form. Where fabrics made from substitutes and the fact is not disclosed, is not the chance of profiteering much greater in behalf of the producer of substitutes than of the grower of virgin wool? Mr. PEARSON. It is absolutely greater. The grower of wool has to compete with the rag picker instead of the rag picker competing with the grower or producer of wool, which should be the case. Suppose you were feeding corn and you could buy a substitute for that corn that did not cost very much to produce. It would not pay you to produce corn, would it? Shoddy is producing a similar situation with the wool industry.

Mr. SIMS. Yesterday, I believe, or the day before, it was shown here that the red kidney bean was worth $12 a bushel, and a bean grown in Manchuria was being laid down on the market in Chicago at $7 a bushel, and that Manchuria bean, which is similar in taste, appearance, and so on, as the kidney bean was being sold at the same price, $12, in competition with the kidney bean. Now, who could profiteer, the man who produced the red kidney bean in the United States, or the man who sold the Manchuria bean as a red kidney bean? The profiteering is all on the part of those practicing the fraud, is it not?

Mr. PEARSON. Yes, sir. Now, then, in regard to the production of wool, probably wool can be produced cheaper in some other country than it can be in our country; but, gentlemen, this is a big industry in our country, and we should protect each other's interest. We want to produce as much as possible and to export, if possible. I say this, that we can produce enough sheep and wool in this country to supply this country's needs and export some, instead of having to import wool That is the business way of looking at this proposition, and it should be done. That very thing can be done. Gentlemen, the question was asked the other day if this bill were enacted into law how we would be protected, and so on, and if we could make enough money to carry on our business so that we could make a profit. Make shoddy stand on its merit and the wool grower will make a profit. Gentlemen, if we could become millionaires we deserve it. There is no industry in the United States today that is more deserving of making money than the stock industry. Just place yourselves for a moment in the position of a herder in our country. You, Congressman Winslow, are big and heavy--I do not mean to make any slurs, gentlemen, at all, you understand we are all friends.

Mr. BARKLEY. That is an obvious fact, anyway.

Mr. PEARSON. For the moment just place yourselves in the position of a herder out on these ranges. Now, there is one scene in those kodak pictures there I want you to see as it gives you an idea of the ranges-back of that bunch of hills there. Imagine yourselves out there as herders when a storm or blizzard comes from the north, with the wind blowing at the rate of 60 miles an hour, or 90 miles and hour. That storm comes up very suddenly and it catches you 20 miles away from the ranch, and the camptender can not get out to your herd because of the storm and drifting snow. I can give you some experiences this past winter. Norris Newcomer and two men were out with his band of sheep when a storm came up. It started like an ordinary storm. Generally on a stormy day the

herder will face the storm with the sheep, so as to get back to bed ground better at night, but that day the storm started like a very ordinary storm and they grazed the band toward the south. The storm suddenly developed into a terrific blizzard, and they drifted. with it. They could not turn their sheep back, but had to let them drift. These gentlemen stayed with their sheep until 7 o'clock that night, after dark, and finally got them into a pocket in the hills so that the sheep would not scatter unless the storm should drift them off. Then the only way the men could find their wagon and get back to it was to face the storm for a distance of 10 miles that night. Well, they finally reached camp, and they were very fortunate that they did not freeze to death. It was one of the worst storms we have ever had. When they got to camp their fingers were frozen, their feet were frozen, and they were just about exhausted.

That is one of the hazards that is apt to come about at any time during that season of the year in the sheep business. I say, gentle men, that there is no industry in the world, no industry in the United States to-day, that is as deserving, or that is more deserving of consideration than the stock business, because we have those hardships to go through, and it is for the benefit of the public that we go through with them, as wool is the foundation of clothing. There is no doubt about that, and we should not be compelled to compete with the rag picker. It should be the other way-the rag picker should compete with the wool grower. I thank you, gentle

men.

The CHAIRMAN. We are very much obliged to you, Mr. Pearson.

STATEMENT OF DR. J. M. WILSON, McKINLEY, WYO., PRESIDENT WYOMING WOOL GROWERS' ASSOCIATION.

