most of the shearing is done by crews of professional shearers who travel from ranch to ranch or shearing shed. Machine shears are used in the West and on the larger farms. On smaller farms, especially in the East, hand shearing is not uncommon. ‘When hand shears are used, the clip is more uneven, and shorter, than with machine shearing. The central pivot in raw wool marketing is the "wool trade,” wool dealer houses who buy wool from growers and re- sell it to the wool mills. The majority of wool mills are located in the New England and Middle Atlantic states and most of the wool dealer houses are in Boston. In the West, dealer representatives follow the shearers, inspecting much of the wool as it is shorn, or soon after it has been shorn. The wool is bought or consigned to the dealer, and shipped, ungraded, to Boston. The majority of Texas wools 16 are sold through the more than one hundred warehouses in Texas, to dealer representatives. Most warehousemen act as agents for the growers, but a number of warehouse operators represent Boston wool houses. The bulk of the smaller clips in the fleece wool states are first sold at the farm to local buyers-ocountry dealers who live in nearby towns and buy wool as only one of their business activities, or the local agents of such dealers. The country dealers may accumulate wool on their own account, speculatively. More often, they buy on commission against orders from central market dealers. Growers generally sell their wool as it comes from the sheep's back. Raw wool is graded and prepared for conswmption channels by the wool dealer. The wool is inspected, before being bought, because of the multitude of factors which deter- mine the value of a lot of wool and because these factors have so far eluded rigid standardization. Prices received by growers are decided by private agreement between buyer and seller and not, as is often the case in other markets, by an agreement to pay a few cents more or less than some published price. No day-to-day farm price quotations are available in the case of wool. Raw or ”grease" wool is sold on its "clean value," that is, the market value of the wool after all foreign matter has been removed. Wool contains a natural grease or yolk. It may contain sand, dust and dirt and such vegetable matter as seeds and burrs. Impurities are removed, at the mill, by l7 scouring. Excess seeds and burrs are removed by carbonizing the wool after it has been scoured. The clean yield or "shrink" of grease wool varies from about 25 to 80 percent of its grease weight.13 In general, Texas and territory wools shrink more than fleece wools, and the finest wools, con- taining more natural grease than the medium or coarser wools, tend to have the heaviest shrink. Leaving aside questions of differences in quality, and transportation costs or other charges, the buyer estimates the shrink of any lot of wool he inspects and offers the grower the difference between the clean price of the wool and his es- 't1mnate of its shrink. If, for example, the clean value of a 1°": of wool is estimated at $1.00 a pound and the expected loss in weight after scouring is 60 percent, the grower will b9 offered no cents a pound. The importance of a correct estimate of shrinkage, to growers, cannot be overemphasized. A study made in 1915 showed 'tklat, on the basis of the then-prevailing prices, the grease Value of fine territory wool decreased more than a cent a pound IWDr each 1 percent increase in shrinkage.1h The second most important factor in price determination is the type and intrinsic quality of the wool. Combinations of _¥ 13Werner Von Bergen and Herbert R. Mauersberger, American Wool Handbook, p. 317. 1”Investigation of the Production, Trangportation and Marketing of W601, p. 10. 18 a variety of characteristics determine the character of the yarn or cloth which will be made from a particular wool and, in consequence, the value of different wools. The cloth will be fine or heavy according to the diameter of the wool fiber. The relative fineness of the fiber determines the ”grade" of wool. Wools are graded, in the United States, either according to the American blood system or according to the more minute count system, used internationally. The blood system originally designated the proportion 0f merino blood in the sheep. Merino wool was known as fine “001. Coarser wools were ranked successively downward, as m3olfoblood, three-eighths blood, etc. Today, the blood system, like the count system, refers only to the diameter of the f1her. In the count system, wool grades run from ”90's," for the finest wools to "36's," for the coarsest. Merino wools are wools, 61;. and finer, and apparel wools, the subject of the present paper, are wools finer than 1411's. The approximate relationship between the count and blood grades is given in APpendix Table 14.. Each fleece contains several grades of wool, according t0 a definite pattern. The shoulder of the sheep carries the finest wool, the britch, the coarsest. As an illustration, the grades in a merino fleece are shown in Figure 3. A cross- bred fleece includes more grades than does a merino fleece. The length of the wool staple determines whether the wool cloth will be "worsted” or "woolen." The longer more mmN .Q .oASpodecmE,wcw momawz now aooz wcaaamonm no manocoom .Sozom .o .4 use .23 .3 .o .pH no Ham msflwpcoo oomoam ompauxmcd Gm odds: .pcdoEd campaoo m o>moH «condom my hoe AHHV Mawpaaxm pmwaa d .©M>wscn ma H003 poHAoncH on» no Haw Haweapown AHV oepaaxm haaooo ma cocoa“ a Go£3 .mpaom mahmcoauoen .mo .d .mapmdoGH :90 no hoamomca mo Hw>oan on» ma mcapnaxm H003 Gwaawnpmdd one and: .m «condom ooooflo one msnpuamm .ooooau ocahos a ma hpfiawsc no noapsnanuman xomz a...» . -mme xx O you Q m .-----------------., 92 ”mm... ‘s .\ \\\\ 1;, ol\«~0.8 .. .. a _H Lu...“ 0. ... u. .u. m 8.3 «.8. «.8 u. ..., 98 l .. .. _. .. 11:1: u .. .. ,. .. - ....... .. — I X \. ~|hHHtI ... or, I I I lllllllllll \ \\\ ”Ac“ . .I \\\\\ ”~05 \\‘-.b ,a Q 0 “9“” ,x are» . my; .mh» m £3: 20 uniform staples or ”combing" wools--usually 60's and higher-- are used in the manufacture of worsteds; the shorter "clothing” or "carding" wools are used in the manufacture of woolens. In worsted manufacture, the wool is "combed" to separate the shorter from the longer fibers. The long fibers are laid Parallel to one another, then tightly twisted to form a hard and lustrous strand. Worsted cloth has a smooth, hard finish. The close weave of the cloth construction is plainly visible in the finished fabric. Woolen yarn consists of fibers of varying lengths which are intermingled and crisscrossed. The yarn is fuzzy In wool fabrics, the yarns are merged 0f the two and loosely twisted. into a solid form, concealing the original weave. sYatems of manufacture, the worsted system is by far the more imPOrtant. Although the coarser wools are, in general, longer than the fine wools, wools of the same grade vary in length. The f1Eleat and longest wools usually fetch the highest price. Many other characteristics determine the quality and price of wool. The strength of the wool fiber, as well as its length, determines whether or not it can be used in worsted manufacture. The elasticity, the color-~which determines how the wool will take the dye--, the crimp (or curl), the luster, softness and uniformity of different wools determine their re lative values . 21 Soil, climate and feed as well as the breed of the sheep and. tflie husbandry, influence the character of wool. This com- posite of characteristics--as well as the lack of standards-- lasscbcziated with different wools has led the wool trade to iden- tify wools with the regions in which they are grown. The names 'lterritory" and "fleece" of course imply different types 01' ‘W()Ol, and wools are further identified, sometimes by the name of the state and sometimes by the region in the state in "1'11 ch a wool is grown. Wool, by nature, is difficult to classify. In addition, existing standards are not rigid. They are merely "rough divisions, little more than rallying points in an infinite a1’1?£ry of classes and subclasses, types and subtypes."l§ As previously mentioned, the farm.price of wool is the B03 ton clean price for each quality and grade, less estimated StlIPignk. Transportation, buyers' commissions and other market- ir1E§ charges, are of course also deducted. In addition, prices re(Beeived by growers depend on the relative bargaining strength or buyers and sellers. In the period 1933 to 1935. 75 dealers handled 90.2 percent of the domestic clip, the five largest dealers handling 33 .6 percent and 25 dealers handling 72.9 percent.16 At that \ lsZimmermann, World Resource; and Industriej, p. 314.8. 16Investigation of the Production, Transportation and .ILQAketing of wool, p. 10. 22 time , there were approximately 653 thousand wool farms.17 The number of dealer firms has declined since 1935: but no current information on volumes handled by dealers is available. S1~7I‘ucture leaves much to be desired. It is unwieldy. There is a basis for believing that firms engaged in assembling and processing wool may be able to take advantage of some elements of imperfect competition. They are more experienced than growers in judging shrinkage, grade, and bargaining resistance. They are more closely in touch with the market and the price situation and they may be backed by a principal large enough to influence the market price for wool . . . . A dealer on the Boston market has other advantages stemming from his strategic position that a grower who sells from the ranch does not have. The former has an established reputation on which the manufacturer he serves can depend. He is likely to handle particular types of wool, prepared in a way satisfactory to par- ticular manufacturers. In other words, he sells differ- entiated products and preparation services to which Inanufacturers have become attached. Manufacturers are \villing to pay for such products and services. But a grower can offer little in the way of differ- entiation of either product or services. His reputa- tion cannot be significant when his clip is only a small part of the total purchases of most buyers. . . . Prices for wool are established in Boston, New York, and other central world markets. From the viewpoint of an individual grower, such price-making conditions approach pure competition. He has little or no oppor- tunity under such conditions to affect his returns (1) by varying the quantity or quality that he, as an in-. dividual, places on the market, (2) by differentiating his product by brands, superior preparation, or pack- aging, or (3) by influencing the volume of his gales by advertising, or special services to buyers.1 It is evident from the foregoing that the wool marketing Mor e - oVSr, the fact that dealers rather than growers sell a \ griculture: 125;, II, 14.314. 17"Livestock and Livestock Products,” U. S. Census of 181). w. Carr and L. D. Howell, H Economics of Pre ari $1 for Market and Manufacture, pp. 85-31. 