EX REE 53 AGRICULTURAL RELIEF HEARINGS BEFORE THE COMMITTEE ON AGRICULTURE HOUSE OF REPRESENTATIVES SEVENTIETH CONGRESS FEBRUARY 21, 24, AND 25, 1928 Serial E—Part 9 UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON 109 COMMITTEE ON AGRICULTURE House oF REPRESENTATIVES SEVENTIETH CONGRESS, FIRST SESSION GILBERT N. HAUGEN, Iowa, Chairman FRED S. PURNELL, Indiana. JAMES B. ASWELL, Louisiana. T. 8. WILLIAMS, Illinois. D. H. KINCHELOE, Kentucky. C. J. THOMPSON, Ohio. HARVIN JONES, Texas. JOHN OC. KETCHAM, Michigan. F. B. SWANK, Oklahoma. THOMAS HALL, North Dakota. H. P. FULMER, South Carolina HARCOURT J. PRATT, New York. THOMAS L. RUBEY, Missouri. FRANKLIN W. FORT, New Jersey. THOMAS A. DOYLE, Illinois. FRANKLIN MENGES, Pennsylvania. JOHN McSWEENEY, Ohio. AUGUST H. ANDRESEN, Minnesota. CHARLES ADKINS, Illinois. JOHN D. CLARKE, New York. OLIFFORD R. HOPE, Kansas. VICTOR 8S. K. HOUSTON, Hawaii. L. A. DARNELL, Clerk CONTENTS Statement of — Mr. Edgar E. Wallace Mr. Fred H. Sexhauer Mr. William H. Settle Minnesota Senate and rouse delegation ._ tion. G. N. Haugen. Letter—Mr. Milo Reno__.___. eee eC Suggested amendments and modifications to H. R. 7940 by re. tatives of farm organizations__.___ [ndorsements by farm organizations Page 644 643 670 678 680 B81 B89 2092 AGRICULTURAL RELIEF Houst oF REPRESENTATIVES, COMMITTEE ON AGRICULTURE, Tuesday, February 21, 1928. The committee met, pursuant to adjournment, at 10 o’clock a. m., Hon. Gilbert N. Haugen (chairman) presiding. Present: Representatives Haugen (chairman), Williams, Ketcham, Hall, Fort, Menges, Andresen, Adkins, Clarke, Hope, Aswell, Kincheloe, Jones, Swank, Fulmer, and McSweeney. The CuairMAN. The committee will kindly be in order. (At the informal discussion among members of the committee.) The Crairman. Without objection, when the committee adjourns to-day it will adjourn over until day after to-morrow at 10 o’clock. The CaairMAN. I have before me a letter from Mr. Milo Reno, president Towa Division, the Farmers Educational and Cooperative Union of America, Des Moines, Iowa, also numerous subscription blanks submitted by Mr. Reno, which I desire to call to the attention of the committee. The letter reads: Hon. GiLBerT N. HaUuGEN, Washington, D. C. Dear Mg. Haugen: At the suggestion of Mr. A. W. Ricker, I am sending you the original subscription lists to defray the expenses of the Corn-Belt committee’s fight for the McNaryv-Haugen bill. Mr. Ricker informed me that some parties were rather weak in the support of this measure, because they felt the ‘farmers of the Middle West were not whole-heartedly for it. These lists will be an evidence as to the earnestness of the farmers in demanding a passage of this m tire. Tam asking that you return these lists when you are through with them. Very sincerely yours, Miro RENo. President. The subscrintion blank reads: SUBSCRIPTION BLANK IN BEHALF OF THE MCNARY-HAUGEN BILL The money subscribed hereon is for the sole purpose of defrayving the expenses of the legislative committee of the Corn Belt Federation of Farm Organizations at Washington, D. C., during the 1927-28 session of Congress, and is to he used to pass the McNary-Haugen bill and for no other purpose. The following organizations comprise the Corn Belt Federation: State farm bureaus of Indiana, Wisconsin, Iowa, Minnesota, Kansas, and Nebraska. State organizations of the Farmers Union in Illinois, Wisconsin, Minnesota, North Dakota. Iowa, Missouri, Kansas, Oklahoma, Nebraska, and Montana. The Iowa State Grange, the Chicago and Iowa Milk Producers Association, the Wisconsin Creamery Federation. bi Wheat Growers Associations of Minnesota, North Dakota, and South akota. The livestock commission houses of the Farmers Union at Chicago, South St. Paul. Sioux City, Omaha, and Kansas City. 42 644 AGRICULTURAL RELIEF The Equity cooperative exchange, the Farmers Union Terminal Association, and the Missouri Farm Association. William Hirth, editor of the Missouri Farmer, is chairman of this federation, A. W. Ricker, St. Paul, is secretary, and C. B. Stewart of Lincoln, Nebr., is treasurer. F. W. Murphy, of Wheaton, Minn., is chairman of the legislative committee which has charge of the Mc¢Narv-Haugen bill at Washington. This blank is being circulated by. a and will be accounted for to_ ~ We, the undersigned, hergby suscribe and pay to the Corn Belt Federation of Farm Organizations the amounts set opposite our names to defray the cost of conducting the McNarv-Haugen bill through the present session of Congress. The subscription blanks contain 765 names and the amount paid $524.10, also letters from 27 local organizations contributing $218.45, making a grand total of $742.55, which indicates the people’s interest in farm-relief legislation and their confidence in the Corn Belt Federation of Farm Organizations. The CuatrMAN. Mr. Wallace, we will be glad to hear you. STATEMENT OF EDGAR WALLACE, REPRESENTING AMERICAN FEDERATION OF LABOR. WASHINGTON, D. C. Mr. WaLLace. Mr. Chairman and gentlemen of the committee, my name is Edgar Wallace, representing the American Federation of Labor. When I appeared here a year and a half ago and on previous occasions, I stated that it was our apprehension that we were afraid that unless the farmers were placed in a position where they could be paying consumers, we, the industrial workers, would be thrown out of employment. I pointed out that there was partial unemployment, just a small proportion of our people who were unemployed at that time, and I stated then that, recognizing that this country can not continue to run with a great portion of our people unable to buy, that we, as workers, were willing, if necessary to pay a little more for our food products in order that our customers, the farmers, might be placed in a position to employ us in turn. I am sorry to say, Mr. Chairman, that what I apprehended a year and a half ago is now a fact, that is, as we are sitting here to-day 40 per cent of the workers of this country are idle because no man has hired them—oh, I do not mean that 40 per cent are totally unemployed, but between part-time employment and total unemployment, out of every 10 potential workers 4 are idle to-day and every day, and this is growing, because, after all, when a man is idle, a workingman, industrial worker, he ceases to remain a paying consumer. So we are heading for the dump. I said that we can not hope to continue in a state of prosperity while such a large proportion of our people are unable to consume commensurate with their efforts, with their value to the country. Now, Mr. Chairman, I am a city dweller. The people I represent dwell in industrial communities. We feel that the surplus raised by the farmer is our margin of safety, that there may come a time when weather conditions or because of the farmer’s despair, might cause a scarcity of the things that we need. If the farmer’s surplus is our margin of safety, I, for one, and the people I represent, are AGRICULTURAL RELIEF 645 in favor of not permitting that very surplus that we need to be a menace to the farmers, to tear down their economic structure, or to make it so that a good crop to them is really less remunerative than a poor crop. I was reading just yesterday in the paper that there is another threatened famine in Russia. Why? By some governmental manipulation they have practically confiscated the crops of the Russian farmers; and the farmers, waking up to the situation that it is no use for them to raise much, where there are any surpluses, have reduced their surpluses and stored what little they have raised: and to-day Russia is menaced with another catastrophe. Now, Mr. Chairman, we feel that relief must be given the farmers in some tangible form. Oh, people say to me, “This equalization fee—unheard of; never has the Government interfered to that extent.” No; but organizations of business men have been able to establish an equalization fee for themselves. It is a well-known fact that machinery manufactured in the United States is sold cheaper abroad than it is sold in the United States, not only farm machinery but all kinds of machinery. The same is true of textiles. There is a 15 per cent overproduction of textiles and, incidentally, let me tell you the wages of the workers in the textile industry are predicated on that 15 per cent that they have to sell abroad in competition with Japan and all the other cheap labor countries. Further, we feel that the farmers are not in position and they have not shown themselves able to establish that equalization fee through organization just as the great manufacturers have established an equalization fee through their organizations, and yet it is as necessary for the farmers as it is for these others. Now, Mr. Chairman, we are in favor of the McNary-Haugen bill. We believe that in that bill is the only comprehensive plan that will safeguard the interests of the farmers and put them on a paying basis. If anyone can show some other way by which the farmers can be safeguarded, that their surplus shall be safeguarded, why, we would be for that plan. But no such plan has been offered, as appears to us to be comprehensive enough to safeguard the interests of the country, which demand