162

AGRICULTURAL RELIEF
ostimate that it would have been 3,000,000 bales. This surplus would have
peen bought and stored with cooperatives for orderly distribution and sale. At
that time the average price of all grades was approximately 11 cents per pound,
and the 3,000,000 bales would have cost approximately $165,000,000. Some
will say that the appropriation for cotton was only $75,000,000 and this would
purchase less than a million and a half bales. They overlook the fact that loans
on cotton are available from the intermediate credit banks for 65 per cent of
/ of cotton.

hal fund being supplied by the bill, we come to the much discussed
equalization fee. Its function is to take care of the losses arising from the
resale of the surplus. How much loss then would there be on the cotton pur-
chased by the board? , The answer is clear. There would have been no loss
whatsoever, but a gain of approximately 100 per cent, basing this on the pres-
ent average of approximately 22 cents per pound. So instead of levying an
equalization fee or so-called tax, on cotton, there would have accrued to the
revolving fund for cotton a profit of approximately $150,000,000, and give cotton
a credit of $225,000,000 for future operations in the event of another surplus
crop. With no tariff on cotton and the world price and domestic price remaining
the same, it is hard to conceive a loss on cotton, when the board does not operate
unless there is a surplus, and until requested to do so as provided in the bill.
But in the event of loss on the purchase of the surplus of cotton, the amount
of the equalization fee would be small compared with the advantages derived
from saving the remainder of the crop from glutting the market and depressing
the price of the entire crop. The equalization fee or a direct subsidy is necessary
for the continued operation of the board. The farmers do not ask a subsidy,
but prefer that an equalization fee be levied on their products in such a way
that all who receive the benefits shall share in the burdens. Thus in addition
to providing a fund to finance the surplus in the years that it may occur, the
levy of this equalization fee would act as a measure qf acreage control and deter
the growers from continuing to create a surplus of their products.

Some objection has been raised to the bill on the ground that it would injure
cooperative marketing associations. If this were true I would be the last man
to favor the bill, for I believe that the ultimate hope of the agriculture of America
lies in cooperative marketing of farm products. Suffice it to say that no strained
construction of the Capper-Volstead Act could take away the preference given
by Ls terms of the McNary-Haugen bill to cooperatives, in the handling of the
surplus.

In so far as cotton is concerned, it resolves itself into a proposition of govern-
mental aid in the purchase and sale of the surplus which has heretofore deter-
mined the price of the whole crop. We have our lean years and our fat years in
cotton production, and the average has been in keeping with the demand, so
that after the largest cotton crop on record, in 1926, we find the carry-over at
the opening of the new crop, such that one vear of famine in cotton would shut
down the spindles of the world.

THE EAST SHOULD MEET WITH THE SOUTH AND WEST
I do not pretend to say that the bill contains a complete panacea for all he
ills of agriculture, for there are other and important things the farmers wil
have to do to adjust their business to conditions that surround them. The
one-crop farmer is violating economic laws and will suffer the consequences, but
the surplus problem vitally affects every farmer, whether he diversifies or not,
and this bill seeks to save him from his surplus. When the Government has
done this they shall have equalized the farmer with the manufacturer and solved
one of the greatest problems of agriculture, in so far as it can be solved by govern-
mental action. The farmer must realize that if he increases his production he
will decrease his price, and by his persistence in creating a surplus by means within
his control, he will bring upon himself not only smaller return for his labor but
an equalization fee for his folly.

The problems of agriculture in the South and the West are the same, and the
industrial East must not neglect their customers and further impair their buying
power, but in a spirit of live and let live, join with their brothers of South and
West to help solve this vexatious farm problem that will not down.

The CuairMaN. Mr. Stone, did I understand you desired te
‘ncorporate something in the record?

Mr. Stone. Yes. I will hand it to the clerk.