Dr. WILSON. Mr. Chairman and gentlemen of the committee, I will not try, as I want to get away to-day, to follow any regular order, but take things as they come. I realize that the time is very short and we have got to get through. In this bill, I think, instead of our friends from Boston sitting here and watching us with a certain amount of suspicion, they ought to be sitting, opposite at the table, to help fix a bill, because it is coming. It may not be this year or 10 years; and yesterday the representative of the had nine years to go and would work all that time to pass the bill. The time is ripe. You gentlemen will be with us in a year or so, trying to get a better way. You ought to be to-day.

they

Col. Winslow was asking if there were any examples where the price of wool was not governed by the law of supply and demand. If I had time I could recite to you a list of them that would be tedious, but to give one concrete example: When the Government took over wool we had a man named Ferguson at Douglas, Wyo. He was in the wool-raising business, and when this wool was taken over by the Government turned over first the clip taken off the year before. He did not have a ready excellent market because he could not sell it and had it a year. One clip was grown in a very bad winter and that wool was tender. He was out so far from the railroad and could not get feed. What I mean by tender-these gentleinen don't know. What it means, is a break in the wool, a tender

place, and it did not have the same tensile strength all through the wool, but to take hold of it in your hands it would break at whatever point the band of sheep had been suffering and starved out. The wool does not grow then. There is a period of time when the sheep are suffering for feed in which the vitality of the sheep is so low that the wool does not grow. It is just the same as a human being with typhoid fever. You can see if he has had one or two or three relapses by his finger nails. During the relapses the nail stops growing. When it starts growing you have the mark there. It is the same way with the wool in this condition, the wool is tender. Mr. Ferguson consigned-it was all consigned then when the Government took it-and he sent to the different wool dealers and he had it graded, and so on, and sent it as the Government ordered it to the different houses. They had absolutely the selling of it and then made loans to the growers on many of the wools that they took 20 to 80, as high as 80 per cent. This one clip was tender. That clip was shipped to one commission merchant and that commission merchant sorted the wool and put it into different grades. He must have had a high cost with 10 or 12 different grades. The lowest grade of that wool sold for 50 cents. The highest grade sold at something over 60; I think it must have sold at 66 or 68. The other wool, the good clip, the clip that there was no question about, and remember this wool is from the same sheep and the two clips, as I remember now, were less than 1,000 pounds apart; 36,000 each, if I remember aright, with a few hundred one way or the other for one clip, or the other clip.

The other clip was handled and sold gross at 50 cents, bought gross the same as the worst wool he had in the other clip sold for, In consequence, the good clip of wool sold gross for 50 cents and the cost for marketing, etc., was a little over 2 cents, so that that clip netted him 48 cents and the other clip netted him 59 cents. Mr. STINESS. What years were those?

Dr. WILSON. The year the Government took over the wool.
Mr. STINESS. What clips did they represent?

Dr. WILSON. They represented the Alex Ferguson clip of Douglas, Wyo.

Mr. SIMS. The Government took over the control of wool in 1918. Dr. WILSON. It was 1917. They took over the wool first in 1917. But this man's clips were 1917-18 clips that were sold.

Mr. CLARK. Was the price of these wools that were taken over by the Government determined by certain inspectors of the wools? Was not that the way the prices were determined?

Dr. WILSON. That was the way it should be, but it was not the way it was done.

Mr. CLARK. How was it done?

Dr. WILSON. It was done in this case by selling. You remember this just as well as I do. It was arranged that where a wool was sold in the original bags and was not graded it went at 50 cents. Mr. CLARK. Made after it was graded and the prices were fixed? Dr. WILSON. It was sold without grading.

Mr. CLARK. You said one lot was graded.

Dr. WILSON. One lot was graded in different cities.

Mr. CLARK. And the prices of these graded lots were fixed by a certain body of inspectors?

Dr. WILSON. Yes.

Mr. CLARK. Is it not possible that they might have missed the point that the wool was tender?

Dr. WILSON. They might and might not. They were supposed to be competent men. The point I mention is the other wool was not graded and was sold without grading. The woolgrower was the man that lost, and the agreement made in Washington by Government wool dealers was that all wool should be graded, and the Government agreed to pay one-half cent for the grading, and when the association took this matter up with the wool dealer he said they did not permit of time to grade it.

Mr. WINSLOW. Was that contract as a whole carried out with the Government?

Dr. WILSON. In the end; yes.

Mr. WINSLOW. That was hardly a normal condition.