a surplus, plus the interests of the farmers, which would place them upon a paying basis as consuming citizens of the country. Now, that is all I wish to say at this time. Mr. AsweLL. Mr. Wallace, I understood you to say that 40 per cent of labor is idle. Mr. WarLrack. I said that—I mean to say that 40 per cent—now, understand me, Mr. Aswell, I do not mean that 40 per cent of the workers are totally unemployed. Some are on two days a week, some are on only three days a week, and some are on four days a week. But on any one given day 40 per cent of the potential industrial workers are idle at this time. Co } Mr. AsweLL. All the information we can get from administration sources is that there is great prosperity around here. How about that? Mr. Warnace. Mr. Aswell, I was in all the industrial centers last summer—— i - Mr. AsweLL. I am serious about that. We hear it and see it in the papers about great prosperity, unheard of. 646 AGRICULTURAL RELIEF © Mr. Warrace. Oh, well, you know the old saying, “The fish monger is not going to cry out stinking fish.” Mr. FuLmer. Have you any figures, Mr. Wallace, to show the unemployment in these various centers? Mr. WaLLace. We have some figures, but my estimate is based upon personal observation. I was in Detroit last summer; I was in New York: I was in Chicago; and I was in many other industrial centers in the country. Especially is this true in Detroit, that for every man who was working you would find one man sitting on the street, last summer. There might be a little amelioration since the Ford plant started, but not much. For every man Ford has employed I will undertake to say that two men rushed to Detroit. Mr. Apxins. How does this year compare with all vears at this season of the year? Mr. WALLACE. It was last summer I was there, Mr. Adkins. Mr. Apxkins. I say, how do various vears at this season compare with other years? Mr. WaLrace. It is now far worse. Mr. AsweLL. Worse than it has ever been? Mr. Warnace. I will not say that, but comparable to 1920. Mr. Fort. To another presidential year? Mr. Warrace. I do not know that the fact that we have to elect a President has much to do with it. The fact of the matter is, Mr. Fort, that in industry the per capita productiveness of the individual has risen faster than his consumptive power. Mr. ANDRESEN. The same thing is true of the farmer? Mr. Warnace. Oh, yes; but what shall we do? The question is, Shall we send our surplus products abroad, and then send another billion dollars after our products so it may be bought back; or shall we use some of this consumptive potentiality from abroad here in this country? | Mr. AsweLL. What are we going to do about that—the 40 per cent idle? That is what I am thinking about. What do vou propose to do about it? Mr. WarLace. The only answer is, Mr. Aswell—because we have made that answer we are treated as criminals—we say raise wages, raise the remuneration of the farmers, and then we will have prosperity in this country, because if we are able to produce more then we should consume more; and that is absolutely necessary, if we are to run on 6 or 8 cylinders, or whatever you might call it, in this country, instead of running on 3 cylinders. Mr. KincueLoe. If you curtail the consuming power of 30,000,000 people who live on the farms in this country, of course, that 1s going to affect the industries, is it not? Mr. Warrace. Absolutely, yes; and that is why we are here, unless we see it and the other fellows do not seem to see it. They seem to think ‘‘the less these people have the more we will have.” It does not work out that way. Mr. KiNcEELOE. From your observations, there is not much “full dinner pail” around in this country under this administration? Mr. Kercaam. You get the slant of these gentlemen, of course. They are bound to put a political complexion on things. Mr. KincuELOoE. No; I am not. The witness is giving the economical situation. AGRICULTURAL RELIEF 647 Mr. AsweLL. The only man who has mentioned politi this table is my friend, Ketcham. politics around Mr. Fort. Nobody has mentioned it, but you talked about it. Mr. KercHAM. Let me put in one question. Mr. KincHELOE. If it is pinching you too hard, go ahead; yes. It vill, perhaps, give you relief. ’ Mr. Warrace. Mr. Ketcham, let me sav that I am going to stick to the economic question; I am not in politics. Mr. Kercaanm. I am not going to ask political questions. You made a statement that at the present time vou thought that 40 per rent of the potential labor power was idle? Mr. Warvace. I think it is. Mr. Kercaam. Will you please tell us when conditions are normal what is the percentage of potential power that is employed? Mr. Warrace. I will sav 80 per cent; it does not run over 80 per cent. Mr. KETcHAM. Mr. WarvLace., Mr. Kercuam. Will you please tell the committee also in that connection how the seasonal situations develop from one year to the other, having in mind this particular season, and possibly the idea that this is a four-year presidential period. Mr. AsweLL. Leave out about the presidential year. Mr. Warrace. I would say that it makes but very little difference. Some men are employed in the winter for instance in the mining industry. The mining industry is supposed to be fully employed in winter because people need fire. You know the condition of the miners; I do not have to explain that to vou; 250,000 miners are out of employment. We would not care a thing for that, if there were 250,000 other places open to them. But as a matter of fact what is true of the miners is true to-day of the building trades. It is true of the textile trades; it is true of the metal trades. They are the basic industries. It is likewise true of the automobile industry, a new industry; it is true of the radio industry, a brand-new industry. Mr. Kercuam. To what extent do you think improvements in machinery and increased efficiency and the like of that makes contribution to the increased unemployment? Mr. WaLrack. I ascribe it practically all to that, with this addition, that the miners’ wages have not been raised commensurate with their added per capita productiveness. Mr. Kercuam. Their index is 228 now. Mr. WaLLace. In productiveness? Mr. KErcHaM. No; 228 in their wage level. oo Mr. WaLtace. Oh, we have not found it so. I will tell you, it 1s like comparing a flour’ with pepper. They say there 1s twice as much flour because there is only four times as much pepper, hence it 1s three times as much. It is too much pepper, vou know. Mr. Krrcnam. Compare those in contrast with agriculture, for instance; for instance labor is 228 and agriculture 127. Mr. WarLace. That is too much of a difference, I will admit that. Mr. Kincueroe. If Mr. Ketcham is through now, I will proceed 2 little further. I am not talking about politics, either. You are talkine about economics. are vou not? 648 ’ AGRICULTURAL RELIEF Mr. ‘WaLLace. I am trying to talk about economics and keep away from politics. Mr. KincHELOE. Of course a ‘‘nonpartisan’ fellow like Mr. Ketcham would accuse us fellows of playing politics. But I want to get the condition of the country as it is. Is it not a fact that there have been more commercial failures in the last six months in this country than there have been in many years? Mr. Warrace. 1 have read of such. I have kept track more of the workingmen out of employment than I have of commercial failures, because one affects the other. There is no doubt but there is bound to be a good many more commercial failures when men are unemployed. Mr. KincHELOE. There have been about 3.500 bank failures in the last seven years. : Mr. WALLACE. Yes, sir—I can not say the exact number, but I know there have been more than general. Mr. KincHELOE. More than general? In the eight years prior to 1920 there were only 864 bank failures in the whole time. Mr. Warrace. I have not those statistics. Mr. KincueLoe. Well, I know about that. What are the conditions of the laboring man in the highly protected industries of this country? Mr. Warrace. Well, we can consider the textile industry as a protected industry. Mr. KincueLoE. That is the highest one of any of them. Mr. Warrace. To begin with, they are miserably underpaid; certainly, they are unemployed to about 50 per cent. Mr. KincaELoE. Then you do not subscribe to the statement that the protective tariff raises the standard of American living in the United States? Mr. WaLLace. Of course, you know what Henry Clay said about protection—*It is a local issue.” That is true. If 1 could have my particular industry protected and all the others have free trade I would be sitting pretty. Mr. KincHELOE. The point I am getting at is, you do not think that the tariff on the textiles of this country, which is the highest of any in the Fordney-McCumber tariff bill, has done much in raising the wages of the laboring people who work in it, do you? Mr. WALLACE. It has not had that effect in the textile industry; it has not raised them. But, as I stated before, we have come to the point where we export 15 per cent of our textiles, and our wages like the farmer’s returns, is predicated on that 15 per cent that has to be exported in competition with the world. Mr. KinceeELOE. I was getting