the concern were living on farms. We want to know if this will be one of the significant tendencies for the future. Shall we have the development of small industrial units in agricultural areas, with the farmers devoting a part of their time to their farms and a part to the work in the industrial plant? I think that is something that merits careful study.

In that connection I think I should call attention to the fact that, whereas the movement of population has been away from the farms, or was away from the farms until 1929, and while since 1920 6,000,000 more people have left the farms for the city than have moved from the city to the farm, in 1930 the movement started the other way. According to preliminary estimates we are now making, it looks as though by January 1, 1933, the country population of this country will be within 200,000 of what it was in 1910, which was the peak of country population, with more than 32,000,000 people.

That is all I have to say in regard to the farm management appropriation.

MARKETING AND DISTRIBUTING OF FARM PRODUCTS

Mr. BUCHANAN. Your next item is for marketing and distributing farm products, as follows:

Marketing and distributing farm products: For acquiring and diffusing among the people of the United States useful information, on subjects connected with the marketing, handling, utilization, grading, transportation, and distributing of farm and nonmanufactured food products and the purchasing of farm supplies, including the demonstration and promotion of the use of uniform standards of classifi cation of American farm products throughout the world, including scientific and technical research into American-grown cotton and its by-products and their present and potential uses, including new and additional commercial and scientific uses for cotton and its by-products, and including investigations of cotton ginning under the act approved April 19, 1930 (U. S. C., Supp. V, title 7, secs. 424, 425), and for collecting and disseminating information on the adjustment of production to probable demand for the different farm and animal products, independently and in cooperation with other branches of the department, State agencies, purchasing and consuming organizations, and persons engaged in the marketing, handling, utilization, grading, transportation, and distributing of farm and food products, and for investigation of the economic costs of retail marketing of meat and meat products, $742,270: Provided, That practical forms of the grades recommended or promulgated by the Secretary for wool and mohair may be sold under such rules and regulations as he may prescribe, and the receipts therefrom deposited in the Treasury to the credit of miscellaneous receipts.

Mr. OLSEN. I offer the following explanation of the estimate:

(1) Decrease of $11,430 is to be effected by general reduction in expenditures on the outlook reports. Since there is an apparent increase of $890 by transfer from "Salaries, office of the Secretary," which has been correspondingly reduced, as pro rata supply handling charges for 1934, the actual decrease is $12,320. (2) $58,620 reduction on account of continuation of legislative furlough.

WORK UNDER THIS APPROPRIATION

This appropriation covers research problems relating primarily to marketing and distributing. This research includes studies of trends of production, demand and prices for farm products. All available data are gathered and analyzed and reports published which show the present economic situation with regard to each major farm product and also point out the probable trends. An annual outlook report embodying this information is published in the early spring of each year for the purpose of assisting farmers in making plans for the farm year. Further reports are issued from time to time on the agricultural situation and reports on intentions to plant and breed are prepared in the spring and fall. All of this work aims to furnish the farmer with information which will enable him to avoid losses which result from extreme variations in production. The material is used extensively in agricultural extension work and in teaching vocational agriculture. In addition the physical problems connected with handling, grading, packing, shipping, and marketing of products are studied and recommendations are made. for improvements. Numerous laboratory studies are carried on such as spinning and ginning tests of various types and grades of cotton, and milling, baking, and other tests connected with the grading of grain. Work is being done to establish new and additional uses for cotton. Extensive research is carried on concerning problems connected with the grading of farm products. Standardized grades have been prepared for a large number of products and demonstrational work is carried on to educate the producers and the trade in their use. The work under this appropriation is devoted primarily to meeting the demand of producers and the trade for information on problems connected with the marketing of farm products.

Mr. BUCHANAN. Your current appropriation for this purpose is $812,320, and your estimate for 1934 is $742,270, or a decrease of $70,050.

Miss CLARK. Of that decrease, $58,620 is on account of the legislative furlough, and the actual net decrease is $11,430. The decrease below the previous year was $87,680. (P. 330 of the committee print and 173 of the explanatory notes.)

Mr. BUCHANAN. you may give us a short statement on that, Mr. Olsen.

DEMAND FOR AMERICAN COTTON IN JAPAN

Mr. OLSEN. Under this appropriation we do all the economic research work that pertains to the marketing of farm products. A part of this research is centered upon studying the probable future demand for farm products, both here and abroad. For example, in the foreign field the studies that we are now making as to the demand for cotton in Japan, and the Orient generally, are bringing out some significant facts. They are bringing out the fact that American cotton does not encounter severe competition from the Asiatic short-staples in spinning of yarns above 20-count, but in the spinning of yarns, of 20-count and less, the competition becomes very keen.. We have also developed the fact that there is a tendency in Japan to spin the higher count of yarns, and that will increase the demand for American cotton.

