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business welfare. We favor equitable protection of communities, to the small farmer and stock raiser, to the wild life, and to recreational facilities.

6. That no charge basis shall be made effective in such law which results in depreciating investment values in the privately owned dependent properties of the holders of such rights, and that provision be made for returning whatever amounts are collected over and above cost of operation of the actual administration of the grazing to the State.

7. It is the consensus of opinion that the Rachford report

which was presented to the department this last year

is based upon unsound economic principles, and therefore should not be adopted. 8. Should the above-mentioned resolutions be enacted in the law, it must naturally follow that any contested point arising between holders of rights, and the Government, can finally be taken to the United States district court.

Mr. CHALMERS. In this connection, before going any further, I should like, if possible, to have incorporated in the record of this hearing a brief which was presented to Secretary Gore, who was then Secretary of Agriculture, by a committee of stockmen representing the National Wool Growers' Association and the American National Livestock Association. This brief was presented to Secreary Gore when he called for a conference of the stockmen and also the Forestry Department as to whether or not the Rachford report should be adopted. I should like to have this brief go into the record of this hearing.

Senator CAMERON. It may go into the record.

(The brief presented by Mr. Chalmers for the record is here printed in full, as follows:)

[A brief submitted to the Department of Agriculture by representatives of the National Wool Growers' Association and the Ameircan National Livestock Association in regard to charges for grazing livestock on national forests as appraised by the Forest Service and set forth in a report entitled “Range Appraisal Report"]

SOME HIGH SPOTS OF THE HISTORY OF THE WESTERN GRAZING SITUATION The livestock industry of the range States is in a precarious condition. To some extent this is a result of the deflation from the war period, but mainly is to be accounted for by the unstable economical situation which always has characterized the livestock industry in the national-forest and public-land States. This instability makes the business peculiarly sensitive and susceptible to extreme effects from any upsetting or disturbing factors.

The uneconomic instability arises from the fact that to a very large degree the stock raisers do not and can not own or control the lands producing the forage upon which their livestock is grazed during a material part of each year.

The range livestock industry, outside of Texas (in which State there are no Government lands), must secure a large part of its grazing from lands located within the national forests or within the public domain. The grazing lands of the forests are regulated under a permit system administered by the Forest Service. Grazing on the public lands is wholly unregulated and without any form of lease or permit or other form of control by the owners of the stock grazed thereon.

The fact that supposedly cheap grazing on forest lands or free grazing on the public domain does not insure a continuous profit to stock owners is not usually understood or appreciated by residents of other States. The fact is that the other costs of operation, such as purchase or production of winter feeds. unusual hazards and losses, the usual low average value of range animals, and the high freight rates on very long hauls render the business less dependable and remunerative than when conducted in sections where lands are owned or fully controlled. Also, settlers who use Government lands of either class (forest or public domain) have been forced, through circumstances beyond their control, to invest heavily in farm or grazing lands in order to carry their stock through times of the year when feed is not available on any of the areas owned by the Government. In times of strong competition for the use of lands, those desiring to procure permanency have been forced

to pay large prices for these purchased lands and thereby have added a large overhead cost to the already high cost of operation. The result is that the actual value of the so-called free or cheap grazing has become incorporated into the purchase price and assessed valuation of owned property which really is valueless unless there also can be access to the Government lands. Much of the land upon which it is possible to maintain livestock in the hot summer months is located in the forests. The value of the forest grazing has therefore been incorporated into the purchase and assessed values of the owned lands. There is nothing in the nature of a bonus or gift accruing to the settlers owning the livestock now grazed upon lands of which the title remains with the Federal Government.

The instability and uncertainty due to these forced investments and inability to secure title to or control of Government lands upon which the settlers still are dependent have hindered the proper development and improvement in the breeding of livestock and in the use of fully modern and efficient systems of production. It can properly be said that the range live

stock industry is not fully abreast of the times as to many of its methods. This is not a reflection upon the ability or efficiency of the western stockmen. An entire industry can not be indicted any more than can a nation. These men are victims of the results of the lack of any economic or other policy or the part of the Federal Government for the use of its resources found in the grazing value of the Government lands. This was wholly true until the inauguration of a policy for the control of grazing on the national forests commencing in 1906. This control was wholly incidental to the matter of conservation of timber resources and of water resources lying within the boundaries of the forest lands.

