396 - AGRICULTURAL RELIEY
unusually good weather conditions are certain to produce troublesome sur-
pluses of some crops in some years. .

When such a condition occurs, evidently the sensible thing to do is to store
this surplus until another year. The proposed bill should provide that the
board shall take steps to provide necessary storage facilities whenever in the
opinion of the board, no other agency or agencies can be relied upon to ware-
house, or store a sufficient percentage of such crops, at low enough costs and
for a sufficient length of time, to secure for the farmer reasonable prices for
their crops.

Liberal credit also may be extended to foreigners wha want to buy our
agricultural products, and who have sound commercial security to offer for
such credit. This principle received the overwhelming indorsement of Con-
gress when the original export credit bill of 1921 was before that body.

Every year since the World War, Americans have been making huge loans
abroad, in one form or another. All too often, however, this money has been
expended by the borrowers to buy wheat, corn, and meats, not from the United
States but from the Argentine or Australia.

If some of these loans could be made for the sole purpose of financing the
exportation of American surplus crops, it would mean hundreds of millions of
dollars in the farmers’ pockets, in the form of higher prices.

Most of us remember the extraordinary increase in the price of grains which
resulted from the gift of $20,000,000 worth of foodstuifs to the starving Rus-
sians in 1922. From the day our Government began to buy these supplies the
price of corn, for example, began to rise, and the day it stopped buying the
price of corn stopped rising.

Despite the fact that only a small part of the $20,000,006 was spent for
corn, it was found that this stimulus to the market means an increase of
$150,000,000 in the value of the 1.500.000.0600 bushels of corn left in the country
at that time,

However, in spite of the three partial remedies above suggested, as well as a
crop-acreage limitation plan to be described later, there will always remain
the possibility, following a series of favorable years, of pyramiding surpluses
of certain crops above domestic requirements, and thus reducing prices below
the “American level.” It is this class of crops which fails to benefit by the kind
of protective tariff now in opeartion.

The prsent Ktcham bill provides that in an agricultural crisis of this kind
the board shall establish a system of “export debenture” payments on the
exported part of each crop, up to the amount of the tariff on that crop, and
2 cents a pound on cotton.

The export-debenture plan would do far more for farmers than would the
*“ equalization-fee ” plan and is far simpler to operate. The former is a frank
recognition of the principle that the consumers of the United States must help
make up to the farmer the loss he suffers through the tariff system. and other
governmental price-raising arrangements in industry. .

The administration of this feature of the law would be very simple, as has
been pointed out to this committee by Doctor Stewart.

There is a certain poetic justice in making this compensating payment to
the farmer out of funds received from duties collected to “ protect” our manu-
facturers. The one action is no more paternalistic than the other. In a way
the Government would be merely saying to the farmer: “ Since you must sell

your products at world price levels, because our tariff does not protect your
wheat, cotton, corn, and meats, we shall permit you to bring in free of duty an
equivalent amount of other goods at world price levels.”

With the above-outlined provisions in operation, farming again would have
a fair break with industry and some plan would have to be devised to prevent
undue acreage expansion. The Ketcham bill provides for declining debenture
values to discourage overproduction. This would be exactly as effective as the
increased equalization fee payments provided in the MecNary-Haugen bill.
By Lam inclined to think that considerably more could be done toward acreage
wl Jam Dian Jor doing this would be by increasing the acreage of legumes
board after car : plowed under as fertilizer. The bill could provide that the
overs, probible on y investigating the quantity of the various crop carry-
demands at home D cTeagen and crop prospects, together with probable crop
of the countrv ought t abroad, shall decide what percentage of the arable land

> ht to be planted in lecumes to be plowed under.