23 ”differentiated" product, and reap the benefits therefrom, has tended to discourage growers from improving the quality of their wool. For this, and other reasons, domestic wools are generally considered inferior to foreign wools. This question will be dealt with in greater detail in Chapter III which con- tains a section in which foreign and domestic wools are com- Pare d . __The Relation Between the Price and the Production of Wool In l9u9, the average price per pound of wool, received by growers, was 149.1; cents; wool production was 213 million 901111CIs. In 1932, the price received averaged 8.6 cents and 351 million pounds of wool were grown. Many other instances or this inverse relationship are found in an examination of [Dr-1.36 and production data. (See Figure )4, and Appendix Table 5.) In general, periods of high prices have been associated with a decrease in production; those of low prices, with an in- crease in production. Periods of high wool prices coincide with periods when all prices are high, and vice versa. Labor, plentiful during 1°W~price periods, becomes scarce and expensive during high- price periods. Enterprises other than sheep reduce their labor costs by increasing the output per man through increased mechanization. But, as previously pointed out, wool growing (1°68 not lend itself to mechanization. Since the 1930's, .m manna xaeaoaa< use .ao:H .a .Hooz no meapethz was Qoapmpaommawha ddoauoseoam can no noaummHumo>nH ”season .3 are his .32 2.9 one L .32 3.2 .32 82 122:1:2:22:22: _j_j___ s cm; - \ -l w /\ \/\/ 8N II/ \ \a\\\.\ I r/\\\‘l l.IIII/ . T I, \ \ llnd fir/I .‘\\--|Llll\//\‘ 9.. , .... 8e /\ rzcioaneqa .L 8 8m 0233 «ma 323 A mean 3231 no 263.: MEGA ZO.F0:QOQQ mme... 000. 30% 50>) 23: 92 295803 825 zmozm e £3: e4 .m oases saesoaaa ens .eosw .a .Hooz no mmapcxawz new soapmaaommdwne Afloaposeoam can no aoapmMHumm>cH «season M2 3,2 .32 3.2 .32 one .36. 32 .32 22 e _ __ _ q,_ __ _ _ —_ __ __ __ a _ _ _d _ _fi_ _ _ _ __ n _ __ _ ON :I‘II“: I’ll > < \ ZI QQN 1/ \ \a\\\ I r/ \\\I ill/I 1'.- I \ \ //'fl [.7 \ I, \\\I-‘LIII\//\\ 9.. / ...r 2:. /\ 2258qu 0m / 090 02300 «HQ ”FIND TWO—HQ fiQZseOQ k6 0201722 onm Zozbaficaq mmo... 000. 89mm .502, 5:2... oz< 20:.03005 .503 zmorm e 359“. 25 output per man hour in sheep and wool has remained relatively constant whereas that in agriculture as a whole has risen steeply. (See Figure 5.) In a prosperous period, labor costs rise more rapidly than wool prices, and thus cause a decline in wool production, as growers turn to other, more profitable undertakings. A survey reporting reasons given by growers for reducing sheep numbers in the period l9h3 to l9h8 supports this contention. em The survey covers the 29 most important wool-growing states. . In Texas and the territory states, labor difficulties were - cited as the most important reason. ”The scarcity of all hired help and high wages" and "available help not qualified or dependable" together accounted for lh.S percent of the answers in Texas, 29.? percent in the territory states, and 17.5 percent in all 29 states. In the non-western states, low returns from sheep compared to alternative enterprises were listed as the decisive factor. In Ohio, Indiana, Illi- nois, Michigan and Wisconsin, for example, 37.2 percent of the growers stated this was their reason while 25.1 percent of the growers in all 29 states, so stated.19 It follows axiomatically--if the present reasoning is correct--that during a period of depressed prices, cheap labor might tend to provoke an increase in wool production. 19Appendix Table 6. 26 .2“ .d .hnpmdenH H003 oapmofion endow a $930,304 «season Mb? QMms mfim~ QV¢< M62 0mm~ _ _ 2 _ 4t _ 4 n n _ _. _ _ _ . _ h - _ A a s cm I 400)) I. QZV QMMIm OI / ZQCUDQOQQ 45:: dausqm‘ 4.2x on. a 8-32 is s. 3012, < 2 $358.22 :25 SEES 228805 .525 9,2 helm 2. «81-232 51 5:8 om. mane: 27 It was previously mentioned that cheap land, as well as cheap labor, is a requisite for a successful sheep indus- try. Perhaps land should be considered secondary in importance to labor, since short term fluctuations in a relatively mature economy, are at present under discussion. Nevertheless, it is probable that low land values, together with low wages, played a role in the increased number of sheep during the 1930's, and high land costs are a factor in the decrease in sheep 2“- numbers during and since the Second World War. The Wool Act of l95h hopes to increase wool production 2»2 by means of price incentives. Under its terms, prices are to I be supported up to 110 percent of parity. Since, unfortunately, annual average prices received by growers as a percent of the parity price are not available and since the average monthly receipts of domestic wool at Boston show July as the month of heaviest receipts, the July price--instead of an annual price-~will be used. In the eleven-year period from l9h0 to 1951, average prices received exceeded or equaled 110 percent of parity except in 19h? (99 percent), and in l9h9 (109 per- cent). Wool production was large in l9u0, but it had declined to only 228 million pounds by 1951.20 The incentives pro- vided in the Wool Act of 195u, when compared to prices received during recent years, would thus appear to be insufficient comp pensation for existing land and labor costs. The Wool Act will probably be ineffective in promoting an increase in wool pro- duction. 20Appendix Table 5. 28 If, and only if, the economy as a whole became very depressed, and labor and land values declined sufficiently, if other agricultural prices continued to decrease and rigid price supports were not extended to other farm products, then wool and sheep might once more regain a certain ascendancy. If such a period should lie ahead, economic conditions might assist in making the Wool Act of l9Sh "effective" in encouraging r- I. an increase in wool production. 29 CHAPTER III FACTORS WHICH DETERMINE DEMAND The Relationship Between the Price and the Consumption of Wool Domestic consumption of wool increases during periods of high wool prices and decreases during low-price periods. In 1932 when the price per scoured pound of territory wool, L—' 6h's and finer, averaged h? cents, national consumption was 188 million scoured pounds. In l9h5, when the price of the same wool had risen to 118 cents, 589 million pounds of wool were consumed. Periods of high wool prices of course coincide with periods when personal incomes are high, and fluctuations in amounts of wool consumed can be attributed to fluctuations in personal incomes. Wool is principally used in the manufacture of clothing. Although a certain amount of clothing is a necessity, expenditures for clothing can be more sharply curtailed, for a period, than can expenditures for other necessities. Expenditures for clothing tend to increase more rapidly, with increasing incomes, and to decrease more sharply, with falling incomes, than do expenditures for other basic necessities such as food and housing. Since wool is one of 1Appendix Table 5. 30 the most expensive textile fibers, it is undoubtedly even more sensitive than clothing as a whole, to changes in income levels. In 1932, income per capita was $381 and per capita consumption averaged 1.5 scoured pounds of wool. In l9h5, per capita income was $1,076 and per capita consumption of wool was u.2 pounds.2 The high per capita consumption of wool in l9h5 can, in part, be attributed to military demand. Of the h.2 pounds consumed, an estimated 2.1 pounds were consumed ?-= by the military. It was previously established that domestic production es: increases during low-price periods and decreases during high- price periods. Domestic consumption decreases during low- price periods and increases during high-price periods. Domes- tic production is therefore greatest in periods of reduced con- sumption and smallest in periods of increased consumption. It should be noted, however, that fluctuations in production look like ripples on an otherwise smooth surface when compared to the magnitude of the fluctuations which have occurred in consumption levels. The Competition of Foreign Wools Australian, New Zealand, South African, Argentinian and Uruguayan wools are imported into the United States. In the five-year period from l9h7 to 1951, for example, an annual gDomestic Wool Requirements and Sources of Supply, p. 68, and Appendix Table 7. average 236.5 million pounds of wool (clean content basis) were imported, of which 9h.6 million came from Australia, 53.8 mdllion from Uruguay, hl.1 million from Argentina, 18.1 million from.New Zealand, and l7.h million from the Union of South Africa.3 The quality of imported wools generally surpasses that of domestic wools. The superior quality of foreign wools can be attributed to the natural advantages for wool growing pos- sessed by the countries concerned, and to their husbandry and marketing practices. The Australian industry alone will be described below. Australia is the world's leading producer of apparel wool, both with respect to quantities and quality of wool produced, but the Australian industry is not suffi- ciently different from those of other large exporting countries to warrant their separate description. The Australian people number about 7.5 million in a land area of about 3 million square miles.u About a fourth of the total land area is devoted to sheep pastures. Sheep flocks in Australia vary in size up to 100,000 and over, but those of 2,000 to 5,000 are most numerous and contain 23 percent of the total. Flocks of smaller size than this contain 35 percent of the total, and the larger ones, AZ 3wool, Wool Topg, and Carbonized Wool, Statistical Appendix. uDonald M. Blinken, Wool Tariffs and American Polipy, p. 21. 32 percent of Australia's sheep pOpulation.S In l9h9-l950, 6 that Australian production was 1,150 million grease pounds; of the United States was 265 million pounds. Almost all Aus- tralian sheep are bred for wool and about 80 percent of the Australian clip is wool of grade 6k and finer.7 The quality of Australian wool can, in part, be attri- buted to the fact that many sheep pastures are treeless grass- lands; some, generally in the interior, are lands covered with an indigeneous shrub which has also been found suitable for sheep grazing. In the United States, except in Texas and in parts of California, much of the land now devoted to sheep is rough, poor pasture. Quality of pasture influences the quality of the wool. In addition, the Australian pastures keep the grease and burr content of the wool at relatively low levels. Thus, Australian wools are cleaner and shrink less than American wools. It is not possible to compare Australian and American costs of production, accurately or in detail. Australia is a relatively undeveloped nation with a low population density. Since she can take full advantage of the economies of large- scale production, costs are undoubtedly a good deal lower in Australia. One might make a very rough guess of comparative SConcerning Wool, p. 23. 6Ibid., Addenda. 7Blinken, op. cit., p. 20. 