The announcement by the Secretary of Agriculture that in the future permits for grazing livestock in the forests would be issued for periods of 10 years was welcomed as an important step in the right direction, but there are other important features of administration of forest grazing that are still under debate and no provision has yet been made for any system of administration of grazing upon the public domain.

Western stock raisers have been greatly encouraged by the recommendation of the President's agricultural conference for the appointment of a special committee "to determine the administration, rules, regulations, and fees governing grazing," upon both classes of Government-owned lands.

ADJUSTMENT OF INEQUALITIES IN CHARGES FOR GRAZING

So far as the report undertakes and contemplates the adjustment of charges in proportion to the different qualities of forest range land. no criticism can be offered. However, this matter is less than a secondary phase and object of the work upon which the report is based.

A FEW OF THE BASIC FACTS

It has commonly been stated and considered that the number of livestock sought to be grazed in the national forests is twice as great as the number that properly can be admitted. This is erroneous.

Approximately 33 per cent of the number of sheep and 21 per cent of the cattle (other than milk cows) owned in the 11 range States are grazed upon the forest lands. The unadmitted stock includes the herds and flocks of settlers, no part of whose feeding grounds was included in the areas over which the Forest Service wsa given jurisdiction in 1906. In our judgment, the total of the annual applications for permits to graze livestock in the forests in any season is less than 10 per cent of the number actually admitted. Also many forests contain large areas of land producing forage for which there is no demand or application.

THE STATUS OF PERMITTEES

The fact is that most of the owners of the stock not grazed in the forests have no wish or desire to secure forest grazing permits. They now enjoy a considerable measure of stability and have control of the grazing lands necessary for all parts of the year.

The characterization (in the report) of the present permittees as a “favored few" conveys a most unfair and erroneous idea. These settlers should not be

thought of as securing their grazing permits through favor. While the Forest Service continuously and sincerely resists the thought of recognition of "rights" to grazing privileges upon the national-forest lands, yet such virtually exists, and must necessarily be the case, in view of the recognized customs and moral equities which came into existence prior to the setting up of a system of governmental administration of this grazing.

The virtual existence of these claims or moral rights is indicated and recognized in the regulations published in the National Forest Manual of Grazing, in the edition approved by the Secretary of Agriculture to become effective in March, 1924, and in all previous editions of that manual. The Forest Service terms the claims of the stockmen as preferences" and states:

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"Preferences may be acquired in the following ways:

"(a) By prior use and occupancy of lands included within a national forest.

"(b) By local residence and ownership of commensurate ranch property dependent upon the range.

(c) By the renewal of a permit formerly held by a copartnership or corporation to each individual member for a number of stock equal to his share in the original permit or by the pooling of preferences.

"(d) By the purchase of a permittee's stock or ranches, or both under circumstances justifying the renewal. (Reg. G-9.)

"(e) By inheritance of a permittee's stock or ranches, or both, under circumstances justifying a renewal of the permit. (Reg. G-9.)

"(f) By regular use of forest range under temporary permit for three consecutive years, and ownership of improved ranch property commensurate with the total numbers of stock grazed in the discretion of the forest supervisor."

COMPETITION BETWEEN FOREST PERMITTEES AND OTHER LIVESTOCK RAISERS

It has been stated that former and present rates of charge for grazing of livestock in the national forests afford the owners of such stock an advantage over other stock owners. The fact is that any inequality of competition that exists is found in the form of a handicap to the stock owners who are dependent upon the forest growing upon forest lands and an advantage to those who are fortunate enough to secure all their forage elsewhere.

