Ru al rl iq R86 537 i) } I ffs — 7 cr . ' . o LV toa or-Difhana Washi 1G sn WON AGRICULTURAL RELIEF HEARINGS BEFORE THE COMMITTEE ON AGRICULTURE HOUSE OF REPRESENTATIVES SEVENTIETH CONGRESS FIRST SESSION JANUARY 17, 18, anp 19, 1928 Serial E—Part 1 UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON RAEI1RN 109K COMMITTEE ON AGRICULTURE House OF REPRESENTATIVES SEVENTIETH CONGRESS, FIRST SESSION GILBERT N. HAUGEN, Iowa, Chairman FRED S. PURNELL, Indiana. JAMES B. ASWELL, Louisiana. T. 8. WILLIAMS, Illinois. D. H. KINCHELOE, Kentucky. C. J. THOMPSON, Ohio. MARVIN JONES, Texas. JOHN C. KETCHAM, Michigan. F. B. SWANK, Oklahoma. THOMAS HALL, North Dakota. H. P. FULMER, South Carolina. HARCOURT J. PRATT, New York. THOS. L. RUBEY, Missouri. FRANKLIN W. FORT, New Jersey. THOS. A. DOYLE, Illinois. FRANKLIN MENGES, Pennsylvania. JOHN McSWEENEY, Ohio. AUGUST H. ANDRESEN, Minnesota. CHARLES ADKINS, Ilinois. JOHN D. CLARKE, New York. CLIFFORD R. HOPE, Kansas, VICTOR K. HOUSTON, Hawaii. L. A. DARNELL, Clerk CONTENTS Statement of — Mr. S. H. Thompson. Mr. Chester H. Gray_-Hon. George W. Donaghey. Hon. T. S. Williams Prge 1 23. 42 11 34 AGRICULTURAL RELIEF House oF REPRESENTATIVES, COMMITTEE ON AGRICULTURE, Tuesday, January 17, 1928. The committee met, pursuant to call, at 10 o'clock a. m. in the committee hearing room, House Office Building, Hon. Gilbert N. Haugen presiding. Present: Messrs. Haugen (chairman), Purnell, Williams of Illinois, Ketcham, Hall, Pratt, Fort, Menges, Andresen, Adkjns, Aswell, Kincheloe, Jones, Swank, Fulmer, Rubey, Doyle, and McSweeney. The CHairMAN. The committee will kindly come to order. We will now hear these farm organizations. Who do you desire to call first? Mr. SETTLE. We introduce Mr. Thompson, who has a few remarks to make to you. The CHAIRMAN. We will “rar Mr. Thompson, state vo STATEMENT OF S. H FATT ~7T THE AMERICAN AT Mr. THoMpsoN. Mr. Chairman, and gentlemen of the committee, I am president. of the American Farm Bureau Federation, but this morning I am spokesman for this group of organizations that have been working together for farm legislation, who have set forth the policies in the different bills and are in acreement with the fundamental principles as set forth in House bill No. 7940, believing that those are the principles that should be incorporated in legislation that would become a permanent policy for agriculture. The different organizations we represent here, after we counciled together, are the American Farm Bureau Federation, the Corn Belt Federation of Farm Organizations, composed of the Missouri Farm Association, the National Producers Alliance, the Iowa Farm Union, the Iowa Farm Bureau, the Iowa State Grange, the Jowa Threshermen’s Association, the Ottumwa Iowa Dairy Marketing Association, the Nebraska Farmers Union, the Nebraska Farm Bureau, the Kansas Farm Union, the Kansas Farm Bureau, the Minnesota Farmers Union, the Minnesota Farm Bureau, the Minnesota Wheat Growers, the South Dakota Producers Alliance, the South Dakota Wheat Growers Association, the South Dakota Farmers Union, the North Dakota Farmers Union, the North Dakota Wheat Growers Association, the Oklahoma Farmers Union, the Indiana Farm Bureau, the Central States Soft Wheat Growers Association, the Chicago Milk Producers Association, the Illinois Farmers Union, the Wisconsin Cooperative Creamery Association, the Wisconsin Farm Bureau, the Equity Cooperative Exchange, the Farmers Union Terminal Association, the South St. Paul Farmers Union Livestock Commission House, the Chicago Farmers Union Livestock Commission House. 2 AGRICULTURAL RELIEF the Sioux City Farmers Union Livestock Commission House, the Kansas City Farmers Union Livestock Commission House, the Omaha Farmers Union Livestock Commission House, the American Council of Agriculture, the Minnesota Council of Agriculture, the Montana Farmers Union, the National Corn Growers Association, the Burley Tobacco Association, the Dark Tobacco Association, the National Farmers Union, and the American Cotton Growers Exchange. : In order to get these people represented in the different organizations, a lot of those organizations were merged, and while we do not ask this committee for the time it would necessarily take to hear from representatives of each organization, we want you to give us enough time to have the different organizations, represented by the men designated to speak for them, and who are qualified to speak on this subject, and can do so very quickly, to put our position before you, so it will take but a little of anyone’s time for it to be presented to you, and in that way you will be not unnecessarily delayed. We have come to the conclusion that these are the policies that we need for the stabilization of agriculture. I am not going into the merits of this measure, but I am going to ask now that you let our legislative director, who is Mr. Chester H. Gray, come before you and explain the position of the American Farm Bureau on this measure, if that is satisfactory. Mr. Swank. We will have an opportunity to ask you questions at any time, will we not? Mr. TaHoMpsoN. At any time; yes, sir. The Cuamman. Very well, Mr. Gray, we will hear from you. STATEMENT OF CHESTER H. GRAY, WASHINGTON REPRESENTA - TIVE OF THE AMERICAN FARM BUREAU FEDERATION Mr. Gray. May I interrupt to ask Mr. Settle, please, in the program which has been revised this morning or which is to be carried out, what particular phase of this bill 1s it expected that I shall explain? Mr. SerTLE. I think that you should point out the few changes the committee ought to make in the bill. Mr. Gray. I asked that question, Mr. Chairman and members of the committee, for the reason that there is a large association of organizations cooperating together in their support of House bill 7940, and I do not wish to transgress on the ground that other men, who will come before you later, will want to take up in regard to certain portions of the bill and present their ideas to the committee. This bill, No. 7940, is the result of what I might call an evolutionary growth, using that word in a legislative and not a biologic sense. Since farm relief started here in the Halls of Congress, the bills, carrying the general idea of farm relief, have differed greatly; even those which the American Farm Bureau Federation and the groups with which we are associated, and have supported, have differed. They have evloved from the point which they were written around four years ago to the point where your bill, Mr. Chairman, now stands. And I would say that H. R. 7940 represents the best and latest thought which has yet been promulgated by the Congress for an effectual and permanent solution of the surplus question. AGRICULTURAL RELIEF al Commencing several years ago, remarking somewhat upon the evolutionary growth of the farm-relief idea, this committee considered that the surplus was not the question. The fundamental objective varied in the different farm relief bills back yonder; but every farm relief bill now, which is presented, including the one I am talking about, confesses that the surplus is the question. I want to call attention to the evolutionary progress made in farm relief. We have gone from a position several years ago, where in farm relief, we were talking about various ideas of relief, to the position where we are talking now about the same idea; namely, surplus disposition and control. This is true, whether the bill is the one we are talking about now or any of the others which have come before this committee. Another point we have progressed along is that in years past, those bills which have carried the equalization principle had different methods for putting that principle into operation. In the first bills carrying the equalization principle the fee was assessed directly on the producer and any residue of the fee, after an operation period had concluded, was allocated back to the producer. That condition in the bills prior to this one gave rise to lots of discussion, much controversy, and a great deal of misunderstanding about the equalization plan for disposing of surpluses. We have elvolved, we have progressed, if I may use that latter word, to the point where, in the present bill, the individual producer, so far as the equalization fee is concerned, does not come into contact with the fee, except that he gets the benefit from the stabilization and perhaps a slight hightening of the market price of the commodity which he gets for his product. In this bill, about which I am speaking, the producer, whether he is marketing cotton; peanuts, or what not, does not pay the equalization fee; he does not get back as a residue any amount of money which might be left in the stabilization fund after marketing, or after the operation period has been concluded. That is perhaps a part of the progress which has been made and which did not exist in the former bills. Let it be definitely understood that the equalization plan in this bill does not collect this fee from the individual producer. The equalization fee, or the fee left after the period of operation is concluded, does not go back to the individual producer, but the fee is collected from the commodity at the most convenient point where that commodity flows through the direct channels of commerce of our country, and if any residue is left in a particular stabilization fund, that residue is retained by the Federal Farm Board for use in a subsequent operation period of the same commodity. Another progress or another point of evolution which farm relief has gone through is that several years ago farm relief was started on account of a wheat situation in the Pacific Northwest. It was an emergency situation which the farm relief bills in those States sought to cure. Sometime later the emergency situation removed into the mid-West with referemce to corn, there being an emergency situation in the production of corn. The producers thereof were desperately situated, and the bills at that time were spoken of as a temporary way of meeting this emergency situation. . Some time later, an emergency situation appeared with reference to cotton, either in an overproduction or at least, if not that, a large AGRICULTURAL RELIEF underconsumption ; anyhow, it left a large part of the cotton unsalable. In former times the farm relief bills were presented merely from an emergency point of view, of trying to solve a temporary condition; now, any farm relief bill introduced—I do not care on what feature it may be founded, nor what method it may seek to use in trying to solve the surplus question—can not approach the farm relief question from an emergency or temporary point of view. At least, those organizations which President Thompson read the names of awhile ago, all of which are in support of H. R. 7940, have gotten far beyond the point that farm relief, as originally considered, is an emergency soiution. We are trying to set up a permanent agricultural policy for the disposition of the surplus. We are on a permanent basis now and have been for some time in the past. Farm relief has progressed from a point of simply making an effort to solve a temporary condition to an effort to set up a permanent beneficial condition, as to agriculture; and that gives the question a much more potent and much more favorable situation than perhaps it had in times past. Another point of progress which has been made in farm relief is that we are somewhat unconcerned now—at least, these organizations, the names of which were read a while ago, are unconcerned about the size of the revolving fund. We are not so much concerned about that, provided it is not too radically low or too elaborately large. Any average-sized revolving fund is satisfactory to us, and we are not caring particularly to designate what that amount shall be, for this reason, that when the bill which we are advocating is passed, the revolving fund is merely a loan to agriculture for use by the Federal Farm Board in disposing of the surplus, and the loan shall carry 4 per cent interest. As it 1s a loan, with the stabilization fund being built up by the equalization fee on the commodity, not on the producer, it is immaterial, with the qualifications I have just expressed, whether the revolving fund is large or small. The fund coming from the Federal Treasury as a loan and being used in the operation periods, being guaranteed and safeguarded and protected by the stabilization fund, will go back into the Treasury eventually at 4 per cent interest and be what its name designates it to be, a revolving fund. In some former efforts at farm relief bills, going back two or three years, the revolving fund was not a revolving fund in a direct application of that definition. It was a gift; it was a gratuity to agriculture with no method, in most farm relief bills, for returning that fund to the Federal Treasury from which it came, much less returning it with 4 per cent interest. We, in the group whose names you heard read awhile ago, are not asking for any gratuity from the Federal Government; we are not asking that Uncle Sam be a sort of Santa Claus, if I may so colloquially express it, to help out in the disposition of surpluses; but, as we see it, we are asking the Federal Government to provide the initiatory money, under the name of a revolving fund, and to get that money back eventually with interest thereon. That is progress. To use the word I first used, it is evolution. It is beneficial progress, and when I use those words, I am not applying them merely to those bills which have been based upon the equalization plan; but I am applying them to all farm relief bills. There 1s quite a difference between those bills which are based upon AGRICULTURAL RELIEF 3 the equalization plan and those which are based upon other plans, in that the equalization bills have, from the beginning, made provisions to make the revolving fund that what its name implies it to be— a fund that will revolve back into the Treasury, eventually. I do not know how many years it will take for that to transpire, but in time the money will go back very similar to that $9,000,000 which was taken out of the Federal Treasury 10 years ago to start the farm-loan system. All of that money either has been paid back to the Treasury or else lies in the Federal farm-loan banks ready to be turned back into the Treasury with 4 per cent interest. That $9,000,000 was a revolving fund, which was a loan, and the success of the farm loan system has permitted the F ederal Treasury to get this money back with 4 per cent interest; and the system is growing as a result of having had its first capital supplied from the Federal Treasury. Now, in this bill and in other farm relief bills, large amounts of money are asked, of course, because we are tackling a bigger problem than was tackled 10 years ago when the farm loan bill was started with only $9,000,000. But it is immaterial, as I said awhile ago, what the amount is, providing the bill is so drawn, as H. R. 7940 1s drawn, that the money will go back into the Treasury, be safeguarded, protected, and guaranteed by the equalization plan. Another point that we have gone forward on is that the obligations, which might be entered into by the Federal Farm Board, should not be such as will require the Federal Treasury to advance more money than is named in the revolving fund. Some point of criticism has been made to various farm relief bills, that there was no limit in the wording of the bills to the extent of the obligation which the Federal Government might be bound by the operations of the various boards named in the different farm bills. In this bill which we advocate the limit of obligations is specifically whatever amount is designated in the revolving fund. There 1S no possibility of Uncle Sam being obligated beyond that amount, and there is every reason to expect that he will get that amount back eventually with interest thereon at 4 per cent. I have given these facts to you as a sort of historical review of some of the things in farm relief that have advanced. and have placed it on a sounder basis. I am asked to point out some of the things in this bill which are to be changed, in order to make this bill read better than it does now, in our estimation. I will say that H. R. 7940 very accurately represents the desire of all those groups which you heard President Thompson read the names of awhile ago, but, like other bills, in its formation various minds and various ideas have been expressed. I believe the chairman of this committee will permit us to bring to your attention, in the form of recommendations a few changes which we have made. If you will turn first to page 5, section 4, you will find some paragraphs on that page and subsequent pages relative to advisory councils. Mr. Fort. Up to section 4 everything is satisfactory, and the organizations mentioned all agree to the bill up to that point? Mr. Gray. Yes, sir. We have discussed at full length the make up of the Federal Farm Board and the method of filling vacancies and ceneral powers. and all of those details as shown on the pages prior nN AGRICULTURAL RELIEF to where section 4 begins. Those things are in accord with the wishes of the organizations which are cooperating upon this bill, providing section 4, in the matter of advisory councils, be changed in some way, which I will suggest here, if I may. The producers of the commodity should be given a little bit more direct control over the Federal Farm Board. Mr. AnpresEN. Will you read the amendment you desire? Mr. Gray. I will. In section 2, as you will notice the Federal Farm Board is made up just as any Federal board is constructed, by appointment by the President of the United States, with the advice and consent of the Senate. This modification, which I shall read, is to give the producer a little bit more of a controlling hand in conoan the affairs and policies which issue from the Federal Farm oard. Mr. Swank. Do you think that is important, the selection of the Farm Loan Board? Mr. Gray. Yes. Mr. Swank. You are talking about progression and progressing, but do you think that will make this permanent? Mr. Gray. On behalf of the men who are associated together, we might personally rather have the appointment of that board at the designation and upon the recommendation of the farmer groups, similar to that in the bill at the last session, but there is a constitutional question involved which none of us deny. Mr. Kercuam. There is the constitutional question in the equalization fee, but that is still another thing. Mr. Gray. That will be explained later. Mr. KercraM. I want to ask you about that, then. Mr. Gray. In regard to the make-up of the board, inasmuch as all Federal boards are made up in conformity with that plan which is written into section 1, we are advising that the part of section 4 be changed so that the advisory councils will be given a little bit more contact with the operations of the board. Mr. Jones. Let me call your attention to this fact in that connection. Mr. Gray. Certainly. Mr. Jones. Only last week, at the request of the President, the House appointed a commission to investigate the submarine S—4. In the appointment of that committee, and in that measure we provided, in making the selections, that the committee selected should be two retired naval officers and three civilians. In other words, we limited the appointment of the President there, and he approved the resolution. The House passed it as the President wanted it. The President suggested or requested that it be left to the House 50 that his appointative power should be limited; and I am wondering whether in this case, of this farm bill, whether it should be unlimited. Mr. Gray. That commission you are speaking of, Congressman Jones, is a temporary commission, and is not a permanent one, like others which might be spoken of, for instance, the Shipping Board or the Interstate Commerce Commission, and others. Other commissions and boards which have been appointed for only temporary work are not required to comform to the consituttional requirements of a permanent commission. In the bill we are supporting, I do not think the constitutional question relative to the equalization fee is uestioned. AGRICULTURAL RELIEF Mr. KercEaM. You are not surrendering that, are you? Mr. Gray. No; we are not surrendering the fee at all. Weare endeavoring to safeguard this revolving fund; the fundamental principle connected with this, we have been supporting for five years. Mr. Jones. I understand thoroughly your position with reference to the major point, but I was wondering if you are going to yield this other point. If you are trying to meet the objections of the President do you think you will satisfy him by yielding what he seems to regard as a minor point and insisting on what the President would regard the major point? a Mr. Kercaam. That is part of the measure, as I understand Mr. ray. Mr. Gray. Yes. I was starting to explain awhile ago that our suggested amendment, in regard to the advisory council, gives to those councils considerably more contact with the administration of the Federal Farm Board, and to say that it seems to some that the make-up of the board, as now written in H. R. 7940, is too severe from this point of view—that the producer is too far removed from his board and that the make-up of the advisory council should be given more authority. Mr. Jones. What was your suggestion? Mr. Gray. Before I start reading it, I confess, Mr. Thompson, and members of the committee, that in my discussion 1 have only been allottea certain grounds to cover, and in doing so I might encroach upon what has been allotted the gentlemen who follow me, and I want to apologize to those gentlemen if I cover any ground which they are holding in their minds to cover; but, I presume if two or three cover the same ground or particular projects, it will not be time wasted, because it will give the committee different slants on the same proposition. In reading section 4, as is hera suggested in an amendment, I do not present it in its final shape 1s presented to you as a suggested amendment, only, of section - Lt reads as follows: The board is hereby authorized and directed——— Mr. KercEAM. You mean this is a substitute for section 4? Mr. Gray. The amendments are changes to be made in section : and which you will notice as I read it by comparison to the printed Mr. Kercaam. You are not reading beginning with section 4, subsection A? Mr. Gray. No. I am skipping the first four lines of section 4 and commencing in the middle of line 22. [Reading] The board is hereby authorized and directed to create an advisory council of seven members fairly representative of the producers in each Federal loan bank district. Members of each council shall be selected annually at a convention called to meet at such time and place as the board designates by proper notice sent to the farm organizations and cooperative associations in the district eligible to participate in such convention. Members of each council shall cerve without salary but may be paid by the board per diem compensation not exceeding $20 for attending meetings of the council and for time devoted to other business of the council and authorized by the board. Each council member shall be paid by the board his necessary traveling expenses to and from meetings of the council and his expenses incurred for subsistence, or per diem allowance in lieu thereof, within the limitations prescribed by law, while engaged upon the business of the council. Each advisory council shall be designated bv the number of the Federal land bank district it represents. — AGRICULTURAL RELIEF Let me digress here, before reading further. You will see we have decided not to make a ‘‘commodity advisory council,” but to make an advisory council for all commodities within each district. So there will be 12 advisory councils of 7 members in each district. In other words, there will be an advisory council to represent all commodities in each district. For instance, in the districts where wheat is raised, the advisory council will give particular attention to operations upon that commodity whenever conditions justify. Wheat, as you know, is produced all over the United States. There is some in Pennsylvania; there is a lot in the other Eastern States; there is a lot in the southwest, much of it being in Oklahoma, Missouri, and all through the Middle Northwest, through Minnesota and the Dakotas. In fact, you will find wheat is produced all over the United States. An advisory council on wheat, specifically made up of wheat producers, coming together might have trouble in deciding upon what the equalizatlon fee should be, what their recommendations to the Federal Farm Board generally might be. The organizations represented here have concluded that it will be better to have an advisory council in each Federal land bank district to advise with the board with reference to any commodity in that district. It may be suggested in the beginning that the amendment as to the “Commodity advisory council,” be made, in changing the name, to read “Advisory council.” Mr. MENGEs. Then you would have 84 members instead of 7? Mr. Gray. There would be 84; 7 in each Federal land bank district to advise with the Federal Farm Board; and under the former bill there would have been seven commodity advisory councils for as many commodities as were operated upon. Mr. ANprRESEN. Under this plan, section 4 now reads that there sha'l be seven members on the advisory council. Mr. Gray. Seven members on the advisory council. Mr. FuLmMER. For each commodity? Mr. Gray. Yes; and in the amendment, which is suggested, we are asking for an advisory council in each district, which will represent the public, so far as the producers of commodities are concerned, and will have contact with the Federal Farm Board in the form of recommendations. In paragraph B on page 6 we are suggesting these words [reading]: Each advisory council shall meet as soon as practicable after its selection at a time and place designated by the board to select a chairman and secretary. . The last sentence in paragraph B, has been cut out as you will see, in the text before you. In the bill the board is given the power of selecting the secretary to the council, and we think it is better if this council is going to maintain a self-governing institution that it selects 1ts own officers. Mr. FuLmeR. That is a good suggestion. Mr. Gray. We have seen in a good many instances where some outside organization has had the power of selecting the officers, and it usually results in unpleasant developments to the group which has its officers imposed upon it. We prefer that these advisory councils select their own secretaries and chairman. Going to paragraph C—— Mr. Forr. By advisory council you mean the council in each landbank district, that they should have a chairman and secretary? AGRICULTURAL RELIEF Mr. Gray. A chairman and secretary. Reading the sugeested changes in paragraph C: Each advisory council shall meet thereafter at least twice each year at a time and place designated by the chairman or upon call of a majority of its members at a time and place designated in the call, notice of such call being sent bv registered mail at least 10 davs before the date of the meeting. The change in that reading from that which lies before