down to that. That is very interesting. I did not know that. If I understood, then, the manufacturers of textiles, which is, I say, the highest protected industry under the Fordney-McCumber tariff bill, when they come to fix the wages for their laborers that work in these institutions, base those wages upon the price they get for their surplus abroad. Mr. WaLrace. That is apparent to me. Mr. KinceELOE. How many thousand coal miners are out of employment in the United States, do you know? Mr. WaLLace. Well, it depends on how you would estimate it, Mr. Kincheloe. If vou were to ask me to give those who are totally AGRICULTURAL RELIEF unemployed, I would say about 200,000; if you estimate it upon part-time employment—and, remember, I consider four days and a half as full employment in the coal mines. Mr. KincHELOE. I was going to divide that. You say that there are over 200,000 out of employment absolutely? Mr. WavrLace. Absolutely. Mr. KincHELOE. Then how many are working on part time? Mr. WavrLace. I would say 75 per cent of the rest. - Mr. KiNcHELOE. Is it not a fact that a hundred per cent of the bituminous mines are on part time? Do you know any bituminous coal mine in this country running six days out of the week? Mr. WarLace. Thee may be a few in certain industries like the railroads and the steel mills that have a monopoly that are working; as I said four and a half days in the week is almost full time for a coal mine, because of the natural stoppages in the coal mines. Mr. KiNcHELOE. Mr. Wallace, is your organization—of course, you are the representative of the United Mine Workers in Washington? Mr. WaLrace. No; I am the representative of the American Federation of Labor, but I am a miner. You see, the American Federation of Labor comprises all of the organizations cooperating? Mr. KINCHELOE. Yes; that is true. Mr. Wavrrace. Of course, they pick men from the various industries to represent the American Federation of Labor. Mr. KincHLOE. I understand. Then, you are the coal miners’ representative in the American Federation of Labor in Washington? Mr. WaLrLace. In the American Federation of Labor, one of them; yes. Mr. KincHELOE. Has your organization ever talked over this farmers’ situation in convention assembled? Mr. WarLLace. Yes, quite often. Now, I want to call attention to the fact that I am here—that is self-evident. But what does it mean? You know what my evidence has been before this committee each time I have appeared here. My organization knows how to put a fellow out if he misrepresents the intent of that organization, and so the very fact that I am here means that my organization feels that it is being properly represented by what I am saying now and what I have said in the past. Mr. KincaeLok. The point I was making was, has your organization in convention assembled discussed this farm situation? Mr. WaLLace. It has discussed this farm situation and has arrived at the same conclusion that I have tried to express here. Mr. FuLmer. Mr. Wallace, do you not find that because of the poverty out on the farm that farmers are leaving and coming In competition with your workers in the cities? Mr. WaLLace. Oh, yes; there is a great deal of that. Some say that is because of farm machinery, that a man can cover more acreage with present-day farm machinery. There is some truth in that, but if the improvement of farm machinery is to result in driving men away from their employment, why, then, machinery is not good. [ welcome all kinds of improved machinery because 1t means more pase for the people. But the net result has been to drive the people off the farm into the industries. I think the figures last year were that the farming population had decreased by 500.000, and that 650 AGRICULTURAL RELIEF means more than 500,000 left the farm, because there is a natural “nerease which is at least as large on the farm as it is anywhere else. Mr. Ketcham, have you a question? Mr. Kercaam. Would you be kind enough to repeat at this time a statement that I think you made at your previous appearance, with reference to relative costs, for instance, of a loaf of bread, taking that as a unit, of a reasonable increase of a few cents in the price received by the farmer for wheat? Mr. Warnace. I do not believe, Mr. Ketcham, I ever made such a statement, because I am not familiar enough with that subject, and I do not talk about something I do not know. I do not believe you will find that in my evidence at any time. Mr. KercaaM. You have made that, then, just as a general observation that you would be willing to pay an additional cent if required? Mr. WaLrace. Oh, yes. Mr. Kercuam. In order that the result of that might be that the farmer might receive a better price for his wheat? Mr. WaLrace. I did make that statement, and I reiterate that, that the industrial workers selfishly believe that they would be bettering their own condition by helping the condition of those who are their customers, even if that included paying a little more for their products. Mr. KeTcrAM. Just in that connection, is it not true, Mr. Wallace, that the proportion of the ordinary worker’s income actually spent for food is relatively becoming a small proportion of his family budget each year? : Mr. Warrace. Yes; I believe that. Iam convinced that our conditions have risen. I believe that we have the highest standard of living to-day—do not misunderstand me as crying ‘‘calamity’”’ as to our standard of living. I believe our standard of living is higher than that of any country in the world—higher than it has been anywhere. But it is not enough, because our per capita production has appreciated faster than our added income, and hence we have these periods of stagnation when nobody can work because the other fellow can not buy the product of his work. Mr. Kercuam. Right in that connection, Mr. Wallace. Do 1 understand you to say, then, if, for instance, in the laboring man’s family budget you think that considering the items of rent and these other things contrasted with those of all foods, that the rise in food costs has not been as great as the rise in the others? Mr. Warrace. No; they have not. Mr. Kercaam. And for that reason you are willing to see, if necessary, a bit of a rise in the food costs in order that the farmer may have an opportunity to purchase more? Mr. Warnace. And selfishly so that they, in turn, might employ us. Mr. Kercaam. Then, if I get your philosophy right, you believe and you rather subscribe to Mr. Garret Garrett’s philosophy, and the burden of that is simply this, that there is no limit to the prosperity and growth and development of the United States so long as we share the benefits of that progressively? Mr. Wartace. That is absolutely true—that we have only scratched the potential productiveness of this country; and that there is a luxury standard available for everybody willing to work for it, AGRICULTURAL RELIEF 651 and that it 1s a disgrace that the man willin ; get the opportunity to work. & to work for it can not Mr. Kercuam. I subscribe to your views along that line most heartily. Mr. WaLLace. I am glad of it, and I wish the business interests of the country would see it also. Mr. Forr. Mr. Wallace, you and I, I guess, are the two who strictly represent the consumers? Mr. WaLrack. I think so. Mr. Fort. You feel as I do, do you not, that the consumers of this country would not object to a reasonable increase in the cost of living if it were necessary only to give the farmers fair treatment? Mr. WaLrace. That has been the burden of my testimony. Mr. Fort. I say that, because I am so often accused here of representing the consumer, as though the consumer’s attitude were necessarily antagonistic. It is not, is it? Mr. WaLLace. It should not be, and it is not. Mr. Fort. Well, it is not, is it? Mr. WaLrace. Not those consumers that I come in contact with. Mr. Fort. Neither is it with those I come in contact with. Mr. WaLLace. But, Mr. Fort, there is this exception: There are some people representing the consumers who kick mightily when something is suggested that would bring a cure, and we are not kicking against a cure. We are not objecting to a cure. Mr. Fort. Neither am I. Mr. FuLmeRr. That was one of the objections of the President, was it not, Mr. Wallace? Mr. WarLrace. I do not know. Mr. FuLmEeR. That it would increase the price to the consumer? Mr. WarLace. Well, I do not agree with him, if he said that. Mr. Fort. There would be an objection, Mr. Wallace, to any increase in the cost to the consumer unless the farmer got the benefit of it. Mr. WaLrace. Oh, absolutely. The men in between the farmer and the consumer are very well able to take care of themselves. Mr. AswerLL. I think two such distinguished consumers as you and Mr. Fort should be appointed a committee to fix up this bill. Mr. Kercuam. Just a little time ago I understood you to say that you were here favoring this particular McNary-Haugen bill because, as you understood it, it was theonly plan that had yet been presented that would seem to be capable of doing the business; and then 1 thought I heard you say that if any other plan could be devised that would do the things that you generally favor here in behalf of the farmers that you would not be opposed to that proposition? Mr. WaLLace. Let me answer in my own langauge. I have come to the conclusion that the great problem of the farmer is his surplus. [—class selfishly again, or representing the workers—do not want to reduce that surplus because I consider that our margin of safety. Now, if some plan can be presented that will take care of that surplus without it being an incubus on the backs of the farmers that plan would meet with our approval just exactly. Mr. AsweLL. That is what we are trying to reach; that is what this committee is undertaking to do. Mr. Apkins. I would like to ask the gentleman a question. 