This statement is well illustrated and borne out by the results of a recent study made by the Bureau of Agricultural Economics. In a preliminary report entitled "An Economic Study of the Costs and Methods of Range Cattle Production on Forty-one Ranches in Colorado," a clear comparison is made between cost of production on ranches dependent on forest grazing and those finding their full year's forage supply outside of the forests. On page 4 of this report the average cost per calf, as shown by a study of 17 prairie ranches, none of which used forest lands, was shown to be $36.36. A cost of $43.22 is shown in the case of 24 mountain ranches, of which 21 were dependent upon the forest lands for grazing during some considerable part of the year. The conditions surrounding the owners of stock entering the forests are unavoidably and inevitably such as compel higher costs, and the application of any new principle or policy which has the result of increasing these costs adds to the present handicap of such producers and accentuates the advantage now enjoyed by those more fortunately situated.

TEN-YEAR PERMITS

On page 5 of the Grazing Manual it is stated:

"The forester may authorize the issuance of grazing permits for a term of years within a maximum period of 10 years."

Again on page 12:

"The forester will authorize the issuance of term permits on such forests, or for such portion of the authorization of. each forest, or for such districts of a forest, as in his opinion may be justified by the conditions. When there is doubt regarding the number of stock which may be provided for per manently on any forest without injury to the range, the issuance of term permits will be deferred until such investigations have been concluded as may be necessary to determine the facts, or restricted to such number of stock as in the meantime can be grazed with safety. Although term permits are subject to reduction when necessary to prevent damage to the forest or range,

wherever possible, it is important that needed reductions on overgrazed ranges be made before the issuance of term permits."

The extent to which 10-year permits will be issued to permittees is not apparent from the reading of the manual. So far as such permits shall be issued they will prove of considerable value and be welcomed by the permittees generally.

THE RANGE APPRAISAL REPORT

In conducting the investigations upon which the fees proposed by the report were based, the Forest Service announced its intention of determining the "commercial value" of the forage consumed by livestock permitted to enter the forests. Of course any attempted study of value must anticipate the worth of the article or commodity to the recipient. How this value can fairly be determined is a question that involves many difficulties.

The author of the report ably treats this phase of the question and fully admits the inadequacy and incompleteness of the study made. In discussing the plan of arriving at value through a study of the cost of production, he says:

"All will agree that the principle is sound in theory, but after thorough consideration it was evidenced that the difficulties in the way of its application were far greater than the facilities of the service in funds, men, and available data could overcome in the time specified."

Apparently, the stockmen dependent upon the forest grazing are expected to pay charges computed upon a plan which the Forest Service admits to be imperfect and unsatisfactory, because of limitations placed upon the time permitted for a proper study and determination. The report further states: "The cost of production necessarily means a consideration of all items of expense. It would be a fine thing if, through study, investigation, and experiment it had been determined what the stockmen could afford to pay for any and all items of expense on a given market value, or, in other words, the relation each item of expense should bear to the value of the product and still allow the operator a reasonable profit.

"The production of livestock is not on a parity with the production of timber, since the entire operation is confined to national forest land in the latter and divided in two distinct units in the former. The cost of producing timber can be arrived at with some degree of accuracy, but the involved items of ranch-property investment, by-products of the farm, labor, feed, the efficiency of operations, and many others too numerous to mention here establish the impracticability of such a method. Furthermore, timber appraisal only determines the minimum the Government will accept for the timber. The annual market value is determined by open competitive bids, a provision specified by law.

"Still further assuming that the cost of production, exclusive of summer forage, should be secured and it was shown that reasonable profit existed between this figure and the market value, it would then be necessary to determine by arbitrary methods what percentage of this profit the Government should take as the value of forage. If there were no spread between the cost of production and market value, or the stockmen were operating at a loss, the Government would necessarily have to furnish the forage free of charge.