you in the bill relates to the time and place of the meeting. In the bill as printed such time and place shall be designated by the board. It is suggested that the time and place of meeting shall be designated by the chairman of the council or by a majority of the members of the council, leaving the council a self-governing and self-convening institution. Reading on, in paragraph D there is no change except to cut out the word “commodity,” leaving the designation to be ‘‘advisory council’ rather than ‘commodity advisory council.” Mr. KincHELOE. Mr. Gray, I do not get the first part of your amendinent. How many members of the advisory council are there supposed to be from each farm loan bank district? Mr. Gray. Seven. Mr. KincHELOE. That will be 84 members all the time? Mr. Gray. Yes. Mr. KINCHELOE. Suppose that this board, in its discretion, would only declare an operative period on seme product that it is not raised all over the country. Why would we need all these 84 men? Mr. Gray. They would meet whenever conditions arose in the different districts that would make it necessary for the Federal Farm Board to be in operation. Mr. KincuELOE. If you make a board for each commodity, would not that board of men who are ervnerienced in raising that commodity know more about that comm ~~ "~n fellows who were just gathered up indiscriminately fr aan districts. Mr. Gray. I thir’ Mr. KixXcHELOE. W than that, then? Mr. Gray. Is not that answered by turning over to section 7, Mr. Kincheloe, which has to be changed somewhat. owing to the fact that we have changed section 4? Mr. KixcHELOE. I am going on the idea that you have changed section 4. I am asking if 1t is not better than the other provision, to have those fellows representing that commodity. Mr. Gray. It is felt by those of us In these conference groups that— Mr. McSwr—x3 (interposing). Can one of the groups of seven meet without © ~ es! being called together? Mr. Gray. Oh, yes. Mr. McSweeNEY. They can meet in any one of these land-bank districts? Mr. Gray. Yes. Mr. Jones. Have you any provision as to what should constitute a quorum in a case of that kind, before the board could act? Mr. Gray. I believe, as I recollect the amendment, there is no designation as to what would constitute a quorum. Mr. Jongs. Could they find the other groups, the other 77 men? 10 AGRICULTURAL RELIEF Mr. Swank. I want to ask you this question. Under section 7, whenever the advisory council of a certain commodity, for instance, cotton, asks this board to operate on cotton, as provided in the bill, the board declares its findings and enters into contract for the purchase of this commodity. Now, under your ameéendment, when would this board operate on cotton? When a majority of these 84 men asked them to? I am just asking for information. Mr. Gray. If you will permit me now, Mr. Swank and members of the committee, to read a suggested change in section 7 on page 9, I think your question will be answered. Mr. Fort. This is a very minor thing, but you will see, if you read the amendment, that there is no limit as to the place they may meet. Should a board in an eastern district be permitted to meet out at Los Angeles twice a year? Mr. Gray. Your suggestion is a very good one. It was supposed, in our amendment, that each council would meet in its own district. Mr. WiLLiams of Illinois. Who performed the work in drafting the provisions of the bill as now before us, and when that was drawn, did that meet with the approval of your group? Mr. Gray. The bill as it is now? Mr. WiLriaums of Illinois. Yes. How did that language happen to zo into the bill. You are here this morning asking very substantial and radical amendments. Mr. Gray. We are asking substantial amendments, but not radical ones in the way that they change the working operations of the bill. These men on the advisory council, are given a little more power and authority and insight into the workings of the Federal Farm Board. Mr. FuLMER. In other words, you are offering helpful suggestions? Mr. Gray. We are trying to amend this in a helpful way. Mr. WiLriams of Illinois. I understand that, but I want to understand how the bill happened to be drawn as it is now. Mr. Gray. When the bill was drawn, sometime ago—I forget just how long ago; let us say three weeks—we had not had the benefit of conference with all the groups represented in the list that president Thompson read you awhile ago; and when the groups did get here and we talked this thing over for days together and finished our efforts last night getting ready for this hearing this morning, it was decided that the advisory council should be given a little bit more power. These amendments were suggested to be worked out; and, frankly speaking, we have not had time to get together to confer with all the conferees on this subject to see whether these amendments are the sine qua non that we want or not. They are presented to you as suggested amendments. Mr. FuLMEr. Let me ask you this question. Under the old bill, for instance, in a land-bank district where you would have hogs and corn and wheat you would have three advisory councils, and under your suggested amendment in that district where they have these three or four farm commodities you would only have one advisory council operating in the interest of all these commodities in the district. Instead of having 21 men you would have seven men made up of men representing these various commodities? Mr. Gray. Yes, sir. In a cotton district, like you come from, Congressman Fulmer, under the old bill if the board were operating on cotton there would be seven men on the davisory council on AGRICULTURAL RELIEF 11 cotton. If they should also be operating on peanuts, which are grown in your district, there would be seven men on that, and if they should be operating on wheat, which is raised somewhat in your district, there would be seven men for wheat. Mr. FuLmeR. That would be the same seven men? Mr. Gray. No: under the old bill that would be seven different men. Mr. FuLmeR. But under your suggestion? Mr. Gray. It would be the same seven men under these suggestions. Mr. Swank. Let us see when the board is going to operate under your amendment. Mr. Gray. Congressman Swank and Chairman Haugen, I felt sure that should I appear before your committee first I would violate the proprieties of these gentlemen who are expected to come before your committee. It is almost impossible, in speaking about a bill, or in speaking for a bill as important as this is, to appear before a committee on one particular phase and avoid talking about the whole bill. It is almost impossible to do that, and right now I am transgressing on the time of one of our friends who has to take the train and leave the city presently. With your consent I wish to retire for 15 or 20 minutes, or whatever time is necessary, to let ex-Governor Donaghey, of Arkansas, come before you and make a statement, if that is agreeable to the committee. The CrairMaN. We would be very glad to hear him. Doctor KiLgore. Mr. Chairman, Governor Donaghey comes from my part of the country. I want to say that he was twice governor of his State, is a banker and large business man, and he is coming as an individual to talk to you from the standpoint of an individual. of his interest in this bill. STATEMENT OF HON. GEORGE W. DONAGHEY, FORMER GOVERNOR OF THE STATE OF ARKANSAS Mr. DoNagaEY. Mr. Chairman and gentlemen of the committee, as a business man my interest has driven me to advocate some form of farm relief. In our section of the country we have but one money crop, and that is cotton. When cotton price is low our business languishes. We do not have any. That is all we have from which to get money. Our bank deposits go down, our merchants soon have little to do. a A little more than a year ago we had a panic in cotton prices. I had not at that time studied what you were doing in Congress here for agriculture. As I said, my interest drove me to look the question up. Since then or for more than a year I have been cooperating with these gentlemen who have presented their plans here before you, and after looking up their plan, after conferences with them, I decided, as a representative of my State, that they wanted what I want, and what we want, and as an individual representing the business men of the State, and representing the farmers of the State, I do not know of any who are opposed to 1t, practically. Of course there are a few, but I do not know of but few, who are opposed to what I am advocating, and I am advocating the same principles that these men are advocating. [2 AGRICULTURAL RELIEF I just wanted briefly here, in a few minutes, to impress upon you with all the force I can the necessity of some kind of relief; and we think this kind of relief is the kind we want. Now as to the technicians, these gentlemen will give you all the technical information that you want, this is, all that they have looked up, and I think that they have looked up all sufficient. I think that the plan they are advocating is the plan. I think the equalization plan is the plan. 1 think that no other plan will give the relief needed, will give the efficiency of relief needed, will give the stability that we need. Of course I understand there are differences of opinion, but my interest and the interest of my State and the interest of the section of the country that I come from is the same as theirs, and I think that gives, in brief, what I have to say to you. Now I have issued, in the last 12 months, three or four different circulars and at my own expense have distributed them throughout the Southern States. I have had prepared articles for newspapers and they have gone into papers with combined millions of circulation, and have gotten out all of the propaganda that I could along this line. I have received thousands of letters approving the course that I have adopted. Now, as to my experience. I want to tell you that I am not a lawyer, professor, or preacher. I am a business man, and the political experience that I have had has been an incident and not a profession. I am a business man all the way through, and it is from our business interests that I appeal to you for aid in the interest of our people of the South. We are giving too much labor for a nickel. That seems to be the whole thing. We are working in economic slavery, we are working at a disadvantage economically. It is the function of government, if I understand it, to deal fairly with its citizens, to deal justly, to deal honestly, and we think that this would be nothing but honesty, nothing but fairness, nothing but the same privilege to us that the Government gives to others. All we ask is to be put on an equality with other industries. The industry of agriculture is our only industry. Our millions are engaged in it. When their pay rolls are cut down we business men suffer as a consequence of their sufferings. - That is about all. I hope you understand what I mean. I don’t want to take up your time. I have tried to be brief, and [ thank you very much. Mr. ANprESEN. Will you permit a question? Mr. DonacrEY. Yes. Mr. ANDRESEN. You mentioned about the urgency of farm relief legislation. Mr. DoNAGHEY. Yes, sir. Mr. ANDRESEN. You feel that it is so urgent that we should have egislation during the present session of Congress? Mr. DonNacrEY. I do. Mr. FuLMER. May I ask that the governor be given an opportunity to extend his remarks in the record, because I happen to know that he is well posted on this matter and will be able to put into the record some valuable information for the committee and others who read the record. Mr. Fort. I have no objection to his extending his remarks, Mr. Chairman, provided the remarks are related to the bills under dis- AGRICULTURAL RELIEF 13 cussion, and the particular features that we decided to take up in this hearing. I did not wish to interrupt the governor. It was my understanding that we would hear absolutely nothing but technical duscussion of importance. We are all agreed, I think, governor, as to the need of a bill. I know I feel very strongly that way. I think we are all agreed that we should have farm relief, and we should pass it at this session. I think there is no dispute in this committee on that. The only question is as to the process and the exact, concrete form that that relief should take, and I think that our understanding was that our hearings were to be absolutely confined to that type of discussion. I did not want to say anything while the governor was speaking, but I wish to object to any other witnesses coming here and telling us of the need of legislation. The CHAIRMAN. Do vou have reference to amendments? Mr. Fort. To the bill, the specific proposal. We all agree, Mr. Chairman, that we should have some kind of legislation. Of course, there is a difference of opinion as to the particular form of legislation we should have, but I think we all agree that we should have some legislation. Mr. Fuomer. I am sure that Mr. Donaghey will not go into the conditions on the farm, because we all know about those, but he will be able to put in some facts in connection with the bill that will be helpful. The CrairMaN. Without objection it is so ordered. We probably could not make any headway by going ahead now for the little time remaining, and we will adjourn at this time until 10 o’clock tomorrow morning. (At 11.50 o'clock a. m. the hearing was adjourned until 10 o’clock a. m.. tomorrow. Wednesday, Jani '& 1928.) House oF REPRESENTATIVES, COMMITTEE ON AGRICULTURE, Wednesday, January 18, 1928. The committee met, pursuant to adjournment, at 10 o'clock a. m. in the committee hearing room, House Office Building, Hon. Gilbert N. Haugen presiding. Present: Messrs. Haugen (chairman), Purnell, Williams of Tllinois, Ketcham, Hall, Pratt, Fort, Menges, (Clark, Andresen, Adkins, Aswell, Kincheloe, Jones, Swank, Fulmer. Rubey, Doyle, McSweeney, and Houston. The CuArrMAN. The committee will come to order. You may proceed, Mr. Gray. FURTHER STATEMENT OF CHESTER H. GRAY, WASHINGTON REPRESENTATIVE OF THE AMERICAN FARM BUREAU FED-ERATION Mr. Gray. Mr. Chairman and members of the committee, we were discussing yesterday some changes proposed by the farm conferees in regard to the advisory councils, and at that time I had not had opportunity, nor had any of the rest of the conferees, to write U1CN—9X__QFR ¥ PT 1——92 14 AGRICULTURAL RELIEF these amendments out so that each member of this committee might have a copy. We are distributing copies now for our discussion in connection with section 4. I believe, if my memory runs correctly, we had gotten down to and had read yesterday, paragraph D, on the first page of this typewritten document, which we have distributed. (The material referred to is as follows:) SUGGESTED AMENDMENT TO COMMODITY ADVISORY COUNCILS ON PAGE 5, SECTION 4, H. R. 7940 1. Strike out the word ‘‘commodity”’ line 18, making the title read “advisory councils.” 2. Amend section 4 to make it read as follows: “Sec. 4. (a) The board is hereby authorized and directed to create an advisory council of seven members, fairly representative of the producers in each Federal land-bank district. Members of each council shall be selected annually at a convention called to meet at such time and place as the board designates by proper notice sent to the farm organizations and cooperative associations in the district eligible to participate in such convention. Members of each council shall serve without salary, but may be paid by the board a per diem compensa~ tion not exceeding $20 for attending meetings of the council and for time devoted to other business of the council and authorized by the board. _ Each council member shall be paid by the board his necessary traveling expenses to and from meetings of the council and his expenses incurred for subsistence, or per diem allowance in lieu thereof, within the limitations prescribed by law, while engaged upon the business of the council. Each advisory council shall be designated by the number of Federal land-bank district it représents. ““(b) Each advisory council shall meet as soon as practicable after its selection at a time and place designated by the board and select a chairman and secretary. “(¢) Each advisory council shall meet thereafter at least twice in each year at a time and place designated by the chairman, or upon call of a majority of its members at a time and place designated in the call, notice of such call being sent by registered mail at least ten days before the date of the meeting. ““(d) Each advisory council shall have power, by itself or through its officers, (1) to confer directly with the board, to call for information from it, or to make oral or written representations to it, concerning matters within the jurisdiction of the board and relating to the agricultural commodities produced in the district, including the amount and method of collection of the equalization fee, and (2) to cooperate with the board in advising the producers through their organizations or otherwise in the development of suitable programs of planting or breeding in order to secure the maximum benefits under this act.” 3. Amend section 7, on page 9, so that it will conform to the changes made in section 4, and will read as follows: “Sec. 7. (a) When the advisory councils in districts which in the aggregate represent more than 50 per cent of any commodity, or when a substantial number of cooperative associations or other organizations of producers of the commodity in such districts favor the full cooperation of the board in the marketing of the surplus of the commodity; and whenever the board finds— “First. That there is or may be during the ensuing year a surplus above the requirements for the orderly marketing of any agricultural commodity or above the domestic requirements for such commodity. “Second. That the durability, the conditions of preparation, processing, and preserving, and the methods of marketing of the commodity are such that the commodity is adapted to marketing as authorized by this section ’ Mr. Gray. The third point of amendment which we desire to call fo your attention in regard to section 4 will be to amend section 7 on page 9 of the bill as printed. Mr. Apkins (interposing). Mr. Gray, before you leave that entirely [ want to ask you just one question. As the bill stands now, 1t provides, as I remember, the advisory councils shall be commodity councils, selected from men representing the various commodities AGRICULTURAL RELIEF 15 Mr. Gray. Yes, sir. Mr. Apkins. The proposed change makes the number seven from each district? Mr. Gray. Yes, sir. Mr. Apkins. Without regard to commodities? Mr. Gray. That is right. Mr. Apkins. Do your conferees believe that that is a better scheme? For instance, if you were going to declare an operation period on corn, that your advisory council would be more helpful to the board on corn than, for instance, an advisory council representing corn? Do they think it is a more satisfactory plan than the special commodity advisory council? Mr. Gray. We do, for one or two reasons, the first one being that the council, as we are suggesting it to you now by amendment, would be more of a permanent institution in each Federal land-bank district, and the men, seven in number, if that is the number that the committee desires to leave in the council, would study the agricultural situation in their district in relation to whatever commodity had a surplus or needed loaning facilities, such as are provided for in this bill. In other words, the seven men in the advisory council would have a complete picture of agriculture in that district rather than a specialized picture on one particular commodity. The second reason that we think it would be advisable and better than the old plan is that the council would not need to be set up in emergency situations, if corn should be superabundant, or wheat, or cotton, or what not, but the council would be there ready to work whenever a condition justifying operation of the bill materialized. Mr. KincHELOE. Don’t you think many of those members might be there but would not know anything about the matter under consideration? Mr. Gray. I think not, Congressman Kincheloe. Mr. KincaELOE. Does the man in the land bank district up in New York know anything about cotton or tobacco? Mr. Gray. He does not need to know. Mr. KincHELOE. He does not need to know? He is supposed to be representative of the farmer. Mr. Gray. He is, for the commodities produced in that district. Mr. KiNncHELOE. So that if there comes up in the northwest a question of whether they are going to have an operating period on cotton he has to represent his people up there, but what information has be got about cotton to intellicently represent them or anybody else? Mr. GrAY. If he lives in a district and is a member of the advisory council in a district where cotton is not grown he is not consulted in any operations relative to cotton. Mr. KincHELOE. What is the reason he is not? Mr. Gray. The amendment we are coming to. I believe, will answer your question. Mr. KincrELOE. Now, what amendment is that? We have been coming to them for some time. Let us see what one that is. Mr. JoxEs. It is on page 2. Mr. Gray. It is the amendment at the top of page 2 in the sheet which has been distributed, applicable to section 7 of the bill. You 16 AGRICULTURAL RELIEF will notice in the text of H. R. 7940, in section 7, on page 9, there are three conditions set up, first, second, and third, which must be met prior to the operation of marketing agreements. Mr. Apxkins. That is subsection D on page 7. Mr. Gray. No; page 9, Congressman Adkins. Mr. AsweLL. Did the farm representatives, prior to its introduction, go over the bill as it was introduced by Mr. Haugen? Mr. GrAY. Yes, sir. Mr. AsweLL. How does it happen they are making so many changes? Mr. Gray. I would not say there are many changes. As 1 remarked to Congressman Williams yesterday, we are making some substantial changes in the way of improvements. Mr. AsweLL. How did it happen? Mr. Gray. The groups which have been working together on the equalization plan of farm relief have come to the Capital City in the last week, and we have had the benefit, as I explained yesterday, of conferring with the entire group and getting a broader pictue of what is wanted than we had when the bill was introduced. Mr. KincHELOE. You say it is not a radical change. You have gone over the provisions where the farmer is going to have anything to say about this.support. Now you make a vital change in reference to these representatives. You are making a radical change there. The other bill provided that these advisory councils should be made up of men that know something about this commodity, and nobody else is on there except those people. This thing here will be all over the United States. Mr. Gray. We have taken from the make-up of the Federal farm board of this bill those provisions of farmer nominations and such like, which were in the bill passed by Congress at the last session ; but in the advisory councils we are seeking to include some sections and some provisions which will put back into the control of the producer some, if not all, of the powers which he had in the other bill, in regard to the make-up of the Federal farm board. Let me read the first paragraph. Mr. KincHELOE. Do you think these amendments here are going to weaken the power of this farm board that is going to function without consulting the farmer? Mr. Gray. These amendments in regard to the advisory council are going to strengthen the producers’ influence on the Federal farm board, no matter how it may be made up. I am saying in a long distance point of view, that the Federal farm board, with an advisory council such as we are suggesting by our amendment, would have something serious to answer to if it should disregard the recommenkn ig which we are seeking to write here in the next three amendments. Mr. KincHELOE. Do you mean the board would have something serious to answer for? : Mr. Gray. Yes. Mr. KincEELOE. And to whom? To the farmers? Mr. Gray. Yes; to the farmers. - Mr. KincrELOE. He is not under obligation to the farmers at all under this provision. The farmer is not being consulted about who the President shall appoint on that board. What 1s that board AGRICULTURAL RELIEF 17 responsible to the farmer about under your bill here that you have now referred to? It was, under the old bill. Mr. Gray. The board, by the terms of this bill, is required and expected to do certain things and with these advisory councils made up as we have amended the bill, the public opinion of the producers will be brought to the Federal farm board in such a way, directly from the advisory councils, that are permanent in nature, that it will be difficult for the Federal {arm board to disregard the wishes of the councils. Mr. KincueLoE. We have a very good example now of these boards and the effect on them of public opinion, in this new radio commission. Do you think public opinion has had any effect on this radio hoard down here? If you do, go down before them once, and they will tell you where to get out. They are not responsible to the broadcasters, or the radio public, or anyone else, any more than this board you propose would be responsible to the farmers. Mr. Gray. That is off this subject, but I am not quite sure that public opinion—— Mr. KincueELoE. This board that vou propose would not be responsible to the farmer. Mr. Gray. And I am definitely sure, in the Farm Bureau, that public opinion is rather strongly on the side of the radio commission. Mr. KincHELOE. You have not looked into it much on the side of the fellows who are independent broadcasters. Of course, if you have been associating with the Radio Corporation of America, that is a wonderful board; but I am just mentioning that to vou as a parallel proposition to this farm board. Mr. Gray. We think not. This is not germane to the subject. When we have anything to say we have no difficulty getting on the air. Mr. CLark. Do I understand, Mr. Gray, that in the first place or originally you set up a Federal farm board with definite powers and full responsibility, apparently, and then you curtail those powers and that responsibility by these subsidiary advisory councils that are going to be controlling over this farm board? Mr. Gray. I do not know that I would use the word “curtail,” but we set up advisory councils that really have the function of being more than letter institutions; they are active institutions. Mr. Crark. Then the responsibility would attach to the councils and not to the farm board? Is that the idea? Mr. Gray. The responsibility of reflecting public opinion of the producers would reside in these councils and be transmitted from the councils to the Federal board. Mr. Kercaam. Right in that connection, please compare the bill as introduced, on page 9, where it says ‘“ Whenever the board finds” with your substitute, section 7 (a), where it says, ‘“ When the advisory councils in districts which in the aggregate represents more than 50 per cent of any commodity, or when a substantial number of cooperative associations or other organizations or producers of the commodity in such districts favor the full cooperation of the board in the marketing of the surplus of the commodity.” It seems to me that that exactly