652 AGRICULTURAL RELIEF Mr. Warrace. Certainly. Mr. Apkins. The body of consumers represented in your organization, I take it, depend on your leaders to look into these various legislative questions that affect them directly or indirectly, and keep them informed of what is going on, etc. Mr. WaLLace. We try to keep our people informed. Mr. Apkins. And you think that that body of consumers is, of course, backing your attitude on this legislation, or you would not be here advocating it? Mr. WarLLace. That is the story. Mr. Apkins. Now, the great body of consumers that are not organized, that are not affiliated with any other organization, naturally would be subject to other propaganda. would they not, that might be antagonistic? Mr. Warpace. My experience, Mr. Adkins, with the unorganized is that they are inarticulate; they have not the means of receiving the information; they have not the means of giving out their expressions. Mr. Apkins. They would probably be influenced by the newspapers’ attitude on these questions in their local communities. Mr. WALLACE. We have found that among the workers they are influenced by and generally reiterate what we say. That is because of the mere fact that a man is estopped from organizing—does not keep him from having organization sympathies; and our experience is that 95 per cent of the unorganized subscribe to our policies, only they have not the means of expressing themselves. Mr. Apxins. The question I wanted to ask of you is this: Among the unorganized in the great big consuming centers, that are not directly in contact with an organization such as you represent, that get their information from the press in the large centers, which 1s opposed to farm relief, I will say that frankly? Mr. WALLACE. Yes. Mr. Apkins. They would be more likely to be influenced by what they see in that press than they would bv what your activity is, would they not? Mr. WaLnace. They would feel so, Mr. Adkins—1 cent added to the cost of a loaf of bread—and possibly resent it, taking that by itself. Mr. Apkins. That is the point I wanted to get. Mr. WarLace. They would not know what it meant eventually. Mr. AsweLL. The press might be qpposed to the Haugen bill, but [ would not make the assertion that the press is opposed to the farmers. Mr. Apkins. I am talking about the Haugen bill. Another thing they are very much concerned about the farmer having to pay this equalization fee. It is the farmers’ funeral if it is bad; and the peculiar thing about it is that they are so deeply concerned about it that they do not want him to pay his own way. Mr. WarLace. They do not want us to pay our dues. Mr. MEeNGEs. I notice you said a little while ago in answer to a question by Mr. Kincheloe that the price of labor in the industries is based upon the products that are exported. Mr. KincHELOE. He said that in regard to the textile industry. Mr. Warrace. In one industry. 653 Mr. MeNnGEs. One industry; all right. The price of products we raise is also made by the products we export. Mr. WALLACE. I was making a parallel for that. " Mr. MenGEs. Therefore, we farmers and you are on the same asis. Mr. WALLACE. I wish all the farmers could see that, Mr. MENGES. You know there is some protection, in the exclusion of foreign labor by the present legislation which is supposed to give you a protective tariff on labor. Does that work out? Mr. WaLrace. Well, it works out to a certain extent. We have the surplus now as the result of our past policies. However, there is a great big surplus of labor in this country. But if we had not had the immigration law of 1924 it would be far more acute. We would have from three to ten million people crowded into this country, all of them producers, because if they could get our jobs it could only be because they would accept those jobs at less remuneration than we claim. So, we have been benefited by the immigration law. Mr. KiNncHELOE. You have really been benefited by the immigration law; that is true. Mr. WarLLace. Yes. Mr. Menges. May I ask you another question? Then the added number of people that would be brought into this country, if that immigration law had not been enacted, would get such low wages that it would be impossible for them to pay prices for the products of the farm commensurate with what it costs to produce them. Mr. Warrace. That is true. Some people claim that if there were more people in this country that they would be in the industrial centers and that there would be more demand for the farmers’ products. But the fact is, the wage level would be reduced and they would buy less. Mr. Menges. I would like to ask another question. I know people whoghave not bought a new suit for four years just because they have not had the money to do it with. oo Mr. WarLace. That is tough on the tailors and the textile industry. Mr. Menges. I know those people would be inclined to purchase the products of the textile industry, providing th-y had the money. Mr. WALLACE. Sure. Mr. Menges. And I think there are in this country at least 25,000,000 who need new suits. How much would 25,000,000 suits add to your income? } i Mr. WarLace. It would help the textile industry; it would help the clothing industry; and those men who are doing without suits are doing without other knickknacks that they might consume; and altogether it is the answer, Mr. Menges, to our troubles. Mr. MencEs. And they are also doing without farm machinery for that very reason. Mr. WarLace. Exactly. i Mr. Swank. I want to ask you one question: Representing the members of your organization, as I understand it, you are appearing here this morning and indorsing this McNary-Haugen agricultural bill? . Mr. Wavrace. I am indorsing the McNary-Haugen bill because [ do not know of anything that has been proposed that will meet the surplus question like 1t would. AGRICULTURAL RELIEF 654 AGRICULTURAL RELIEF Mr. AsweLL. Do you think it could become a law if we passed it? Mr. WaLrack. I think so. Mr. AsweLL. Do you think the President would sign it? Mr. Warrace. I doubt that. It is possible it might be vetoed again. But have you anything else that would really help the farmer? Mr. AsweLL. Oh, yes: Ihave a bill that would help us. [Laughter] a —— ee — House oF REPRESENTATIVES, COMMITTEE ON AGRICULTURE, Friday, February 24, 1928. The committee met, pursuant to adjournment, at 10 o’clock, a. m., Hon. Gilbert N. Haugen (chairman) presiding. Present: Representatives Haugen (chairman), Purnell, Williams, Ketcham, Hall, Fort, Menges, Andresen, Adkins, Clarke, Hope, Aswell, Kincheloe, Jones, Fulmer, and Rubey. The CuAIRMAN. The committee will be in order and we will hear Mr. Sexauer this morning. Mr. Sexauer, please state your full name, whom you represent and address, for the purposes of the record. STATEMENT OF FRED H. SEXAUER, EXECUTIVE SECRETARY DAIRYMEN’S LEAGUE COOPERATIVE ASSOCIATION (INC.), NEW YORK CITY Mr. SExauER. My name is Fred H. Sexauer; executive committee secretary, Dairymen’s League Cooperative Association (Inec.), 120 West Forty-second Street, New York City. The Dairymen’s League Cooperative Association -is firmly of the belief that over a long period of time the farmers can become so organized that they can obtain through various methods of organization and otherwise the same benefits that others obtain® Mr. ANDRESEN. Pardon me. Are you one of the officers of the Dairymen’s League? Mr. SExaUER. I am a member of the executive committee of the Dairymen’s League Cooperative Association, and one of its directors. MT. ANDRESEN. What is your name? Mr. SexauEr. My name is Fred H. Sexauer. Mr. KincHELOE. Is that a national organization? Mr. Sexauer. No. Mr. KincEELOE. What States does that association cover? Mr. Sexavger. Parts of Pennsylvania, Vermont, Massachusetts Connecticut, and all of New York State. Mr. KincuELOE. How many members have you? Mr. SExuaEr. We have about 40,000 actual participating-producer members. But, because of the fact that farmers to-day are not organized as well as industry, labor, and others we feel that something is necessary to tide over the period between the present and the time when that can happen. I am not going to presume to tell you the condition of agriculture, because you, having sat here for a month perhaps, and some of you for years—know that much better than I do. Mr. CLARKE. Seven vears, remember that. AGRICULTURAL RELIEF 655 ~ Mr. SEXAUER. You ought to know it better than I do. The dairy industry 1s, as you know, in much better shape than the rest of agriculture, because of that; and because we rather