period, and that we regarded it as a breech of good faith to change the grazing fees during that period, and that view was sustained. The CHAIRMAN. Well, if Congress should see fit to say that it was a binding contract and legalize it then there would be no question. about it.

Colonel GREELEY. No; there would be no question about it.

One other point in this connection I would like to bring out. In meeting the problem of securing slack range, as we term it, for taking care of the new settlers or the smaller ranches, a problem that we have discussed with the permittees and livestock associations many times, the stockmen themselves suggested that the fairest method would be to make a cut in connection with the transfer of a grazing preference from one livestock producer to another. There are, of course, many sales of livestock with or without ranches in national forest regions from time to time, and many of these sales involve livestock that has been grazed under a recognized preference on a national forest. The department has always recognized the right of a preference holder to waive his preference in favor of another party. The stockmen themselves said that if you have got to make cuts to provide more range for newcomers it is fairer to make these cuts on the man who was selling out than on the men who are staying right in the business. From that viewpoint, where additional range was needed for redistribution, we have developed a policy of making cuts when stock under permit was sold to other parties.

Under our present regulations the right is retained by the department to make a cut of 10 per cent upon the preference number when the livestock and the ranch combined are sold, or a maximum cut of 20 per cent when either the stock or the ranch is sold separately. In other words, when the outfit is broken up, and the two parts are separately disposed of. Those cuts may, of course, be waived, and they are waived unless there is need for finding range somewhere to take care of the new permittees or newcomers who have, we believe, a legitimate demand for range.

Senator SPENCER. Do those cuts, Colonel, apply where a range and the cattle on it have just had their ownership transferred but the cattle still remain right there?

Colonel GREELEY. Yes, sir; where a ranch and the cattle are transferred, but the cattle remain right on the range, as in fact they often do, that cut may be made.

Senator SPENCER. Would not the requirements of the new purchaser be just as great as the requirements of his vendor?

Colonel GREELEY. The requirements of the new purchaser would be the same as those of the vendor.

Senator SPENCER. And would not the influence be the same? Colonel GREELEY. Oh, yes; he would have to carry on the permit under the same terms as the vendor.

That process of cutting on transfers is simply an expedient. It is not done because there is any fundamental reason for doing it. There is no reason why we should interpose any handicaps or difficulties in ordinary business transfers of property between stockmen. It is simply an expedient, suggested by the stockmen themselves, as the fairest way of accumulating slack range for redistribution. They said if you have got to find range somewhere to take care of

these new ranches it is fairer to take it from the man who is selling his property than to take it from those of us who are going to stay on in the business.

Senator SPENCER. If A had a ranch and a certain amount of stock and he sold that ranch and that stock to B, who continued in precisely the same business that A had previously carried on, then you would have the right to make a reduction?

Colonel GREELEY. Yes, sir.

Senator SPENCER. But the wisdom of it would be up to the department?

Colonel GREELEY. We would have the right to make the reduction, yes, sir; but whether it was actually made would depend entirely upon the need for providing new range for some one else.

Senator CAMERON. The man who was buying the range and the herd of cattle or sheep would be notified that he was subject to this rule?

Colonel GREELEY. Oh, yes; he thoroughly understands that.

The operation of that policy of making cuts when livestock is transferred has materially reduced the necessity of cuts upon permittees who have continued steadily in the operation of their ranches and herds. I would like to give you an illustration of how some of these things actually work.

We collected very comprehensive data on the current trend in our livestock business in 1916. In that year on all of the national forests applications from 5,522 new settlers or ranches were approved. Those applications covered 253,000 cattle units. Now, to find the range for those 253,000 cattle units our existing permittees were cut less than 10,000 head, or less than one-twenty-fifth of the amount of range that was allotted to these newcomers.

Senator SPENCER. About 4 per cent.

Colonel GREELEY. The remaining new grazing units were provided by taking up the slack range accumulated through cuts on transfers and by the voluntary dropping out of certain permittees or the curtailment of their herds.

So that in actual practice, while we have retained the right to make cuts of 10 per cent in any one year for reallocating the range, the amount of such cuts has been very small. As a matter of fact, in the aggregate, the use of the national forest ranges has been exceedingly stable.