33 labor costs after reading the following quotation, which mentions war and pre-war wages in the United States. It should be noted that flocks are much smaller in America and each flock, in the West, requires one or more sheep herders. ". . . on the flat sweeps of Australia, a sheep herder can handle a flock of h,OOO (and an Australian sheepherder makes at most 390 a month with board) . . . . Before (the Second World War), an experienced American sheepherder was paid $65 a month for a seventeen-hour day, plus board and bare neces- sities. Now (19h7), with or without experience, he wants $150 to 200, an eight-hour day, a vacation with pay, and a radio."8 Australian sheep are machine-shorn at the ranch. Shearing and "classing" crews move from.ranch to ranch during the shearing season. Australian practices differ from Ameri- can practices principally in the fact that fleeces are graded at the ranch, and in the care and skill with which the wool is handled. Each fleece is picked up as it is sheared and "skirted," that is, its outer portion is cut off. Since this outer portion is likely to contain the lower grades of wool in the fleece as well as tags (locks matted with sweat and manure) and stained and burry wool, skirting--depending on how "deep" and careful the skirting--rough1y divides each fleece into quality lines. (See Figure 3, page 19.) The 8"The Trouble with U. S. Wool," Fortune, XXXV (January, 19h7): PO 930 - 3’4 skirted fleece is then handed to the wool grader who places it in one of the bins next to him, according to his judgment of its quality. The wool which has been skirted off and other inferior parts of the fleece are classed, at the same time, and separately. When there are a sufficient number of fleeces in one bin, the wool is pressed into wool packs, each weighing about 360 pounds. Each bale is branded and weighed, and the number, description and weight are immediately entered in the wool book. Wool is sold at auction, through the intermediary of wool brokers, to whom the wool has been consigned by growers. The Australian grower, in contrast to his American counterpart, sells a graded product and directly benefits from whatever superior qualities his wool may possess. Adequate and uniform ranch preparation is assured through the broker and auction system. The technicians who supervise the skirting and grading have to be approved by the wool broker and the penalty for a grower's failure to meet established standards is his exclusion from the wool auction. Since auctions are almost the only outlet for wools, the penalty is effective.9 9D. W. Carr and L. D. Howell, Economic; of Preparipg Wool for Market and Manufacture, p. 5. 35 The greater uniformity in grade and type, and the superior quality of foreign wools is illustrated in a study made by the United States Department of Agriculture in which two large lots of typical Texas and Australian wools were compared.:10 The Texas wool showed a larger proportion of black-- especially undesirable for fabrics in pastel shades-~painted and stained wool. Losses in sorting the Texas wool, almost double that of the Australian, indicated excessive quantities of trash in the Texas wool. The Texas lot included strings, used in the United States to tie the fleeces. If sisal string is used, the sisal fibers damage the fabric made from the wool. The Texas lot contained 27 percent of wool too short for combing--that is, wool unsuited to worsted manufacture-- whereas all the Australian wool was of combing length. The Australian had a higher concentration within the main sort and within one grade on either side of the main sort-—almost 97 percent for the Australian compared with 88 percent for the Texas wool. Foreign wools are aLmost always more concen- trated within the main grade. Some manufacturers claim that Australian wools also give a better "handle" to the fabric and that, grade for grade, the foreign wool is finer. In spite of the superior qualities of foreign wools, domestic wools have been able to maintain a competitive ad- vantage in the domestic market thanks to the wool tariff. _ 10Appendix Table 8. 36 A detailed discussion of this question more properly belongs in the later chapter on the wool tariff. Suffice it to say here that recent developments in textile manufacturing have made the tariff less effective than formerly, in protecting domestic growers. Manufacturers' preference for foreign wools has in- creased in direct proportion to increases in the cost of labor. Wages accounted for about h3 percent of gross operating margins of woolen and worsted manufacturers in 19LL7.11 Average hourly earnings of workers in the wool industry rose from about 53 cents in 1939 to $1.55 in 19115.12 Manufacturers are reducing the total number of workers they employ by increased mechanization. They are also trying to reduce the number of highly skilled and higher paid workers. In order to do so, the raw material has to be sufficiently uniform to require minimum handling. A minor revolution in textile machinery occurred after World War II. It was stimulated by developments in cotton manufacturing machinery, and new techniques in spinning and weaving, invented to meet the particular needs of the rayon fiber. As an outgrowth of the developments in the rayon in- dustry, the "American" system, a short-cut method of preparing the wool for spinning together with an improved spinning h 11b. w. Carr and L. D. Howell, op. cit., p. A7. 12Ibid., p. A9. . . 37 frame, was introduced in worsted manufacturing. Improvements have also been made in other spinning machinery and in the weaving machinery of both the woolen and worsted systems. The increased speed and capacity of the new machines as well as their simplicity of operation, have enabled manu- facturers to reduce the number of workers employed. But, to Operate effi?iently, these high-speed machines require a highly uniform fiber stock. If the stock is not uniform, breaks occur in the roving (or yarn) at high speeds, and the machine stops. The cost of the labor attending the machines then becomes high. Wools that contain paint and tar tips, fibers of vary- ing lengths and diameters, and weak fibers, are especially unsuited for use on these machines. Under these circumstances, manufacturers prefer highly uniform wools. They can well afford the extra expense. Because of the quality and preparation differential, Australian wool generally commands a higher price, duty paid, in the Boston market than do American wools of the same grade. Since 1930, Australian wools have been consistently higher in price than comparable domestic wools, except from 1940 to l9h5. The rise in American prices from 19h0 to l9h5 can be attributed to high price supports and other protectionist measures adopted by the United States government during World War 11. During the 1930's, Boston prices of Territory wool, staple, 6k's and finer, scoured basis, averaged about 86 percent of the corresponding prices of Australian duty-paid 38 wool.13 A study of wool prices made in 1937 by the United States Tariff Commission estimated that from.192h to 1935, the net effect of all factors, other than the duty, affecting wool prices, resulted in an average differential of 5.8 cents per scoured pound in favor of Commonwealth wools. Differences in preparation between foreign and domestic wools were es- timated at 8 cents for fine wool, 6 cents for moderately fine and 5 cents for coarser wools.1u A study made in 19u7 showed an averagedifferential of 9 cents in favor of foreign wools.15 The differential may be even higher at the present time. It should be noted, however, that Australian wools in bond, that is, before payment of duty, have been consistently lower in price than similar domestic wools. The Competition of Non-Wool Fibers It was previously mentioned that wool consumption de- pends on the level of personal incomes. The price of wool was not discussed as a factor influencing consumption. Wool prices would not influence consumption if there were no substitutes for wool. In fact, all textile fibers may be substitutes or partial substitutes for one another, depending on the dictates of fashion and other considerations. 13Appendix Table 9. 1MD. W. Carr and L. D. Howell, op. cit., p. A6. 15Blinken, op. cit., p. A6. The heavy winter cottons, a new fashion in women's wear, are an example of cotton-wool competition, although these two fibers are not usually considered as having similar charac- teristics. In this inter-fiber competition, the relative prices of different textiles undoubtedly play a role. Wool is one of the most expensive textiles. In 1952, a scoured pound of territory wool, 6h's and finer, cost 165 cents, a pound of cotton, 38.8 cents, and a pound of acetate rayon, 82-h cents.16 In general, of course, the more alike the competing fibers, the fiercer the competition between them. Five syn- thetic fibers: Nylon, Orlon, Dynel, Dacron and Acrilan, and the regenerated protein fiber, Vicara, most closely share some of the formerly unique attributes of wool, and, therefore, seem to pose the most serious threat. In 195M, most of these syn- thetics were about as expensive or more expensive than wool.17 In late 1955, the prices of Acrilan, Dacron, Dynel, Nylon and Orlon were substantially reduced. The reductions ranged from 20 to 30 cents a pound.18 These wool-like synthetics have but recently come onto the market. It is probable that they will become cheaper and cheaper as methods of production im- prove, production expands, and ways of reducing costs of production are found. 16Aphievingpa Sound Domestic Wool Industry, p. 81, and Appendix TabIe 7. 17Appendix Table 7. 18The Wool Situation, February 21, 1956, p. 9. no In textile manufacturing, the cost of the raw material represents a relatively small percentage of total costs of production. The differential in the prices of different tex- tiles is therefore less important than relative processing costs. It was previously mentioned that new developments in textile machinery make necessary the use of a highly uniform fiber. It goes without saying that machine-made synthetics are more uniform and better adapted to standardized machine techniques, than any natural fiber, and that, therefore, their processing costs are lower. A second attribute of the new machines, not previously mentioned, is that one can shift from one kind of fiber to another. The ability to use cotton, rayon, acetate, other man-made fibers and wool in the same plant, Opens new possi- bilities in the variety of materials which can now be manu- factured. Wool consumption as a percentage of total fiber con- sumption appears to'be declining, while the consumption of synthetics has steadily increased. In l92h, apparel wool was 8.1 percent of total mill consumption of textile fibers. 19 It is also inter- In 1951, 5.6 percent was apparel wool. esting to note the cyclical variations in the wool percent consumed. A drop to 5.3 percent of total mill consumption in 193k can be attributed to the shift away from wool to less expensive textiles during the depression. 