fear for the prosperit of the dairy industry in the future, with so many other people inten ested In dairy production, or becoming interested in dairy production, we feel that some action is necessary to protect the rest of agriculture and bring it to a level which will make it prosperous enough so that producers of other products will not go into the production of dairy products to the extent that we have an exportable surplus which will bring about a condition in the dairy industry that now exists in other departments of agriculture. We believe that there is a very distinct danger of that happenin Deducting in t f milk (por ; ke PPENINE. ting mn terms of milk the exports of milk and milk products from the imports of milk and milk products, we find there were imported into the United States last year approximately 1,800,000,000 pounds of milk in foreign products. There was produced in this country last year 120,000,000,000 pounds of milk. So that our margin of imports which gives us the protection of the tariff in this country, such protection as we have, is only about 114 per cent. The production of milk in the United States increased last year £,000,000,000 pounds over the previous year; and should the consumption not increase as fast as the production, or should the production only increase one-half as fast as production, our imports margin would be gone and we would be facing the export situation. Mr. ANprESEN. How long would that take, do you estimate? Mr. SExauer. That is rather difficult to say. During the last year in what pretends to be more nearly the grain and hay sections of New York State, for instance, the county of Cayuga in which I live, produced $5,000,000 of agricultural products, of which $1,700,000 are dairy products, last year increased their production of dairy products 38 per cent. The county of Monroe, which is also a small grain crop and fruit section, increased their production of dairy products 25 per cent. The sections which are strictly dairying do not increase so fast. So that it is rather difficult to state, but with the present prices of airy products in comparison with prices of other agricultural products [ venture to say it would only be a year or two, possibly three years, before that situation will occur, depending somewhat upon the amount of young stock raised. But inasmuch as the amount of voung stock raised to-day is much greater than it was a year or two ago we feel that we are approaching that margin dangerously fast. Mr. Hope. We have been increasing in dairy production in the Middle West and grain-growing States. oo Mr. SExAUER. I believe that is true. I have not the statistics to bear that out, however. But I do know that the reports we have received from condensers is that in those sections where they have established new condensers, such as you men know of in the South and central South that there is a tremendous interest in dairying, and they are getting to be mie producers where formerly there was hardly anything but butter plants. } {ir Bow I may say that in South Carolina, from which State [ come, and several other Southern States, they are going into the R3160-—28—SER E, PT 9——? 656 AGRICULTURAL RELIEF dairy business very largely—North Carolina and even in my State of South Carolina. Mr. Sexaugr. That is the report we get from various condensers in our conversations with them. Mr. FuLumER. And I might say that that is brought about by the condition of the farmers in their other lines of activity. Mr. SExXAUER. Yes, sir. Mr. Hore. What is your market; is it a local market or do you go outside of your own territory to quite an extent? Mr. SExavER. We market our fluid milk locally to the extent that needs fluid milk; and beyond that we market cream in the local and other cream markets, and the remainder we sell to manufacturers or among ourselves in the form of condensed milk, milk powder, cheese, butter, etc. Mr. Hore. One thing I wanted to get at was whether this Middle-West growth in the dairy industry would really enter into competition with you people if it should develop to quite an extent? Mr. SexAaugRr. It absolutely would. If they produced butter and the prices of butter became unprofitable, that milk would find its way into condensed milk, bring down the price of condensed milk, and then the condenser, not wishing to condense his milk turns to the cream market and endeavors to dispose of his products there. This, in turn, forces the producer of cream to turn to the fluid-milk market, which in turn creates a surplus in the fluid-milk market, thus depressing the whole price level downward. There is this interrelation between the price of butter and the price of other milk commodities, and it is immaterial, so far as we can see, where the product is produced, so long as it is produced in this country and brings about a condition where we are facing less tariff due to the fact that we have become an export nation of dairy products. Mr. ANDRESEN. I might say to the gentleman form Kansas that that the production of Minnesota butter has doubled since 1920, and to-day we are producing a hundred million pounds more butter per year than any other State in the Union. Mr. CLARKE. Are not the cooperatives primarily responsible for developing the quantity of production and elevating the standard of quality? Mr. ANDRESEN. Greatly. One of our principal markets for butter is down here. Mr. KiNcHELOE. Is not the biggest dairy State Wisconsin? Mr. AnprESEN. Not in butter. Mr. SExAUER. I might say right there that the most serious condition with which we are faced in cream is the cream from Wisconsin, Iowa, Ohio, Indiana, Michigan, and similar points; that 1s the most serious condition which we face in cream. Mr. CrargEe. Allow me to say to the gentleman that I represent the greatest dairy district in the United States and probably in the world, in the production of fluid milk, and yet to-day the Land O’Lakes butter is being sold in my district. Mr. SeExauEiR. I might say also that they ship carloads and carloads of cream into Congressman Clarke’s territory for the manufacture of cream cheese, which also comes in competition with our dairy products. So we have a very distinct interest in what happens to agriculture in other sections of the country. AGRICULTURAL RELIEF Q57 a, 2 Nes. You are not planning or hoping to have milk included pr SEXAURR. No, sir. fr. Jones. It is just the indirect benefit you hope t having a plan that will bring up other farm Tommonitics End tom tend to create interest in other phases of farm life rather than so much in dairying? Mr. SexavEr. Right. I am very strongly of the opinion that no man milks cows from choice. Mr. Jones. I think you are correct in that. Then, any measure which would bring general farm prices up to somewhat the level proportionately with other products would accomplish the same purpose? Mr. SExXAvER. We are not particularly for the Haugen bill or any other bill, but we are for something which will accomplish that result. However, at the present tinie we are not convinced that there is any other bill which has been presented which will do that, other than this type of bill, which embodies within it a method of placing those losses back on the individual producer in such a way that nothing is taken from the National Treasury. As an organization, we are opposed to a subsidy; we are opposed to anything which approaches 1t, because we believe it is too easily used by others and not easily enough used by farmers, and we are in favor of something which will throw any losses occasioned by the marketing of excess production, let us say, back on to the producer of that product. Mr. Jones. But in that connection, of course, the direct appropriation, if there were no provisions for repayment, would be a subsidy. But a measure which ties outo the tariff system and spreads its advantage, if any, out over a large percentage of folks, would not necessarily be any more of a subsidy than the tariff, would it—with direct reference to the so-called export premium or debenture plan? Mr. SEXAUER. I am not in a position to discuss the details of other bills, but I will say this, that my theory of a snbsidy—and 1 may be wrong in this—but my theory of a subsidy is that anything which takes out of the Government money which is..collected for another purpose, regardless of how collected, if collected for.another purpose, tends so closely to subsidy that we, as farmers, would find difficulty in differentiating between the methods. tr Mr. KINcHELOE. You are for any measure, that will take the money out of the pockets of the taxpayers themselves for their own business; now what is the difference between taking the money out of the pockets of the taxpayers themselves for ;the benefit of a business or taking his. taxes out of the Treasury after he pays 1t in there? i Mr. SExavuer. I am not exactly sure that I get the gist of your question, but if you refer to the taxpayer taking the amounts of money out of the taxpayers for the—— Mr. KincueLoe. What I am talking about 1s, you said you were opposed to any kind of a subsidy, that your organization was against any kind of a subsidy? Mr. SExaver. We are. Mr. KincuerLoe. And that you were opposed to any bill that would take any money out of the Treasury. Now. I ask you as an 658 AGRICULTURAL RELIEF economic proposition, what is the difference in taking the money of the taxpayer out of the Treasury after he has already paid it in, and taking it out of his pocket in the way of increased price for the purchase of things that he has to have by reason of discriminatory law in favor of a business? Mr. SExXAUER. Are you referring to the tarifl? Mr. KiNcHELOE. I am, absolutely. I just wanted to get your idea about it. Mr. SexaugeR. That is a matter of public policy to-day, upon which at the present time I do not believe that there is a question— I mean that the question is not raised in relation to this bill; and that being the case our association has taken no stand in the matter, and I am not at liberty to state for the association. Mr. KincHELOE. What do you mean by ‘public policy ”’? Mr. SExAuer. We have a tariff. Mr. KincHELOE. Why, yes; because you have an administration to put it on. Understand, I am not a free trader; the Democratic Party never was for free trade. But you have indicated that you are diametrically opposed and your association is very much opposed to taking any money out of the Treasury for the purpose of conducting the farmers’ business. Mr. SExAUER. 