meets the suggestion of Mr. Clark that you have transferred, by these pronosed amendments. the real power in that recard—that [8 AGRICULTURAL RELIEF is, the powers that are underthe marketing agreement—from the board to the advisory councils. Mr. Gray. May I read these amendments now, Mr. Chairman, so that we will have the basis of our discussion more adequately before us? v Having suggested the changes for section 4, it necessarily follows that changes be made in section 7, and these are proposed: (a) When the advisory councils in the districts which in the aggregate represent more than fifty per cent of any commodity, or when a substantial number of cooperative associations or other organizations of producers of the commodity in such districts favor the full cooperation of the board in the marketing of the surplus of the commodity—— Now dropping into the text of the bill: And whenever the board find— First. That there is or may be during the ensuing year a surplus above the requirements for the orderly marketing of any agricultural commodity or above the domestic requirements for such commodity; Second. That the durability, the conditions of preparation, processing, and preserving, and the methods of the marketing of the commodity are such that the commodity is adapted to marketing as authorized by this section. Then leaving out the third condition in the bill as printed, and dropping over to line 4 on page 10: Then the board, after publicly declaring its finding, shall arrange for the marketing of such surplus. And so forth. Mr. Crark. Now, Mr. Gray, I believe you are just setting up there nothing but a buck-passing machine, as I think you are going to find, in your advisory council. That is right herein your proposition. Now let us center somewhere the authority. That is my idea. Mr. Apkins. It seems to me right there, Mr. Clark, as long as you have brought that up, that this matter of an operating period on any commodity should not be started unless most of the farmers interested in the commodity think that it ought to be. This very amendment cures that very condition. Mr. Fort. May I ask a question? In fact what you have done is take what was third in section 7, which was one of the things the board had to find existed, namely, that a substantial number of cooperatives on the advisory council wanted the board to act. That had to be found as a fact by the board before it could act. Mr. Gray. Yes; in the bill as written. Mr. Fort. Now, you have taken that out from a thing that is necessary to be found by the board as a fact and made it a recital preliminary to the board’s finding any fact. Mr. Gray. Yes, sir. Mr. Fort. In other words, you have put the initiative for any action by the board not in the board itself, but in the commodity councils. ; Mr. Gray. In the commodity councils in districts which represent more than 50 per cent of the commodity. Mr. Fort. Or the cooperative associations. Mr. Crark. I don’t think that is quite right. . Mr. Fort. On the geographical council or the cooperative associabion. You are putting the initiative on the geographical council or AGRICULTURAL RELIEF 19 the cooperative association rather than the initiative being in the board. Mr. Gray. A similar feature was in the bill as it was passed last ear. y Mer. Fort. I am trying to get clear what your purpose is. That is your purpose, to shift initiative from the board to the geographical councils or, in the alternative, to the cooperative associations. Mr. Gray. Providing those councils represent in the aggregate 50 per cent of the commodity which needs the service of the Federal Farm Board. Mr. Fort. They represent the territory, however, on the geographical basis instead of the commodity basis. They represent the territory where 50 per cent of the commodity is produced, but they do not necessarily in person or through direct knowledge represent the commodity itself, do they? For example, the council of the Federal land bank district in which California is situated, might not include a single raisin grower. but vou have made this bill apply to all commodities—— Mr. Gray. It would be barely possible, in that condition, that a raisin grower might not be in the western council. Mr. Fort. And all of the raisins of the country substantially being raised in that Federal land bank district, you are putting in the hands of the commodity council in which they may have no representation whatever, the sole right to initiate any action in behalf of the raisin growers. Mr. Gray. That is safeguarded by the provisions which we read yesterday in making up the advisory councils, where conventions are called for the purpose of nominating and selecting the members of the advisory councils. Mr. Fort. It is if the raisin growers, constitute a substantial number of individuals compared to the total number of farmers in that district, but not otherwise. Mr. Gray. Yes; otherwise. Mr. Fort. How? Mr. Gray. If the volume of business in aggregate dollars justifies it. Mr. Fort. Where is that in the bill? Mr. Gray. It is not in the bill. Mr. Fort. That is what I am getting at. Mr. Gray. Neither is the numerical feature in the bill. It is up to these conventions, Congressman Fort, for the selection of the members of these district advisory councils, and these conventions are composed of delegates from the producers in those different districts. Mr. Fort. I don’t think you have that anywhere in the bill, have you? Mr. Gray. Wouldn't it be right in the amendment we read yesterday relative to the make-up of the councils, where it is proposed that each council shall be selected annually—I am reading from section 4. paragraph a, which I read yesterday: The members of the council shall be selected annually at a convention called to meet at such time and place as the board designates by proper notice sent to the farm organizations and cooperative associations in the district eligible to participate in such convention. Mr. Fort. You do not define eligibility. 20 AGRICULTURAL RELIEF Mr. Gray. No; I do not. Mr. Fort. You do not in any case put that power in the individual producers or in the members of an association? Mr. Gray. In no farm relief bill has that been done. In the one that was passed last year that same phraseology was used, and there was no demand for a definition of eligibility. Mr. Fort. You might find, might you not, on this basis, Mr. Gray, 50 per cent of the crop—take, for instance corn—may be raised outside of the districts that are primarily known to us as wheat and corn districts of the country. Mr. Gray. If that be the case, statistically proven, the advisory councils which represent 50 per cent in the aggregate are necessary to make their recommendations before the Federal Farm Board has any indication of popular producer opinion on the subject. That is covered in the first section of paragraph 7, as suggested for amendment. Mr. Fort. I assume it is improbable, but it is still possible that there might be no wheat growers or men who were substantially interested in wheat on any of these advisory councils in a great part of the territory in the United States. Mr. Gray. I would hardly think that possible, with the make-up—— Mr. Fort. Those men’s interests might be in the mill feeds rather than in the wheat itself. That is possible. Mr. Gray. That would be possible, yes, under certain territorial limitations. But you can not avoid all of those things. Mr. ForT. What I am trying to get at is why are you trying to get away from that commodity advisory council proposition and putting the settling of the problem in wheat or corn or anything else in the hands of a group of men who do not represent the wheat or corn growers, but represent a territorial, geographical division in which the growers of any commodity may be in the minority in the selection of a representative. Mr. Gray. I would not agree that your premise is correct for an answer when you say that these councils do not represent the growers of commodities in the district which they represent. These councils which are called together in convention and are created at this convention, the advisory council being composed exclusively of the producers, will surely get on the countil such men as will represent the commoditites in that district. I would not confess that vour premise is a proper one for an answer. Mr. Fort. All commodities are grown all over the country. I mean every isolated commodity you can name will be found in some degree in each district, barring cotton in New England. Mr. Gray. That is possible. Mr. Fort. Therefore they may not represent the commodity. They may represent an antagonistic commodity. Mr. Gray. That is hardly possible when it says they must represent in the aggregate 50 per cent of the commodity. It is hardly possible if not wholly improbable. Mr. Fort. Then why do you get away from the other? Why do you get away from the direct representation of the particular commodity? Why should not the wheat growers of the United States, as a group of wheat growers. settle what is going to happen to wheat? AGRICULTURAL RELIEF 21 Mr. Apkins. Or make the recommendation? Mr. Forr. Or make the recommendation, yes. Mr. Gray. Partly for the reason that they are far flung all over the United States. Mr. PurneLL. How would they get together? Mr. Crarg. Who? Mr. PurneELL. The wheat growers. Mr. Gray. I was going to say it would be almost impossible, but that would not be true with transportation like we have it nowadays. Mr. PUTNELL. It is not a physical impossibility. but they cover such a wide area that it is impracticable. Mr. Gray. The commodities cover such a wide area that we have difficulty in deliberating on this thing. If you are going to have commodity councils covering the commodities, you have to have a national convention every time the occasion arises. and that may be three or four times a year. Mr. Swank. We know the wheat growers have a convention each year, and every year the cotton growers get together. Mr. Gray. lf 50 per cent or more of the wheat growers in the districts represented by this make-up of the councils which we are recommending to you, advise the Federal farm board that the time has come to do thus and so, start the marketing agreement, start the loans, or what not, then you have a very accurate representation of what the wheat grower wants done, and in that you might disregard some small minority group of wheat growers who would not be in harmony with the program. Mr. Fort. You might disregard 4914 per cent, but you never would have all of your wheat growers or their representatives in one room. As I asked you yesterday, you said that these meetings should be held within the Federal farm district. Vr. Gray. Each council in its own district. Mr. Fort. Now, then, you are going to have 12 separate meetings, and the moment that enough of those district to represent 5014 per cent of the total wheat growers of the United States, separately, without consideration of any other wheat growers but their own, vote for this action, then the board must act, if 1t finds certain other things, without any meeting of the minds of the wheat growers of the United States. and without opportunity for them to get together and act. Ar. Gray. You have a meeting of the minds if these district councils, meeting » cccordance with this amendment, went over the marginal line of 50 »er cent of the aggregate production of the commodity. Mr. Fort. T . Mr. Gray. Ycu .id have majority control. Mr. Fort. Yes: but you would not have the majority meeting together. Mr. Gray. Not necessarily. Mr. Fort. You have not got that anywhere expressed? Mr. Gray. We have not got that anywhere expressed, and I do not know, in the minds of these conferees, whether we want to do that, on account of the wideness of the growth, the wideness of the production of some of these commodities—wheat, being one and cotton beine snother. flune clear from the Pacific to the Atlantic shores. v- 29 AGRICULTURAL RELIEF I don’t know whether we want, as we had in the last bill, these commodity councils which would have had difficulty in getting together, and, if they got together, would have extreme difficulty at times in agreeing upon a method of procedure. Mr. Fort. You want it to be forced on them without a hearing? Mr. Gray. Not forced on them at all. Let each district make up its mind in its council what it wants, and if the districts—12 in number—all ‘reporting to the Federal farm board, show an aggregate representation of 50 per cent of the commodity, and recommend that certain things need to be done, then the board, looking at its later findings, does that thing or does not do it, as the wisdom of the board dictates. Mr. Forr. By a board that does not, necessarily contain a single wheat grower. Mr. Gray. I did not get the question. Mr. Fort. I say the decision can be made as to wheat by the boards from a group of territorial districts which do not necessarily, under any provision in your bill, contain a single wheat grower. Mr. Gray. I hardly see how you get your mathematics, Congressman Fort. I would not imagine that 50 per cent of the commodity could recommend to the Federal farm board from the districts which do not contain a single wheat grower. Mr. Fort. I did not say from districts. I said without a single individual member of the board, or of the commodity council itself, being a wheat grower. Mr. Gray. That might be true in one district, Mr. Fort. It might be true in all. Mr. Gray. But it would not be true all over the United States. Mr. PurNeLL. That would carry with it that your board would just ignore public opinion and general conditions in recommendations, which is hardly to be expected of the board. Mr. Gray. Congressman Purnell, we still have some faith in public opinion. We are in a representative democracy, and it applies not only in governmental affairs but in economic ones as well. Mr. Apxins. I have fought out in my mind the probable reason i this suggested change. First of all, this bill is a surplus control Mr. Gray. Above all things it is that. Mr. Apkins, Above all things. If it has any excuse for being here, that is what it is for. Now, then, I can see that, if there is a surplus of corn, a surplus of wheat, a surplus of cotton, a good many members of the council would be customers for that surplus, and naturally they would want it at a low price, and I can see now, with this line of questioning that has been brought out, the probable cause for this suggested change, that the Federal land bank districts that are located in the cotton sections of the country, the Federal land bank districts located in the corn sections of the country, those located in the wheat sections of the country, where the surplus is, there is where this district board representing all the surplus producers of cotton, corn, and wheat would be in touch with the situation and would have the authority to initiate before the board a suggestion to declare an operation period, where a fellow who might happen to be selected in Illinois, for instance, where they produce but little cotton, or a fellow from AGRICULTURAL RELIEF 23 Vermont, where they produce but little wheat, might block theidea of an operating period. That suggests to my mind the reason for this change from the provision as it was written into the old bill. The old bill provided for a Federal land bank advisory council. This bill provides for a Federal land bank advisory district, an active council from each Federal land bank district. I am satisfied in my mind that is why the change is suggested. Mr. KincHELOE. The only reason you have given why you preferred this to the old bill was on account of the trouble of getting the old commodity councils together, on account of distance. Mr. Gray. No. Mr. KINCHELOE. What is your reason? That is the only one that have heard you give. Mr. AsweLL. May I ask this question: Does the commodity council represent the commodity better than yours? Mr. Apkins. That would be all right if you did not get some sort of an arrangement that would put a lot of people of that sort on the advisory council. Mr. Jones. Let the witness proceed. Mr. KincHELOE. Mr. Gray, the only reason I have heard you give why you prefer this method of selecting an advisory council over the other was because the territories were so remote that they would have trouble getting them together. Mr. Gray. No. That is one reason. Mr. KixcaeLoe. That is the only one you have given us. Mr. Gray. No. ’ Mr. KINcHELOE. What is the other one? Let us hear it again. I didn’t hear it. Mr. Gray. It gives the producers of the commodity in each district more direction over the Federal farm board than was contained in the commodity advisory council sections of the bill which you approved last session. Mr. KINCHELOE. In the bill that was passed last session the advisory council was elected by the producers of that specific product. Mr. GrAY. And here it is by the producers of the specific products grown in each district. Mr. KincHELOE. No. There may not be a bushel of wheat grown. Mr. Jones. I would like to have you explain just in what particular it gives them more authority In just what respect does it do that? 1 would like to.see that. You are referring to subdivision A of section 7, as you offer the amendment? Mr. Gray. Yes. Mr. Jones. What additional power is given by your proposed amendment over the power given in subsection 3 of section 7 of the old bill, or the bill as pending? Just what additional authority is given there? Mr. Gray. Let me read: I When the advisory councils in districts which in the aggregate represent more than 50 per cent of any commodity, or when a substantial number of cooperative associations or other organizations of producers of the commodity in such districts favor the full cooperation of the board in the marketing of the surplus of the commodity, and whenever the board finds, one and two— a Jones. Subdivisions 1 and 2 are the same as in the present 111. ) 1] AGRICULTURAL RELIEF Mr. Gray. One and two. Mr. JonEs. The bill as pending, requires the action of these advisory councils, and your amendment also provides it. Mr. Gray. But by changing the order of the sections and by putting the advisory councils and their recommendations outside of the findings of the board enumerated in section 7, it is our thought that it makes the recommendations of the councils more forceful, and necessarily prior to the operations of the Federal Farm Board, and gives the recommendations of the councils an authority which in the order here represented in the bill as drafted those recommendations do not have. Mr. Jones. It may be true, but I can not see why putting it first rather than third accomplishes that. In each instance it is a condition precedent to the operation of the board, and it does not look like it would be much different whether it is first or third, if all conditions are essential to the board’s operation. Mr. Gray. It is not listed as a condition which the board finds. [t is listed as a condition which the councils find. Mr. Jones. But if the councils took action under the pending bill the board would have to find that the council had taken action. They could not operate until it had taken action. It is 8 condition in each instance, and I am trying honestly to find out what additional effect it would have. It seems to me that it is a condition precedent in each instance, and it would not make a great deal of difference. You might make it a little stronger by placing it first, but I don’t think it 1s océasion for all this turmoil that we have here. Mr. Gray. In dictating or in revising this section on the second sheet, which you have in type before you, the effort has been to make the advisory councils, by the rearranging of section 7, a little bit more authoritative in findings and in their recommendations. By taking the recommendations of the councils out of the conditions which the Federal farm board must find prior to its action and by placing such recommendations prior to the first paragraph of section 7, places a great deal of the initiation of getting into an operation period on any commodity upon the advice which the councils send in to the board. Mr. KincHELOE. No more so than the bill we passed. Mr. Gray. There are accusations made that by placing the Federal farm board wholly to the selection of the President by and with the advice and consent of the Senate, the farm organizations have surrendered their ultimate and absolute right of control over that board. We do not agree to that. But that accusation is made, that we have surrendered everything in the make-up of the board. That is an erroneous accusation ; but granting, for the sake of argument, the accusation is true, then by rewriting section 7 you put back into the producers’ hands some of the authority of initiating the operation which the Federal farm board will undertake. Mr. Jones. That would be true, unquestionably, and there is some force to that statement anyway ; but that would be true, unquestionably, if you do not still retain in the board the authority to require these other conditions to be complied with before they take action. Mr. Apkins. Will you please repeat that statement? Mr. Jongs. I say that if subdivision A of section 7 contained all the conditions that must be met before the board could operate, the AGRICULTURAL RELIEF 25 argument would be very forcible; but in addition to the conditions laid down in the first part of subdivision A, the board must also find some things, and the same things that it must find in the pending bill in reference to the other requirements for its operation. The board must not only have the action, according to the amendment, of 50 per cent of the entire commodity, but the board must also find, first, that there is or may be a surplus, etc., and, second, that the durability, the conditions of preparation, processing, and preserving, etc. Even when the advisory council has taken action, under the proposed amendment the board must find these other conditions also to be true. In other words, the board would still have the veto power of an operative period on that commodity. Mr. Apkins. Do you believe the statement Mr. Jones just made is correct? Mr. Gray. I was conversing with Congressman McSweeney and did not catch it. Mr. Jones. Let us assume your amendment is adopted. The advisory councils in wheat, we will say, representing more than 50 per cent of that commodity, have met in the respective districts and have taken action favorably, then the board may still veto action on every other condition that is laid down; that 1s, numbers 1 and 2 here, or they may veto action under the other rovisions in this section, if they do not want to go into that commodity. They would still have that authority. Mr. Gray. Yes; but as I said a while ago, Congressman Jones, with the make-up of these councils and recommendations representing in the aggregate more than 50 per cent of the commodity being operated upon or to be operated upon—— Mr. JonEs. I realize the persuasive force of that. Mr. Gray. There is a persuasive force which the Board would be very much embarrassed to disregard. Mr. Jones. But the other condition is not binding. Mr. PurneLL. Certain other conditions must be found to exist by the board. Even then they may ignore the recommendations brought up to them by the councils. Mr. Gray. I have said so. Mr. Fort. Mr. Gray, there is one point in there that I want to ask you about. As I said before, the section as originally drawn made it necessary for the board to find as a fact that the commodity councils favored it, and that a substantial number of cooperatives representing the producers of the commodity favored it. That was the old language, was it not? Mr. Gray. Yes. Mr. Fort. That was a finding of fact the board had to make. Now, by changing this, you have eliminated that as a necessary finding of fact by the board. They have nothing to say as to whether a substantial number favors or not. It is not for them to determine, and that will be a legal question as to when that has happened. Mr. Gray. That position is testified to by 50 per cent or more of the commodity producers being represented in these recommendations. Mr. Fort. I want to bring out whether this is your purpose. As you have now drawn it you have said when the advisory councils representing 50 per cent of the producers. representing districts 26 AGRICULTURAL RELIEF which contain 50 per cent of the production have given their O. K., that then the board may act or, in the alternative, a substantial number of cooperative associations located in districts which represent 50 per cent of the product, then the board must act. Mr. Gray. Not “must.” Mr. Fort. In other words, you have got your language so that it does not take a substantial number of cooperatives representing the producers all over the country, but it merely takes a substantial number of cooperatives representing producers in districts that raise 50 per cent of the commodity. In other words, you have it below the 50 per cent figure. You do not have to have a recommendation of 50 per cent of the commodity at all, the way you have it worded here. Is that intended? Mr. Gray. No; that is not the way it was intended, and I do not believe the words here would justify your point of criticism on that. Mr. Fort. You have “such districts.” Legally that refers back to the last use of the word “districts,” and the last use of the word “districts”’ has been the districts that raise 50 per cent, therefore the legal interpretation would be that you are limiting it to the cooperatives in districts that represent 50 per cent of the commodity, and not all the commodity. You don’t care if that is cleared up? Mr. Gray. Not a bit. Mr. Fort. You do not want language in here that would be susceptible of that interpretation? Mr. Gray. We want the districts that recommend to the Federal Farm Board to represent 50 per cent of the aggregate of the commodity. Mr. Fort. And any language that makes that clear will be satisfactory to you? Mr. Gray. That will be all right. Mr. Apkins. In part, at least, the object of this amendment is to meet this situation: The last bill we had, that gave the farmers, you might say, the right to suggest men to the President that might be appointed on this board, being eliminated for constitutional reasons or for veto objections, does not this in part, at least, seek to vest in the farmer in another way a part of that authority that was taken away from him in the suggestion of names of members of the board. Mr. GraY. I have said that; yes. Mr. KincaELOE. Do you think your amendment gives the advisory councils more power than they would have had under the bill that we passed last year? Mr. Gray. Yes; I think it does, especially when the advisory council is more of a permanent institution in these draftings than it was in the provisions of the bill last year, where the councils were set 1p as conditions arose. Mr. KincuELOE. Why would his permanency, when he knows nothing about the commodity, add to his efficiency? Mr. Gray. I would not agree that the councils or any member know nothing about the commodities in the district. I did not agree to that premise in the beginning. Mr. KincaeLoE. Let us take an example of it. Let us see which would be the most efficient and better informed to advise their members