19Achievinga Sound Domestic Wool Industpy, p. 76. Lil The outlook for wool is perhaps less bleak than it would appear from the foregoing. Synthetics though approaching wool in suppleness, warmth and resilience, still lack the "feel," the warm softness peculiar to wool. On the contrary, many have a certain feeling of clamminess and are inferior in their power of holding and excluding heat. The unique proper- ties of wool may continue to give it a certain competitive ad- vantage, particularly for special cases. Moreover, the greatly increased versatility of textile machinery should open new outlets for wool, used in mixtures with other fibers. The raw material itself may be "synthetized." The process of mercerizing cotton was evolved to give it a more silk-like appearance. Similar developments may occur in the case of W001 . Wool interests are at present promoting research in the chemical and physical properties of wool, in the hope of discovering methods of improving the natural fiber. In the "blu rring" of the differences between one fiber and another, a new and better wool may find a new place. It is obvious, howe Ver, that the forces marshalledq against the more poorly prepared and poorer quality domestic wools will not be so 533 1 1y overcome . Li2 CHAPTER IV THE WOOL TARIFF l The first governmental action, specifically concerning wool, was the Tariff Act of 1816. Since then, every tariff 9015: almost without exception, has provided protection for wool and wool manufacturers. The history of wool tariffs is a reflection of the economic history of the wool industry, and 0f the country itself. Tariff act succeeded tariff act in monotonous repetition, as America transformed itself from an agricultural to an industrial country. Wool manufacturing deve10ped; population increased and pushed the frontier further and further west; sheep moved from the east to tile m:l-d‘fiwest and finally, from the mid-west to the far west. The NMichael Association of Wool Growers and the Association of Wool Manufacturers played a part in the shaping of government p01icies. The wool lobby was, in fact, one of the most success- ful industry groups in obtaining government protection. As we Shall see in succeeding pages, whenever prices fell or foreign competition threatened to become more severe, tariff rates 1ner'tiagged. During periods of prosperity, they tended to decline. \ thi lUnless otherwise indicated, the historical material in b I: Chapter is based on information found in The Tag:i__ff on Wool 5' aldor R. Mohat and The Tariff on wool by Mark A Smith. 1+3 The American economy, at the beginning of the nineteenth century, was a rural economy. Foreign demand for American agricultural products permitted the import of manufactured articles. The finer wool fabrics were imported from Great Britain. American wools were spun and woven into a coarse cloth, the "homespun" and, in the main, consumed on the farms on which they had been grown. The few woolen mills then in existence: supplied a narrow market, hedged by British imports on the one side and by household manufactures on the other. Foreign trade came to an end under the Embargo Act in late 1807, the Non-Intercourse Act of 1809 and, finally, with the outbreak of war in 1812. American woolen mills--of which there were 21;. in l8lO--and household industries increased production to meet army demand for coarse woolens as well as to meet the demand for broadcloths, which Britain had pre- Vim-18 1y supplied. Household production remained the more im- portant, but domestic mills increased output three or four- fold during the war.2 Sheep numbers and wool production in- creased, stimulated by the increased consumption of mills and household industries, and by the disappearance of foreign markets for other farm products. As soon as the war ended in 1815, cheap British wColeus were again imported in large quantities. In Britain and in the United States, a period of recurring crises--which was to last until 1830--had begun. In an attempt to check \ 2Mark A. Smith, The Tariff on Wool, p. 99. the flood of imports, the Tariff Act of 1816 imposed .919 valorem duties of 15 percent on wool and 25 percent on woolen goods.3 The tariff on wool increased in 182k, 1825, and 1826. After the crisis of 1825-26, Britain is said to have thrown Particularly large quantities of goods on the American market at prices which, in some cases, did not cover the cost of Production.h‘ In the Tariff Act of 1828, the wool duty con- sisted of a specific rate of L; cents a pound and an 33 valorem duty of ho percent. Under this Act, the tariff was to increase to LL cents a pound and 50 percent g_d_ valorem in 1830. Almost no raw wool was imported during this period. Some wool was, in fact, exported to Great Britain. Despite the tariff, Britain continued to dump woolens on the American market, until 1830. By this time, business conditions in Britain had improved and the survivors among manufacturers and growers in the States had become more capable of holding their own in a climate of tempered competition.S With a return to prosperity, and with wool prices rising in domestic and world markets, tariffs were reduced in 1832 \ factu 3Each tariff act imposed duties on wool and wool manu- ape 1Stres. Duties on wool manufactures later consisted of a wooiiric rate to compensate for the cost of the duty on raw fact together with an a__d valorem rate to protect domestic manu- ures from foreign manufactured imports. Only the specific c mp £1 erisating duty on manufactures will be discussed in the _ lowing pages. Protective ad valorem rates increased and de- cr Ea e~8ed as the tariff on raw wool increased and decreased. “Smith, op. cit., p. 101. 5Haldor R. Mohat, The Tariff on Wool, p. 7. 1+5 —* and 1833. Under the Act of 1833, duties exceeding 20 percent were to be reduced, by annual installments, to a uniform rate of 20 percent on all articles by 1 July 18h2. The crisis of 1837 brought with it a sharp break in the price of wool. Prices recovered somewhat during the next two or three years, but prices from 18h0 to 18h6 remained generally below the levels of the 1830's. Higher rates were imposed under the Tariff Act of 18h2, a frankly protectionist measure, despite the fact that the agitation for the Act was largely based on a deficiency in Federal revenues. A 5 per- : cent duty was levied on wool costing 7 cents a pound or less I j and a duty of 3 cents and 30 percent was imposed on wool « costing more than 7 cents. During the highly prosperous period from 18h6 to 1860, ‘there was little agitation of the tariff question. Tariff .rates were lowered in 18h6 and again in the Act of 1857. From 1830 on, domestic manufacturing had expanded as laousehold manufacturing declined. Sheep numbers increased :from 12 million in 1830 to 19.3 million in 18h0 and from 21.7 Inillion in 1850 to 22.5 million in 1860. Eastern growers INBaped most of the benefits of the high wool prices during tale 1830's as little wool was then being shipped from the Mltd-West. After 18h0, the increasing urbanization of the East made dairying and diversified farming more profitable than sheep husbandry. Total sheep numbers declined in the IEElet and fine-wool sheep were increasingly replaced by ho dual-purpose breeds. Concurrently, increased settlement and improvements in rail and water transport in the states bordering the Ohio, Mississippi and Missouri rivers brought about an expansion of wool production in these states. Sheep numbers increased rapidly in the Mid-West, from 1814.0 to 1850 and at a slower rate from 1850 to 1860. The 18h0's were a period of low farm prices and although wool prices were also low, Mid- Western farmers found wool more profitable than alternative enterprises. After 1853, in contrast, all farm prices were high. With wool prices higher than they had been during the 'hO's, Western farmers neglected sheep in preference to meat and grain for export. The Civil War brought with it an unprecedented demand for wool, attributable, in part, to the necessity of supplying an army of a million men and, in part, to the scarcity of cotton which wool and flax were largely to replace. It is estimated that wool production doubled during the war. A Production of about 80 million pounds in 1860 increased Steadily until it reached 168 million pounds in 1867. Pre- war trends in the sheep industry abruptly reversed themselves. Sheep numbers increased in the East and rose phenomenally in the Mid-West. Western dominance of American wool-growing which had been eminent before the war, was postponed. New settlers in the West could not afford to buy merino sheep at highly in- flated prices. Only in California, Oregon and New Mexico were Sheep which previously had been raised primarily for meat, bred for wool . A7 The duty on wool was increased in the Tariff Act of 1861 and, again, in the Act of 186A. The primary purpose of both acts was to provide additional revenues for war purposes. But the absence, in Congress, of free trade advocates from the South made it easier to adOpt protectionist measures. The Tariff Act of 1861 introduced the system of com- pensatory rates on manufactures which was to become a permanent feature of future tariff legislation. duty on wool, if it does in fact raise the price of imported and domestic wools, will raise manufacturers' raw material ‘ 4 costs by the same amount. a competitive advantage to foreign manufacturers using cheaper wools.. Tariff acts prior to 1861 protected domestic Inanufactures by providing higher duties on woolen goods than on.wool. In the Act of 1861, as in previous acts, a duty on .raw wool and a higher protective 3d valorem duty on manu- .factures were imposed. In addition, a specific duty was levied on cloth and dress goods to compensate manufacturers :for the wool duty. The compensating rate-—in this and later 81:ts--was arrived at by multiplying the wool duty by four on tile premise that wools shrank an average 75 percent, h pounds (31‘ grease wool being required in the manufacture of one pound- or cloth. Thus, in the Act of 1861, the duty on wools costing 3-E3 to 2h cents a pound--the most important class--was 3 cents. alkle compensatory duty on manufactured articles was 12 cents. It is obvious that a 3 The duty would thereby provide ;_r h8 One should bear in mind that, at this time, the more important competitive threat still came from foreign manu- factured goods and not from imports of raw wool, the latter representing perhaps a fourth or a fifth of domestic consump— tion. It is doubtful, therefore, whether raw wool prices were raised by the full amount of the tariff. Nonetheless, the compensatory system was based on the reasoning that they 1 4 were. In 1865, state growers associations united to form the National Wool Growers Association. The National Association of Wool Manufacturers and the Growers Association then met in convention, at Syracuse, and pledged their joint support of higher duties on wool and woolens. The Syracuse Convention .formally established the ”united front" of growers and manu- .facturers which was to exert such a powerful influence on Indeed, the recommenda- government wool policies from 1865 on. 1Slions of the Tariff Commission and of Congressional committees, Eund the wool duties themselves did not differ, in any important IWBSpect, or, for very long, from the policies of the two asso- Ciations. The "united front" may have been less united than it wOuld at first appear and not altogether representative. The wC>£Psted manufacturers are said to have dominated the National A8 sociation of Wool Manufacturer‘s from its inception. The buI‘den of a specific tariff on raw wool fell more lightly ‘JIDCIn them.since the worsted industry uses the most expensive 1+9 wools. Moreover they generally use wools of light shrink. The compensating system, calculated as it was, on the basis of a maximum shrink, gave them additional protection. The woolen industry using cheaper wools, of higher shrink, found the specific duty on wool equivalent to very high 3d valorem rates for which the specific compensatory duty on manufactures was insufficient compensation. The first protests from the P A woolen industry were heard at the time of the Syracuse Con- vention and later culminated in the formation of the Carded 7 a Woolen Manufacturers Association, in 1909. The woolen manu- 5 j" factures at first opposed duties on wool. Later, they pleaded for 2g valorem rates or rates of duty somewhat more consistent with the values of different wools. A wool schedule passed by Congress as a separate act, 111 1867, doubled the high rates of the Act of 186A.