to be in reasonable adjustment. The people I represent advocate strongly that an exhaustive and comprehensive survey be made in the late summer and fall of this year which would establish the facts and figures to form the basis of a determination and a report to Congress by the Secretary of Agriculture on or before October 15, 1947. This date has been selected because the statistical year in sugar is October to October. It is so provided in the Sugar Act. That is the time when the crops of the islands-like Hawaii, Puerto Rico, and Cuba-have been harvested and largely delivered. In October the mainland beet area has already started its harvesting operations and the mainland cane area begins its harvest in October. Thus, it is possible to establish with relative definiteness the sugar situation. From the standpoint of production in Europe and producing areas that serve Europe, a great deal more accurate information will have been developed in that respect by October.

At the present time, there is in prospect an increased production in all domestic areas and perhaps the largest crop that Cuba has ever produced, but that is based on estimates and prospects which will have become realities by October.

We have complete confidence in the Secretary of Agriculture and in the Director of the Sugar Branch in the Department of Agriculture. We are convinced that a transfer of the authority to them would result in the earliest practicable removal of unnecessary controls. We definitely feel that the report required by section 2 of the Robertson bill, Senate Joint Resolution 58, as amended, will make available to the American public, as well as to Congress, the cold facts about sugar.

We advocate a gradual decontrol and we feel assured that Senate Joint Resolution 58, as amended, provides for that type of development. Therefore, we endorse this bill and in the emergency which confronts us, we ask for prompt and favorable action thereon.

Senator FLANDERS. Mr. Bourg, you speak about the dangers of a run-away market. Would not a run-away market be favorable to cane and beet sugar raisers? I am not trying to make you out as a philanthropist.

Mr. BOURG. An excessive price would be very harmful and would probably be disastrous. We had that experience in 1920. And bankruptcies and court suits followed, that put people out of business for years afterward.

But in 1920 we had the same situation practically as we have today, except that there was less well-organized Government control. But they took the price control off, and then they did not buy the Cuban crop of 1919.

The result was that the big users, of course, were able to bid up sugar and to put it in storage, and sugar became scarce. A lot of it was in hiding. But eventually the price went high enough so that it attracted Java and Formosa and other sugars, and the price suddenly went down. It was at about 18 cents for raw sugar, and it went all the way down to about 5 cents.

There is no attraction in that for us. We do feel that the situation today is less favorable, because we do not have those other countries to draw from.

Senator BRICKER. You mean less dangerous?

Mr. BOURG. Less dangerous. We also feel that we recognize and you should recognize that this emergency food council-which was a war agency that developed into a postwar agency, and, as agencies of Government do, they perpetuate themselves ad infinitum-is not likely to find justification in 1948.

Now, the Cuban crop is estimated at about 52 million. It could be 7,000 tons more than that. We are going to get, I think, about 3,100,000 in the United States out of that.

Now, there is almost 2,000,000 in addition to local consumption in Cuba that has been committed and has been sent away. I do not complain or criticize, but by all means there should be no further commitments or continuation of that form of distribution of sugar beyond 1947.

Senator BRICKER. You mean the world-wide allocation program?
Mr. BOURG. Yes.

Now, of course, we certainly want to take care of famine areas and places that are in absolute dire need, but we do not consider Canada and Great Britain as eligible under that sort of a definition.

Senator BRICKER. Do you think you would be able to reach the area that was suggested here by Mr. Marshall awhile ago?

Mr. BOURG. Yes; there is only one deterrent at the present time to a greater production, and that is fertilizer. Of course, fertilizer is short with everyone.

But we think we can justify the claim for sugar, because sugar is the only food outside of rice which is still under price controls. It is the only food that is rationed. And the need is so great that it would be in the public welfare to give us more fertilizer, make it available. That would not increase the acreage necessarily, but it would encourage farmers to plant more acreage, and it would definitely produce more sugar per acre in any State.