of the advisory council, growers of that commodity who have spent their lives in it and know all about it, or, let us take tobacco AGRICULTURAL RELIEF 27 growers of the land bank district of Kentucky, down here, advising their members of the advisory council whether to declare an operating period on cotton or on. corn. That is what it amounts to in your amendment. Mr. Gray. Could you contemplate a meeting of cooperatives called by the Federal farm board representing all the growers in your Federal land bank district upon which council the tobacco growers would not be represented? I could not contemplate such a thing. Mr. KincrHELOE. Tobacco growers, of course, would be represented in my district, because they raise tobacco there. I am talking about growing cotton. Mr. Gray. If cotton is grown in the district it would be represented also. . Mr. KINcHELOE. In this bill that we passed that you all agreed to last year you not only had commodity councils, but this board, even then, appointed at the suggestion of the farmers, much less this autocratic board that would be appointed under this bill, before they could declare an operating period on any commodity, the advisory council and a substantial number of cooperative marketing associations had to agree to that. Mr. Gray. Yes. Mr. KincEELOE. How much more power can you give them, and where do you give them any more power under your amendments, or as much as you have here? Mr. Gray. By the method of the make-up of the council, by the permanency of the councils’ organization, and by the rearranging of section 7 where the recommendations of the advisory councils are taken away from the category of being findings of the Federal farm board and put in the category of being findings of the councils themselves. Mr. KinceELOE. Then you take away from the advisory council the power to vote and say when there shall be an operative period on any commodity, under your amendment. Mr. Grat. I think not. ‘ Mr. KincHELOE. That is what I understood you to say, then. What did you say? Mr. Gray. I said by rearranging section 7 and taking out of the findings of the Federal farm board relative to the advisory councils and putting that in a place, in revision, where the advisory councils set out their own findings to the board, you have given the advisory councils, by so doing, more authoritative influence over the board than if the board itself made those findings. Mr. KincHELOE. That is exactly what 1 am talking about, and we had that same power under this bill that we passed last year. Why did you do that? Now why do you object, Mr. Gray, or the people whom you represent—and I am asking this for information, because I can not see it—why do they seriously object to having an advisory council for each commodity for which an operating period is to be declared who knows all about the commodity, about its market conditions, about whether there is a surplus or not, how it should be handled, how it should be graded, who are experts in their own line? Why do you favor this provision you are trying to put in the bill now over a provision of that kind? 28 AGRICULTURAL RELIEF Mr. Gray. Taking tobacco, for instance—— Mr. KincaeELoE. All right; let us take tobacco. : Mr. Gray. Under the old bill the tobacco growers from your State and district would meet with tobacco growers from Missouri, my home State. They would meet, under the old method of advisory councilship, with the tobacco growers of Connecticut, the tobacco growers of Michigan, and other tobacco growing districts over the United States. It would be much more difficult for those tobacco growers, representing one commodity, to come to an agreement, because their interests are not all identical, than it would be under the present recommended arrangement for 50 per cent of the councils representing agriculture in the districts to come to an agreement and make their findings. In other words, we are after action. Mr. KincHELOE. Then, under your amendment, if these tobacco growers did honestly differ, some wheat or cotton men who did not know a tobacco stalk from a mullen plant, would come in and decide it. Would that be the effect of your amendment? - Mr. Gray. I would not agree that that would be the effect of the amendment. Mr. PurNELL. Mr. Kincheloe, following your line of argument, let me ask you how you would get an expression under your plan? Mr. KiNncaELQE. Under the original bill? Mr. PurnNeELL. How would you get an expression from the growers of any given commodity? . Mr. KincHELOE. You would have some mass meetings of cooperative associations. Mr. Pur~NeELL. Would you call them together from all over the country? : Mr. KincHELOE. No; I'don’t mean to take every farmer to one place in the United States. Mr. PurNELL. It is easier to imagine that with tobacco than it would be with cotton or wheat. Mr. KincHELOE. They could start with whatever unit they want to—the county, for instance. They could then send delegates from there. How is it going to be any more democratic under this amendment here? How is the farmer going to be anv more directly represented? Mr. Kercram. I want to ask this question, Mr. Gray, whether or not in your redraft, provision 3 on page 9 is to be written in the bill, or in the language in the first paragraph of section 7 is 3 to come out? Mr. Gray. It was intended, Congressman Ketcham, that number 3 would be dropped absolutely, it having been covered in this initiatory paragraph. Mr. Kercaam. In the bill as originally introduced the point is made by Mr. Purnell that there is where you get the basis of the expression of your commodity councils. Mr. Gray. But that is a finding of the board which rests largely upon the initiative of the board to secure. In the rearranging of the paragraph these councils—and referring back to the make-up of the council, where they are made to be autonomous bodies, not dependent upon either their chairman or secretary, being appointed by the board—in rearranging section 7 you get a recommendation from the councils even if the Federal farm board has not asked for a, ing. AGRICULTURAL RELIEF 29 Mr. Kercaam. Right here, referring again to your redraft, may 1 call your attention to the fact that the language starts out like this: When the advisory councils in districts which in the aggregate represent more than 50 per cent of anv commodity. That is to say, not the people who are interested in the production of that commodity in that district, but it says whenever the advisory councils in districts which represent 50 per cent of the commodity, ete., it may go ahead and act. Is that what your intention is? A good deal has been said here about action by minority. You would not have action by anybody, providing the council of that district represented a majority or the principal part of that commodity did not act whether or not the folks who were actually engaged in the production of it desire them to or not. Mr. Gray. Take raisins. That commodity has been mentioned. Let us take raisins, in answer to your question. Raisins are practically all grown in one Federal land bank district. In that district they have more than 50 per cent, in the aggregate, of the entire commodity. Having the findings of the advisory council of that district the other advisory councils would not meet, nor would the Federal farm board need to wait upon the findings of any other of the 11 advisory councils. That district represents more than 50 per cent of the aggregate production of the commodity. The members of that council, seven in number—if that is the number that we shall leave in these recommendations—would represent the raisins of the district and of the country, and I do not see how the council could be accused in its recomniendations to the Federal farm board of overreaching or disregarding the wishes of the raisin producers when the council itself represents all commodities, raisins included, in the district. Mr. KercaaM. The fact remains, while you could not imagine it, yet if they wanted to do it, they could do 1t. Mr. Gray. Do what? Mr. Kercuam. If they had commodity organizations, then that particular point would be absolutely correct; it would never be done. Mr. Pur~ELL. It is not assumed, then, is it, that some districts in which raisins are not grown would like action on the question of an operating period for raisins? Mr. Gray. Not at all. Mr. Pur~NELL. They could not. Mr. Jones. As a matter of fact, the erucial point in this thing is the good faith of the board, is it not? *f you have a board that acts in good faith all will be well and good. it you have a board that does not act in good faith they can ignore any of these people if they want to. Mr. Gray. There is a great deal of justice in your remarks, Congressman Jones, but, frankly—— Mr. Jones (interposing). It is their responsibility but, of course, as in anything else, if they do not act in good faith, why, you are blown up anyway. Mr. Gray. Not absolutely. If they do not act in good faith and carry out the recommendations of these advisory councils representing in the aggregate more than 50 per cent of the commodity, it is going to require explanation on the part of the Federal farm hoard. L6160—2R—sFrR EF PT 1— 30 AGRICULTURAL RELIEF Mr. Jones. We would be helpless, anyway, and the big question in this is the constitution of the board and the good faith of the board. The board must have not only what we are talking about here, but these other facts, and they must act in good faith, or you would not have anything. Mr. Gray. A very'large amount, as I agree and as all the conferees will agree, is the element of good faith in the Federal Farm Board. If you should get a farm board that is nonagricultural in mind, I presume no recommendations and no publicity of the advisory councils could require it to act in the proper method; but we have the belief that in building up these councils as here suggested to you now, you are getting a method of impressing upon the Federal Farm Board the authoritative voice of the producers of 50 per cent of the commodity which we have never yet encountered in any bill that has been thus far introduced. Mr. Apxkins. In districts where there are surpluses of any commodity produced, in the Corn Belt, the Wheat Belt, the Cotton Belt, and every other belt, I suppost a board made up in that district, a large number would be naturally in favor of doing something to relieve the major commodity of a large surplus. Mr. Gray. I would think so. Mr. KercaaM. Just one more question and then I am done. Going back to section 3, I read the following paragraph, cutting out all of the intermediate language. Let us just use the words “when,” “then” and “shall,” for instance, section 7 says when the advisory council and so forth and so on, and in the first paragraph the board so and so, and the second, so and so, “when” they find it—now, what I say is this, that when the advisory council finds a certain thing, as in A, and the board finds certain things as in the first paragraph, and certain things as they find it in the second provision, then jumping to line 4, the language is, “then the board shall arrange for the marketing of the surplus.” What I am getting at is this. Is it not the intention of this series of amendments you have suggested to make these advisory councils practically a determining body as to whether or not the period shall be set up and the functions of the board discharged, without submitting their judgment to the final review and veto of the board itself? Mr. Gray. No. If you had left off that last clause I could have answered yes. But the Federal farm board is the functioning body to put into operation those provisions of the marketing agreement which begin at line 4 on the top of page 10 of the chairman’s bill; but it is intended honestly that we will give to the advisory council an 1nitiatory power which along with the findings of the board will result in marketing agreements, disregarding that last clause of your question. But the Federal farm board, if it does not concur in or obey the recommendations of the advisory councils, can fail to see that conditions first and second enumerated in these amendments are binding. , . Mr. Kercaam. Then you would not object to putting something in lines 4 and 5 that would clarify that, and enlarge the definition by saying “after publicly declaring its findings and the findings of the advisory council” or some language of that kind? Mr. Gravy. 1 do not know what language you would put in there, of course, but I think we could hardly consent to any language that AGRICULTURAL RELIEF 31 would limit any more the authoritative recommendations which these advisory councils under this drafts are privileged to submit to the board. Mr. KerceaM. You see what I mean. It certainly seems to me, as you are setting up this board here in your bill, at least we ought to be safeguarded by some sort of a final review or the veto powers of the board itself. Mr. KincHELOE. Don’t you think that the more power you give the advisory councils the better the farmer is off? Mr. KercuaMm. Providing it is a commodity board, all well and ood. £ Mr. CLark. You have gotten back to my original proposition, that here is a buck-passing proposition. Mr. Gray. Mr. Chairman, if there are no more questions on this amendment, or, rather, on this series of amendments to section 4 and to section 7, I have finished—— Mr. KercaaMm. I will ask you this question. If IT understand the idea of those who have been drafting these amendments correctly it 1s this, that the advisory board or council is intended for the benefit of the interests of the farmers in the districts they represent. Mr. Gray. Absolutely. Mr. KercuaM. That is righ? Mr. Gray. Yes, sir. Mr. KErcaaM. Now then, if I understand the question here it is that it is supposed that the farmers who are producing the crop in districts might oppose the findings of the advisory council. Is that right? Mr. Gray. The farmers might oppose the findings of the advisory councils? Mr. KercaaM. There might be a question of the farmers in the district represented by the advisory council not being in accord with the action of the council. Mr. Gray. Some members around the table here have suggested that this morning. Mr. KErcaam. That could happen? Mr. Gray. That could happen; yes. Mr. KincuELoE. May I ask you another question or two before you leave the stand? Mr. Gray. Certainly. Mr. KiNcHELOE. At whose suggestion were these amendments made in the new Haugen bill as pending, providing that the board shall be appointed by the President without anv recommendations from the farmers’ organizations? Mr. Gray. It had its initiative, as far as my memory serves me, in the first writing of the farm relief bill which we are advocating. The suggestion that the Federal farm board be built up in conformity with the usual practices in creating such boards, being appointed by the President and confirmed by the Senate, was subscribed to by all the farm organizations that were reachable at that time, which means the ones that were in this fight and were advocating this method of farm relief all through the last session. Me KiNncHELOE. Was that acreed on at a convention of some ina?’ 32 AGRICULTURAL RELIEF Mr. Gray. No; it was not agreed on in convention, but in conference. Mr. KincaeLoe. Well, at whose suggestion? Mr. Gray. At no one particular person’s suggestion. Mr. KiNncHELOE. Somebody made the suggestion or you would never had used this language. Mr. Gray. It was the result of experience. Mr. KincaeLoE. Well, how do you mean—experience? Mr. Gray. The difficulty of getting the bill through and enacted into law with that provision in it. Mr. KincHELOE. So, then, your major reason for it was because if the original provision was in it it would not meet the approval of the President. Mr. Gray. It might not. We don’t know. Mr. KINCcHELOE. I sav, was that the major reason? Mr. Gray. I suspect it was. That might have been the major reason. Mr. KiNCHELOE. You were there? Mr. Gray. We want this kind of legislation enacted into law, and if we are going to get a presidential veto on that particular thing, by giving the advisory councils a little bit more authoritative power, why not rewrite the bill, refine the measure so that that obstruction can be removed. Mr. KincueLOE. Then what about the equalization proposition. Do you think the President is going to sign this bill if it passes? Mr. Gray. I have no authority to say. Mr. KincEELOE. You will encounter more obstruction in that equalization fee than you would in the board proposition. Mr. Gray. No; I think we would have more trouble in regard to the board feature than we would have with some of the other features. Mr. KincrELOE. Where did you get that information? From the President? Mr. Gray. From the long letter he appended to his veto message, from the Attorney General in which I presume he subscrbed to avery word, or he would not have appended it. Mr. KincaELoE. He also raised the constitutional objection to the equalization fee. Mr. Gray. Yes; but we are not giving way to tnose objections. Mr. KincuerLoe. That is just exactly what I am trying to find out. Mr. Gray. We can alter the bill in some regards, as I mentioned vesterday. There are 10 objections which are alleged against the bill as it passed the last session. In the revision of this bill we have removed eight of those. We are not going to remove that objection which resides in the equalization fee, because that is the only device that any of us have ever vet been able to evolve which avoids tae farmer being made a pensioner of the Federal Treasury. Mr. KincueLor. Well, what I am getting at is this. You admit, or you did awhile ago, or yesterday, that the provision relating to the appointment of the Farm Board in the bill that we passed was a much better provision than you have got in the present Haugen bill. Mr. Gray. In regard to the Federal Farm Board? Mr. KincHELOE. Yes, when the farmers have something to say about it. I sav vou admit that that provision that was in the bill AGRICULTURAL RELIEF passed at the last session of Congress is better than” the one in the Haugen bill. Mr. Gray. If I should admit that there might be others in this room from these farm groups who would deny it. I have heard some, 1 think, of the conferees on this question, say they prefer to have the regular method of appointing this board. They say that ander the machinery set up last year, which was very heavy and voluminous, made so mostly by Senate amendments, it would get {arm organizations into strife, one against the other, as to whom they should agree upon to be recommended to the President. They want to avoid that. Mr. KincaeLoE. They have changed their mind on it now and say that this provision in the pending Haugen bill is better? Mr. Gray. I don’t know whether they have said it is better or not, but I know some of them have said they are perfectly willing to male the change. So if I should say I like the provision of last year better than the provision of this year I might not be correctly voicing the concensus of opinion of the conference. Mr. KincrELOE. I am asking vour opinion. to express 1t? Mr. Gray. I don’t care to express it, Congressman Iincheloe. I have no personal opinions on any of these bills. I have only an official opinion, and my official opinion, representing the American Farm Bureau Federation, is that this bill as now drafted, relative to the make-up of the Federal Farm Board. is satisfactory to the group advocating the change. Mr. KincuELOE. What do you mean Where do you get that official opinion? : Mr. Gray. From the mandate of the membership of the American Farm Bureau Federation. Mr. KincHELOE. Do you mean the farmers? Mr. Gray. Yes, sir; those farmers who are members. Mr. KincHELOE. Do you think the farmers thoroughly understand the difference between the provision in the bill ss it passed last year and the pending Haugen bill? Mr. Gray. Not necessarily. Mr. KixcHELOE. I want to tell you right now that you got more votes on the floor of the House by reason of that being a board appointed at the direction of the farmers than anv other thing that I know of. Mr. Gray. Theat is a matter of opinion. Mr. Kincr ‘Vell. you haven™ + so you haven’ . right to express yours. Mr. Graz. '~» what got the votes. opinion. Mr. KINCHELOE. As I~» to get some information as whose instance. Mr. Gray. It was done, as I have said, by the concensus of opinion, no one man deviating from this concensus of the conferees who have been at work on this bill for more than two years. Mr. KincueLoe. Well, where was it done? Mr. Gray. And attached to that change in the Federal farm board are the chances first presented in the advisory councils. 33 AGRICULTURAL RELIEF Mr. KincueLoe. Was that at a meeting of some kind, of official representatives? Mr. Gray. Yes. Mr. KincHELOE. Where was 1t? Mr. Gray. The last agreements were made in conference in this city. Rir. KincaErLoe. When was that? Mr. Gray. But the beginning of these changes has been under consideration all through the recess period. Mr. KincaerLoe. Well, it was finally agreed upon at a conference here at Washington. When was that? Before the Haugen bill was introduced? Mr. Gray. Saturday of last week, I think it was. Mr. KincaeLOE. Then it was after it was introduced? Mr. Crark. Who were present at the conference? Mr. Gray. Representatives of these groups, the names of wihch president Thompson read to you yesterday morning. Mr. Wirriams of Illinois. Mr. Gray, you stated In answer to a. question by Mr. Kincheloe that your organization was backing up its original position on the equalization fee? Mr. Gray. Yes. Mr. WirLiams of Illinois. That means that you would prefer to have Congress pass a farm relief bill containing an equalization fee, and have that vetoed and get no legislation, rather than have Congress pass the very best possible farm relief bill at this time? Mr. Gray. I could not answer your question as you state it. Mr. WirLiams of Illinois. You would rather have no bill than have one without an equalization fee? Mr. Jones. I would like to have an answer. Mr. Gray. I don’t agree, neither does this conference—and I think [ speak the unanimous voice of the conference—that we necessarily must expect a presidential veto on a bill such as we arenow advocating. Mr. WiLniams of Illinois. The President said in his veto message he could not approve it on account of the equalization fee, and he gave two reasons. One was that it was unconstitutional. He undoubtedly will not change his position on that. The other was that it would destroy American agriculture. You don’t expect him to sign a bill with an equalization fee in it, do you? Mr. Gray. Yes, sir; as this bill is drawn. ~ Mr. WiLLiams of Illinois. Then you are the only man in Washington that knows what is going on, that even dreams that he will sign it. You are here asking the American Congress, after we have worked seven years, and worked hard, to get some real farm relief, to pass a bill that you and your organization are bound to know is going to be vetoed, and destroy the possibility of getting any kind of relief in this session. Mr. Gray. I don’t agree with you. Mr. Wirriavs of Illinois. I am not with you, as one favorable fo the equalization fee. Mr. Gray. To answer that question, I must come to another amendment which I was not going to bring up just now, but which I will, in response to Congressman Williams's question—— Mr. Fort {interposing). Before you leave this other point, may I ask have vou considered that part of the Attorney General's letter l AGRICULTURAL RELIEF 35 which held that last year’s bill was a delegation of legislative authority in the drafting of this provision of section? Did your conferees consider that part of the decision? Mr. Gray. I think IT am correct in answering your question more generally than you haye stated it, that we have considered everything in the Presidential veto. even including the attachments to that veto. Mr. Fort. The Attornev General, in his opinion, specifically says that the “delegation to Federal officers, acting concurrently with private agencies, the unlimited discretion to decide whether the pricefixing operation shall be commenced” is one of the delegations of legislative power that Congress may not make. Now, your bill as originally drawn apparently met that point. Your bill as originally drawn, as submitted by Mr. Haugen, apparently tried to meet that point by making certain fact findings the basis for operation. Your bill as now amended makes the concurrence of certain private organizations the basis, and therefore is a delecation—— Mr. Gray. Private organizations? Mr. Fort. Private organizations representing producers. Mr. Gray. They are public. Mr. Fort. There is a direct conflict with the specific languace of the Attorney General's decision. Mr. Gray. Answering Congressman Williams, not in a definite way, but in a way which is satisfactory, I believe; and deviating somewhat from what I had in mind to talk about this morning, because I was going to give way at this place to other gentlemen whom Mr. Settle will introduce, he being our chairman to-day; let me explain the remaining amendments, by calling your attention to Senator McNary’s bill on the same subiect, it being almost identical to Congressman Haugen’s bh! Senator McNary’s bill 1s keting agreements’ —— Mr. KixcueLoe. What page is that on? Mr. Gray. Paze 9 of the bill. I do not know what page it is on, the material you have before you. Mr. Jones. It is on pace 7, the top of the page. That is page 7 of this arrangement of the bills in parallel column. Mr. Gray. You will find there that Senator McNary has set out four findings which the Federal Farm Board shall discover to exist before it gets into the operation of marketing agreements, levying the equalization fee, and such like. The finding in Senator MeNarv's bill reads as follows" SEcoxp. That the operation of the provisions of section 5 relating to loans to cooperative associations will not be effective to control such surplus because of the inability or unwillingness of the cooperative associations handling such commodity to control such surplus with the assistance of such loans. The conferees, Mr. Chairman and gentlemen of the committee, have agreed unanimously that that section or that finding in Senator McNary’s bill shall be lifted entirely and incorporated in section 7 of H. R. 7940, thereby making one more condition which the board shall find to exist before it gets into an operation period. That condition is that the board has to find that the loaning provisions theretofore set out in the bill shall have been tried. or that the cooperatives 36 AGRICULTURAL RELIEF have refused to try them, and then the marketing agreements come later. Mr. CrLark. Just a minute. Where does this go in? Mr. Gray. It goes in section 7 of Chairman Haugen’s bill, on page 9. Just add one more condition, and give it the number which is necessary. It will be three, I suppose. The answer of myself, speaking for the American Farm Bureau Federation, the answer of these other gentlemen who will speak to you later, is and will be that if that section is lifted out of Chairman McNary’s bill and put into Chairman Haugen’s bill, relative to marketing agreements, in section 7, it gives all of those who advocate loans as being the solution of this surplus question a run for their money. There is an opportunity for trying out the loaning provisions. If they fail, or if the cooperatives refuse to try it—which latter will be most likely—then the Federal farm board goes into the marketing agreement, the levying of the equalization fee, and such like. My answer to Congressman Williams, then, is this: As I said awhile ago, about the Federal farm board, if it refuses to abide by the findings of these advisory councils representing 50 per cent of the aggregate production of a commodity, the board will have some very difficult explaining to do. In a similar way, let me say that anyone who opposes the try-out of the equalization plan in this kind of a bill, with that section lifted from Senator McNary’s bill into Chairman Haugen’s bill, will have some very difficult explaining to do. Mr. WiLLiams of Illinois. That is not an answer at all to my question. I asked you to state, and I think you should state to this committee, because I think the committee has a right to know, and I think the Congress has a right to know and this country has a right to know, whether you are here now demanding the enactment of a bill containing an equalization fee or nothing. Mr. Gray. We are demanding the enactment of a bill containing the equalization fee. Mr. Wirriams of Illinois. You know that means nothing. You are bound to know that. Mr. Gray. I do not agree that it means nothing. Mr. WirLiams of Illinois. The President vetoes the bill passed by this Congress, because the President says it is unconstitutional and will destroy American agriculture, and you turn around and request that again. You are bound to know, as we all know, that the President has objection to the equalization fee which that language will not overcome. Mr. Gray. This language permits every test that is necessary to find out whether the equalization fee is constitutional and is legal. Mr. WirLiams of Illinois. It is putting the equalization fee in operation, the thing that the President said in his message is unconstitutional and will destroy American agriculture. You are bound to know that the President of the United States is not going to back up and sign a bill with a provision of that kind in it, and you are here asking Congress to do a foolish thing in passing a bill that is sure to meet the veto, and we all go back home, you and me, and our constituents will say, “What have you done for the farmer?” We say, “Three cheers for the farmer. We passed this bill and the President vetoed it.” They will sav to the Members of Congress, AGRICULTURAL RELIEF “You knew he would veto it. Why did you pass a bill that you knew he would veto?’ Mr. Gray. The alternative is for Congress to pass some bill which the farmers do not want and which might be repugnant to them. Mr. WiLriams of Illinois. If you have that feeling, that you have to have this or nothing, of course you will get nothing, and there are a great many people in the country who would like to have nothing. Mr. Apkins. Let me say this. I put up as good an argument as I knew how in the House for this proposition. Mr. Gray. You made a good speech, Congressman, in favor of this bill. Mr. Apkins. So far as I was concerned, I was willing to do all I could for the bill. I am giving you this preliminary history before I put my question. The reaction I got from that speech surprised me, from our own friends who heard the speech and those who read it. I sent it the next morning to every Member of the House and the Senate. But what surprised me at that time was, in talking with a number of fellows that came in one after the other, this is what they all said: “My God, you are not going to put us up against the equalization fee again?” Now a good many farmers are going to say, “You hnew the President would veto that.” That convinced me that if we reported this bill out to the House that they will take the equalization fee out in the Committee of the Whole. I think I am in a position, by reason of having put up the strong argument that I did in favor of the bill, and by reason of the reaction that I have got on that proposition, and perhaps in as good position as any other Member of Congress, because of my record—and it speaks for itself, to ask you this question, as a representative of the createst farm organization in the world— Mr. Gray. Thank you. Mr. Apkins. I am saying that advisedly. The farmers writing me (which correspondence I expect to put in the record), some of the most conservative men we have got, say “Get us some farm bill, if necessary, without the equalization fee.” Now if we should bring this bill out, on the suggestion of the best thought of the farm organizations’ representatives in Washington, with a set-up of $400,000,000, with a board with all these powers and functions as suggested here, and can get that set up and start in—it will take some little time to operate, and I am no less of the opinion that the equalization fee is necessary to maintain it than I have been, but when a man goes so far as to say, pass some law that would at least give the farmer some hope, and winds up his letter by saying, “I hope you have a pleasant time in Washington, Charley, but (laughter) to be frank with you, I have little hope of Congress doing anything for the farmer.” Mr. Gray. We have great hope. - Mr. Apkins. I am talking about the fellows I am representing. Now, then, with this bill passed as you suggest, representing the full deliberation of practically all of the farm organizations of the country, it is going to take some time to organize; and with this board provided, as we suggest, with $400,000,000 behind it as a fund, it certainly will have some effect on the market and at least give the farmers some hove. We still reserve the right and still have the 37 38 AGRICULTURAL RELIEF right next December to come back to Congress and make the fight for what we consider is vital to the maintenance of this proposition. Now, I want to submit to you, as representing these organizations, if we are not in better shape to do that with the fundamental idea established, with two of the essentials in it, to go before the country? We will not lose all this $400,000,000. We can not lose it all in that time, and if it does what we all hope it will do—bring agriculture on a level with other activities—next December we will not have very much trouble putting on a proposition to let the farmers maintain it themselves. Mr. KincaELOE. What is your question? Mr. FuLumer. May I add right there that in the meantime we will elect a Democratic President? Mr. Apkins. Now we are up against a practical legislative proposition here which is not what I would like. I am on record for everything you have said here, and propose to fight for it, but we are up against a practical proposition that if we can not get this—and we have every assurance, so far as assurances go, from leaders that are close to the President (and I am not)—that such a bill would be signed, if the country is not better off and if the farmer is not better off, and if we have a chance to demonstrate what surplus control will do, if we have not got a better chance to have the bill signed to go over on the floor and pass the bill and have it signed—if that would not be better for the country than to pass a bill and have it vetoed. I want to know if you do not think we would be better off than to go back without anything. Mr. Gray. No. Mr. Apxins. We would not? Mr. Gray. We would not be better off because, under those conditions that you have set up in that question, the bill, if it is to be passed emasculated as you suggest, could not contain any guarantee that it was going to be corrected in a subsequent Congress. Mr. Wirriams of Illinois. And we would be better off without anything? Mr. Gray. If the bill went through the Congress just setting up a Federal farm board, as Doctor Atkeson, former representative of the Grange describes it, an organization with nothing to do, and you would go before the people of the country on that kind of a bill, and you would get approval on it, then why should Congress amend It when approval had been given in a congressional campaign. We want a bill which has the fundamentals of permanent agriculture in it, not some temporizing emergency situation, or some foolish thing, as you suggest. We want a bill that has meat in it, or to use a rougher expression, that has guts in it. Mr. Apxins. In other words, if we can not get the bill as suggested by your organization, with the equalization fee in it, your judement is that we had better not have anything? ’ Mr. Gray. That - would be our judgment. Mr. Apkins. That is what I want to know. Mr. Jones. Let me ask just this one question. You suggest a further addition here, and in that addition you say that if the cooperative associations are unwilling to try the loan feature—and you say they probably will not be willing to try it— then if they are not willing to try it your additional provision does not, AGRICULTURAL RELIEF amount too much. I am inclined to agree with you, and I want to do what the farm organizations want. Mr. Gray. I think, Mr. Jones, the cooperative associations will use these loan features for current marketing operations, and they will use them very advantageously. Mr. Jones. I understood you to say the latter condition would probably prevail, that they would be unwilling to use the loans. Mr. Gray. For the purpose of disposing of the surplus. They will be unwilling to tackle that proposition, of obligating themselves to pay back the loans at interest for the purpose of disposing of the surplus when usually there is a loss in such an operation. Mr. Jones. That is the impression I got from talking with a number of the representatives of farm organizations, that they would not use these loan features provided for, and you yourself stated that thev would probably be unwilling to use it, and it seems to me your additional provision falls to the ground. Mr. Gray. These conferees have been working together for months, have appeared before this committee time and time again, and have said just what I have said, in different or better words, that coopertives will not use those loans. The loaning provisions of any of the bills designated generally as the loaning type of bill, will prove ineffective, not helpful to agriculture, the principal reason being that when vou have a surplus to dispose of the cooperatives will be afraid to involve themselves in disposing of that surplus. Mr. Jones. That is the impression I got, just as vou have stated it, in talking with them. The extra condition, you say, is put in to cure the situation presented by Mr. Williams, and you say the second condition is the one which would prevail. 39 The provisions of section 5 relating to loans to cooperative associations will not be effective to control such surplus because of the inability or unwillingness of the cooperative associations handling sneh commodity to control such surplus with the assistance of such loans. Your explanation shows, and you have stated awhile ago, that the second condition would probably be the one that would prevail, that they would be unwilling to utilize it. If they are unwilling to control it what does your additional provision amount to? I am asking for an honest response on that. I am trying to get correct information. Mr. Gray. There have been many people of your community, as well as elsewhere, and in the Congress, advocating the loan method of solving this surplus question and, as we acreed yesterday. surplus is the question. Mr. Jones. You say they will not use that if it is given to them. What does your additional condition amount too, then? Mr. Gray. It gives them a run for their money. Mr. Fort. There have been other proposals introduced in Congress which provided for loans to corporations set up by cooperatives, where no liability for the repayment of the loan itself could thercafter rest upon the cooperative or its individual members. Your language there, as you have it in section 5, and as you now have it in this second provision in section 7, limits the loans to the cooperative associations themselves and imposes on them a direct obligation for the repayment. It is quite conceivable that the cooperative assoclations might be unwilling to operate under loans under a provision that constituted a legal liability on that cooperative to repay that 10 AGRICULTURAL RELIEF loan whatever happens, and they may not be unwilling, under the other forms of legislation, that permit them to create corporations to which the loans are to be made, with no legal liability on the members individually in the cooperative to repay them. : Mr. Gray. We do not want that obligation removed from the corporation itself. We do not want any merger of cooperatives in such way, corporative or cooperative, that can borrow money from Uncle San: and be not obligated to return that money with interest on it. That is business. Mr. Fort. Neither do we. Mr. Gray. And so far as protecting the individual member of the cooperative is concerned, we are in absolute harmony with what you have in mind. Mr. Fort. Then your loan provision in section 5 is not what you want? Mr. Gray. In what particular? Mr. Fort. Because you are, in your section 5, making it purely a legal obligation, without any reference to any limitation on the repayment or terms for repayment other than obligatory terms which may be imposed by the board if they collect it by way of equalization fee, in fact, if not legally so. Mr. Gray. We are trying to confine the loans of this bill to loans to be used for disposing of surpluses, and that is shown in the language of section 5, where it says loans for the purpose of assisting’ the cooperative associations only in controlling the surplus of any agricultural commodity in excess of requirements for orderly marketing. There is the basis of our program—Iloans not for things other, but for things relative to the surplus disposition. Mr. Settle will introduce in good time, he being our chairman, at least for the day, some gentlemen who will have some amendments to the loan section which we will recommend. Mr. Chairman, I have presented all of the amendments which were delegated to me to present. However, there are two other amendments, one on the loan section and one relative to insurance, which our chairman for to-morrow. will have presented for consideration of the committee. So far as I am concerned, if the committee pleases, unless you want me to appear again, I have said all that I desire to say, and I can sum 1t up in one sentence: We want H. R. 7940 enacted into law, but first reported out from this committee with a favorable report, including the amendments which we are suggesting to you. I thank you. Mr. WiLriams of Illinois. Mr. Chairman, I want to insert a brief statement in the record, if I may. During the session of the committee yesterday morning Mr. Earl S, Smith, chairman of the Illinois Agricultural Association called me from Chicago on the telephone. In the course of our conversation I said to Mr. Smith that I had heretofore as a member of this committee and a Member of the House consistently supported the equalization fee. That I believed it was workable and was the best method yet suggested to procure the necessary funds for the stabilization of agriculture. That if there was even a remote chance for us to have that scheme written into law at this time I would give it my earnest support. I stated further that owing to conditions here which are perfectly obvious and which everv one recocnized. the enactment of AGRICULTURAL RELIEF {1 a farm bill carrying that provision was utterly impossible. That if the friends of farm relief stood for that program and for nothing else it meant no legislation at this session of the Congress, and that I proposed as a member of this committee to exert my efforts to have reported out of this committee the very best possible farm bill we could pass through Congress and get signed by the President. Later in the dav I received the following teleeram from Mr. Smith: Confirming conversation over telephone and speaking for our members throughout the State as well as those in your district we urge your continued active support of the essential principles of legislation contained in the Haugen bill. The equalization fee is the one outstanding essential of this legislation. It is our firm belief that no other proposal vet advanced offers genuine opportunitv for the stabilization of agriculture. [ have very great respect for Mr. Earl C. Smith and the fine organization for which he speaks and I regret exceedingly that my sense of duty to the people of my district and to American agriculture will not permit me to follow his judgment in this matter. That would mean the defeat of all farm relief legislation for at least two years. I will not join in a program of that kind. In my opinion it would be a mistake amounting to a crime against agriculture for this Congress not to pass, and pass now, the best possible remedial farm legislation. If it is not altogether what we want, if it is not as good and far reaching as we may think some other form of legislation would be, we can certainly at a future date and in future Congresses amend, improve, and strengthen it. It would certainly not be a more difficult task to amend what actual experience might prove to be defects in an existing Statute, than it would be to write a new one. We can make a start in the right direction now, a most helpful start in my judgment, if we do not throw away the opportunity by stubbornly insisting on a program that every sensible man knows can not be attained at this time. [ make this statement so that no one may misunderstand my position as a member of the committee and also hoping it may be the means of saving some one here in Washington the useless expense of wiring messages from here to Chicago and elsewhere in Illinois for the purpose of bringing pressure to bear upon me to do a thing I do not intend to do. The CuarrMan. Without objection the committee will stand in recess at this time until 10 o'clock to-morrow morning. (At 11.55 o'clock a. m. the hearing was adjourned until 10 o’clock to-morrow.) House oF REPRESENTATIVES, COMMITTEE ON AGRICULTURE, Thursday, January 19, 1928. The committee met, pursuant to adjournment, at 10 o’clock a. m., in the committee hearing room, House Office Building, Hon. Gilbert N. Haugen presiding. Present: Messrs Haugen (chairman), Purnell, Williams (of Illinois), Thompson, Ketcham, Hall, Pratt, Fort, Menges, Andresen, Adkins, Clark, Aswell, Kincheloe, Jones. Swank, Fulmer Rubey, and Mec-Sweenev. 12 AGRICULTURAL RELIEF The CaamrMaN. Gentlemen, the committee will be in order. Mr. ANxprEsEN. Mr. Chairman, at the conclusion of the hearing yesterday Mr. Gray was on the stand, and he made some statements concerning which I wanted to ask him a few questions, but the time had run out. I would like to have him take the stand for a few minutes now. Mr. TrHomMPsoN. Mr. Chairman, I have been sitting on this committee for the last six years listening to the testimony of these farm bureaus and farm organizations, and I have concluded that the administration is not going to sign a bill with an equalization fee in it. [ want to be put on record here as favoring that kind of bill, but I want a bill that we can pass. I want a bill that the administration will approve. The farmers have got to have something, and we have got to have action. I wish to indorse the statement of Mr. Williams. I indorse his statement in full. I have read it, but I was not here to hear it yesterday. FURTHER STATEMENT OF CHESTER H. GRAY, WASHINGTON REPRESENTATIVE OF THE AMERICAN FARM BUREAU FED-ERATION Mr. ANnprEsEN. Mr. Gray, yesterday my colleague, Mr. Adkins, made a statement, and in answer to his question as to whether or not you favored no legislation during the present session of Congress if we could not pass a bill with the equalization fee in it, you stated that you would rather not have any legislation in this session of Congress, unless you could get a* bill with the equalization fee in it. Is that correct? Mr. Gray. No; not in that way, I think, Mr. Congressman Andresen. Mr. ANDRESEN. Is not that the sum and substance of it? Mr. Grav. I will explain that further a little later, if it is permissible, Mr. PvryerL. Why not explain it now, while we are on the subject. I am very mucn interested in that myself. I would like to have it clarified. Mr. Gray. AsT understood Congressman Adkins’s question, which was rather a long one, he wanted to know what the best judgment was of the farm organizations affiliated in this endeavor to pass an equalization fee bill relative to what Congress should do this winter, and I answered the question, as I remember it to be, that our best judgment is that the Congress should pass an equalization fee bill. The reason I answer that way is this, Congressman Andresen and members of the committee: You can not expect a farm organization, whether it is in favor of the equalization plan or in favor of some otiier plan, hurriedly to change its position. There is none of us that has authority to change a position of a farm organization which has been arrived at slowly, painfully, throughout years. Take the American Farm Bureau Federation, which specifically I represent. It took as fully two years, as a national group, to come to a concensus of opinion that the equalization fee plan is that which we desire, and it was not until the last resolution adopted in December of last year was passed that.we specifically named the MeN ary-Haugen bill. We have been four or five years oetting to that point. AGRICULTURAL RELIEF 13 Now it would be ridiculous for me to stand here and say that if the Congress and if this committee can not pass the equalization fee bill the American Farm Bureau Federation will support another bill. We can not support another bill. So I answered the question of the Congressman from Illinois by saying that it is our best judgment that the Congress should pass the equalization fee bill, and I do not think that the record will show that the answer to the question went any further than that. If the Congress goes further than that or if this committee goes further than that and reverses its former position, such action will show that it has a greater elasticity of position than the farm organizations can possibly have: The responsibility for enacting legislation other than that which conforms to our best judgment will not lie upon the farm organizations advocating this bill, but will lie with the members of the committee and the Members of the Congress. Mr. AxpreEsEN. Now, Mr. Gray, if we act on the official statement made by you and do not pass any legislation, then the responsibility would not be the responsibility of the Congress but would be the responsibility of the farm organizations? Is that correct? Mr. Gray. Just how was that again, please? Mr. ANDRESEN. You stated that if we reported a bill out of this committee and it passed the House and became law, which did not have the equalization fee in it, the responsibility would be the responsibility of the committee and of the Congress and not of the Farm Bureau Federation. Mr. Gray. It would be. Mr. AxpresEN. If we act on your suggestion and do not procure the passage of a bill that does net “ave the equalization fee in it, then the responsibility would not -e our responsibility here, but it would be the responsibility of the farm organizations? Is that correct? Mr. Gray. If we who are associated together in behalf of the equalization plan of farm relief legislation persuade this committee to follow its prior record of reporting and standing for an equalization plan and that bill should pass into the Congress and be voted upon and be defeated, the responsibility then would be more largely that of the farm organizations than of this committee. But if the reverse should be true, as I have just stated; that is, if this committee, in its wisdom, should disregard the groups here appearing and formerly appearing in behalf of the equalization plan, and report out favorably some bill without the equalization fee, then the responsibility primarily is upon this committee, and almost equally primarily upon the roll call in both Houses of Congress. Mr. Pur~eLn. Mr. Gary, if I may interrupt Mr. Andresen for just one question, on the other hand, if some of us decide to follow the views of the farm organizations, as we have done here for a number of years, and take the responsibility for sending a bill down to the President which we know now will be vetoed, and we rely upon your judgment and the farmers get no legislation, then you take the responsibility for our action. Mr. Gray. We are not shirking that responsibility. Mr. Pur~NELL. I say it is a two-edged sword. If we do what we think is richt and it does not agree with what vou think is right, then AGRICULTURAL RELIEF we are responsible, but if we follow your judgment and are wrong, that is your responsibility. Mr. Gray. That is a very gentlemanly and very exact way of stating it, I believe. oo Mr. ANDRESEN. When did your conferees have their meeting in which it was decided that they would take a bill with the equalization fee in it or nothing?" Mr. Gray. I could not point to any particular date on which that question, as you have definitely stated it, was decided upon; but the entire history of these associated groups is such that no man can come to any conclusion other than that the equalization plan is the one we want, because in this long drawn out program of getting the farm groups thoroughly acquainted with the various forms of farm relief— and they have studied half a dozen—we have come to the idea that the equalization plan is the one that is most applicable and most workable. When it comes to the question of saying in which conference did they adopt the resolution saying “We will have the equalization plan or nothing,” that would be a hard question to answer; but it has been inferentially said in certain resolutions adopted. For instance, at St. Louis last November, I think it was, the Corn Belt Federation— and there are others who can speak with authority for them better than I—— Mr. ANDRESEN (interposing). Has the American Farm Bureau Federation ever adopted such a resolution? Mr. Gray. No; the American Farm Bureau Federation has never adopted a resolution which said “We will have the equalization fee or nothing,” but there is no one in the American Farm Bureau Federation that has the vestige of an authority, since we have reaffirmed our support of the equalization plan four different years, in consecutive sessions, to say now that we will take some other plan. So that the best judgment we have is that the equalization plan is what the Congress should pass. If the Congress does not coincide with our judgment, that is not our responsibility. Mr. ANDRESEN. Your organizations favor H. R. 7940 with the equalization fee in it? Mr. Gray. Yes. Mr. AnprESEN. If the bill is passed substantially as drafted, with the amendment you have offered, leaving the equalization fee out of it and providing for sufficient funds to put the bill into operation, would you say that the purpose and principle of the farm organizations have been defeated? Would you not consider that a victory, and that we had at least made a