"It is by conclusion, therefore, that value of one product used in producing livestock can not be determined without a most comprehensive study, careful long-time investigation, and experimental work covering the whole operation." In spite of the above admission of the author of the report, his entire investigation was conducted under a plan that entirely divorced the grazing furnished by the forests from the other parts of the operations of the stock raisers, including their procurement of grazing by various methods and in various places during the major part of the year when stock is not admitted to the national forests. He states that the value of the forage to the stockmen can only be computed by appraising it as a fractional part of their yearly requirements of feed, but nevertheless proceeds and finishes upon a plan that wholly disregards this relationship.

He proceeded to attempt to work out a mathematical formula for determination of a value by comparison with prices paid for leases by other stockmen for private lands of an entirely different character.

He entirely ignored the fundamental fact that the lease values of these other lands had, by competition from stockmen having no investment in improved

farms or grazing lands, been forced to a point that made the lessee's total annual feed bill fully as high and often higher than would permit a profit in years of average production and market conditions.

The present move arbitrarily to elevate charges to accord with inflated prices for grazing on dissimilar areas, established by unequal competition during 19 years' adherence to the original plan of adjusting charges for the forest grazing, can not be justified upon any basis of consideration for economic welfare of the industry or of the 36,000 families directly affected.

We do not consider that the possibility of adding one and a half million dollars to the annual revenue of the Government will be recognized as justifying such a procedure by any bureau.

Explanation may be made of the fact that in some instances private lands situated within the boundaries of national forests are leased to stockmen at rates considerably above those now charged by the Forest Service. This higher charge by no means shows the value of the grazing. Such payments are usually made by stock owners, who in the West are known as tramps. At some times of the year they may lease small areas of State or other lands and usually are considerable users of the unregulated public domain. Having no investment in dependent lands and little overhead expense, they can of course pay any price demanded for the grazing needed to carry their stock through short periods when free grazing can not be obtained from the Government lands outside the forests.

The principles upon which the report is based are opposed completely to those which we firmly are convinced should be observed and used in any attempt properly to estimate the value to established settlers of the forage found in the national forests. It must always be borne in mind that this unit of the western stockman's grazing is but a fractional part of his necessary annual grazing supply and can not be divorced safely from the other parts of his business in any study of the Western States as a whole.

The author of the report, from the outset assumed the propriety of commercial exploitation by the Government of a part of a grazing resource, the national forests, without any regard to the related properties dependent thereon. The report undertakes to burden the users of the forest grazing with a scale of prices utterly beyond the ability of the bona fide settlers engaged in the livestock industry to pay. If the charges proposed in the report are recognized and applied, it will mean confiscation of the value of the settlers' privately owned lands, which are so intricately tied up with and dependent upon the forage of the forest lands.

The plan and basis of the report is in direct violation of the principles outlined in the Manual of Grazing Regulations, approved by the Secretary of Agriculture, to become effective in March, 1924. On page 1 of the manual the leading objects of the grazing regulations are stated to be:

"1. The protection and conservative use of all national-forest land adapted to grazing under principles conforming to the natural conditions surrounding the forage resources.

"2. The permanent good of the livestock industry, through proper care and improvement of the grazing lands, under principles conforming to the requirements of practical operation.

"3. The protection of the settler and established ranch owner against unfair competition in the use of the range."

The manual also states (p. 48, regulation G 10):

"The Forester is authorized to prescribe such rules as may be necessary to determine the fair compensation to be charged for the grazing of livestock on the national forests, in consideration of:

"1. A proper use of the grazing resources to best serve the public interest. "2. Reasonable consideration of the value of the forage to the livestock industry.

"3. Effect of the rates upon the livestock producers."

We submit that it clearly has been shown that the plan and principle of the range appraisal report is a contravention of the object and policy of the Forest Service as outlined in the regulations approved by the Secretary of Agriculture. Inasmuch as the report is not consistent with the regulations approved by the Secretary of Agriculture to govern the administration of grazing in the national forests and is admittedly wrong in its methods of appraisal through having failed to take cognizance of more important and numerous considerations which determine the ability of the 36,000 permittees to pay for forage grown in the national forests, we most strongly urge that no recognition of official status

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