1 did not say that. Mr. KincHELOE. You said that awhile ago? Mr. SexavEer. All right; let it go at that. Mr. KincHELOE. If you did not say that, what did you say? Mr. SExXAUER. My recollection is that I stated the association was opposed to a subsidy. Mr. KincHELOE. Or any legislation that would take money out of the Treasury for the benefit of some business? Mr. SExavuER. No; this business, for the fear it would be used for other purposes. Mr. KincaeELOE. What business? Mr. SExavugRr. Thid business. Mr. KINCHELOE:'You mean to help the farmer, agricultural purposes? iJ Mr. SExXAUER. :Exactly. Mr. Kincaerog:! That is what I am talking about, and you are opposed to any legislation that will take any money out of the Treasury as a subsidy to assist any branch of agriculture; is that right? Mr. SEXAUER.:Y es. Mr. KincueromtAnd then I asked you what is the economic difference, if any(iin:taking money out of the Treasury which is the taxpayer’s money“after he has paid it in there, for the benefit of some business, or taking the money out of the taxpayer’s pocket in the way of the increased price for a product he has to have by reason of some discriminatory law in favor that institution that makes that product? Mr. SExAUER. There may be and may not be any difference. Our association, however, has not gone on record as either favoring or opposing that particular method. Mr. KincHELOE. Has your association gone on record as being in favor of any one of these bills here? oo Mr. SexavuEr. They have gone on record as being in favor of tle principles in this bill. AGRICULTURAL RELIEF Mr. KincauLoe. Which bill do you mean, the McNary-Haugen bill? } . ’ 2 Mr. SEXAUER. The McNary-Haugen bill with its equalization fee, with its Federal farm board, for the purpose of elinia the c00perative organizations, for instance, which may not be strong enough to handle particular cominodities, and turning that function over to a farm board created by the Government. Mr. KiNncHELOE. But your association is not in favor of appropriating any money out of the Treasury to help agriculture at all? Mr. SExAUER. Wait a minute—which absorbs the losses which occur from taking care of this surplus. Mr. CLarRkE. May I ask a question, Mr. Sexauer? Mr. SEXAUER. Yes. Mr. CLARKE. I understand that originally you were opposed to the first McNary-Haugen bill, including dairy products, is that right? Mr. SExAUER. The association went on record at that time as being opposed to that. Mr. CLARKE. But you really have made efforts or tried to evolve a plan for making certain that dairy products would not be included in this bill; is not that true? Mr. SExAUER. I think that is the case, Mr. Clarke, yes. Mr. Jones. In other words, you want to “try it out on the dog.” Mr. SExAUER. No, I believe that the dairy industry in the United States is probably better organized than any other agricultural industry, and that they are better able to solve their problems, providing they are given a fighting chance, by having other agriculture in a prosperous enough condition so it does not force them into the dairy busiress. Mr. Jones. The whole purpose, as vou conceive it, of the McNary-Haugen bill is to try to bring the farmer in on the tariff 1s it not? Mr. SExaver. To give him the same benefit—not entirely—— Mr. Jones. Is not that its stated purpose in its preamble? Mr. SExAUER. Perhaps I am not very good in doping out the various phases of it, but my understanding of the bill is that it is to give agriculture the same protection, both from the standpoint of the tariff and from the standpoint of orderly marketing and organization that all other industry has. Mr. JonEs. I do not see why, then, you should object to any other plan that would accomplish the same purpose. Mr. SExavER. Perhaps if it accomplished all of those purposes that would be true, if it did not take the money out of the Treasury to do it. Mr. Jonks. What you want is just some plan that will bring the farmer in on the tariff and thus give him his opportunity to engage in other things besides dairying. Mr. SExaveR. Providing he absorbs any losses which occur from doing that himself. Mr. Joxes. And regardless of what may be the effect on the public? Mr. Sexaver. The effect on the public— » Mr. JonNEs (continuing). So long as they leave you out of it? Mr. SExauEeR. The effect on the public will be the same, as far as can see. . oo i. Mr Jones. And go along, so long as they leave you out of it? 560 AGRICULTURAL RELIEF Mr. Sexauer. We are going to get our benefit from it. Mr. Jones. If you are not going to share your part of the burden, do you not want the other farmers to share all of the burden of each commodity? You want to get the benefit—that is just the trouble with cooperative marketing to-day, the member has carried the nonmember on his shoulders. You want to be in the position of a nonmember; you want the farm organizations to carry out a program here that will make the producers of that commodity or those commodities bear the burdens and let your people share the benefits, without bearing the burdens; is not that correct? Mr. SexavuER. Well, if we are as selfish as that, the fellows who have advocated that and who seem to be glad of our support, have not indicated it. Mr. Jones. You want to pay no fee at all; do you; you do not want your members to be levied on for a fee in this proposition? Mr. SeExavugR. Should it be necessary to do this, that might be necessary; however, we do not conceive it is necessary. Mr. Jones. Are you willing for it to be so amended that whatever fee is levied on other commodities that a measurably similar fee will be levied on milk products? Mr. SExXAUER. Provided it is necessary to use the bill for dairy products, and the dairy associations say it is not necessary. Mr. Jones. But you do not want the fee? : Mr. SExAUER. Because the dairy associations and those interested in dairying do not feel it is necessary. Mr. Jones. In other words, they want the benefits without the burdens, do they not; that is their position as stated by you? (No response.) Mr. KincHELOE. But they do think it necessary for those other fellows to pay the equilization fee? Mr. SExaUER. I would not like to state that. Mr. FuLMER. Mr. Jones, I think he has made himself clear that if they get in competition because of the other fellow— Mr. Jones. No, that is not his stated position. His stated position is that they do not want the milk products in the bill; and if they do not put milk products in the bill this board will have no power to levy a fee. The statement that he would be willing to pay the fee if necessary does not alter your position. You do not want to be put in a position where you would be subject to a fee? | Mr. SexaUuER. My position is that dairy products, with the 1% of agriculture if rightly protected, will never need the help of this bill. Mr. Jones. Especially if the power to levy the fee does not include the power to levy on dairy products. Mr. SExaUuEr. But it will not be necessary to operate on dairy products. Mr. KincaELOE. But you think it will be necessary on the other commodities? Mr. SExavER. It evidently is. Those who have made a study of these other commodities far more than I have—I know nothing about cotton, I know nothing about corn and nothing about wheat—but those who have made a study of these other commodities seem to feel it is necessary to do something for those other commodities. AGRICULTURAL RELIEF Mr. KINCHELOE. You come as the representativ iation which thinks it is necessary, in ordor to bring prcshon: 2 to tho other branches of agriculture, to levy an equalization fee, and you are very much in favor of them doing that. But vou do not think it will be necessary to put any fee on dairy Det and therefore your association is willing to get the benefit of the equalization fee paid by the farmers to raise the other products? 