start in the right direction? Mr. Gray. I would say that that action on the part of the committee and of the Congress would hardly be a beginning toward consummating what we advocate in the American Farm Bureau Federation. And let me read you our resolution on that subject. Other gentlemen appearing will read resolutions for other organizations, I am sure. We appreciate the action of the Sixty-ninth Congress—— Mr. PURNELL. When was that adopted? i Mr. Gray. This was adopted December 7,1927, in the ninth annual meeting of the American Farm Bureau Federation held in Chicago, Ill. AGRICULTURAL RELIEF 15 We appreciate the action of the Sixty-ninth.Congress which, in a nonpartisan manner, passed the surplus control bill. If put into operation this measure would have marked the beginning of a sound economic agricultural policy in our Government. Commodity marketing and surplus control are inseparable. Cooperative organizations, however, can not bear the load unaided. Under certain conditions in order that operations may be successful the entire commodity marketed, and not the member producers alone must, by the application of the equalization fee principle, meet the requirement that each marketed unit shall pay its share of the cost of its own stabilization and protection. We insist that legislation which contains the principles embodied in the MeNaryv-Haugen bill, with such improvements as experience and good judgment mav suggest. shall again be passed bv Congress. That does not give Mr. Thompson, my national president, who appeared before you two or three days ago, nor myself, nor my legislative committee, nor any functioning body of the American Farm Bureau Federation, any commission to support a bill which deviates substantially from the outline contained in this resolution. As I say, Congressman Andresen, it has taken us four or five years to get to the point where our membership, after studying farm relief, eventually have put down fundamental principles like those, and even have named the bill. This is the first time 1t has ever been done in our organization. Now it may take us four or five years to change our plan. This organization which I represent is far flung, from the east to the west, to the north and to the south, and the membership of the agricultural organizations—and I am not speaking of one, but I am speaking of all—neither arrive at their conclusions hastily nor depart therefrom quickly. Mr. AnxpresEN. Mr. Gray, you have studied the figures of prospective increase in acreage for wheat and cotton and some of the other crops for this coming year, have vou not? Mr. Gray. Yes. Mr. ANprRESEN. Do you recognize that if conditions remain somewhat normal we are going to have a large cron of wheat, a large crop of cotton this year? Mr. Gray. We might reasonably expect that, not knowing, of course, what climatic conditions will be—that is, seasonal ones. Mr. Former. I might say that all the indications are for a small cotton crop this year, with a large amount of boll weevil coming into existence. Mr. Gray. It is a guess to estimate at this time what the production will be in September or November, or what the situation will be next fall. . Mr. ANDRESEN. But there has been a large increase in the acreage of wheat planted? Mr. Gray. I think you are right on that. My recollection coincides with that statement. Mr. ANprRESEN. With the ideal winter we have had for the production of wheat, are we not to assume that if conditions remain somewhat normal during the spring we will have a large crop? Mr. Gray. Giving more information on that line, I happen to have been in contact with Mr. Umberger, dean of agricultural extension in Kansas, who tells me that one-third of the wheat crop in Kansas is said to be winter-killed on account of the severe cold snaps lately and the dry condition of the soil. So you can not tell what the wheat will come into when spring arrives. ROB160—22—8FRE PT 1—— 6 AGRICULTURAL RELIEF Mr. ANDRESEN. That is a small part of the country. Mr. Gray. But it is a large wheat-producing country. Mr. ANprESEN. But if we do have normal conditions we will have a large surplus? Is that correct? Mr. Gray. My conviction is, representing the organization, that there will be a necessity for surplus control and disposal legislation until Congress repeats its former action of last session; yes. That question is going to be before the Congress until it is settled in some way that really grapples with the surplus question. Mr. AnprESEN. Knowing those facts, then you are willing to go ahead and say that unless we pass a bill with the equalization fee in it we ought to wait until some subsequent Congress has taken upon itself the responsibility of passing a measure, and until we get a President that will sign the bill? Mr. Gray. I believe it would be the concensus of opinion of our membership, as reflected in the resolution I have read, as well as ones adopted years prior thereto, that any step toward setting up a farm board with nothing to do would be a step which would not serve agriculture usefully. Mr. ANDRESEN. Do you assume to speak for the members of the farm bureau of J State of Minnesota? r. Gray. Yes, sir. Mr. PurnELL. Mr. Gray, may I ask you right in that connection— we haven't pg here yet the equalization fee. We had not gotten quite down to it. Mr. Gray. Pardon me, Congressman. My presentation has been, as much as I could di-ect it with the questioning of the committee members, confined to amendments which we desire. Mr. PurneLL. In what you said a while ago, Mr. Gray, you hinted or suggested that your committee wanted to lift out of the McNary bill one of the sections which we find on the comparative print at page 7 pre, and set 1t over into Chairman Haugen’s bill. ir. Gray. Yes. Mr. PurNeLL. You know what I have in mind? Mr. Gray. Yes. Mr. PurNeELL. Now, what I want to ask you is this: I think I have learned this from conversation perhaps with you and other members, that in an honest effort to try to meet the objections of the President and still preserve some of the principles in which your organization believes, and for which all of us have been putting up the best fight we know how to put up here for a number of years, you set up these intermediate conditions which must be met and which must be found to ih, before the equalization fee starts. Is that correct? = I 'T. Gray. Under Senator McNary’s bill there are four conditions ol ich must, by the Federal Farm Board, be found to exist prior to e public finding that a marketing agreement and an operation period shall be put into effect, idx Pusan, In other words, in your effort to meet the equaliza-+ You ha op aen, or, rather, soften the objection that there was to revolving Lu 2 hope ot creating a board and providing for this ble to operate here witho t : Sl Tommus, 3 Wight bo poss DC ut even calling into being the equalization AGRICULTURAL RELIEF Mr. Gray. But the fee is in the bill ready for use whenever necessary. Mr. PurNeLL. Yes; the fee is in the bill and may be called into being if.it becomes necessary to do so; but the point is that in an honest effort here to harmonize these different objections and various contentions, you have, in the amendment to the bill that you have presented to us, set up certain machinery, that you have the board, the revolving fund, and along with it the hope that you may operate and stabilize prices and not have to call into being the equalization fee, or at least you save that as a last resort. Is not that true? Mr. Gray. If the cooperative marketing organizations are unable or unwilling to use the other instrumentalities set up in the bill, the equalization fee, to use a baseball expression, is a pinch hitter. Ar. Harn. Would that bring about a complete pooling of the surplus commodity? Mr. Gray. I beg your pardon. Mr. Harr. Would that bring surplus commodity? Mr. Gray. It would do so. Mr. PurNELL. And to pursue your baseball expression a little further, so to speak, you would save vour pinch hitter, the equalization fee, for the ninth inning? Mr AswerL. That whole matter can oe bill. Mr. Purnern. That is the Aswell bill? Mr. ASWELL. Yes. Mr. Pur~ELL. I have heard of it. How long, in your judgment, if you care to Hursue the line of thought I have suggested, do you think it would pe before we could actually determine whether or not it is necessary io call into being the equalization fee? Mr. Gray. That would be merely a guess on w= mart, but it likely would be a year. Mr. PurNELL. During which time what would the board be doing? Mr. Gray. Getting its feet under, in a general way— — Mr. Pur~ELL (interposing). Acquainting itself with its duties and the conditions surrounding it. and. in other words. orienting itself? Is that true? Mr. Gray. Those are ways of describing what the board would be doing in the first few months, or, perhaps, the first year of its existence. This is a tremendously big job. It is the first time we have ever tried to set up a Federal farm board with definitely outlined functions, and that board, composed as we feel it will be, of conscientious as well as able men, will approach its questions with some caution and after mature judgment and investigation, before indulging in any proceedure. That might lead us to surmise that under the four conditions set out in Senator McNary’s bill, and under the four conditions to be set out in Chairman Haugen’s bill, providing the second condition of the Senate bill is lifted into the House bill, in trying out and seeing how to meet these four conditions, it is not unreasonable to surmise that 12 months would go by. But listen, please. During all that time, there would be in formation the findines of the Federal farm board, cetting ready for the oneratr i x AGRICULTURAL RELIEF tion period or the marketing agreement, if, and when, and as conditions justiffied, such marketing agreements. Mr. PurnEeLL. Of course, it is a matter of opinion as to how long it would take the board to find itself, and to acquaint itself with its duties and to learn, its job. My guess is no better than yours or anybody else’s, but I think it would take nearer three years than one. Now the point I am getting at, Mr. Gray, and I want to preface it by saying this Agricultural Committee is composed of men who are at heart vitally interested in the solution of this problem. Mr. Gray. I have no doubt of that. Mr. PurneLL. We are not thinking about a thing else in the world, and we have not been for the last seven years, but finding some real, honest-to-God farm relief. During that time all of us have welcomed the advice and suggestions of your organization, as well as these other groups that have come here. And so I resent any suggestion that may be made by anybody on the outside that any member of this committee is acting in bad faith and not in an honest effort to find the solution here, if he even suggests considering a compromise. He may find himself in disagreement with some of those with whom he has been in agreement all these years. If we can not have honest differences of opinion in trying to solve a problem as comprehensive as this, no man has a right to a seat around this table, and you gentlemen, none of you, have a right to represent the organizations you do represent. Now is not that a fair statement? Mr. Gray. That is a fair statement; but still that does not remove from the farm organizations under the conditions I mentioned when [ answered Congressman Andresen, the responsibility which lies on them, and the resonsibility which lies around this table, under certain conditions, for actions being taken either by the farm groups or this e. Mr. PurNELL. I would be very happy indeed if we could send the original McNary-Haugen bill down to the other end of the avenue fits day and get the signature of the President to it, but it can not 2 done, and we might just as well meet a practical proposition when we see 1t in the road. My reason for asking you the question [ did awhile ago is this. ° pony Pecording to your statement, Mr. Gray, it would take this : east one year—and in my judgment three years—before it could start, to know its job and begin to function, and if, as you have stated to me privately and as you have stated here before this committee publicly, this bill has been so drafted as to make it possible to SA hope that we might not even have to call HE the equa 1zation fee, that we might stabilize these prices by the estab-1shment of the board and this revolving fund, setting up these conditions, which must be found to exist what objectio San fer t this committee for not establishin b ating revolving fund. lettine ablishing a board, creating a revolving Conc toting bar Joni their job, whether it takes one year or three I believe in now ond lan foe teh Wo belive fn, 24 Wie aroun I : ] ght lor on the 1loor of the House an Who ples and which I have asked the President to sign? zetting the board, saying ar Botting something, making a start, “Congress is in sympathy with d Ty ths eum 73s thing we can for you, and f Ya, mh Tre me goat 0 90 100 Dest you, rom time to time we are going to add to AGRICULTURAL RELIEF 19 it and amend it and strengthen it until we put on the statute books of this country the very thing which we all believe will solve ultimately this problem?” Now, what is wrong with that? Are we wrong in our efforts here to try to do something, or must we go back to our people again empty handed and say to them again that we had an opportunity to make a start and get some of these basic things on the statute books, or are we to go back to them and say we just sat down there and said we would take everything we want, everything that we have been asking for, or we will take nothing? [ want to state to you that, as one member of this committee who believes in the leadership of the American Farm Bureau Federation and these other organizations, and who has followed them in many instances, and who has sponsored some of the legislation that I think is helpful to agriculture in this country, that it is the most serious proposition I have tackled since I have had my membership on this committee, and I don’t want to make any mistake. I am not thinking about myself politically at all. I will take my own chances back to my district. All I want to do is to try to find out what is the best thing for American agriculture, and when I once make up my mind as to what that is, I am going to do that thing, if od what it is. recardless of the conseauences to me or to anvbody else. Mr. KincaeLoE. Mr. Gray, I want to ask vou a question or two. Are vou through, Mr. Purnell? Mr. Prryern. I did not intend to make an extended statement. If Mr. Gray wants to follow the line of questioning which I have suggested there, namely, as to what the objections of himself and his associats would be to taking that steps, in view of his statement that it might work without calling into being this pinch hitter, I would be clad to have him give to this committee the best information he has on it. Mr. Gray. Two or three answers, all negative in nature, could be given to vour question. First, I think, is this: When any group comes here to Washington and makes a determined fight for a principle in legislation, as in the Federal reserve act, as in the immigration act, as in the Shipping Board act, as in the transportation act, and as in many others, they do not abide by compromises to the extent of vetting the enacting clause passed by Congress, so to speak, expecting later to come to subsequent Coneresses and get the meat of the bill put in. In all of those bills which I have named, and others which could be named, the advocates thereof came here and fought, as they had a perfect right ot fight. In some of those bills the American Farm Bureau Federation was participant positively, for fundamental things which the groups wanted in those paticular bills. If, for instance, the advocates of the transportation act had come here and had been willing, under the stress of controversy which that bill aroused, to have taken the enacting clause, so to speak, as being all that first Congress would have enacted, if they h ad not gone ahead and written into the act provisions turning back the railroads to private operation, which was the main and the prime purpose of the act, we would have had no cuarantee that at anv subseauent Congress those 50 AGRICULTURAL RELIEF fundamental features in thei ransportation act would have been passed at all. Mr. PurneLL. You must assume, Mr. Gray, that the members of this committee do not regard their duties so lightly as to pass any bill that contains only an enacting clause. If this bill will not do any good without the equalization fee and I make up my mind that it will not, I will fight it just as hard as I have been fighting for it. Mr. Gray. I am sure you will. Mr. PurnerLL. I would not advocate the passage of any bill out of this committee that will serve as a mere gesture, that will serve merely to pass the buck and put the responsibility on other shoulders. Now that Congress has passed the responsibility over to us, the other members of the House not on this committee can sit over there and wait until we bring something in, and whether they want the equalization fee or not, they can go back and tell their people that “This is all we had a chance to vote for.” You are talking to a group of fellows here that have to bear the responsibility before the farmers of this country. We are the fellows who have to say in the first instance whether we are going home empty handed or with something. That is what I want to impress upon you. I do not know a man here, although some of them do not represent farmer constituents at all, who does not recognize the needs of American agriculture, or who does not know that if we are going to put American industry and American labor and American agriculture on an equality, it has got to come through this committee Mr. Gray. I think you are right in that. Mr. PurNELL. And we are not going to psss out of this committee and we are not going to support anything with merely an enactin clause in it. Most of these fellows are old stagers here, and os are not afraid, and, moreover, we recognize our dut when we s TE and we are going to try to do the best thing we can do, and we want you to help us work that out. We are not going to report something out of this committee just to pass the buck over to the Hous wi Gray. The expression about passing a bill on ol relief containing jas an cpacting clause, was used with the qualifying by this Conran ok, ic [Jouns that there might be bills passed that this Ho 7040 wou Do really grapple with the question farm relief bills ‘now on tho onlonda oolk oh ere ig ps So-ca led them) that do not take the first. ston art ay he nine question. oo N vr] 7 ‘ . Commas TELL We Dad 5 BTERg farm bills introduced in the last of thors mittee; in round numbers, a thousand Mr. Gray. Our ’ . the members of he Teonaey of an roel, ask owe Sihsnd, mg os s dishosine 'W, 1s on one main point, and that i pt of 2 mapluy, The bill that we are considering here, if the boos on oh ° Sraahaation fee should be taken out of it, after adequately grapplos with oh of : Operation, will not be a bill that although you might take Soy Srplus ques lon, for the reason that out 1t in Chairman Haucen’s bill civary's second condition and Mr. Pur~xELL. I hope we Jo AGRICULTURAL RELIEF 51 Mr. Gray. So do I. Still, with that second condition in there, the initiatory action resides with the cooperative organization, and if they are unable or unwilling to-do the things which that second condition permits them to do, referring back to section 5, the loaning section, the provision falls flat; and, as I said yesterday, I believe that when it comes to a real surplus question the cooperative organizations are not big enough, either in numbers or finances, to grapple with it. We will have under such conditions a bill that is not a surplus control bill. We will just simply have a cooperative marketing bill, and we have had that and do not need any more of that type of legislation. I think, Congressman, that the loaning provisions, as in section 5, and as in this second provision of Chairman MeNary’s bill which we are speaking about, will be useful for current marketing overations. Mr. Pur~xeLL. And micht stabilize the price? Mr. Gray. But when it comes to surplus disposition they will be ineffective if applied, and probably not applied on account of the unwillingness of the cooperatives to run the risk of applying them. So with that kind of a bill, with the equalization fee taken out, we have another cooperative marketing bill, and the farin groups are not. advocating another cooperative marketing bill. Mr. PurNELL. Mr. Gray, let me say I live out among these farmers, and I think I speak their language pretty well, and I know what they think. Anybody that tells you that there is not a farm problem in this country does not speak the truth. I am not laying it all on the farmer's shoulders either, but I want to tell you that one of the things that is wrong right now is the broken-down morale among the American farmers. Mr. Gray. You are right in that. Mr. Pur~ELL. You know there is a broken-down morale, and as a member of the committee, when we had this other bill up, I said this much to the President: I think if this bill does nothing more than to strengthen the morale of the American farmer, you give him to understand that down here in Washington there is a sympathetic Congress that wants to help him, it will go a long way toward solving the problem. Assuming that all your objections to the bill are well founded, a mere passage of this bill will strengthen his morale and help him to solve it himself. [ do not think that will solve it by any means. If that be true, and I think it is a thing that can not be controverted, that he has a broken-down morale and he has reached the point where he thinks Congress either can not or will not do anything to help lift him up, would we not be serving a good purpose, knowing that we can not get this bill with the equalization fee, if we look back to him the groundwork, the board and the revolving fund, and the conditions which are here set up, and tell him, as we would tell him publicly and privately, “While it is not all we wanted and all we nope to get, we have made this much of a start and we are going to add to it just as fast as we can, we are going to help you just as fast as we can,” would we not help his morale? Would not we be doing him as much service, and should we not do as much service as we can and as {ast as we can? Mr. Gray. Answering your question from the point of view of whether or not you would be strengthening the farmers’ morale by so doine—and 1 consider that a part of vour question—I am em- 32 AGRICULTURAL RELIEF barrassed to answer that I do not believe you would be strengthening the morale of the farmer. Let me give you an instance to explain to you why I answer in that way. When this resolution of the American Farm Bureau Federation which I read recently to you was presented to the voting delegates at our ninth annual meeting in December, last, at Chicago and this last paragraph specifically naming the McNary-Haugen bill, which every one of the voting delegates there knew of and had studied closely, was presented, Mr. Cornwall, president of the Vermont Farm Bureau Federation, arose, he being from the northeast part of the Nation, and said that although he did not pretend to speak for the farm bureau members in all the northeast part of the Nation, he did speak for those in his own State of Vermont, and he was wholly in accord with the resolution specifically naming the McNary-Haugen bill. That got a fine hand from the group. Now listen. I am giving this incident to demonstrate my answer. He was immediately followed by Mr. Dickinson, representing the Massachusetts Farm Bureau Federation, which organization sent Mr. Dickinson there to vote against the MecNary-Haugen bill. Deviating now from that recital, I will say that since that happemed Mr. Dickinson has been elected president of the Massachusetts Farm Bureau Federation. He was sent to Chicago to fight against the McNary-Haugen resolution. He got up on the floor there and supported it, and since then, in the Massachusetts annual meeting, he has been elected president of his organization. I am making a demonstration of my answer. Following that, Mr. White, president of the New York Federation, arose and supported the resolution, and Mr. Borders, representing the New Jersey Federation; then Mr. Putnam, president of the New Hampshire Federation, and Mr. Buckingham, representing the Connecticut Federation, thereby cleaning up the entire northeast section of our membership in support of this resolution specifically standing for the equalization fee. Now, if that could happen over the northeast section of our Nation, I would be compelled to answer your question by saying that after studying this question as those men have, and in view of their response on the floor, publicly, to a resolution such as this, you would not strengthen their morale by handing them anything less than they sire. Mr. Purners. Now, Mr. Gray, let us follow that a little further. L doubt if you are entirely fair in submitting that bald, unqualified question to any group. I can go out into my district of my State and go before any group of farmers and put that question up to them, and I know the answer I will get; I know what they want. I know Lid they feel. They believe in the principle of the McNary-Haugen ns wth the equalization fee init. If I were to put that a thousand take 0 Pi of a question I would get the same answer. You all Y Ws, comping right now and not qualify that statecommit you will probably find a majority of the members of this mmittee in favor of the McNary-Haugen bill with the equalization fee in it. But that is not the point. Mr. Gray. Then let us report it out this morning. AGRICULTURAL RELIEF 33 Mr. PurNeLL. But that is not the point. If we are going to stop right there, and if that is all you are going to say to your farm group, all you are going to say to this committee, that is one thing; but if you are going to go ahead and add to that statement that we can not cet it and we know we can not get it, then does it not necessarily follow that we ought to then concern ourselves with the next important question, whether or not we will try to get anything. That is the thing that we are up against right here. I repeat that it is a serious and most serious question for us to decide. Mr. Gray. It is very serious. Mr. PurNELL. And it does not mean that any man that supported this bill around this table will change in any degree the sentiment or belief that he has in that measure. Mr. Gray. It is a very serious situation. It is serious for the farm representatives, for the farm groups, and it is serious for the membership of this committee. We know that. Mr. PurneLL. I want to say, as I said to you privately, this committee has a very high regard for your judgment and advice and for the advice of your associates, who have come down here and helped us through the evolution of this bill. I was just thinking, while we have been discussing in the last few days this bill, how crude was the very beginning, when we had the old script plan which we proposed to work through the post office; how ridiculous it seems to-day. We have gone through a process of evolution here. There is not, of course, anybody here who is going to turn his back on it. But that is not the question. It is not a question of whether we have forsaken the principles of the bill we have been fighting for. It is a fact that we are up against a practical proposition, and that is whether we will go home with something or nothing. Mr. Gray. What is the practical proposition? Mr. PurneLL. Whether we will go home with something or nothing, and with me it is also a question of whether we will o home with something that is worth anything. Mr. Gray. The practical proposition is not whether we will go home with something or nothmg. The practical proposition which is disturbing many people, but not particularly disturbing the farm groups, is whether or not there is going to be a veto of whatever farm relief measure comes out of this Congress. Mr. PrrNELL. You know there will be a veto, don’t vou? Mr. Gray. I do not know it. Mr. Pur~EeLL. There has been some suggestion here by inference, if not by direct statement, that some of the members of the committee have assurance that the President or the administration wants us to do this thing without the equalization fee in it. I have not talked with anybody about it. Nobody has invited me to do one thing or the other. Whatever has been said has come from within this committee. I do not know what the President would do if we sent this bill down to him without the equalization fee in it. I have no knowledge whatever, directly or indirectly. So that it is not a question, as was intimated by somebody, that we are forsaking the principles of our bill and trying to put through something somebody else wants. Nobody has said anything to me about it, and I don’t think anybody has said anything to any.of the members of the committee. 