Senator BRICKER. Again, your limited supply of fertilizer is wrapped up with your export to the countries in Europe that are now getting it, where their own plants have been either destroyed, captured and taken out, or not permitted to reestablish production? Mr. BOURG. That is right.

Senator FLANDERS. Senator McCarthy?

Senator Sparkman?

Thank you, sir.

Mr. BOURG. Thank you.

Senator FLANDERS. Our next witness is Mr. Joseph M. Creed. You also have a short piece of testimony, sir?

STATEMENT OF JOSEPH M. CREED, IN BEHALF OF AMERICAN BAKERS ASSOCIATION

Mr. CREED. Very short, Senator. I think all the members have been provided with copies.

My name is Joseph M. Creed. I represent the American Bakers Association whose membership is composed of bakers from every segment of the baking industry in the United States. Of the approx

imately 30,000 bakers in the United States, our membership does approximately 80 percent of the annual dollar volume which, in 1946, was estimated at $2,500,000,000.

The baking industry is the largest industrial sugar user in the country having consumed an estimated total of 525,000 short tons, raw value, of sugar in 1946. Throughout the war, the baking industry, in common with all other sugar users, was severely handicapped through restrictions on the supply of sugar, which were accentuated by the sharp increase in demand for bakery products.

It has been the sincere hope of the baking industry that the cessation of hostilities would see a quick ending of all unnecessary Government controls. As a matter of policy and for the record, the baking industry is very definitely opposed to continuation of Government controls any longer than is absolutely necessary. We recognize, however, that sugar presents a special problem where an exception to this policy should be made.

Realizing that the world's supply of sugar is still substantially below demand and that some important sources of supply are not yet in production, we recognize the need for extension of the present price and sugar rationing controls for the balance of the calendar year 1947.

To that end we have collaborated in the preparation of the bill under consideration and in our estimation, it is satisfactory to meet the needs and requirements of the baking industry.

We are hopeful that in taking this position and in urging the retention of these controls, the Secretary of Agriculture will see fit to grant to industrial users, in the second quarter of 1947, a quota of not less than 75 percent of their base period use.

I might say here, Senator, that this statement was prepared before the announcement was made yesterday of 75 percent. So to that extent it is a little out-dated.

Senator MCCARTHY. Incidentally, how much of an increase did. that amount to?

Mr. CREED. I would say over the current rate of 60 percent it would be 22 percent increase.

Senator MCCARTHY. Do you know what percentage of increase the average housewife got?

Mr. CREED. I think she was given a 10-pound increase. It is 35 pounds this year as compared with 25 last year.

Having carefully studied the entire situation with respect to prospective supplies, and in view of the substantial increase in the allocation of sugar for the United States for the year 1947, it is our considered judgment that a minimum of 75 percent can be granted in the second quarter without detriment to the rationing program. Unquestionably, as these prospective supplies materialize, it will be possible for the Secretary to increase these quotas in subsequent periods. The reasons for our urging extension of price and rationing controls beyond their present expiration date must seem fairly obvious. We are fully aware that merely by the removal of price and rationing controls, the supply of sugar, unlike that of cattle or dairy products, would not be increased. The situation is entirely different and should be viewed as such. Should controls be removed at this time, thousands

of bakers, especially the smaller ones, would find it most difficult to obtain sugar. Likewise the housewife would have little opportunity of meeting even her present levels of supply should controls be removed

now.

Therefore, in order to maintain an equitable distribution of the available supplies and to prevent an inordinate rise in the price of sugar we urge that the Congress enact this bill which is the result of several weeks of effort on the part of the sugar growers, processors, users, and the Government and thus prevent an unnecessary chaotic impact on our economy.

Thank you.

Senator FLANDERS. Thank you. That was an excellent presentation, sir. Many thanks.

Mr. CREED. Thank you.

Senator FLANDERS. We have now Mr. Robert Shields of the United States Beet Sugar Refiners Association.