I would like to emphasize this point very strongly. There have been a good many individual cases-and the committee no doubt will hear of them in its western hearings-where heavy cuts have been made, just as there have been many individual cases, of which I have no doubt the committee will hear, where people have applied for range and have been refused because they could not be accommodated without cutting out old permittees or curtailing them to a degree that was not warranted. In the aggregate the use of our ranges by the livestock producer has run along steadily, with no drastic changes ene way or the other. Just to enforce that point I would like to give you one or two summary figures, quoted from Mr. Rachford's report.

In 1909 we had 14.242 cattle permittees grazing less than 40 head. The average number that they grazed was 16. In 1923, 14 years later, we had about 18,000 such permittees, an increase of nearly

4,000 in the number of small permittees in the course of 14 years. The average number that they grazed in 1923 was 17 head per permit, almost the same number as 14 years previously.

In 1909 we had about 4,500 cattle permittees who grazed between 41 and 100 head of cattle, and the average of those permittees was 68. Fourteen years later, in 1923, we had over 5,600 such permittees, grazing almost identically the same number on the average, 67 head per permit as compared with 68, in 1909.

There had been an increase of over 1,100 permittees of that class in the course of 14 years, but with the average permit remaining very stable.

In 1909 we had 1,900 cattlemen who grazed between 100 and 200 head-we are coming now up into the middle-sized group. The average permit for that group was 148. In 1923 we had 2,354 such permits, with an average of 145. There is an increase of 454 in the course of 14 years.

Of the larger cattle permittees, grazing over 200 head, we had 1,523 in 1909, and 1.806 in 1923. There the average permit was reduced from 500 to 465. In these figures is the best key to the actual working of this reduction policy as it affects the larger cattle grazers. Senator SPENCER. Does that last class take in every permittee who has in excess of 200 head of cattle?

Colonel GREELEY. Yes, sir.

Senator SPENCER. Irrespective of what the number may be?

Colonel GREELEY. Irrespective of the number. Thus in the course of 14 years, on cattle, we have increased the number of all permittees, particularly of the smaller permittees, and the net effect of the reductions has been to reduce the average of the larger cattle owners by 35 animals, or from 500 to 465, in 14 years. The reductions have been very small when you view the proposition in the aggregate.

The situation as to sheep is somewhat different. In 1909 we had 2.418 sheep permits for less than 1,000 animals. The average per permit was 422. In 1923 we had 3,282 of those permits, an increase of 864. The average number was 371, a reduction of 51 heads.

In 1909 we had 1,906 sheep permittees grazing between 1,000 and 2,500 head. That number was slightly reduced in 1923, to 1,710. The average number per permit remained very nearly the same.

In 1909 we had 422 sheep permittees grazing between 2,500 and 4,000 head. Fourteen years later that number had been reduced to 316, and again the average number of sheep permits had remained almost the same, or in fact, in that case, had slightly increased.

In 1909 we had 328 permittees, who grazed over 4,000 head of sheep, and the average per permit was 7.385. In 1923 we had 276 permittees of that class, and their average per permit was 6,744. 14 years the average of the large sheep permits had been reduced 641 head, or less than 10 per cent.

In

So that in the aggregate, while our regulations have provided a good deal of authority to make reductions, and while we have made reductions in a good many individual cases, when you view the grazing business on the national forests as a whole, it has been exceedingly stable.

I would like right here, Mr. Chairman, to refer to the point which you brought up in the committee's session on April 17 as to the situa

tion outside of the national forests compared with the situation inside the national forests.

In my judgment and I think Mr. Barnes and Mr. Rachford agree with me in this much greater changes have taken place in the livestock industry outside the national forests during this 14-year period from 1909 to 1923 than have occurred among the livestock producers who utilize range in the national forests. I think there is no question that the business of the grazing men who use national forest ranges has been much more stable during those last 14 or 15 years than the business of the stockmen who do not utilize forest ranges. The greatest disruption of the livestock business outside of the national forests has been due to the amount of settlement that has gone on, and particularly to the operation of the 640-acre homestead law. It has been due also to the deterioration that has taken place on much of the unreserved public range lands, to the heavier losses that many stock outfits have incurred and heavier expenditures that they have been put to because of injury to their old ranges from overgrazing, and the extent to which their old ranges on the public domain have been cut up by 640-acre homesteads. In many cases the heart of a range has been taken right out, and they have had to readjust and spread out, to employ more herders, build more fences, develop more water, and all that sort of thing.