‘ The newly IVlnmed alliance between growers and manufacturers exerted a Enawerful influence on the terms of the Act of 1867 and, in addition, devised a new, more minute, system of wool classifi- cation. The Act of 1867 divided wools into three classes: Class I, "clothing" wools; Class II, the longer, "combing” W(Dols; and Class III, carpet wools.7 Foreign wools competitive \ 6Mohat, op. cit., pp. 20-21. 7Carpet wools were separately listed for the first time 1’1 ‘the Tariff Act of 1867. Although they are not competitive 21th American wools, a duty was levied on them, in every tariff lf3t3 from 1816 on, up to and including the Act of 1909. They water became duty free. As stated in the introduction, carpet <3C>1s have been omitted from the present discussion. L jun!!- ”31 50 with American wools fell mainly within Class I. Wools in Class II were partly competitive and became more competitive as worsted manufacturing became increasingly important. Class I and II wools paid a duty of 10 cents and 11 percent 3g valorem if worth 32 cents a pound or less and 12 cents plus 10 percent if worth more than 32 cents a pound. If Class I wools were washed, the rates were doubled. Scoured wool, of both classes, paid triple rates. The enormous demand for wool during the Civil War came to an end with the war's conclusion. Production and prices had reached dizzy heights. Curtailed post-war demand led to the collapse of the wool market in late 1867. Sheep were slaughtered in great numbers or driven to the west. Total Inunbers declined by about a third, from 35.8 million in 1867 tC) 22.h million in 1871. The pre-war trend toward westward mLigration of the sheep industry, temporarily arrested by the Ci:vil War, resumed its course. After the war, sheep numbers dI'Opped from 37.6 to 2u.5 million in the East and increased f1?cm17.h to 9.6 million in the West. The cost of raising sheep, at; about this time, was estimated at roughly $2.65 per head in the East and 50 cents a head in the West.8 The post-Civil War period was the period of the final I‘I‘Ontier. Between the Civil War and World War I, the geograph- icEilconfiguration and the industrial might of present-day A’"elt‘ica took on visible form. Population doubled between 1870 \ 8Carleton M. Allen, Wool, the Raw Material, p. 5. 51 and 1900. A growing industrialization led to a great expan- sion in wool manufacturing as a whole, and to the rapid development of worsted manufacturing. Worsted manufacturing consumed 3 million pounds of wool in 1860, 100 million in 1890. In 1870, the value of production on the woolen system had been $155 million, that on the worsted, $22 million. The woolen and worsted industries were of about equal size in 1900. By 1910, the worsted industry produced p312.6 million while the woolen industry produced only $107.1 million worth of goods. Wool consumption did not increase in prOportion F to the increase in population. Per capita consumption of .~;.___1 wool was less in 1900 than it had been in 1860. During this period, more and more shoddy (reworked wools) and cotton came to be used in the manufacture of certain articles, formerly made entirely of virgin wool. As settlement progressed in the Far West, sheep were increasingly displaced by other types of agriculture in such states as California, New Mexico and Texas. Much of the West, however, is arid or semi-arid country, suitable only for r‘ELIIChing. But the grazing lands which can support sheep can generally support cattle as well. At the present time, cattle are pushing out sheep, much as diversified farming pushed them out in other regions at an earlier date. Sheep are likely to I‘emain only in areas where water and herbage are too scant for cattle . 52 The Tariff Act of 1867 had established a wool schedule which reappeared, with minor variations, in successive tariff legislation until the Act of 1921. Over the entire period, rates slightly increased. The system of classification of wools also remained the same from 1867 to 1922. This "permanent" tariff, as it were, was twice in- terrupted, from 18911 to 1897, and from 1913 to 1921, when wool was placed on the free list. The Republican Party ascribed "all the country's .1 ‘|.l-..h _'._..‘,__ cum..- blessings to the wonder-working policy of protection,"9 while ; _ ~ “...? an the Democratic Party held opposite views, although protection- ggg, late and free traders in Congress were not divided strictly ac- cording to party affiliation. Cleveland and Wilson supported the lowering of tariff barriers. Before the passage of the Act of 189h, the Crisis of 1893, and the depressed agricul- tural prices which followed, led to a compromise bill whereby wool was one of the few commodities put on the free list. Pepular feeling which had earlier favored the lowering of barriers, again swung to high tariffs and the duties were restored in 1897. The prosperity which followed seemed to strengthen the protectionists' hand, but the crisis of 1907 was followed by a period of depressed prices which the Tariff Act of 1909 seemed unable to prevent. Political sentiment turned against the Republican Party, largely defeated by its own argument, and free traders in Congress, better organized * 9F. W. Taussig, The Tariff History of the Unitgg M: p. “-100 53 and more unified than they had been in 189h, passed the Tariff Act of 1913. Only the tariff on raw wool and the com- pensatory duty on manufactures were removed in the Acts of 189h and 1913. The 2Q valorem protective duties on manufac- tures were retained in both Acts. As one enters the current period, the basic theme: low tariffs during periods of prosperity, high tariffs during periods of adversity remains unchanged. Tariffs in the Acts of 1921 and 1922, after the crisis of 1920, and in the Act of 1930, with the beginnings of the great depression, were higher than they had ever been before. Yet the "background" and, with it, the raison d'etre of the tariff had changed utterly. During the nineteenth century, the arguments for a tariff centered around the need to protect infant industries. Raw material tariffs were an appendage of the more vital tariff‘ on manufactures. Raw wool imports, though gradually increasing, were small compared to domestic production and consumption. In the industrial economy of twentieth century America, the burden of comparative disadvantage falls most heavily on the wool grower. Manufacturing interests are far more capable of holding their own--with or without a tariff. It was during World War I that wool imports for the first time exceeded domestic production. Imports rose from 63 million in 1913 to 378 million in 1918. Domestic production was 267 million in 1913 and 25h million in 1918. 51+ Prices climbed steeply during the war. Fear of a Shortage at the beginning of the war had led to heavy govern- ment buying. Immediately after the war, a consumers' strike, in protest against continued high prices, caused wholesale cancellations of orders by manufacturers. In addition, the American government possessed wool stocks almost equal to a year's supply,10 which had to be liquidated. The bottom 87“: dropped out of the wool market in May, 1920. The "emergency 2 tariff" of 1921 was passed and remained in effect until the passage of the Tariff Act of 1922. Rates in both acts were 5 my prohibitive. i_e The Act of 1921 imposed a duty of 15 cents per unwashed pound, 30 cents per washed pound and h5 cents per scoured pound on apparel wools, and a specific compensating duty of 85 cents on manufactures. Since raw wool which had been in any way improved by removing part of the fleece was to pay double duty and since almost all foreign fleeces are skirted, the rate per unwashed grease pound was in fact 30 cents. Tariff acts prior to the Acts of 1921 and 1922, it will be recalled, divided wool into three classes, clothing, combing and carpet. The Shorter apparel wools, including merino wool, belonged to the clothing class. Changes in combing machinery had made it possible to use these shorter fibers in worsted manufacturing. Thus the distinction between clothing and Commung wools had long been obsolete. In the Tariff Act of \ losmith, op. cit., p. 1h2. 55 1922, wools were divided into two classes: the first, con- sisting of wools "not improved by the admixture of Merino and English blood," i.e., carpet wools; the second, of wools "not especially provided for," namely, apparel wools. The Act of 1922 also replaced the antiquated blood system of wool classi- fication with the more modern count system. U? The continued depression in the wool industry, after , '1 the passage of the Act of 1921, had led growers to press for a permanent enactment of the high rates of the "emergency“ " tariff. Rates in the Tariff Act of 1922, while not as high as in the Act of 1921, were higher than in any previous acts. 0f greater significance, perhaps, is the fact that behind the many changes made in the wool schedule in 1922, one can clearly see the shift towards an increase in the protection of raw material producers and a decrease in the protection of manufacturing interests. The growers gained and the manufac- turers lost,through two important changes. The duty was levied on the scoured pound, instead of on the grease pound, as formerly, and the concealed protection enjoyed by manufac- turers under the old compensatory system was reduced. Under the Act of 1922, apparel wools were taxed at 31.cents per pound of clean content. Since the percent of grease and foreign matter varies greatly according to the type of wool, a duty levied on the clean pound would, on the face of it, appear more equitable. The old duty has indeed 56 been facetiously characterized "as a duty on dirt."11 At the same time, it must be remembered that the clean yield of foreign wools averages 60 percent whereas that of domestic wools averages ho percent. In other words, an average grease pound of foreign wool yields 3/5 of a clean pound; a pound of domestic wool, 2/5 of a clean pound. The duty of 11 cents per grease pound of the Tariff Act of 1909. for example, thus y ‘ aegis!