Mr. BUCHANAN. What do you mean by higher count?

Mr. OLSEN. I mean the fineness of the yarns. Twenty-count yarn is yarn of which twenty times 840 yards are required to weigh a pound. The higher the count the finer the yarn.

COTTON PRODUCTION ABROAD

Mr. OLSEN. Now, as an illustration of the character of the work we are doing in the foreign field, I might refer to the study in Egypt, which shows that there is a very definite limitation upon the extension

of cotton growing in that country. I do not think we need be particularly concerned about competition from Egypt. I can not go into that in detail, but it is very significant information to American cotton growers.

Mr. BUCHANAN. Where is the principal expansion in cotton production?

Mr. OLSEN. There is probably some little opportunity for expansion in Russia. Yet, they will probably not produce an amount greater than what Russia will consume. We have not completed our study of the Anglo-Soudan, but we do not believe that competition from that area will be very keen. There is probably some opportunity of expansion in India and in China.

Mr. BUCHANAN. As I understand it, India is bound to the plan of devoting so much of the land to foodstuffs, on account of the density of the population, that not a great deal of land is available for cotton production.

Mr. OLSEN. Yes, sir; the density of the population there forces them to use a good deal of their land for the production of foodstuffs.

Mr. BUCHANAN. That brings about a limitation on the production of cotton. That production is limited to the surplus of land after providing for their foodstuffs.

Mr. OLSEN. That is probably true, although as price conditions change, they may shift from one crop to another.

Mr. BUCHANAN. The production in Russia is practically on irrigated land, is it not?

Mr. OLSEN. Yes, sir. From what we know of conditions in the competing countries, our conclusion is that the cotton industry of this country is in a strong position for the future with reference to international competition.

WORLD COTTON CROP AND CONSUMPTION

Mr. SANDLIN. What is the cotton crop now as compared with last year, or what is the world crop?

Mr. OLSEN. The total world supply of cotton is now 24,400,000 bales. Roughly speaking, it is 1,600,000 bales below the 1931-32 crop, but it is 900,000 bales above the 1926-27 production.

Mr. SANDLIN. What is the average world consumption?

Mr. OLSEN. As to the average world consumption, I have some interesting figures: The world consumption of American cotton during the period from 1921 to 1930 was 13,400,000 bales and for the years 1926 to 1929 it was 15,400,000 bales. For 1931-32 it was 12,300,000 bales.

Mr. SANDLIN. Is that the entire world consumption?
Mr. OLSEN. Of American cotton; yes, sir.

Mr. BUCHANAN. What is the entire world consumption?

Mr. SANDLIN. They do not consume 15,000,000 bales of American cotton, do they?

Mr. OLSEN. Yes, sir. For 1929 it was 15,400,000 bales. I have here a chart which shows that situation pretty well, up to last year. You will see here the production and the carry-over.

Mr. BUCHANAN. I think you might put that in the record.

Mr. OLSEN. I would like to put a statement in the record covering the cotton situation.

Mr. BUCHANAN. You may do so.

The statement follows:

COTTON OUTLOOK

The outstanding fact concerning the cotton outlook is that the supply of nearly 25,000,000 bales of American cotton for 1932-33 is more than twice recent yearly rates of consumption.

As world consumption of American cotton fell from about 15,000,000 bales in 1928-29 to about 11,000,000 bales in 1930-31, stocks increased. In 1931-32 world consumption of American cotton rose as a result of short crops in foreign countries, but with the large crop in the United States the carry-over was increased over 4,000,000 bales bringing the total world carry-over of American cotton on August 1, 1932, to approximately 13,000,000 bales.

Cotton acreage in the United States has been reduced from 47,100,000 acres harvested in 1926 to 36,600,000 acres left for harvest according to the November estimate for 1932. The production of 17,100,000 bales in 1931 came with the highest yield per acre since 1914 and despite a material reduction in acreage. This year with a further reduction in acreage and more nearly normal yields production was estimated in November at 11,947,000 bales. In determining their acreage for 1933 cotton farmers will be influenced by the fact that prices are at approximately the same low levels as they were last year. However, farmers have already reduced their cotton acreage materially and present acreages devoted to food and feed crops will about supply these needs. Prices of alternative crops that might attract land out of cotton are much lower generally than they were a year ago and supplies of labor in the Cotton Belt are increasing. Supplies of work animals are decreasing and supplies of production credit are low, but in view of the increasing self-sufficiency of southern agriculture production credit is probably not as significant a factor in determining cotton acreage as it was a few years ago. With respect to yields it is significant that boll weevils entered hibernation in numbers over a larger part of the belt in the fall of 1932 even than in the fall of 1931. In the east applications of fertilizers affect yields and the amount of fertilizers used has declined greatly in recent years because of low incomes. The low returns from the 1932 crop will undoubtedly hold purchases to a low level in 1933.