3 i AGRICULTURAL RELIEF Mr. KixncHELOE. In order to have a bill that will become law you had better find out from the President, because we might send one down there and he would veto it and we would have to go home without anything. Mr. Jones. Have you had some conferences with the President recently, since this session began? Mr. Gray. I see the President occasionally on various projects. Mr. Jones. Have you any assurance—without undertaking to quote him—that if we were to insert this second condition the President would probably approve the bill with the equalization fee in it, or have you anything that you might specify that would give us a reason to hope for that? Mr. Gray. I would describe President Coolidge’s qualifications in this way, Mr. Jones: He has a remarkable facility for getting information and giving none. Mr. Jones. What I was getting at—he gave out a good deal of information when he vetoed the bill before. There was a good deal of information in that message. [Laughter] I wanted to know if you had any assurance that if we inserted this additional provision of section 2 he would change his attitude or might approve the bill? I think that is a very practical question. Or, have you any statement from him or indication from his attitude that might lead you to hope that he might have changed his attitude? Mr. Gray. We could not expect the President of the United States to commit himself to a representative of a citizen's group, such as that of the American Farm Bureau Federation, on a proposition like his, Whew I doubt if he has committed himself even to his own inner amily. Mr. Jones. I just wanted to know if you had any basis for a hope that he might, by putting in this additional condition, sign the bill. Mr. Gray. The basis of hope would be that it gives the loaning provisions an opportunity to be tried out if the cooperatives want to try them out; and from various sources, the President included, there has been an advocacy of the loaning mechanism of various farm relief bills; and this bill, with the se@ond condition from Senator MecNary’s bill included in Chairman Haugen’s bill, would give the loaning provisions a try out and leave the equalization fee plan, as we stated a while ago, a pinch hitter, a thing to be used when there was a real surplus question which the loaning provisions will not grapple with and can not handle. Mr. JonEs. If the President did approve it; but I was wondering if you had any basis for hope that even if we put section 2 in and made this condition in that further way, the President would approve it and thus give you a chance to try it out. I am asking that in an honest effort to get some information. if we can. I think that is an important question. Mr. Gray. It is an important question and I wish someone could answer 1t with more specifications than I can give. [Laughter.] Mr. Kercaam. Mr. Gray, suppose the bill without the equalization fee passes both Houses of Congress and is approved by the President, and then after two years trial—I think this would cover the present and might have some effect upon legislation after two years, including 1928 and 1929—do you not believe that the prophesies of your people as to the effect of these other provisions will have been AGRICULTURAL RELIEF 55H quite fully demonstrated, and you would be in better position then to come back and say “We have proved by two years actual experience that none of these provisions is effective in bringing about the thing we want. We now insist upon our original proposition, namely, the incorporation of the equalization fee in the bill?” Mr. Gray. Answering your question in two parts, if the farm oroups then would be in better position to come back and advocate the equalization plan, Congress, on the other hand, would be in a worse position, because the members of that body and the opponents of this farm relief plan, would say “We have not had long enough time vet to try out the other sections. Wait awhile until we try them out.” There is the danger, Congressman Ketcham, in passing a bill which does not go to the heart of the question. We will always be met by the argument, “We have not had time enough to try these loaning provisions out, or whatever is incorporated in the bill. Wait awhile. Under different conditions, different climatic conditions, different seasonal conditions, political conditions. or otherwise, it will work.” I will answer your question then by saying that the farm groups would be in better position to come back in two years and advocate the equalization plan, but we would meet with insuperable obstacles on account of the advocacy for further delay. Mr. JoxEs. There are one or two other questions-1 wanted to ask. It is vour position, then, and the position of those whom you represent, that it would be better to report a bill out with the equalization fee in 1t? Mr. Gray. That is our position. Mr. Joves. And take chances on the results? That is the position? Mr. Gray. Thrt es our position. Mr. Jones. Jf alt “he indications are that the President would veto it after we put it ‘nro him, do you think it would be worth while to report any bill at all? Do vou think it might not be better just to let it ride until—- - Mr. Gray (interposing). May I answer that question in this way? Are these farm groups and all others who appear here before this committee and who have appeared before many another committee of Congress, dealing with the legislative or the executive branch of the Government? Mr. Frommer. That is a good question. Mr. Jones. I appreciate the force of that, but before you get a law vou must deal with both. In order to get legislation we must have the approval of the Executive, unless we have an overwhelming majority which, from all indications, we do not have. The Congress has taken the action during the last session of the same Congress. Not the same Congress, but the last session of Congress, and there has been no change in the Executive, during the same administration, I will sav. Now we have taken the action, and do you think it would be worth while to go through the same action again? 1 am not asking this in any critical sort of way at all, but do you think we should go through the same action again with the same man at the head of the administration. Do you think it would be worth while to go throuch the process of marching up the hill again with the 36 AGRICULTURAL RELIEF same load of poles, to use the language of;the street? Now do you really think that would be worth something to do that? Mr. Gray. I think it would be worth something to do it, but 1 qualify your question by saying that we are not marching up the hill with the same load of poles. This bill is, using the words that Congressman Williams used the other day, substantially different from the bill which was presented to the President before; but it is substantially similar to the other bill in one feature. Mr. Jones. I think in the main feature it is very similar to the other bill, and that was the reason for my other question as to whether you had any reason to hope for approval. Now, if you have some hope of approval of the measure, even in its substantially changed form, I can see very readily why it might be better, and I think Sed poe some reason why it may be better even though there was Mr. Gray. We are on the fighting line, Congressman i behalf of this bill, and whatever the patter might be * We are willing to meet it. Whenever the membership of these various farm groups change their position which, as I indicated in answering Congressman Andresen’s question this morning, would be a long time coming about, because farm groups do not change their position quickly—they can not, their physical make-up does not permit them to do it—whenever that condition comes around, whoever represents these groups might come before this committee and its successor with a different position. But that is some time in the future, and i 4 o resent tenor and frame of agricultural mind, it is not of pir ees 1 was Just trying to get a thorough understanding Mr. KincaeLoE. Mr. Gray, I want to ask esti [Inasmuch as this seems to bo just a question brass there 1a n question whether we are going to abolish Congress and the Agricul tural Committee and just have a President. I want to asl 3 ou . few questions along that line. So far as responsibility is concorn a. and so far as the Congress and the mémbers of this ommittes are onagmme L an the farmers, that is a question which the individual : ongress has to decide. So far as I am concerned I not running to cover, and I am not excited. I have not a word on earth to say against the President because he saw fit, in the ex De Drerogative, to veto the McNary-Haugen bill; but he did not re ri 1 i ir en Ne ho Adil than we had to pass it. to a Red tn question whether there is a movement here, that is a splendid attitude. in eho, on some future bil JT BO na e, In my judgment, to put the Congress iy member when I used to read the Constitution i I at we had three branches of the G enstitution it provided was not only the nie: ? e Government and that the Congress then it is un tot ator but, the one that enacted the legislation pb to the President to sign it or veto it, b i id veto it, Congress still had the right by tw thi d WE even If ho did anyhow. It looks like the people ab a tim I one, a Da it tatives were framing the Constitution we 2 kh ge their reprosengress to enact legislation. So I £11 and on th of looking to Constill stand on that Constitution. AGBICULTURAL RELIEF 87 Now, they talk about a bill that the President will sign. Of course, I do not think that any organization or any Member of Congress ought to sacrifice his principles just simply to get some kind of legislation. I am not going to be stampeded about it at all. Your people, if I understand you, your various organizations, have met not only since the last Congress and since the President vetoed the bill, but a long time before that, and you have long since come to the point that the equalization fee is the only thing that will overcome overproduction, and that is the reason you are for it, and you are still of that opinion. notwithstanding the President vetoed the bill. Mr. Gray. We are of that opinion. Mr KincHELOE. I was just wondering, in your resolutions that you adopted in Chicago, where you eulogized Congress’ for passing this bill, why you did not go further and put the responsibility where it, belongs for it not becoming law. Was that discussed in any way? Mr. Gray. I do not hesitate to answer that that question was discussed. Mr. KiNcHELOE. But there are no whereases or resolves or condemnation of the person who made the enactment of that bill impossible. That was not done. Mr. Gray. That was not stated in the resolution. Mr. KixcHELOE. I say it was not. There night have been a good deal of chewing the rag around there, but nobody went on record. [Laughter.] Now, I think you will acree that there is the same necessity for farm legislation that there was before. Mr. GRAY. It is just as necessary now as it was four years ago, when we first appeared in behalf of this legislation. Mr. KincHELOE. Do you think the farmer and the agricultural interests of this country are in as bad shape as they ever were, notwithstanding the Evening Star here last nicht came out to the: contrary? Mr. Gray. Will you hold your question awhile until T make a remark along that line, please? Mr. KINCHELOE. Yes. Mr. Gray. Through the courtesy of the American Farm Bureau Federation and through our close relationship with all the activities of the land-grant colleges and universities, I am transmitting to each Member of Congress to-day, or you may receive it to-morrow, the report of the special committee of the Association of Land Grant Colleges and Universities upon the agricultural situation. I wish each member of this committee would give studious attention to that report, because it, for one thing, bears out what T have said, that the agricultural situation is just as emergent as it ever has been; and if there is anybody in the United States that knows and understands the agricultural situation, in my humble opinion, it is the officials, the teaching personnel, the technicians. in the land-grant colleges and universities. Mr. Hare. Had we not better do something to help them? Mr. Gray. We had better do something to help them, and something constructive. Mr. KincHELOE. You don’t think really they got any of that information from the farm papers, the Washington Post and Washington Star. do vou? [Lauchter.l 58 AGRICULTURAL RELIEF Now they are talking about getting a bill through that the President will sign. Mr. Purnell said that was the practical question; that we are sure if we pass a bill with the equalization fee and revolving fund in it he will not sign it. We do not know whether the President would sign it or not. If I understand it, you people are standing for a certain definite policy. Mr. Gray. We are. Mr. KincaELOE. Whether we agree with you or not, and because a bill fails in Congress or is vetoed by the President I don’t presume has much effect on changing your ideas about fundamental prineiples, and if I understand you, not only your organization but all of them that Mr. Thompson read here the other day, are still for a farm bill with an equalization fee in it. Mr. Gray. We are. Mr. KincHELOE. And you are not for any bill that does not carry an equalization fee? Mr. Gray. We are not. Mr. KiNncHELOE. So you would be satisfied, if I understand you, with the original Haugen bill that is now before the committee, where the board was appointed directly by the President, instead of being recommended by the farmers, as in the bill we passed. Mr. Gray. Yes. The bill as introduced, in regard to the make-up of the Federal farm board, is satisfactory to us. You are referring to H. R. 7940? Mr. KincHELOE. Yes. I say you would be satisfied with a bill where the board is appointed directly by the President instead of being appointed upon recommendation of the farm organizations of the country, as it was in the original bill that was passed at the last session of Congress. Mr. Gray. That is satisfactory to us. Mr. KincueLok. Do you know any farm organization of this country that is against the McNary-Haugen bill? Well, I will say that is against the principle of the equalization fee, except perhaps. the Grange? Mr. Gray. That is on record against the principle of the equalization fee? Mr. KincuELOE. Yes. Mr. Gray. I donot know that any organization has gone on record specifically on the negative side of that question. I do not recollect that even the National Grange has gone on record negatively against the equalization fee. They have their program, which is a debenture plan, and which I am not, of course, in position to explain or criticize, so far as that goes; but these farm organizations are working very congenially together. They differ sometimes on projects, but that does not harm or sever our relationships; but I am here representing, and these other groups are here representing our judgment in behalf of our program. If some other group has some other program, their judgment will lead them to try to persuade you to do that. Mr. KincueLoE. That is the reason I am asking you if it is true that the farm organizations of this country are practically a unit in favor of the McNary-Haugen bill with the equalization fee in it. Mr. Gray. It seems so. ~ Mr. KiNCHELOE. And you are not going to sacrifice that principle lust because the President vetoed the other bill? Am I rieht in that? AGRICULTURAL RELIEF 59 Mr. Gray. Yes. Mr. KercaaM. A moment ago you gave a very clear and correct answer to the question I suggested, as to the possibility of this bill, without the equalization fee, operating at the end of two years, and then whether we would be in a stronger or weaker position if certain conditions did or did not develop. I want to put this question: Supposing the bill passed, was signed, and became operative, and that it did prove to be the thing that would do the business, how would you feel then at the end of two years? I want to know what your attitude of mind is. Are you absolutely committed to the proposition that 95 per cent, 96 per cent, or 97 per cent, or some per cent of farm relief is in the equalization fee would not be needed if the unexpected happened and the bill without the equalization fee passed and became a law at this session? Mr. Gray. No; we would be better under that condition. Mr. Kercaam. Would your organization give every bit of its strength and power to the provision of the bill that you have introduced and approved, if that did become operative? I want to know what your attitude would be now. I think you are perectly frank. We have been perfectly frank with you, certainly. hile you are not authorized to speak excent officially, I would like to hear your expression of view. Mr. Gray. You are asking the question, of course, of me as the representative of the American Farm Bureau Federation, and I could not answer that as definitely as you would desire me to answer, nor as I might answer if I represented a large cooperative group. However, we are in support of cooperative groups in the Farm Bureau and have had somewhat to do in setting up cooperative enterprises, so I would answer your question in this way: That the cooperation which the Federal farm board would get in putting into effect for the two or three year period which you set up, for purposes of argument, would largely lie upon the activities of the cooperative associations and not with the activities of the American Farm Bureau Federation or any of these other big national service organizations, because we do not handle anything. We have nothing to sell or nothing to buy. That answer would have to be given by the representatives of cooperative groups. But my indication of an answer would be that you could expect from cooperative groups and from the service organizations splendid cooperation in putting into effect the bill, if passed. This is an indication as to what my judgment would be of their activities. Mr. KercaaMm. You would be disappointed, of course, if the equalization fee were not in the bill? Mr. Gray. Surely. Mr. Kercaam. But you would not be disappointed so far as to enter active opposition to the working out of this bill. even if it was not in the form which you want it in? Mr. Gray. I think there would be no active opposition but, as I have said—and I make the statement after conferring with a good many cooperative leaders—I doubt whether the cooperative leade:s would get themselves into contractural relationships with the Federal farm board when there was a real surplus question to handle; and that is what we want to tackle in any farm-relief legislation. I doubt whether thev would fulfill all expectations in that recard. 50 AGRICULTURAL RELIEF Mr. Fort. Mr. Gray, you made it very clear that you have no personal opinions, but that they are purely official. You have read the resolution adopted at the farm bureau meeting in December, specifically approving the McNary-Haugen bill. Was the bill that they then specifically approved presented to them in the form of House bill 7940, or was it the bill that passed the last session of Congress under that name, or was it the bill that Senator McNary has introduced in the Senate, which varies from H. R. 7940? Mr. Gray. Your question, Congressman Fort, can not be answered with precision, because it is not stated in conformity with the conditions which existed. In the resolution which I read awhile ago we did not approve any particular issue of the McNary-Haugen bill. The words are these: We insist that legislation which contains the principles embodied in the McNary-Haugen bill, with such improvements as experience and good judgment may suggest, shall again be passed by the Congress. That does not put any catalogue number on at all, relative to any ziven bill. Mr. Fort. That reads ‘Be again passed by Congress.” It refers to the principals of the McNary-Haugen bill as previously passed. Mr. Gray. Yes. Mr. Fort. Whose authority have you officially, therefore, since you have no individual opinion, to make the modifications in the bill as it passed last session, that you are submitting to this committee? Mr. Gray. Reading the resolution again, we find these words: With such improvements as experience and good judgment may suggest, shall again be passed by Congress. Mr. Fort. Now that experience and good judgment, then, is yours as an individual? Mr. Gray. Not at all. Mr. Fort. What is it? Mr. Gray. In conference with President Thompson, in conference with Mr. E. A. O'Neil, chairman of my legislative committee, in conference with Charles Hearst, of Towa, president of the Iowa Farm Bureau Federation, member of my legislative committee, in telegraphic conference with George M. Putnam, president of the New Hampshire Federation and also third member of my legislative committee, it has been decided that such amendments and changes as are incorporated in the present Haugen bill, H. R. 7940, do not violate the fundamental principles embodied in what we know as the general principles of the McNary-Haugen legislation. I am not voicing my personal opinion. I am voicing my authoritative opinion. Mr. Fort. That is what I want to get at. "Are all those gentlemen here except those you referred to that you got in telegraphic communication with? Mr. Gray. They will be here to-morrow. Mr. Fort. Will you be good enough to-morrow to interview them officially and advise us officially whether the American Farm Bureau Federation favors the adoption of the McNary-Haugen bill with the eaualization fee, and will accept no alternative bill? Mr. Gray. What is your purpose in putting on the last clause? Mr. Fort. You say you can not express a personal opinion; you can only express an official opinion. You have been asked here to-day AGRICULTURAL RELIEF Al whether you will only{take the equalization fee, and if you canfnot get that you will take nothing. Now I would like that as the official expression of your body, and according to what you say, this group of men have authority for the American Farm Bureau Federationfto suggest amendments to the bill. Mr. Gray. In other words, you want not only a positive but you desire a negative statement as well. FY Mr. Fort. Whether it is that or nothing—if that is the attitude of the American Farm Bureau Federation. I think we are entitled to that. Mr. Gray. Can we get the same kind of expression from the membership of the committee here, the Committee on Agriculture, positive as well as negative? Mr. Fort. You can from me, and you have from other members. Mr. Gray. I have no hesitancy in saying that I can transmitkto this committee, either in person or preferably by letters signed by those gentlemen whom I have named, our positive convictions on this proposition. I do not know whether we are going to commit ourselves to a dog in the manger attitude or not. I am not trying to shield this committee from its responsibility. If it wants to take a negative attitude, as I said this morning, that is its responsibility. Mr. AsweLL. How could you shield the committee? Mr. Fort. We appreciate that, but following Mr. Kincheloe’s question, the attitude we are finding here is that there are three groups who have to be satisfied before any bill on this subject can become law, and the third is representative of the farm organizations who are not satisfied with the bill as introduced by Chairman Haugen, who come to us—it being the responsibility of this committee and the Members of Congress to shape legislation—with the suggestion that that bill, without certain amendments, should not be reported, unless they get all the amendments Chairman McNary, in the Senate, put in his bill, and are telling us that a certain type of legislation containing specific paragraphs and clauses is what they want. Now I think we are also entitled to know whether their attitude is that or nothing, and I think if that is their attitude, we have got to make up our independent judgments as to whether we can give them that, whether we can give them nothing, or whether we can work out something independent of their suggestion, in view of their attitude that it is that or nothing. Mr. Gray. If the members of this committee or if the committee as a group—referring to the Agricultural Committee here—are seeking an alibi or defense of negative action on farm relief from the farm groups, I suspect you will wait some time to get that sort of an alibi. I am perfectly willing to and I shall give this committee, at your suggestion, a positive statement from those men whom I have named, as to our positive position. If a negative position is taken that is your responsibility, and you will get no alibi from the farm groups. Mr. Fort. In other words, Mr. Gray, the attitude that you do express is one of willingness to cooperate with us only in the drafting of a bill that involves or incorporates the equalization fee? Mr. Gray. I answered that further and fully in answer to Congressman Ketcham’s question a while ago. You will get our cooperation R6160—28%—sFRE. PT 1—5& B82 AGRICULTURAL RELIEF n making successful, as much as it can be made successful, whatever farm relief bill passes Congress. Mr. Fort. No; I said in drafting. You did not get my question. Mr. Gray. Maybe I did not understand your question. Mr. Fort. I asked you whether we would have your cooperation in drafting legislation if that