Dr. WILSON. It was the condition when the Government was supervising and was that when they took it over by the Government. Mr. WINSLOW. Yes.

Dr. WILSON. Or rather the wool growers when they were supposed to have graded, checking it out.

Mr. WINSLOW. Whether that happened or not, it was not a normal condition in the wool trade. It was a Government agency working under war conditions, was it not?

Dr. WILSON. It was an agency working with the Government through the regular channels of the trade.

Mr. WINSLOW. The Government was a party to it?

Dr. WILSON. The Government's part came in when they came, as Mr. Clark says, to make the principal value of these wools, the different grades of it.

Mr. WINSLOW. Values?

Dr. WILSON. That was the only part the Government had.

Mr. WINSLOW. It was virtually an arbitrary price making on the part of the Government?

Dr. WILSON. No. The price was fixed by the price on a certain day that year and was fixed lower than the price then. It was the price in July?

Mr. CLARK. July 1. They fixed them on the basis of the market price on wools July 1, 1917, was it not?

Dr. WILSON. I think it was, and prices then on July 1 were not as high as the date the prices were fixed.

Mr. CLARK. That is right.

Dr. WILSON. And another clip of wool that went to this same dealer, remember that the first was Ferguson's that sold so low and matter was taken up and they had it reexamined, the dealer had and found it was worth 5 cents a pound more on reexamination.

Mr. WINSLOW. He had it from the Government all the time? Dr. WILSON. No; the Government had nothing to do with this. This was the dealer himself, that he discovered after reexamining it that it was worth 5 cents more than what he told the woman--it belonged to an estate-that it was worth in another letter. Those matters were all taken up. These are values I am telling you. These matters were taken up by Mr. Pennwell, of the wool division, and he wrote he could not get anything done.

I will say

Those are the actual facts. Those are on record here. this: I hold here a report of the last wool sales in Boston the 5th of March, the last Government sales, and where in the name of God the Government got so much rotten wool, I do not know. There is more rotten wool in this country at present than anywhere on earth. Wool selling as low as 12 cents a pound when they tell you wool is worth $1, and here is good wool selling at 12 cents a pound and here is odds and trimming at a quarter and wool selling at 20 cents. Mr. SIMS. Is that Government wool?

Dr. WILSON. The Government owns these and are selling them at auction at which all these gentlemen who are wool dealers congregate, and when they see bargains they buy them, when they see bargains they buy. If this wool was a bargain they would have bought.

Mr. SIMS. Intense competition?

Dr. WILSON. Intense competition; yes. You see in those ready markets these wools were offered and they could not get buying on them. Here is one sold for 9 cents.

Mr. MONTAGUE. Offered by the Government?

Dr. WILSON. Owned by the Government.

Mr. MONTAGUE. Offered by the Government?

Dr. WILSON. Offered by the Government; yes.
Mr. WINSLOW. No bids?

Dr. WILSON. No bids. The wool was so rotten nobody wanted it.
Mr. SIMS. What was that put up by the Government for?

Dr. WILSON. You will have to ask some of these men. We asked them and they said they did not know and did not know where they got it.

Mr. SIMS. It was sold by human beings and sombody graded that wool before the Government bought it.

Dr. WILSON. No; I beg your pardon. It was bunk, practically. Mr. SIMS. In other words, it was the judgment of human beings supposed to know what they were.

Dr. WILSON. Mr. Clark can tell you.

Mr. CLARK. The Government took over all the wool there was in the country at a certain date. It did not make any difference what quality it was; practically all of the wool was taken over by the Government that there was in the country.

Mr. SIMS. Commandeered.

Mr. CLARK. Yes; and controlled from that time on. The prices at which they took it over were as described by Dr. Wilson.

Mr. SIMS. By supposed wool experts?

Mr. CLARK. Yes, sir.

Mr. SIMS. And the argument was that the owner of the wool should not receive any more than it was actually worth?

Mr. CLARK. The market prices on a certain day.

Mr. SIMS. Has the Government taken up any other rotten wool at the same time in the same way? Did they take over inferior or rotten wool?

Mr. CLARK. They took over everything. The reason these wools are not selling is because they are largely low-grade wools and there is no demand for low-grade wools at the present time. The demand for fabrics is for fine fabrics, fabrics made up of fine wool, and consequently there is no demand for these coarse wools.