STATEMENT OF ROBERT H. SHIELDS, EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL, UNITED STATES BEET SUGAR ASSOCIATION, REPRESENTING THE AMERICAN SUGAR-BEET INDUSTRY POLICY COMMITTEE

Mr. SHIELDS. Mr. Chairman, my name is Robert H. Shields. I am executive vice president and general counsel of the United States Beet Sugar Association, but, as stated in my two-page statement, I am today representing the American sugar-beet industry policy committee, which represents all of the sugar-beet grower associations in the United States.

The entire sugar-beet industry is in favor of legislation along the lines of the bill being considered by this committee, which would extend the authority for price control and rationing of sugar and vest this authority in the Secretary of Agriculture.

Through its policy committee the industry has recently given very careful consideration to the pro's and con's of continuing wartime price and rationing controls on sugar.

The American sugar-beet industry policy committee is composed of all sugar-beet grower associations and all beet-sugar processors in the United States-23 grower associations and 17 processors. On February 2, 1947, this industry-wide committee unanimously adopted the following resolution [reading]:

The American sugar-beet industry policy committee strenuously opposes the continuation of wartime price and rationing controls on sugar beyond the time necessary to protect the American public against excessive prices. However, just as the public in the past has recognized the need of the domestic industry for protection against excessive world supplies of tropical sugar, the domestic industry now appreciates the need of the public for an adequate supply of sugar at reasonable prices.

The policy committee believes that current supplies of sugar justify substantial increases in the present 1946 ration to housewives and other sugar users of the Nation. It also believes that just as soon as practicable all of these sugar controls should be ended.

As long as present circumstances prevail, the policy committee favors continuation of sugar control provided that such controls are vested in the Secretary of

Agriculture, that he is free to remove any or all of these controls at any time conditions warrant, and that he exercise these controls in a manner to provide maximum possible supplies for consumers, encouraging full production of domestic sugar, and recognize the special problems of the sugar industry remaining ander the control with the rest of the Nation's economy free of control.

We believe that it would be against the public interest to terminate sugar price and rationing controls at this time. There is a substantial increase this year in supplies of sugar for consumption in the United States so that increased rations can be provided. This was written yesterday.

This increased supply, however, will not be enough to meet all needs. Consequently, if controls were removed now, the price would be bid up by competition for the limited supply.

Higher prices would cause very little, if any, increase in supplies for United States consumers because nowhere in the world is there any large supply of sugar that would be free to move into this country. Along with higher prices would come very inequitable distribution.

. Partly by accidental circumstances and partly by advantageous position some sugar users would get much more than others. Household consumers and small industrial users would be at a disadvantage and very likely would get less sugar than they would have under rationing.

We believe the public interest will be served by continuing a program to prevent unreasonable price increases and maintain a fair share of the available supply.

Moreover, we believe that it is in our own interest as an industry to have these temporary controls continued for a time.

It is true that both growers and processors would have an immediate gain from any price increase. We think, however, that the higher prices rise during a time like this the lower they will fall when the inevitable downturn comes. Present conditions encourage full production but a sharp drop in prices would cause a severe curtailment of production.

We believe that the domestic sugar industry should maintain capacity production now and in the future and that enlargement of its capacity should be encouraged. In the past the industry has had public support for this position and we do not want to jeopardize this support for this position for the sake of temporarily increased returns resulting from premature decontrol.

Our production of beet sugar has increased by 20 percent in the past year and there will be a further increase this year. Beet growers and processors are striving for a new record production in 1947. When the sugar from our 1947 crop becomes available next fall it may be possible to remove some or all of the controls with safety.

On the other hand, it may be advisable to wait until the next crops of cane sugar are ready for market. We think it wise that the exact timing of decontrol be determined by the Secretary of Agriculture in the light of actual developments during the season.

As I have said, we believe that the exercise of these controls should henceforth be vested in the Secretary of Agriculture, and in him only, as is provided for in Senate Joint Resolution 58. We have