“ amounted to less than 9 cents' protection for each grease The duty therefore taxed light shrink- ing wools at a lower rate than wools of heavier shrink. The . ,«. r u : ~= i pound of domestic wool. cold duty thus tended to favor manufacturing rather than grower ;_W interests. In the Act of 1922, light shrinking wools lost their former advantage over the less well-prepared wools. By levying a duty on the clean pound, the Act of 1922 thus effec- ‘tively raised the tariff on raw wool. concealed protection was further whittled Manufacturers' Euvay by the compensatory rates established in the Act. Since 31361, the compensatory duty had been calculated on the assump- manu- timen that h pounds of grease wool were required in the I‘acture of one pound of cloth. If foreign wools shrink only hi) percent, the extra bounty to manufacturers is readily ap- Parent. Under the Act of 1922, the compensatory ratio was chuxnged to a more realistic 1 1/2 pounds of scoured wool to or“3 pound of cloth. The compensatory duty, levied on the wool \ 11Taussig, op. cit., p. h59. 57 content of the cloth, and not upon the full weight of the fabric, as formerly, was fixed at h5 cents a pound. In the Act of 1922 and in succeeding acts, the duty levied on carpet wools was to be refunded if the wools were in fact used in the manufacture of floor coverings. The Tariff Act of 1930 raised the apparel wool duty to . .- e Lanai—A5? 3h cents per scoured pound, for wools finer than hh's, and imposed a compensatory duty of 50 cents on manufactures. As 5 ~+ a concession to the woolen industry, a new small class of : wools, finer than hO's, but not finer than hh's, was taxed 5 at 29 cents per clean pound. . a In 1988, as part of the American concessions under the General Agreement on Tariffs and Trade, the duty on wools finer than hh's was reduced to 25 1/2 cents per clean pound, tflaat on wools hO but not finer than uh's was reduced to 17 cents a pound. ‘ The fluctuations in wool production and consumption Ilevels, attributable to the "ups" and "downs" of the business c=:)rcle, were described in chapters II and III.‘ It was noted tihat supply tends to increase during low price periods and to dficrease during periods of high prices whereas consumption lJBvels fluctuate in an opposite sense. Increased consumption cOzincides with high price periods, and vice versa. Finally, although both demand and supply fluctuate, supply may be con- $141ered as relatively steady. Supply fluctuations are of negligible size if one compares them to the fluctuations in amOuhts consume d . Thus, during a depression, domestic supply equals or nearly equals domestic production. During a period of pros- perity, in contrast, consumption exceeds production. Whenever consumption is greater than production, the resulting gap is filled with the requisite quantity of imports. In 1932, total scoured mill consumption fell to 188.5 million pounds. Domes- tic production was 175.h million pounds and imports were 13.1 :77 million pounds. Foreign wool accounted for 6.9 percent of total mill consumption; domestic wool, for 93.1 percent. In 19h6, total consumption was 609.6 million pounds. Of this, S 5 106.9 million pounds were domestic wool, and 502.7 million, i,¥j ‘ foreign wool. Foreign wool accounted for 82.5 percent of total mill consumption, and domestic wool for only 17.5 percent.1 The demand and supply equation of wool can best be described in the following terms: on one side of the equation, a domestic demand which increases or decreases with the fluc- tuations of the business cycle, but which, at a given time, is fixed; on the other side, a supply--consisting of both foreign and domestic wools on the United States market--which can increase or decrease at will, as it were, and whose magnitude, at any given moment, depends on consumption requirements. This is, of course, a somewhat simplified analysis. Neverthe- less, the evidence does point to demand as the determining L 12Appendix Table 11. 59 influence. Prices seem to play a subsidiary role, being themselves determined by the demand-supply relationship at any given moment. And, perhaps because of the world demand for dollars, or for other reasons, foreign supplies do tend to gravitate towards the United States market whenever demand increases. The regulatory mechanism permitting the entry of only ,-~« the requisite amount of foreign wool is, of course, the tariff. ; It was pointed out, in proceeding pages, that tariff rates - tend to increase during periods of oversupply and vice versa. The cyclical role of the wool tariff is further enchanced by its specificness. Obviously, a duty of 3h cents a pound when wool costs 33.9 cents a pound, as it did in 1932, is more onerous than the same duty if wool costs 115.5 cents a pound, as in 19.5.13 The tariff tends to reduce imports during low price periods, and to provide that a smaller domestic market will first absorb domestic production. A number of studieslu have been made on the impact of the tariff on wool prices. Since wool imports, in recent times, are a substantial percentage of domestic consumption, and since American imports account for a substantial share of world trade in wool, the tariff has, in the main, been very _ 13Prices quoted are for graded territory wool, fine average and good French combing, clean basis, Boston, July. See Wool Statistics and Related Data, p. 83. luSee, in particular, Haldor R. Mohat, The Tariff on Wool, E. Dean Vaughan, The Benefits and Costs of the ar on 00 ,. and Valda M. Scales, The B so s o e n e ta es oo ariff 3t VaryinglRates on the Australian and United States Wool Indus- Eries and Trade in Wool. Tush incl-L A: ‘5‘: , -... a: l.‘ Q‘s-nu- - 0U effective in raising the prices of both domestic and foreign wools on the American market. Prices of foreign wool are probably not raised by the full amount of the duty, as some studies assume, but by a substantial portion of it. Domestic prices are raised by this amount, less the foreign-domestic quality differential previously mentioned. It should be noted, however, that the price impact of the tariff will be large or small depending on the quantity of imports. As has been just discussed, the quantity of imports is large during prosperous periods and small during periods of depression. Moreover, United States imports accounted for an average 11 percent of world trade in wool during the period 193A to 1938, and 30 percent of the world wool trade, in 1914.8.15 If one tried to assign a numerical value to the price impact of the tariff, one could thus correctly do so only for a period of a very few years. If a tariff is to be effective in protecting the domes- tic market for domestic producers, the rival domestic and foreign products must be competitive in some important uses. .It goes without saying that a tariff cannot protect a product from its domestic competitors. In recent times, the position of domestic wool has been seriously undermined by the attacks upon it of superior quality foreign wools and of synthetic fibers. (See Chapter III.) If manufacturers are willing to 15 Albert M. Hermie, Prices of Apparel Wogl, p. 7. 61 pay premiums for foreign wool, and use synthetic fibers instead of wool, the tariff of course becomes less effective in protecting the domestic market. The first legislative attempt to supplement the tariff and reinforce the competitive position of domestic wool, was the Wool Products Labeling Act of 1939. Under this Act, "all products containing, purporting to contain, or in any way represented as containing wool or reprocessed or reused wool must be labeled."16 The label must show the percentage of the total fiber weight represented by each kind of wool and the percentage of non-wool fibers present, if any. Both manufacturers and growers supported the Act, but for different reasons. Manufacturers hOped the Labeling Act would help to protect the wool industry against the increasing competition of lower priced rayons. In an effort to meet rayon competition, manufacturers had also been using more and more reclaimed wool. The growers were chiefly concerned about this increased use of reclaimed wools. However, because it put a premium on "100 percent virgin wool" fabrics, the Act was probably of greatest benefit to the relatively few large firms specializing in the manufacture of such fabrics. These firms generally use the better prepared, more expensive foreign wools. As a consequence, domestic growers gained little or 16D. W. Carr and L. D. Howell, Economics of PreparingAWool for Market and Manufacture, p. 18. 62 nothing from the provisions of the Act. Promotion of the sale of virgin wool fabrics tended to benefit foreign, not domestic, producers.17 The Wool Act of l9Su, to be discussed in Chapter JI, is another measure which supplements and, indeed, almost supplants the tariff. 17Ib1d., pp. 18-19. 63 CHAPTER V THE COMMODITY CREDIT CORPORATION AND THE PERIOD OF THE SECOND WORLD WAR Few of the governmental assistance programs of the 1930's included wool. Commodity Credit Corporation loans were made available to wool growers in 1938, and again in 1939. The 1938 program.included loans on the 1937 clip, 'rn -.ol per capita. On a peacetime or training basis, an es- tiJnated initial issue of 75 scoured pounds of wool per man in “the Army is required; on a combat basis, almost 100 pounds POI‘ man are required; after the first year, annual maintenance recluirements are estimated at about 1+0 pounds per man.1 During ——_‘ 1John N. Klein, Wool during World war II, p. 7. the five-year period, l9h1 to l9h5, military consumption amounted to roughly 1,5h7 million scoured pounds of wool. Under the terms of the Buy American Act of 1933, supplemented by other provisions of law, government agencies are required to buy supplies from domestic sources, when available, unless domestic prices are "unreasonable." Domestic prices, customarily, were considered "unreasonable" only when they were 25 percent or more above ”the whole delivered cost" (including the tariff) of similar foreign goods.3 Accordingly, all wool textiles supplied on government contract were to be made of domestic wool. It soon became apparent that the larger-than-usual domestic production would be too small to meet war demand. In November 19h0, an administrative order authorized the use of foreign wools in textiles manufactured under government contract. Domestic wools, if available in the requisite grades and quantities, were to be used in preference to foreign Wools. Prices of domestic wools had risen above duty-paid :foreign prices at the beginning of the war. Ceilings on domestic and foreign wool prices, based on late 19141 market Quotations, went into effect at the beginning of 19h2. A ¢1fferential in favor of domestic wools--amounting to roughly ‘ 2Domestic Wool Requirements and Sources of Supply, p. 9. 