The larger outfits that use the national forests have during those 14 years undergone some reductions. That is perfectly true, but nevertheless they have kept right on in the livestock business on a substantial scale. But many of the larger outfits using range outside the national forests have during the last 15 years been seriously broken up on account of these conditions on the public lands. Wholly aside from the effects of the economic depression, many of the larger outfits using outside lands have been forced to reduce very greatly, and some of them have disappeared from the map altogether. In many instances you can see unfortunate results along this line in the disappearance of the better grades of cattle.

It is impossible, of course, to express the difference in stability of the livestock business as between the man in the national forest and the man outside in any definite or concrete terms, but I am satisfied-and I think these figures reasonably support it-that the stock outfits in the national forests have not been reduced and have not suffered upsets nearly to the extent that they have occurred among the stockmen outside the national forests.

All of these phases of grazing administration on the national forests that I have been running over have been intensively studied by the Forest Service, particularly during the last four years, discussed with the stockmen at many occasions, and have been summed up and put into effect in the new grazing manual which was approved a year or so ago by Secretary Wallace and is now in effect. I would like to run over the three or four most important points in that grazing manual, from the standpoint of its bearing upon the stability and encouragement of the livestock business.

The most important of those is the provision for 10-year permits, as I have defined them, designed primarily to stabilize the tenure of national forest ranges by our permittees. Another thing meant to facilitate legitimate business transactions in the transfer or sale of

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livestock or ranches connected with grazing permits has been the removal of all limitations on the number of transfers of grazing preferences which will be recognized by the Forest Service. We formerly had limitations on the number of transfers within any given period of time that would be recognized by the service. At the request of the stockmen we have withdrawn those altogether, so as to facilitate normal business transactions where the use of national forest range is involved.

Another feature of the new manual is a provision for more adequate improvement and development of the forage on our ranges, particularly through more effective cooperation with the stockmen. We have worked out a plan under which it is possible to utilize a part of the grazing fees for range improvements. This has been approved by our legal advisers, and as it is now in effect a group of stockmen can get together with the forest supervisor and work out a plan for improving their ranges in any way that improvements are needed. An agreement can be made under which a portion of the grazing fees instead of being paid in the usual way as grazing fees will be paid into a cooperative fund and disbursed for the construction of these improvements.

That is a matter that means a great deal, because we all appreciate that our national forest ranges can be vastly improved in carrying capacity and productivity through such means as fencing, water development, eradication of rodents, etc. One of the projects that we are taking up this year in Arizona under this plan is to use part of the grazing fees for cleaning out certain areas of prairie dogs and doing away with that serious injury to the range. The eradication of poisonous plants is an important thing and is one of the phases of grazing administration we want to push just as rapidly

as we can.

Another feature of the new manual is the provision for greater cooperation with the stockmen and particularly for strengthening the position of the local livestock associations in dealing with the Forest Service, enabling them to take up with us such matters as range improvements and the actual handling of grazing allotments as association units. That, we feel, is a very desirable development. All the rest I have, Mr. Chairman, deals with the question of grazing fees. If you wish, I will go ahead with that.

Senator SPENCER. I would like to hear it all.

The CHAIRMAN. We will be glad to have you go ahead, if you feel like it.

Mr. RACHFORD. There is one further point in connection with the revision of the manual that I think it might be well to mention, and that is that the sale of ranch property alone, with waiver of stock, is now given the same status that was formerly given to the sale of stock alone. That places the ranch property in exactly the same position as stock and will permit of continuing the preference or the renewal of the permit to the purchaser in the event the ranch property alone is sold.

Colonel GREELEY. That is just in line with the idea of facilitating business transactions.

In considering our new grazing manual in consultation with representatives of the stockmen, three cattlemen and three sheepmen, who spent several days with Mr. Rachford, Mr. Barnes, and myself