3 vp SExAUER. That is the only place there needs to be an equalizaion fee. Mr. KincHELOE. I would not blame you then, for being for this bill if it does not cost your organization a cent. You would never pay an equalization fee, but the other fellow who happens to raise cotton tobacco, corn, and wheat will have to pay it, and therefore hold up his end and the result is yours is held up and costs you nothing. Mr. WiLLiams. 1 understand the position of the dairy business is that the dairy business was so thoroughly organized that it is able to take care of itself. But their support of this bill is based on their desire to see other branches of agriculture made profitable so they will not quit raising wheat, corn, hogs, and other products and go into the dairy business in competition with your industry? Mr. SExaver. Right. Mr. KincHELOE. But you are ready for the farmers to pay an equalization fee on the other products to pay their losses and therefore by reason of their doing it it upholds the dairy business; that does not cost your members anything and, consequently, you are very much for this legislation. Mr. Apkins. Do you yield for a question there? Mr. SExAUER. Yes. Mr. Apkins. I understand there is not any commodity here clamoring for a bill that is not on an exporting basis? Mr. SExauer. That is my idea. Mr. Apkins. Those who are not are getting the benefit of the tariff? Mr. SExAUER. Right. Mr. Apkins. Then, another thing, it is a fact conceded by every man who has made a study of cooperation—and it has been demonstrated all over the world—that the dairy business is the easiest business to operate cooperatively of any commodity we have. Now, then, you men realize the fact in my own district, for instance, where men do not like to milk cows and would rather raise grain and sell it or raise it and feed it to cattle and hogs and sell them than anything else, are buying cows as fast as they can in order to get some cash crop so they can get by. They believe that this scheme will help them because they are on an export basis and the world market is their market, and they are here asking for this remedial legislation so that they can take hold of this matter, carry the burden themselves and I believe they can raise the general price level. I can see the interest that you have in it and I have been talking to you men about it; that is, we are compelled to do something we did not want to do; that in time necessarily we will have the dairy business where the grain business is, and that you men have an interest in the matter both from a selfish standpoint as well as helping the general farm industry in coming here and advocating this. 661 562 AGRICULTURAL RELIEF Now, then, this bill is available if the time comes when you get on an export basis and have to depend on the world’s market— this bill is available for you to operate under if you need to. If not necessary, you will not operate under it. Looking upon it as being for the general good, not only for yourselves but for agriculture generally, you would be here. So far as taking the money. out of the Treasury directly to subsidize it, the taxpayer is smart enough to know all that money will have to come back and be gotten from him in some other way. So [ can not see where anybody needs to have a fit about some industry that can see where they can get a direct benefit from helping other industries with their influence to get on a level so they will not be competing with them. Where is there anything inconsistent about it or anything unfair or anything unjust about it. Mr. KincaELOE. What is your question? Mr. Apxins. 1 think at the very outset of your statement you set out very clearly that you wanted our people—— : Mr. AswerL. I want to know, too, what is your statement? Mr. Apxins. I did not interrupt you gentlemen. Mr. Kincueroe. I would like to ask the witness if he has any. Mr. Apkins. May 1 proceed? Mr. KincaeLoe. We think we know your position on this bill. Mr. Apkins. When you were making your statement I did not interfere with you, and I am not going to be interfered with myself. ~ Mr. KincHELOE. You take more time of this committee putting your own views in this record than all the other members put together. [If you examine the record you will find that to be correct. Mr. Apxins. I think the gentleman from Kentucky takes up Shows a much time as anvone, and I am objecting to being interrupted. Mr. KincaELOE. I want to know what your question is going to be. Mr. Apxkins. I think you made your statement very clear as to the reasons why you are here. I think you announced in the record fairly why you were here. I am sure Brother Kincheloe—— ~ Mr. KincHELOE. Ask a question. The point I am making is that [ like to see members of this committee ask questions and develop all the facts that are possible to be developed. But I am getting a little leary and a little tired—and I think I speak the sentiment of about 20 others—for a man to sit here and put his ideas forward and give his statement, and then ask no questions on the subject, but see if the witness agrees with him. Mr. Apxins. 1 think .every member of this committee—I could name two or three—has been very free to inject their opinions in the record and make statements in this record. I am not objecting to it, but I think it comes with mighty bad grace from members of this committee who are given to the habit just as much as anybody else bo sit here and criticise other members for doing the same thing I do. Mr. Fort. Mr. Sexauer, your theory is that the passage of the Haugen bill will probably maintain the relative relationship in farming that now exists between the grain and cotton growers on the one hand and the dairy interests on the other; that the production will probably remain relatively the same? Mr. SExaUER. I am accepting the statements of the men who are interested in those commodities as to what they say this bill will do, AGRICULTURAL RELIEF 663. because they have studied it. Assuming that the men who are inter- - ested In those commodities are right In their suppositions—yes, we are interested in having that done. They say this will do if. They have studied their problems. So, we are for it just as we would want them to be for a problem which we said would benefit the dairy industry, because we would study the dairy industry. Mr. Fort. Then, on the strength of their statements, you assume that the passage of the Haugen bill will maintain the present acreage for example, devoted to wheat? or Mr. SExAUER. | assume so; yes. Mr. Fort. And therefore you do not join those who think that the equalization fee will tend to decrease the wheat production? Mr. SExAUER. No. Mr. Fort. Or that of any other commodity? Mr. SExavEiR. I should not think so. 1 can not see that it would work that way. Mr. Fort. The position of your association, then, is that where we are now raising a surplus which it is impossible to dispose of at a profit we should continue to raise surplus in that commodity? Mr. SExavER. It 1s my opinion that it is for the best interests of the country as a whole to develop its raw materials and sell them on markets, particularly in the development of such raw materials as when they are developed do not decrease the fundamental raw material which this country has. Mr. Fort. I do not think that quite answers the question. I asked you if it was the position of your association or yourself, as its spokesman, that we should pass legislation deliberately designed for the purpose of maintaining a surplus which 1t is impossible to dispose of at a profit, with the agricultural commodities at the present stage of surplus production. Mr. SExavER. Absolutely. Mr. Fort. You do? Mr. SExaver. Yes, sir. I think it is necessary for the economic structure of this country to do that. Mr. Fort. You think it would also be true, then, that it would be desirable to have excess surplus production of dairy products? Mr. SExAUER. If they can be produced on the same basis, I see no objection to it, providing that can be protected in the same way. But I do not believe we will have that. It does not make any difference, as I see it, whether vour surplus production 1s dairy products or whether it is wheat, corn, or oats, as far as the economic structure of the country is concerned. As far as a particular commodity 1s concerned, I do not think you are going to get that, providing you do not force men to go in that in order to obtain a livelihood to keep their children going through school and paying taxes—they are not going to go into the dairy industry; and I speak not only from the standpoint of the industry of the West, but of our own sections, where we have grain sections. Men do not want to go to milking cows unless it comes to a point where it is necessary to pay taxes on their farms. Up to that point they stay in the production of cabbage, small grain, corn, potatoes, fruit, and various other things. When it gets to the point where they are going to lose their farm, or can not maintain their children in school, then they are apt ta go into the production of milk. 564 AGRICULTURAL RELIEF Mr. Fort. You have made that very clear. But the point I am getting at is that if it is economically desirable for the