3§taff Papers of the Commission on Foreign Economic £23321 (Randall CommissionT, p. 3i3: 65 8 cents a clean pound--wss thus maintained until 19h6 when ceilings were lifted. Duty-paid foreign prices then ad- vanced to approximately the normal peace-time price relation— ships, and the differential, once again, was in their favor.u As of March 19hl, mills which used domestic wools in filling government orders were paid a premium to cover the difference between domestic and foreign prices. In l9h3, military consumption began to decline. Civilian consumption increased. When manufacturing for the civilian trade, wool mills used foreign wools in preference to the domestic product. The price and quality difference in foreign and domestic wools was a strong inducement to do so. Hoping to prevent a decline in domestic wool prices, growers applied "strong pressure for additional government protection."S Protection was granted in the form.of a Commodity Credit purchase program, effective April 19h}. The program provided that, with minor exceptions, all domestic wool not sold by .April 25, 19h3, was to be sold to, and purchased only by, the CCC. The program was extended, through yearly renewals, until the end of the war in August 19145. It was then continued on a permissive basis until April 15, l9h7. CCC purchases were made through the established wool trade. Private dealers, warehousemen, commission agents and ‘ hAppendix Table 9. Sklein, OE. Cite, p. 300 lhf Fun_-~—___- i 1 A . . a l 00 cooperatives were designated "handlers," if they were willing to comply with Commodity Credit regulations as to quantities purchased, maximum marketing fees, and resale to mills on government account. Three appraisers determined the grade and shrink of each lot of wool. Shrink was determined by the core test method. A boring tool extracts samples, which are then tested for shrinkage, from each lot of wool. The Corporation published a schedule of purchase prices, based on OPA ceiling prices, by grades, scoured basis at Boston. Growers were paid the official prices on an ”in-weight-at-time-of-appraisal" basis, less handlers fees, transportation costs, grading or scouring costs as pertinent, and the CCC fee of l l/B cents per pound to cover the cost of appraisal, storage, and interest. Initially, growers' associations felt skeptical as to the government's ability to deal with the intricacies of the wool business. After a few years, they were unanimous in their praise of the program. In particular, the previous ”take-it-or-leave-it" offers of wool dealers had been replaced by'a.detailed itemization of grades, marketing costs, and prices. Appraisal seemed to them more uniform and more impar- tial than in the past. Wool dealers, on the other hand, ex- PPessed strong opposition to the government program. Purchase prices of the CCC averaged about h2.3 cents a grease pound. This was lhl percent of parity in 19h}, but only'lOl percent of parity in l9h7, after the parity price had increased relative to Corporation purchase prices.6 During 6Appendix Table 11. the war, the CCC sold wool at the price at which it had bought it. In December l9h3, Corporation stocks were about 170 million pounds; by December lth, they amounted to 32h million pounds; in December 19h5, they were A61 million pounds. Wool stocks reached a peak 523 million pounds in September 1914.6.7 In an effort to liquidate its stocks, the CCC lowered its selling prices by 7 cents a pound in November l9h5, and again, in February l9h6, by an additional 1 l/Z cents a pound. But as the CCC was prohibited by law from selling below parity, selling prices were raised, as parity prices increased. By the end of March l9u7, selling prices in dollars and cents were about as high as they had been during the war. The support program was discontinued April 15, 19h7. It was resumed on August 5, 19h7, after a bitter debate, in and out of Congress, on methods. The controversy reflected the new alignment of political and economic forces--together with the inevitable compromises between opposed interests-- which was later to produce the Wool Act of 19514. As originally passed by Congress, the Wool Act of August 5, 19147 provided, under authority of Section 22 of the Agudcultural Adjustment Act, as amended, that the Secretary at Agriculture might impose an import fee up to 50 percent of, and in addition to, the duty then in effect, or import quotas, ‘ 7Cumulative Supplement for l9h5-46 to Wool Statistics and.Related Data, p. 30. ’TW- -D o- P 68 _' or both, whenever he felt that wool imports threatened govern- ‘ment price support programs. Grower representatives attending the Congressional hearings, favored the imposition of import fees and quotas whereas the National Association of Manufacturers, at its annual meeting in April 19h7, and during the hearings, ex- pressed unanimous opposition. The alliance between growers and manufacturers, dating back to 1865, was broken. Evidently, i the use of foreign wools reduced production costs to such an extent that, by 19h7, manufacturers were willing to lose the r' I-“ Jag? political support of grower associations. At about this time, in Geneva, representatives of twenty-three nations were discussing means of lowering inter- national trade barriers. The United States representatives hoped for a modification in the British system.of empire trade preference. In exchange, the United States was prepared to discuss tariff reductions on some 200 wool and wool manufac- tured items. Australia showed particular interest. When the news of the debates in the United States Congress reached Geneva, the representative of Australia returned home for new instructions. A representative of the United States did likewise, hoping to use his influence against the proposed legislation. Thus, United States foreign policy and, also, the need to sell industrial products to countries exporting raw materials conflicted with the American wool growers' de- sire for protection. 69 The President of the United States opposed "additional barriers to the importation of wool," and vetoed the Act, as proposed.8 Subsequently, a new bill, in which the quota and fee provisions had been omitted, was passed by Congress and signed by the President. Under the terms of the Act of 19m, and of a later Act in l9h8, mandatory supports were maintained through June lii' g 1950, at the l9h6 level of u2.3 cents a pound--lOl percent i of the April parity price in l9h7. 9h Percent of the parity price in l9h8 and l9h9. The Act of l9h8, and another Act I 3' in l9h9, provided that after 1 January 1950, wool prices would be supported at the level between 60 and 90 percent of modernized parity necessary to encourage a domestic production of 360 million shorn pounds. The lO-year moving base used to calculate the new parity price raised the parity price of wool by about 5 or 6 percent. As mentioned above, CCC wool stocks reached a peak of 523 million pounds in September 19h6. The Neel Act of 19h? allowed the CCC to lower its sales price, without regard to parity. As selling prices were lowered, and epen market prices advanced in l9h8 and l9h9, then shot up with the out- break of war in Korea, Commodity Credit inventories gradually declined. The Corporation was able to dispose of old stocks while fewer growers took advantage of the new loan and purchase 8The Wool Act of 1947: Messgge of the President. 70 program. The last of the CCC wool stocks were disposed of during the summer of 1950. No wool was purchased under the 1950 and 1951 CCC programs. Loans were again granted to growers in 1952, 1953, and 195k. From.April l9h3 through March 1950, the CCC purchased 1,63h million pounds of wool. Losses in disposing of this wool totaled $92,200,000 or about 10 percent of CCC losses on 5% all commodities during its first 19 years of operation.9 ’ From.the proceeding discussion, it would seem that the tariff was, in the main, effective in reserving for domestic i _’ producers a part of the domestic market sufficient to absorb -—«2§ their production, so long as domestic wool's main competitive threat came from outside the United States, and the foreign- domestic quality difference did not play a leading role. The tariff became less effective as the competitive advantage of foreign wools increased and non-wool fibers began to encroach on raw wool markets. The CCC purchase program came to supple- ment the tariff. But, by this time, American wools were at such a comparative disadvantage that the CCC was faced with accumulating stocks and few buyers. A new approach to the problem had to be found. The new solution was, of course, the Wool Act of l95h which will now be discussed. 9Staff Papers of the Commission on Foreign Economic Policy (Randall Commission), p. 183, and Achieving_a Sound Domestic Wool Industr , p. 29. 71 CHAPTER VI THE NATIONAL‘WOOL ACT Since the National Wool Act of l95h attempts to find the solution which previous legislative efforts in behalf of wool have failed to find, it is, in itself, a summary of American wool problems, and policies. A complete discussion of the Act would thus involve all the factors which have been touched upon in the proceeding pages. Only a brief review of the most meortant of these factors will be presented in this concluding chapter on the Wool Act of 195A. The Wool Act proposes ”to encourage the annual domestic production of approximately 300 million pounds of shorn wool, grease basis, at prices fair to both producers and consumers in a manner which will have the least adverse effects upon foreign trade."1 An increase in production is to be encouraged through wool price supports up to 110 percent of parity. If the sup- port price deemed necessary to encourage production is between 90 and 110 percent of parity, direct payments are to be made 1It is unclear from the text of the Act whether 300 or 360 million pounds is the production goal of the Act. Part of Section 702 is quoted above. Section 703, however, which contains a detailed description of the methods of price sup- port, states that the production goal is 360 million pounds. (See Appendix B.) Production has been less than 300 million pounds since l9h5. to growers. If it is between 60 and 90 percent of parity, loans, purchases and other Operations will be used as methods of support. When direct payments are made, growers will be paid the difference between the national average price re- ceived by producers, during the marketing year, 1 April to 31 March, and the support level established for that year. Since the Act became operative, in April 1955, direct ?‘“9 payments have been used as the method of support. The support i 5 levels established for 1955, 1956 and 1957 are 62 cents a 3 pound, 106 percent of the September parity price in 1955 and 1956, but only 101 percent of parity in 1957. Prices, not fl’**'rvr m..- .