AGRICULTURAL RELIEF

57%

Mr. AxpersoN. I am simply pointing out the President’s objec-
tions and the facts which I think support those objections.

Mr. FrLMER. You state that under this bill it would be a matter
of guessing whereas under the present system we have just about as
many guesses as we have under this bill, as I sec it.

Mr. ANDERSON. Yes, but people are making those guesses on the
basis of financial risk involved, whereas here the Government is
making those guesses for them and is imposing a tax in relation to
the guess that it ultimately makes.

Of course, the President points out that a basis of stabilization
which is predicated upon costs plus for inefficient as well as efficient
producers normally results in a increase in both acreage and pro-
duction, on the average over a period of years, and that this would
ultimately involve a large increase in the equalization fee, might
ultimately bring about a breakdown of the system itself.

The President calls attention to the fact that the bill would build
up an enormous bureaucracy. I only wish to call attention to the
fact that under this bill, in which no discrimination as between
agencies 1s permitted, the board might be required to make a large
number of contracts and these contracts and the operations under
them must all be supervised and the results of those contracts deter-
mined by an audit in order to fix the liability of the stabilization
fund to cooperatives or corporations created by them as well as by
processes, etc.

I would also require a large force of men to audit and determine
whether the equalization fee has been applied and payment made
in every instance in which somebody is liable for its payment. I
think the audit of these accounts would be a very difficult matter.

The President pointed out that while the board will not buy or
sell directly, it must, in determining the loss for which the stabiliza-
tion fund will be liable, establish prices which are the basis of the
losses in the contract and pass upon the purchases and sales made
under them. This in his opinion practically puts the board directly
in the business of fixing prices and of buying and selling on the
market.

The President points out there is no time limit under which con-
tracts may run, and that there is no limit in the previous bill on
the amount of liability of the Government for losses, charges, etc.
That particular thing has been corrected in this bill by providing that
total liability for which the equalization fund may be liable, whether
put up in the first instance by the Government or later by contribu-
tions through the equalization fee scheme, would be the maximum
amount which the Government has actually allocated to the par-
ticular crop, as I understand it, or perhaps the actual amount which
would be appropriated for all crops.

Mr. Menges. Mr. Anderson, does not the machinery exist now
that you indicate here would be required for the handling of these
crops?

Mr. ANDERSON. Oh, yes; the machinery exists now for handling
those crops.

Mr. MENGEs. Who pays for it?

Mr. ANDERSON. You mean the physical machinery?

Mr. Menges. The machinery that is required to handle these
crops In the market that vou have indicated: they exist now?