AGRICULTURAL RELIEF 
280 
Mr. FuLmer. And would only be used when we would find out 
we had a surplus which was depressing the price of cotton? 
Mr. KiLGore. Yes. 
Mr. FuLmer. And only to the extent of buying cotton in a suffi- 
cient number of bales to bring about a fair price, and then withdraw 
from the market. Then, for instance, as the gentleman stated awhile 
ago, the speculator would want to take advantage of that to boost 
the market. You could then feed back the surplus you had on hand 
and put him out of business and hold a stable market. 
Mr. KiLGORE. A stable market; yes. 
Mr. Harr. Doctor, you would go in or out of the market to the 
extent of stabilizing the market when you had a surplus; when you 
did not have a surplus the market would take care of itself? 
Mr. KiLGorE. Yes. 
Mr. Apkins. And out of that fund you could repay the money bor- 
rowed from the Government? 
Mr. KiLGorEe. It is a guaranty that the money borrowed from the 
Government will be returned to the Government and kept intact. 
Let me follow just the thought there expressed as to the ineffective- 
ness of a loan fund in the loan bills, by this statement, prepared 
with some care: 
The effect which any “holding movement” would have on the 
cotton market would depend to a large extent upon the trade's 
judgment as to both the intent and the ability of the holding agency 
to keep the cotton off the market as long as necessary 
I want you to get my thought there, gentlemen—that the effective- 
ness of any holding of the surplus off of the market will depend to a 
large extent upon the trade’s judgment as to both the intent and the 
ability of the holding agency to keep the cotton off the market as 
long as necessary. 
Any proposal to merely loan money to finance withholding cotton 
from the market would not carry conviction to the trade’s mind and 
would, therefore, have the minimum effect on the market. If with- 
holding were financed by every grower contributing his pro rata share 
to the cost of withholding a surplus, and a payment of such con- 
tribution were assured beyond question, then such a move would Carry 
conviction to the traders in cotton as to both the intent and the ability 
to withhold. 
That would be true with an equalization fee as a guaranty of the 
integrity of the loan through the revolving fund. It would not be so 
with mere loans from thé revolving fund of the loan bills. 
I believe this is fundamental, and it is a serious obstacle to the 
effective operation of any of the loan bills. 
In this connection I want to call your attention to two provisions 
in the latest loan bill. The Crisp bill, introduced December 5, 1927, 
contains this provision [reading]: 
(f) Whenever, in the judgment of the board, sufficient loans can be secured 
by the corporation at reasonable rates from other lenders, it shall suspend the 
further making of advances. 
That shows conservatism. Our cooperative this year borrowed 
some money at 4 per cent—less than it could get it from the inter- 
mediate credit banks. Under those conditions this bill would not 
likely operate to handle the surplus, because we have already reached 
the point where we can get money at as reasonable a rate as the 
intermediate credit banks or the Government source would furnish it.