AGRICULTURAL RELIEF 
Mr. Morgan. Our tobacco is exported to the extent of about 
80 per cent of the crop. 
Mr. Jones. Yours is a different type of tobacco from that of 
Mr. Kehoe; you represent the dark tobacco? 
Mr. MorGaN. I represent the dark tobacco people, yes sir; and 
about 80 per cent of our tobacco is exported. 
For the first year, when we received 175,000,000 pounds, we did 
stabilize prices. We graded the tobacco for the growers. We 
recognized 405 separate and distinct grades of tobacco; and we were 
ue to stabilize those grades of tobacco and obtain a fair price for 
them. 
In this business the man not in the cooperative association gets 
the advantage of the price and gets all of his money, whereas the 
member who makes the market has to carry all of the surplus, and 
the surplus is dependent on the size of the crop. 
Mr. Hope. What proportion of the growers are in your cooperative 
association? 
Mr. Morgan. We started out with about 69 per cent, and the 
next year we had about another 15,000 join, increasing it to probably 
74 or 75 per cent. 
Mr. Hore. Is that» resent membership, then? 
Mr. Morgan. This » membership signed for five years. 
This last crop, though—-wnat 1s, the 1926 crop—was the last crop of 
the five-year period. 
We held these prices normal and stable all the way through. 
But here was the main thing that the member immediately saw, 
that whereas the price that he got was more than he expected and 
more than he believed he would have gotten without the cooperative 
association, still he did not get quite all of his money, but his neighbor 
across the fence, who was not a member, was getting all his money 
and, of course, a little dissatisfaction crept in. Everything was done 
In a peaceable way to get the nonmember to join, and for two years 
the association went along in a most satisfactory manner by carrying 
the surplus, but for those two years it was above a normal crop 
instead of being a normal crop of 250,000,000 pounds; the 1922 crop 
was 303,000,000 pounds, and the next year the crop was 323,000,000 
pounds. So we did have a large surplus, which, of course, the 
association had to carry for the benefit of the members. 
When the third year ¢ame around dissatisfaction began to creep 
in. In the meantime the buyers—and they know their business— 
went into the various communities and paid fancy prices to a few 
growers scattered around, in order to encourace them to break their 
contract. 
I am sorry to say, too, that even some of the bankers of our district, 
who were expecting large deposits on account of this association and 
who saw visions of large amounts of money, as we were handling it 
in millions of dollars, found they got no deposits, because in a cooper- 
ative association, if you get in any money you pay it over to the mem- 
bers; you do not deposit it in bank. So those bankers began to be 
disappointed. On their boards of directors were many tobacco buyers; 
and pressure was brought to the bankers. When a grower would 
come around and want to borrow a little money—I do not say that 
occurred in all cases, but in many cases—the banker would reply, 
86160—28 —SER E. PT 3——2 
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