AGRICULTURAL RELIEF

533
Mr. AxpersoN. I do not concede, in the first place, that the opera-
tions of the board and of the commercial agencies which it might set
up, necessarily would result in losses; I think thev might result in
profit.

Mr. FuLmer. It is not a matter of profits. You buy a million
bales of cotton to stabilize the price of cotton, for instance, with the
price at 18 cents, to do that you would have to pay 18 cents a pound
if the loans were made to those cooperative associations on the basis
of 65 to 75 per cent, where would they get the money to pay the
difference so as to take a million bales?

Mr. AnpERsON. I have not suggested that the limit should be 65
to 75 per cent. I think they could be made on a higher basis. I do
not believe, if you ask me that direct question, that it is ever wise to
allow anybody, cooperative or otherwise, to deal in a commodity
entirely on somebody else’s money.

No commercial concern can operate safely on that basis. Every
commercial concern ought to have, whether cooperative or otherwise,
invested in its activities some capital of its own. It might be pos-
sible and perhaps desirable to lend—I express no opinion about it
because I do not know—to even lend the cooperative the capital
necessary to carry the equity in the crop, though I think that might
be a very dangerous experiment. But if it were done, it should be
done as a capital loan, with the liability of the cooperative or com-
mercial organization for that capital to the Government rather than
as a commercial loan on the commodity.

Mr. Former. You know, as a matter of fact, that the associations
have not any capital?

Mr. ANDERSON. I know they have not, and I think that is one of
their very, very great weaknesses.

Mr. FurMmEeRr. In the case of a loss in this line to an association,
how would you get this loan repaid so the Government would not
have a loss?

Mr. Axperson. I think the capital loan would have to be subject
to exactly the same basis of liabilities, so far as the cooperators
were concerned, that the stockholder has in a commercial concern
for the capital which he contributes to the operation of that concern.

Mr. FuLMER. In other words, it is your idea that we should have
set up a board with a loan fund, let it be $500,000,000 or more, and
this board should be instructed to function along the basis of any
other governmental board and on such basis that they would be
unable to operate, therefore, would not accomplish anything, because
unless the cooperative.associations had some money or means whereby
they would be able to borrow this money, certainly they could not
function?

Mr. AxpersoN. I can only say in reply to that, if that is the con-
clusion you have reached I have certainly failed in my effort to put
over the ideas which I have with respect to this problem.

Mr. Frumer. I understand you to say, Mr. Anderson, that you
thought there ought to be a board and a loan fund.

Mr. ANDERsON. I did not say that.

Mr. FvuMeER. You did not say that?

Mr. ANpErsoN. No. What I said was that I thought that such

board properly constituted could aid in the organization of the

R86160—28—SER E. PT T—2

3