lished. It is self-evident that the country would be better off eco nomically if instead of encouraging the development by new settler of a lot of poor, marginal lands, with very slight chances of mak ing successful homes on them, the better lands in these localitie with their already developed ranches could be more intensel utilized for the production of agricultural crops or the production of feed crops in connection with the grazing of livestock.

Then it has also appeared to us that while the encouragement o agriculture is undoubtedly sound public policy, there should be equa encouragement of the stockman who is primarily a stockman an not a farmer, who is organized for livestock production, and wh is an efficient livestock producer, with the experience and qualifica tions. A stabilization of his industry is just as important a par of the economic development of the West as the encouragement o agricultural development.

In recent years, too, the question of credit facilities for the stock men has been an important factor, particularly during the economi depression of the last three or four years. We have found that greater stability in the use of national forest ranges would undoubt edly give the stockmen better credit facilities. They would hav better standing with their bankers if they could show that they ha a more stable tenure of Government range over a considerabl period of time.

With these purposes in view, after our consultation with the stock men in the spring of 1922, we decided to expand our former syster to permit the issuance of grazing permits for periods of 10 years We had previously issued permits in some instances for periods o five years, particularly in 1919. But it seemed to us clear that wit all of these changes in the agricultural situation the time had com to go further than that for the definite purpose of stabilizing th use of the range by the established livestock producer. Thus th 10-year permit system was worked out, approved by Secretary Wa lace, and put into effect beginning with this season of 1925.

There are these limitations, however, under the terms of the per mit which assures the grazing of the number of livestock carrie by the preference, the recognized preference, for a period of 10 years (1) The department may reduce the number of livestock at an time if necessary to prevent deterioration or injury of the rang (2) The department retains the right to make a reduction of no more than 10 per cent at the end of five years if necessary to pro vide range for new users or redistribution in other ways. But i the permittee has been reduced to the extent of 10 per cent of h herd for the protection of the range, no further reductions can b made for redistribution.

In other words, this 10-year permit system means just this: W will start permittee A off in 1925 with a permit for 1,000 head c cattle his preference number-that runs to 1934, inclusive. At th end of the first five years he may have to stand a cut of 100 cattle the department feels compelled to do that to give the range to som body else. At the end of the next five years he might have to stan a cut of 100 head of cattle for redistribution. But that is the wor that can happen to him. He has this degree of assurance for a 1 year period, so that he can, to the extent that he desires, organize h

business on that basis for 10 years. He is assured of 1,000 head of cattle for five years and 900 head of cattle for the next five years. The CHAIRMAN. That is, if the policy of the department is re

tained.

Colonel GREELEY. Yes, sir.

The CHAIRMAN. But, of course, the department could reverse itself at any time it saw fit?

Colonel GREELEY. No; not under these 10-year permits. The only agency that could reverse those permits would be Congress. I do not think, as a matter of law, that the Secretary of Agriculture could cancel or withdraw one of those permits except for violation of its terms.

Senator SPENCER. Do you reserve the right of cancellation or modification of the issuance of the permit?

Colonel GREELEY. Only for a violation of its terms, except, as I have indicated, as to the 10 per cent reduction.

Mr. BARNES. The solicitor has held that a grazing permit is a legal contract.

Colonel GREELEY. It is in effect a contract.

Mr. BARNES. Yes.

The CHAIRMAN. It is a contractual relation between the permittee and the department.

Senator CAMERON. How many have you made this year, Colonel Greeley?

Colonel GREELEY. We have instructed the district foresters to issue 10-year permits wherever the use of the range has been sufficiently settled down and stabilized. I imagine that this year at least 80 per cent of our livestock will be grazed under 10-year permits.

Mr. RACHFORD. Yes; all of that.

The CHAIRMAN. Colonel Greeley, before we get too far removed from this. You stated the solicitor has so held?

Mr. BARNES. Our solicitor.

The CHAIRMAN. The solicitor of the department has so held?

Mr. BARNES. Yes. It was put up to him as a question: Was it a legal contract that we had entered into between the permittee and the Forest Service? And he said it was.

The CHAIRMAN. One that is binding upon the Government?
Mr. BARNES. Yes.

The CHAIRMAN. And he has held that it is?

Mr. BARNES. Yes: that we could not violate it.

The CHAIRMAN. But that was only the opinion of the solicitor of the department?

Mr. BARNES. Yes; of course that has guided us.

Colonel GREELEY. Well, I think that is perfectly good law, Senr. It is certainly a contractural relationship that is set up, and I do not think that any Secretary of Agriculture could step in and reverse the action of his predecessor in issuing that permit unless there was ground for doing so on account of violation of its terms. Certainly that has always been the position of the Department of Agriculture. As you may recall, when in 1920 there was a very insistent movement in the House of Representatives to immediately increase grazing fees, the Department of Agriculture took the position that we had issued five-year permits in 1919 with the understanding that the fees would be continued during that five-year

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 sepa rately. In other words, when the outfit is broken up, and the tw parts are separately disposed of. Those cuts may, of course, b waived, and they are waived unless there is need for finding rang somewhere to take care of the new permittees or newcomers wh have, we believe, a legitimate demand for range.

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

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

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

Colonel GREELEY. The requirements of the new purchaser wou 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 pern under the same terms as the vendor.

doing

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

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 bear 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 ithout 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 One 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 be n 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. In 14 years the average of the large sheep permits had been reduced 641 head, or less than 10 per cent.

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