legislation does not include an equalization fee. Mr. Gray. No; I have no authority to help draft a bill which is not in accord with our policy. Mr. Fort. Then if that be true, if the committee is not in favor of a bill with an equalization fee in it, you do not intend to assist the committee in drafting any other bill? Mr. Gray. No. Mr. Fonmer., Mr. Chairman, may I add right there, following Mr. Fort’s question up a little, if it is a matter that this committee proposes to take the dictates of the President instead of functioning for the people of the United States, it is useless to continue further the hearings. We might as well adjourn and ask the President what we should do, and submit it to the Congress. Mr. Kercaam. Don’t you think it is just as fair for these gentlemen to state what they want before the committee as it is for the members of the committee who have said, “I am not going to vote for any bill that has an equalization fee in it’? Mr. FuLMER. In the meantime this committee has taken up a lot of time trying to pursuade this witness not to go up against the President. As a matter of fact, these folks were invited here and have been given this time to speak on this bill, and then when we go into executive session it is the responsibility of each Member to vote for or against a bill carrying the equalization, or one leaving it out. So far as I am concerned, I am willing to take the responsibility and represent the American people, instead of taking the dictation of one man as to what shall be the legislation that we should pass in the interest of agriculture. Mr. Jones. I think Mr. Gray has made the position of the Farm Bureau very clear. Mr. AsweLL. Has any member of this com 1ittee asked that you defend him about his duties? Mr. Gray. Several members, Congressman Aswell, have asked questions which, if they were answered in the way those questions were desired to be answered, would have put the farm groups in the position of defending the members of this committee in this regard; that this committee must face its responsibility. If it reports out a farm relief bill which the farm groups do not desire, it can not expect those of us who represent the farm groups to come here and say that such a report will be agreed to by us. I am not going to call out names of the committee members who have asked those questions, but the record will show who have asked the questions seeking to zet a negative as well as a positive answer; that is, to make the farmers responsible for both kinds of farm relief bills. I do not think they are going to get a negative answer, because that kind of an answer would put the farm groups in the position of defending the members of this committee, if there be such, who desire to report out a bill heartless. with no meat in it. AGRICULTURAL RELIEF 63 Mr. AsweLL. Will you stand aside a moment and let me ask a question? The President, during the last Congress, asked his Attorney General for ‘an opinion on the constitutionality of the equalization fee, and the Attorney General definitely and specifically told the President that it was unconstitutional, and the President vetoed it. Now we have the same President and the sane Attorney General. If we put the equalization fee up to the President again how could he sign it without repudiating the Attorney General? The Attorney General would have to get out of the job, would he not? Mr. Gray. Why should we worry about that? Mr. AsweLL. Iam talking about a practical question. I am asking you a practical question. Mr. Gray. And we practically dispose of it by saying that is the other man’s worry. Mr. AsweLL. Then you prefer that we leave in the equalization fee when you know in advance positively that he will not sign it? Mr. Gray. I do not know that in advance, and I have not agreed to that at all. I referred to the land grant colleges here awhile ago. If you go back in the Civil War and post-Civil War period you find that the act setting up the land grant colleges and universities in this Nation went through as strenuous a time to be passed as farm relief is going through. It was vetoed by President Buchanan. It was declared to be, as judgment then ran, unconstitutional because 1t was class legislation. Who in this room believes that now? Mr. Apkins. Mr. Gray, I have followed very closely Mr. Purnell’s questions and your answers to him. If I understand this pinch hitter you are talking about, it is proposed by the suggested amendment that at the initiative of some farm group or cooperative the equalization fee might be invoked on some commodity. Is that the purport of 1t? Mr. Gray. Yes, sir. Mr. Apxins. Now, I have thought a great deal of that myself. Here is the thought that comes to me, and I want to know what you think about it, if you have done much thinking about it. With a revolving fund -of $400,000,000 and the board operating with the privilege of some commodity groups of cooperatives invoking the equalization fee, how many of them do you think would do that when they can, with the $400,000,000 so available, have other groups who do not want to impose the equalization fee? Do you think they would do it? Mr. Gray. I was disturbed bv people passing around me. Do what, now, please? Mr. Apkins. Take, for instance, in my neighborhood, where they raise a lot of corn, and they declare an operation period on corn. With this pinch-hitter clause in it that you are speaking about the cooperatives on corn, under that provision, as I understand it, could invoke the use of the equalization fee during their operating period on corn. Now the thought that has come to me about the matter is this. Would the cooperatives and the corn producers ask to have the equalization fee invoked to take care of the loss when they knew that the $400,000,000 was available to the producers of all other commodities without the fee? The thought came to me what Tom Smith would say. Would he not say, “Are not the corn growers entitled to it just as much as the wheat growers. the cotton orowers. or 64 AGRICULTURAL RELIEF anybody else?”” Now he insists on having his surplus handled out of the equalization fee, and the question arose with me whether that would be operated or not, so long as there was anything of the equalization fee left to operate it. Had you thought of that at all? Mr. Gray. We have discussed that. Mr. Apkins. You know human nature. We can not change he Have you thought about that or discussed that at all? r. Gray. We have. Mr. Apkins. Do you think it would ever be operated while there was any of the fund left? Mr. Gray. It is a hard question to answer. It would depend, Congressman Adkins, upon the attitude and the decision of the board of directors of the cooperative organizations. Mr. Apkins. I am asking you a practical question now. That is the thought I had in mind. I said myself that I would be willing to try it out on one thing, but I would not want to give the other fellow the privilege of using the fund while I was trying it out on this fellow. That works a little like the fellow that had a remedy for measles and got scared of it, and they had a simple boy in the family and they finally decided they would try it out on John, and if it didn’t kill him then the rest of the family would use it. In other words, the thought I had in mind was, Will we debar the other fellow from access to the stabilization fund until such time as some group decides to try it out because I question very much whether the corn growers in my neigh. borhood—and I think we have pretty loyal cooperative elevator companies—that if our companies would join with others to say “Here we want an operating period on corn, and we want you to estimate the size of the fee that will be needed to take care of this loss, and we will take it.” I do not know whether our membership might disintergrate on that proposition or not, and say, “That is a pretty thing bo hand fo the corn growers, and stabilize other people’s surplus out or one . easury. N ow you are imposing it on us.” Have you Mr. Gray. Yes; and that is one of the reasons for our organization standing against any farm relief bill that holds primarily and fundamentally the danger of disintegrating loyalty to the coo, era tive organizations, for the simple reason that a man does not Heed ip ney cooperator in order to get the benefit of this hand-out by eral lreasury; and i i yours, and we dou oy oo have been discussing that for several Mr. Apxins (interposing). Wh i ind i i ¢ . t1h of putting thot oa om w 61 ad in mind is as to the widsom r. KINCHELOE. id} in hs bill, hror Why do you want to put the McNary provision r. Gray. Because, if you will read b i nary s pl, you will find that those Jitu tn sain 8 pf Seay wo ul d call ox derly mar oti” Those loans can be used for what I Mr. K . i mers da LO. They can get that under the Haugen bill that Mr. Apkins. Y i die provisions of os Nan orderly marketing of the surplus, under keting of all - oes not pertain to the general marg _ our commodities, domestic use of the ¢ di understand it, but this other feature that we ar OThIND ity, as 1 e speaking about, if AGRICULTURAL RELIEF 65 I got the purport and foundation of it, was a sort of concession on your part to get the bill signed, when you left it optional with any cooperative or any number that might choose to come in under the fee. The question in my mind is whether they will ever choose to come in, as long as they have the stabilization fund back of them. I think my position is very clear, that this stabilization fund can never be maintained unless we do provide a fee to keep it going. Now, with that clause in it, as a matter of fact, it is questionable whether it will ever be invoked as long as there is anything left of the fund. Mr. Gray. Yes; it would be invoked. There is no doubt about that, because, as I have stated to the committee here several times, the experience that cooperators have had down to date, and the experience which they will get under these loaning sections, if they are ever tried out in disposing of a real surplus, will show them, after awhile, if not right now, that it is a good thing to keep away from for a cooperative to obligate itself to the Federal Treasury or to the Federal farm board and have to pay that money back. So experience would soon bring the cooperators to the point which I have suggested, and which is suggested in Senator McNary’s amendment in these words ‘‘because of the inability or unwillingness of the cooperative associations” to do this thing. I believe, and I feel sure, the cooperative soon would be unwilling to obligate themselves under the loaning section, on account of their known inability to make their obligations good, unless they would burst their organization in seeking todoso. So the cooperatives themselves would come to the point of view of having the Federal farm board go into the equalization operation. It will come, Congressman Adkins. The equalization plan will come Mr. Apkins. I agree with that. Mr. Gray. And it will come even with that section in there. It will come maybe a little bit later, as Congressman Prunell indicated a little while ago. It will come a little bit later than it would have come in the bill as it passed last year, but it will come, because the cooperatives are not going to try to bear that burden more than once. If they do it once they will never try it a second time. Mr. Apkins. You think if we impose the duty on this board of taking care of the surplus, with no restrictions on this board as to paying this sum back to the Federal Government if it is lost— and I am for that, as far as that is concerned— Mr. Gray (interposing). We are not. Mr. Apkins. Well, in the event it is lost, then I would not want to go back and give the power to anybody. This is an experiment anyhow, and if the experiment loses this board has the power and authority and initiative to go ahead and undertake to stabilize any commodity, and if a loss occurs nobody pays it. We impose upon the board the duty of doing this, and if there is a loss, the board does not make anybody else pay it. The point I have in mind is the practicability of this clause. That is the only thing I had in mind. as to whether it will ever be tried out. Mr. Gray. It will be tried out quite surely. Mr. Crark. Mr. Gray, may I ask a question. This bill, when stripped of everthing else, is a compulsory pooling bill, intended to take care of the commodity when the emereencyv arises. 56 AGRICULTURAL RELIEF Mr. Gray. Compulsory pooling in what way? Mr. CLark. Compulsory pooling of the particular product. Mr. Gray. Pooling the product but not necessarily the producers thereof. Mr. CLark. Why does it not. naturally follow that you would eliminate all of your cooperatives sooner or later, right under that proposition. Mr. Gray. On the contrary, under the McNary-Haugen bill or the equalization plan, instead of eliminating the cooperatives you enhance them because under the contractural relationships which they go into with the Federal farm board in the handling of the commodity which is being operated upon, at the end of their year’s operation there will be in the cooperative organization, let us say it may be the American Cotton Growers Exchange, the residue from dealings of the contractural agent, to do the work which the Federal farm board wanted done. Nobody outside of the organization will be permitted to get that revenue or patronage dividend. There is the inducement to come in, of that patronage dividend at the end of the operation, as well as getting the benefit of the generally enhanced prices, which goes to the outsider as well as the insider. The equalization plan attracks men to the farm organizations instead of scaring them away. If there are no other questions, Mr. Chairman, it being almost "dignmning time, I presume I may just say these words in conclusion. If the McNary-Haugen bill is passed after approval by this committee and it does not work, if it does not do what we expect it to do and have appeared before this committee maintaining that it will do the responsibility lies upon those farm organizations which have so long advocated it and are still continuing to advocate it. If any other bill is reported, of a negative character, setting up a Federal farm board with slight and emergency powers, only, for operation, and it fails to do that which this committee wants it to do, that responsibility is on this committee. Mr. KincreLoe. Mr. Gray, just right there, before you quit. I don’t agree with you. I think whatever bill is passed here, whether It 1s successful or unsuccessful, the responsibility is on Congress, because we are the people who are elected and sent here to enact laws, and so far as I am concerned, I am ready to take my own responsibility. Mr. Gray. Well, that is a point of view. ’ The Crairman. Have the representatives of the farmers and definite plan of procedure mapped out? Mr. KiLcore. Mr. Chairman, the cotton cooperatives have two matters. I do not know whether you wish to take them up this morning or not. We would not have time to conclude, but the cotton Cooperatives which have organizations in 14 of the 16 States proo ee ott on, have two matters which they would like to present One of them is the insurance provision whi i i i passed last year and the other Fone is ros dn ihe bill 3s 16 Sang i hos) Sols, cosperniives in their operations. last year, but it was not prone oe hie the Shute Committee like this committee to oi 0 this committee. e would ve us an opportunity to present that, and AGRICULTURAL RELIEF 67 then afterwards to hear us on the matter of the equalization fee and what it means to us in our cotton cooperatives. We could not even begin, in the few minutes left, to say anything about these matters; but may I hope that this committee, Mr. Chairman and gentlemen, will give us such opportunity. The cotton cooperatives are largescale organizations. There are other large-scale cooperative associations who would like to be heard along these same lines—the wheat growers, for instance. We have had a real experience. The tobacco growers is another organization that is a large-scale organization. We have had a real experience during a number of years and we can give you a page out of our experience on the matter of the equalization fee. Now, we would hope that before you make up your minds as a committee you give us a chance to present this experience and what it means to us, and we can not do it in the few minutes left here this morning. Mr. KincHELOE. The committee has no thought of not hearing you gentlemen that I know of. Mr. Kincore. Well, that is all right. Mr. Jones. We will be very glad to hear you. The CratrMaN. While we want to expedite the hearings in every way possible, I don’t want to convey the thought that we are going to cut off any of you gentlemen who want to be heard. I do not think the committee is ready now to determine the question, before they have heard evervone that desires to be heard and is entitled to be heard. Mr. PurNeLL. The program, of course, Mr. Chairman, that we have agreed upon, is that we are not going to rehash farm conditions, but we are going to confine it as closely as possible to suggested remedies and changes in the pending bill. The CrAIRMAN. The committee 1s responsible for its acts, and so far as the members of the committee are concerned, they are responsible for their acts. If we are to expedite this matter, we had better stick to the subject. Mr. KinceeELOE. Mr. Chairman, I believe every member of this committee ought to have an opportunity to ask every witness that comes here any question he wants to. Why get stampeded on this proposition? I believe every member of this committee that wants to be heard or wants to ask any questions, ought to be heard, and I believe that everybody who opposes any kind of legislation and wants to be heard ought to be heard. The CrairMAN. I do not want to take up the committee’s time, but may I be pardoned for the suggestion we are getting away from the question entirely. We are talking about eliminating certain provisions of the bill, especially the equalization fee. No suggestion have been made as to what should be substituted. I take it that everybody agrees that the bill without an equalization fee will not accomplish the purposes of the bill. The declaration of policy states its purpose; that is, shall the declared policy be carried out, if not, what? The aim of the bill is made clear in a few sentences. And what is it? “To preserve advantageous domestic markets for such commodities.” That is one. Are we for that? Second, “To prevent such surpluses from unduly depressing the prices obtained for such commodities.” Are the producers entitled to that? We have been talkine about the surplus. 18 AGRICULTURAL RELIEF Everybody seems to be agreed that the big question is how to dispose of surpluses, or how to establish a balanced production. Many believe it is beyond the power of the producers, or Congress, to establish a balanced production. Many agree that the equalization fee is necessary in order to preserve advantageous markets, and to prevent surpluses from unduly depressing the prices obtained for such commodities. In other words, to enable the producers to market their commodities in a way so as to share in the benfits of protective laws already established. The question then is, ‘“Are the producers entitled to the benefits of the laws already established?’ If so, and if the equalization fee is required to accomplish the desired results, why strike it out as suggested? If the farmers are entitled to share in our protective laws already established; if not to be accomplished through the plan suggested, it seems fair to ask how is it to be otherwise accomplished? No one has suggested a substitute. If any, why not let us have it? Mr. KincHELOE. I want to talk about the procedure to-morrow. Mr. Gray, I do not know who is here. Is it the plan of you gentlemen and your desire to designate who should appear before the committee and when? Mr. Gray. 1 will let Doctor Kilgore speak. Mr. KiLcorg. Yes, sir; we are ready. Mr. KincHELOE. Do you gentlemen want to come before the committee the first thing to-morrow? Mr. KiLcore. We are ready. Mr. KincHELOE. Is that satisfactory to all the farm organizations? Mr. KiLcore. It is. Mr. KiNcHELOE. I move we adjourn. The Crairman. Before we adjourn, may I finish my statement. What is next suggested in the declaration of policy, “From causing undue and excessive fluctuations in the markets for such commodities.” Are we for that? Are we going to carry out the declaration of policy? If not, what is to be substituted? Without a substitute. we have. as has been stated, little left but the enacting clause. What I wish to suggest, as I did before, is that no one has suggested anything to take the place of the equalization fee. Now then, if the equalization fee is eliminated, what is to be substituted for it? Many have suggested a subsidy. I believe that only one of the numerous farmers and representatives of the various farm groups appearing here in support of the measure has expressed himself in favor of a subsidy, even though they might be justified in accepting it, considering the billions of dollars in subsidies granted to others. No, the producers are not, here asking for charity, but on the contrary they are vigorously protesting against it. All that is asked is, that they be permitted to market their products in a way that will give them the benefits of protective laws already established, and to thus insure them the American price level. If so, they are willing to pay their share of the cost of equalizing the price, and receive their proportlonate share of the benefits. What they want is a law that will make the desired relief permanent. Not a temporary subsidy, wholly dependent upon appropriations from time to time, which might keg the whole purpose sought, but as before stated, permanent a a - In other words, one that will place the farmer on an equality organized industry in respect to our protective laws. AGRICULTURAL RELIEF 69 Now, gentlemen, much has been said about surrendering to the President. I yield to no man in my respect for our Presidents, regardless of their political affiliations. We are charged with the responsibility to perform certain duties, and we are here to perform those duties. One suggestion is, to pass the buck, and thus prolong the agony for two years. Why should the agony be prolonged? I believe that this committee and the present Congress are capable of determining what should be done in the matter. The question is, are we for preserving advantageous domestic markets for the farmers, as provided in the bill, and to prevent surpluses of agricultural commodities from unduly depressing the price obtained for such commodities, and for protecting the producers against undue and excessive fluctuations in the markets for their commodities? Shall we, as Republicans, carry out our party platform pledges “to establish a balanced condition between agriculture, industry, and labor”’? Shall the pledge made in the Democratic platform ‘to establish an export corporation or commission, in order that the price of the exportable surplus may not establish the price of the whole crop’ be repudiated and renewed pledges made, and thus permit the acknowledged adverse conditions to continue, or shall party platform pledges be upheld by the enactment of effective legislation as urgently requested by the numerous farmers and representatives of farm groups, who have been knocking at the doors of Congress for so many years? Mr. AswerL. If we pass a bill with this equalization fee in it will we be prolonging the agony? The CuairMaN. If a lot of obstacles are placed in the way. Mr. AsweLL. Now let me ask you this question. If we pass any bill with this provision in it do you believe it could become a law? The CrairMAN. It can if it receives favorable action on the part of Congress and the President or by a two-third majority of the two ouses. . Mr. FuLmeR. I understand the cotton people will come before us in the morning. The CrairMAN. There is another gentleman here from Illinois who would like to return home, and it was agreed this morning that he might be heard to-day for a few minutes, if that be agreeable to the committee. What is the pleasure of the committee. : The request is for unanimous consent that we hear Doctor Kilgore the first thing in the morning. Without objection it is so ordered, and we will adjourn until 10 o'clock. (At 12 o’clock noon, the hearing was adjournea to-morrow, Friday, January 20 1928 ° AGRICULTURAL RELIEF 31 would limit any more the authoritative recommendations which these advisory councils under this drafts are privileged to submit to the board. Mr. KercEaM. Yousee what I mean. It certainly seems to me, as you are setting up this board here in your bill, at least we ought to be safeguarded by some sort of a final review or the veto powers of the board itself. Mr. KiNncHELOE. Don’t you think that the more power you give the advisory councils the better the farmer is off? Mr. KercHaMm. Providing it is a commodity board, all well and ood. ¢ Mr. CLarRk. You have gotten back to my original proposition, that here is a buck-passing proposition. Mr. Gray. Mr. Chairman, if there are no more questions on this amendment, or, rather, on this series of amendments to section 4 and to section 7, I have finished—— Mr. KercaaMm. I will ask you this question. If I understand the idea of those who have been drafting these amendments correctly it is this, that the advisory board or council is intended for the benefit of the interests of the farmers in the districts they represent. Mr. Gray. Absolutely. Mr. Kercaam. That is right? Mr. Gray. Yes, sir. Mr. Kercaam. Now then, if I understand the question here it is that it is supposed that the farmers who are producing the crop in districts might oppose the findings of the advisory council. Is that right? Mr. Gray. The farmers might oppose the findings of the advisory councils? Mr. KercHaM. There might be a question of the farmers in the district represented by the advisory council not being in accord with the action of the council. Mr. Gray. Some members around the table here have suggested that this morning. Mr. Kerciam. That could happen? Mr. Gray. That could happen; yes. Mr. KincHELOE. May I ask you another question or two before you leave the stand? Mr. Gray. Certainly. Mr. KINCHELOE. At. whose suggestion were these amendments made in the new Haugen bill as pending, providing that the board shall be appointed by the President without any recommendations from the farmers’ organizations? Mr. Gray. It had its initiative, as far as my memory serves rue, in the first writing of the farm relief bill which we are advocating. The suggestion that the Federal farm board be built up in conformity with the usual practices in creating such boards, being appointed by the President and confirmed by the Senate, was subscribed to by all the farm organizations that were reachable at that time, which means the ones that were in this fight and were advocating this method of farm relief all through the last session. y Mr. KincHELOE. Was that agreed on at a convention of some ind? Nn @ a oO it 1 < * 3 o £ QO + 3 oO Pg ro a ~ Q - Oo oN oO ™ 0 °2 oO — 14 | | 1 53 be -— — 0 Pe © =} ~d 0 <q nn om 3 oN 0 oN 0 1 - -