- including government payments, received by growers, which had averaged 53.2 cents in l95h, fell to h2.8 cents in 1955 and h1.2 cents in September 1956.2 Under the 1955 Program, for example, a grower received, on the average, 19.2 cents for each pound of wool produced. The 1955 wool subsidy thus amounted to about hh.9 percent of the market price. An individual grower is never of course the "average grower." Each grower, under the 1955 program, did not re- ceive a 19.2-cent subsidy. He was paid the equivalent per- centage of hi3 receipts, that is, hh.9 percent of the market price of his wool. The amount paid to each grower is there- fore proportional to the quality and grade of the wool sold and, since the subsidy is paid on a per pound basis, owners of -2The wool Situation, November 1h, 1956, p. 6. 73 large flocks receive more than small growers. Average re- ceipts to individual growers may be estimated from Table 1. Total payments to growers under the 1955 Program amounted to 56.3 million dollars, of which h9.l million were payments on shorn wool. At the present time, direct payments are not used in support of other agricultural commodities. They have become necessary, in the case of wool, because of the increasing competition of synthetic fibers. Any method of price sup- port which would tend to raise prices cannot be used. Syn- , thetics have, as it were, placed an upper limit on wool prices. An upper limit has also been placed on domestic prices by foreign wools. Superior quality foreign wools would most certainly be used in preference to domestic wools, if foreign and domestic prices were equal. They are, at present, often used despite the fact that foreign duty-paid prices are higher than domestic prices. Domestic prices must fall to competitive levels, if domestic wools are to find the requisite outlets. ‘ As previously mentioned, CCC wool stocks reached dizzy proportions during World War 11. These stocks were accumu- lated during a period of very high demand and relatively high prices. The direct payments program solves the problem of stocks accumulating on government account since payments are 3The Wool Situation, November 1h, 1956, p. 11. 714 made on wool marketed privately, and no purchases are made by the government. The incentive levels provided in the Wool Act, on the other hand, are not very different from the prices received by growers before the enactment of the law. Under the Act, the upper limit of price supports is 110 percent parity. In the eleven year period from 19h0 to 1951, average prices re- ceived by growers were above or about equal to 110 percent of parity. Before 19h0, except during the depression of the early 1930's, and in 1938 and 1939, prices received Aha—r.— I ‘1‘-‘ A Aéu—ru.._.-.—..A may“ . , ‘1?an :r J. ' ‘ ._.‘ '>"I,‘ fluctuated between about 100 and 110 percent of parity. It seems probable, therefore, that the Wool Act will not cause a substantial increase in production. Production has indeed continued to decline since the passage of the Act. Domestic production was 235.8 million in 1951;, 233.11 million in 1955 and 231.8 million in 1956.“ The production goals of the Act, especially if they are compared to the relatively small price incentives, appear pretentious. Since l91h, domestic production has equaled or exceeded 360 million pounds in 1931, from 1933 to 1935 inclusive, from 1938 to 1930, inclusive, and in 19h3. It has equaled or exceeded 300 million pounds from.1928 to l9h6, inclusive, and has been declining fairly steadily since then. It should also be noted that low-price periods have generally #The Wool Situation, November 1h, 1956, p. 7. 75 ...... I e 11.! 11.. I: . . . . [4.11%.1 . . ‘. .mmmH ca seesaw sea unmask emeao>m on» .noasoo m.m he muons moons no mopeds one wcfizaaapazs an oopoHSOHeo ma coaposcoamd_ OhOS ho 9H9: .Ho 0&9: .HO . 9H9: .HO oo.mna.ma oo.omo.: oo.mmo.o 0.0mm.am nose one comm - oo.Hmm.H . oo.ome . o:.aoo.a - o.omm.~ on com : ma.mam.a No.5me oa.ano.fl m.aem.~ - om.mom . oo.am - oo.ama . o.mme mom oe om ma m~.nmm ao.oa om.maa m.oHe - ma.HmH - om.oe - mo.oe . m.mam e: o» mm Hm uuoa ho mama so need so need so ma.ama e om.oe e mo.oo e m.mH~ mm oe no as space ondoa a Nbdflwwmoz hdamndm ounce w.N: concomoaaom HI F a. H003 fleece—comm Shem nod sheen mason ocean nwmaeoom .uaozoac Hoe: aeonm go gonadz mo omepsooaom mfiocnh mo MNHm Mm aidmcomm mmod mma mHQZD amazomc 4003 EC mBMHflomm amadzHBmfl H mflflHA one xoopmm>HA: Soau mo>HaoQ :om.mma.maa :mm.mmm . eases oa.om :0m.osm.:m h o:. o:m.a noeo one comm mm.om .h mo.ma moa.mwa.mm ::.a mm.oo no. ooa.m ooemuoooa mo.oH Hme.omm.HH mm.we ea. :oo.m ooeuooo am.a emm.mee.mH . me.ao om.s aam.s . oem-oom aa.oa mmm.mem.oa mm.oe mm.m eoe.ma oem-ooa Ho.® oem.aam.ea mm.oe mo.o o~:.mm mouom a:.m oom.maa.ma em.om mo.Hm mmo.oo eeumm a:.m mom.mea.ma om.om mao.oaa mm eoeee oewMMMMMMo useoaom meadom o>wMMMMNmO psooaom aensdz Shem nod soaposoosm Hoe: saonm datum msHSaOQMM match cmmnmommMMm odes ZOHBUDQOmm 4003 92¢ mmmmm mmadam QMBHZD N mumprz Hoouao om muommom SOdenaapman owdpnoohom need ozo mods omegamm demon mo nmomzez 2H nZOHaoeomm mHmme mom amazomo momma am haemomsm ozonomm domHoszm mo onaomHmonHo mooBZMomam. 0 m4m4e 95 .mnonfidzlmooflm awownoas Ca onflaooa mo momswo .noundo .m .m onm fisnom .n .0 «oonzom .mfionm was» on oooow noon o>m£ ome oasonm zmnanpoEom no C300 #50 on own onm waafinwu none 00»: mnaomon on» mawnnom A mm .0 oomv :.momHnQ Inopno o>npwnnopaw on oonwasoo moonm Eon“ mnndpon 30H: wnaowon Hwnonow onp noons .pxop on» G“ axonm ono on» ma HmpOp nnmnp onm nonéowop voodonw onoz xmnnopmo so an ooomoona mwnaowom0 .wnnnonnamo .nomono .QOpwnHQmmz .aow>oz .swpb .wnouan4 .oowxoz 302 .oownoaoo .wnHSohz .onmoH .wnwpnozm .maonwaxo .oommonnoa .medpnoM .wnnnwnn> .wnnmbahmnnom: .mmmqmn .mxmwnnmz .mpoxmo opsom .wpoan spnoz .nnsowmnz .mzon .mpomoccnzm .cnmcoomnz .nwmnnonz .mnocnnnn..acanoqn .onsom .ounm o>apwaon no onomoo oasoz man» oonnm mnooEsn amonm HmpOp no poonmo map no oocmpnoaSH o>npwaon Sosa non mooo :oopnoa non moEHp no nonasz= .omHnQnouno man no onam on» on mnwonooom oopSwHoz no: onm mnozmnaa nonpo ca ammononH* 0.m w.: :.m m.m m.m 0.N _Enwm nonpond o» oo>oE nopmnoao no .oomon no oaom nonmn no anon m.m 0.m 0.N 0.m m.m N.H ooao no .spawon noon ca .omd ooonmpod no noumnoao m.: m.m :.0 0.: m.m H.: 950 Adam no n3oo ado on oEnp 0000 w oxHH ooxooa ocm swan ooEoom mQEdH onw aoosm no mooanm m.o m.o n.o 5.0 o.n m.o moonna pawn an mono a no npnnnnnnmom mopmpm mopanm .pnoo .pnou mm puma, waxes :nonpo m .z.3 m .z.m Humanoaom «commom Hdpoa mopdpm amndm mopwpm mmoflm o>prz noapsnanpmaa omwpnoonom “GOSGHPGODV 0 "Wuhan”. 96 TABLE 7 PER CAPITA CONSUMPTION OF WOOL, TOGETHER WITH A COMPARISON OF THE PRICES OF WOOL AKD SYNTHETIC FIBERS 1930 - 1956 Per Capita Consumption of Price!per Pound Apparel W001 W001, territory, Rayon staple Acetate (scoured basis) fine good French fiber, viscose staple fiber, Year combing and staple 1 1/2 denier S denier Pounds Cents Cents Cents 1930 1.63 76.2 60.0 31 1.92 63.1 5706 32 1.51 07.0 LS.G 33 1.95 07.0 10.0 3h 1.33 01.5 31.6 35 2.51 724.0U 31+0U I 36 203k 92.0 30ou 6003 37 2.13 101.9 23.1 52.2 38 1.69 70.0 25.0 L6.5 39 2.20 82.7 25.0 ué.0 1+0 2035 200a 9603 2500 «M300 :1 3.86 2.0a 108.8 25.0 A3.0 L2 0.15 1.08 119.1 25.0 03.0 {+3 u'lLl 1068' 117.8 214.0% 14.3.0 04 h-17 2.5’a 119.0 2h. 01.9 15 1.21 2.1a 117.7 25.0 36.0 15 1.31 102.6 25.1 39.1 17 3.65 121.2 32.0 u7.8 MB 3.31 16 .0 36.% 08.0 u9 2.27 16 .1 35. 12.9 50 2.38 199.2 36.1 02.5 51 2.h7 270.5 40.0 08.0 52 2.21 165.3 39.5 #2.% 53 (.0224. 17300 3500 350 Sh 1.00- 170.6 30.0 3Q.O 5% 1.3 1112.1 33.7,_ 35.7 56 -- 137.1 32.0» 32.0b afistinated civilian. Drot including prices for December. 97 TABLE 7 (continued) £399.12: fume of... - Year Nylon Vicera Orlon Dacron “crilar panel Staple Staple Acrylic Polyester teyle Steele ;Td T03 Fiher Staple Stap‘e Fiber F130? Fiber 21d Tow Cents Cents Cents Cent: Cents Certs V I\/ 19)}:‘(; --- ¢VQ§ -...- -—- o——-- ——— 1990 ~—— 03.2 —-- --- -~- 125.C 53 180.0 1.;J‘CQC’ 1‘/0.0 180.0 3:.C’ 12 JgL’ 5 155.- 10..0 132., 101.7 110.0 123.0 5 150.0 100.0 117.9 1...: \P \z o \9 H U o \ ...J r 41 O T ‘. .. .— -.- -~————-« -- .. \T m 0 O SourC" Wool Statistics and Related Data, pp. 83 and 129, and Cumulative Supple eat for 19LS—Eé to Wool Statistics find—Rglated Data, pp. 32,36, 93, 9k, and 93. 98 TABLE 8 A COMPARISON OF AMERICAN AND AUSTRALIAN WOOLS Percentage Distribution by Sort 1 A —--9-—1 ‘Mr-fi‘.’ Sort American Australian Warp2 Filling3 Total warp a Loss 5.00 2.80 800 l.u0 0.87 2.27 .22 703 17.56 5.52 23.08 21.12 6&3 h1.02 20.68 61.70 65.02 608 2.76 -- 2.76 10.15 583 .13 .13 .07 #08 .03 .03 ens hurry 1.10 .30 Black .09 Felted ' .03 Paint .08 .02 Stained 3.29 .005 Strings .56 1Original 12 months Texas wool, h0,000 pounds. 2Length over 1% inches (i.e., of combing length, suitable for worsted manufacture). 3Length less than 1% inches. “Includes 30,000 pounds of 6&3 combing, all more than 1% inches in length. Source: D. W. Carr and L. D. Howell, Economics of Pregaring Wool for Market and Manufacture, p._E2. 99 TABLE 9 AVERAGE PRICE PER CLEAN POUND AND PRICE DIFFERENTIALS OF AUSTRALIAN AND TERRITORY FINE WOOLS AT BOSTON 1930 - 1956 Australian, Australian, Territory, Fine Territory Y'r 613-703, Good ,\_ 613-703,Good Good French as a GAP Top—making, “hty Top-making, Combing and rercentage Ex-duty Duty-paid Staple (618 and of duty- fine) paid Australian Cents Cents Cents Cents Percent 1930 56.0 31.5 88.7 76.2 86 31 16.0 31.0 36.6 63.1 78 32 30.0 I 61.7 07.0 73 33 US-Q ‘ 79.? 67.0 Oh 31 61.9 95.9 81.6 85 35 52.6 86.6 71.8 06 36 file? 100.2 9200 92 37 71.9 1 105.9 101.9 96 38 50.1 1 81.1 70.1 63 39 52.’ ' 66.1 82.7 96 10 61.1 95.1 96.3 101 11 69.5 103.5 108.3 105 12 75.1 109.1 119.1 109 13 75.9 109.9 117.8 107 15 75.? 109.2 117.7 108 16 76.1 + 110.1 .102.6 93 17 102.9 136.9 121.2 91 19 170.3 a 195.0 166.1 85 i 50 198.7 3 221.2 199.2 89 51 259.1 % ' 281.6 270.5 95 52 150.0 { 175.5 165.3 9 55 139.6 . 165.1 112.1 86 56 136.6 + 161.1 137.1 81 Sources: D. W. Carr and L. D. Howell, Economics of Preparing Wool for Market and Manufacture, p. D5, Albert M. Hermie, Prices of Apparel Wool, p. 35, and Cumulatigg Supplement to Wool Statistics and Related Data, pp. 56 and 60. and“) .1. ‘ .9‘. .u 1. fl 0'. ‘ . PI. .’ '11:.- 0rd . ., ' .1 100 TABLE 10 MILL CONSUMPTION OF DOMESTIC AND FOREIGN APPAREL7WOOL (scoured basis) 1930 - 1952 Total Domestic Foreign Percentage of Total 'Year Domestic Foreign million million million pounds pounds pounds percent percent 1930 200.. 109.9 5 .8 70.7 25.3 31 237.7 203.9 33.8 05.8 10.2 32 188.5 175.0 13.1 93.1 6.9 33 21.1.5.5 221;.0 20.9) 91.), Exor)’ 30 167.0 105.0 22.6 86.5 13.5 35 319.0 293.5 25.5 92.0 8.0 36 299 d 22901 7007 Yeou 2300 37 270.2 174.3 99-0 63.7 36.3 38 219.0 190.2 25.0 85.0 11.6 39 293.1 202.0 51.1 82.6 17.0 00 310.0 215.1 90.9 69.0 30.6 02 571.0 211.5 328.9 02.8 57.2 03 591.2 203.6 38:. 30.0 65.6 00 577.0 150.9 026.1 26.2 73.8 05 589.2 120.0 068.: 20.0 79.6 07 525.9 181.2 360.7 30.7 69.3 08 083.2 239.0 206.2 09.3 50.7 09 339.0 180.1 150.9 50-3 05. 50 036.9 100.8 250.1 02.6 57.2 52 306.0 90.0 208.: 20.0 71.6 Source: D. W. Carr and L. D. 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