The large supplies and low prices of American cotton together with the reduced crops of foreign growths in 1931 stimulated world consumption of American cotton last year. Japan and China made outstanding increases in their takings

of American cotton.

The rise in cotton prices and the gain in business confidence in July, August, and early September were associated with an increase in cotton consumption in the United States and an improvement in cotton exports and in the cotton textile trade in many foreign countries. Exports of cotton to European countries generally were higher in the first three months of this season than in the corresponding period a year ago. Whether this improvement in exports to Europe is maintained or not will depend upon the extent to which fundamental conditions improve and an increase in consumer buying develops. The tren 1 of cotton consumption in the United States will depend upon the trend of general business conditions and consumer buying power also. Exports to the Orient are running below last year reflecting in part the large stocks of American cotton in those countries, but primarily the larger crops in India and China. Cotton production in foreign countries is now estimated at 11,500,000 bales compared with 10,400,000 bales in 1931-32 and 11,900,000 bales in 1930-31. Generally, therefore, competition from foreign growths will be greater than it was last year, but less than in 1930-31.

Several factors need consideration with respect to the longer time outlook for American cotton. A better appraisal of Russian cotton prospects is causing the production of that country to be less of a disturbing factor on world markets than it was a few years ago. It now seems clear that over a period of years cotton consumption in Russia is likely to develop fully as rapidly as cotton production. It is too soon to state that the peak of Russian cotton production has been reached, but it is quite apparent that any further increases will be at a moderate rate. In the other countries cotton production has declined materially in recent years as a result of low prices. The estimate for production in foreign countries excluding Russia is now 9,600,000 bales for 1932-33 compared with 11,200,000 bales at the peak in 1928-29. Acreage in foreign countries excluding Russia is now estimated at about 5,000,000 acres below 1928-29 and nearly 6,000,000 acres below the peak of 1925-26. Obviously the level of foreign cotton

production will influence materially the effect of any improvement in business conditions upon the demand for American cotton.

Mr. ENGLUND. We have just compiled a volume pertaining to the statistics of cotton which might be of interest to you. There is a lot of interest in it for the Southern States. That compilation goes back for a period of many years.

EXPANDING USE OF COTTON

Mr. OLSEN. In addition to studying the trend of domestic markets, we are devoting a great deal of time to such problems as how to expand the consumption of certain domestic products. The work in connection with cotton is a splendid illustration of that. For instance we believe that if cotton had been used in 1930-31, for cotton bale covering instead of jute or other material, there would have been a net saving of around a million dollars without taking account of the influence on cotton prices of the increased consumption. It is estimated that if we traded in cotton on a net-weight basis, we could develop a potential market for cotton for baling, amounting the first year to around 200,000 bales and a very substantial part of that amount each year thereafter.

Mr. BUCHANAN. Do you mean you could develop a use for an additional amount of 200,000 bales of marketable cotton without having a tariff against jute?

Mr. OLSEN. If you had a tariff which excluded jute, you would have that kind of a market. With the present prices of cotton and jute we could use cotton in competition with jute for cotton bale covering, if trading were on a net weight basis.

Mr. BUCHANAN. That is probably true.

Mr. OLSEN. We have developed the use of cotton cloth for curing concrete. While its initial cost is slightly higher, its great durability makes it only about one-half as expensive in the long run as other fabrics and we figure that there is a potential market there for about 6,000 bales a year. Then, we have developed barrel tops out of cotton material, working in cooperation with the State of North Carolina.

Mr. BUCHANAN. Did you say it was used for barrel tops?

Mr. OLSEN. Yes, sir; instead of jute covers. The shipping tests show that cotton is just as satisfactory as burlap for covers, and that it holds the marking better.

Cotton is being used for consumers' packages for potatoes and onions. That use has shown a remarkable expansion since 1930. In 1930, 3,500,000 packages of potatoes were shipped in cotton bags, and in 1931 that number had increased to over 10,000,000 packages. We estimate that there may be a potential market for about 125,000 bales of cotton for that use. More than 1,250,000 open-mesh cotton bags were used for shipping oranges during the past year. We have designed and developed a special type of bag for consumer packaging of fruits, potatoes, onions, and nuts, of which in just the last few weeks the onion people and the walnut people have taken around half a million each. These bags are rapidly growing in favor.

Another very intensive research activity under this appropriation is in connection with the standardization of farm products. You know what that is, and I will not go into it now.