Nation to raise a surplus which can not be profitably sold, in one agricultural commodity why is it not in all? Mr. SEXAUER. Because the very shift can be made, makes it easy bo shift from grain to dairy production as they are needed, and they will not shift 1t to them. Mr. Fort. We have a lot of unused land yet. Should we adopt a program that made it desirable to utilize that land for the production of further surpluses, etther of dairy products or of wheat? Mr. SexaUuER. Only so far as perhaps it might be necessary to strengthen. the economic structure of the country. Mr. Fort. To use further land? Mr. SExAUER. In so far as it might be necessary to strengthen the economic structure. Mr. Fort. In regard to this particular commodity, if any equalization fee program should ever be operated as to dairy products, it ought to apply to raw products of milk, should it not? Mr. SExaUER. There is some question as to what is raw material in dairy products. The raw material —fluid milk could not be exported and could not be handled to any extent at all. The only export in the case of dairy products is that of the finished products which could be transported ; and, secondly, you could not make it effective on the raw material; you would have to make it effective on some type of the finished products, possibly that type of finished products which is most easily exportable. Mr. Fort. Then, let us assume the bill has been made operative as to butter and not as to anything else, and that its effect is to make butter a more profitable product to go into. Will that not have a tendency to force more fluid milk into butter and thereby benefit the fluid-milk producer? Mr. Sexaver. True. Mr. Fort. And they would not under your proposal pay any equalization fee? Mr. SexauEer. The mechanical details of the operation of the bill naturally are going to require a large administration force and detailed study as to its actual operation. Were I able in my spare time to devise a method of operation of this bill and get it perfect, perhaps I would have a little better job than I have got. So I can not do that. Mr. Fort. Do you not think we ought to try to figure it out in theory before we put it practically on the books? Mr. SexAvUER. I have never heard of any law which affected the economics of any industry being placed on the statute books in perfect form. : Mr. Fort. Neither have I. Mr. SExAUER. And so I am assuming that in placing those on the books that whoever does it and however it.is done it will be done with the best advice of those men who are most familiar with the particular commodities it is going to affect, and as it is expanded or contracted it will be expanded or contracted with the advice of those who are interested and those who have knowledge of the particular commodity. AGRICULTURAL RELIEF 565 Mr. Fort. And you are the best posted man in the dairy products who has appeared before the committee, and I am asking you as the only expert we have had on that subject in order that we may properly consider any piece of legislation and know what your judgment is as to the way we should legislate. Mr. SEXAUER. My judgment is that at the present time it is not necessary, and before 1t becomes necessary we will sit down with a force of experts and give it consideration from all angles and outline a plan. Mr. Fort. You think we should leave that to the board? Mr. SExaUER. No, absolutely not. I do not know how you are going to do this. You may or may not, as you wish—if the amendment is to be made to the bill before passage that dairy products should be put into the bill, if the committee as a whole wish to take that up, they probably will take it up with those men who are experts, and in that expert advice is not to be arrived at at a moments notice the suggestion I would have to give you here is that it should be from details, conscientious and long-time study of the intermovements cf the products and how it could be vest applied on all commodities. Mr. Fort. Is the action of yourself and your association in endorsing this based on detailed study—its own study? Mr. SExAUER. I do not believe it is necessary for milk, if it is given to the others; and we believe that the others have the same mtimate knowledge in reference to their commodities as we have as to milk. Mr. Fort. But your milk is now admissible under the bill without any further legislation, if we pass the Haugen bill in its present form? Mr. SExAuer. Mv understanding is that it is not. Mr. KincurLore “Well, it is. Mr. Fort. It is. What is the purport of page 17? (Reading:) In the case of any agricultural commodity other than grain, cotton, livestock, or tobacco, the board shall, in connection with its specification of the place and manner of paymeént and collection of the equilization fee, further specify the particular type of processing, sale, or transportation in respect to which the equilization fee is to be paid and collected. Milk is an agricultural commodity, is it not? Mr. SExavER. Right. Is there not somewhere else in the bill a method whereby it will be decided as to what commodities shall be entered into under that basis? Mr. KincuELOE. It is in the discretion of the board. Mr. Fort. It is discretionary with the board. or. SExAUER. Is there not also an advisory board in there somewhere? ‘ Mr. Fort. Not with binding powers in the bill as introduced. Mr. SExAUER. I see. Perhaps I am wrong. Mr. Fort. If we are going to put it in with discretionary powers as to the advisory council, should we put the matter in so that dairy products could only be taken up in the advisory council or butter in the advisory council or milk products? Mr. SExauEr. You would probably put it in as dairy products. Mr. Fort. Which would include fluid milk? Mr. SExAUER. That would include fluid milk. 666 - AGRICULTURAL RELIEF My. Fort. Then, really, under the language of the bill—I have not studied it in detail with this particular reference in mind, not being a milk producer—should it, or should it not, be protected so that the fee should not go on fluid milk? Mr. SExaUEr. I have confidence enough in the organizations which are handling milk so that if it should or should not go on fluid milk, that they could convince the board of it at that time. Mr. Fort. Do you think we ought to leave all these questions to somebody else to settle.and dodge our responsibility? Mr. SExAUER. I did not say that. Mr. Fort. Is not that what it comes to? Mr. Sexaver. Why should I say whether you should dodge your responsibilities or not? : Mr. Fort. But you are wanting us to leave all these questions sither to a board or some advisory council or some cooperative association, or somebody else. Is it not our job here to draw a piece of legislation that has its limits and its restrictions and its powers pretty clearly defined? Mr. SExavEer. I would assume that that was the case. So far as we are concerned, we would just as soon have dairy products left out. But if they are left in—if you, in your discretionary power, decide to leave them in—I believe we can convince anyone that it is not necessary to operate the bill so far as those commodities are concerned. Mr. Jones. As a matter of fact, you would prefer to be left out for the present? Mr. SExAUER. I do not see the necessity for putting them in. Mr. Fort. Then your idea, Mr. Sexauer, is that the passage of an equalization fee bill will protect against overproduction in the dairy industry by making it more profitable to produce in others. Mr. SexaueR. Right. Mr. KincaeLOE. You said you had 40,000 members? Mr. SExAaUER. Right. Mir. KincaeLok. In New York and some adjacent States? Mr. SexavgeRr. Right. Mr. KiNcHELOE. Have you any national organization? Mr. SExAUER. Have we a national organization? Mr. KINCHELOE. Yes. Mr. SExXAUER. You mean Dairymen’s League? Mr. KincHeELOE. The dairy industry. Mr. Sexaver. The Dairymen’s League is connected with the National Milk Producers’ Cooperative Association. Mr. KincHELOE. Does that include the dairy industry of Minnesota and Wisconsin? Mr. SExAUER. Some of it, I understand. Mr. KincaELOE. What percentage would you say of those engaged in the dairy industry are in the organization? Mr. SExavER. That is very, very difficult to say, depending on whether or not you are speaking from the standpoint of quantity production or from the standpoint—— Mr. KincHELOE. Everything. Mr. SexavER. Everything; from the standpoint of quantity production, I understand there are some 300,000 to 400,000 members in the national oreanization, and that national organization probably AGRICULTURAL RELIEF R67 would cover—assuming that there is an average stl - lent to ours—25 to 30 per cent. That is more or Productio estimate. I would hate to be held to those figures. oT Mr. KincHELOE. You are under the impression, if T understood you in your answer to Mr. Fort, that in the McNary-Haugen bill that is now being considered dairy products were not considered a basic product? Mr. SEXAUER. Not a basic product? The gentleman—I do not know his name—rather convinced me that it could be considered with the agricultural commodities under the terms of the bill. Mr. KINCHELOE. There is no doubt about that. The revised bill covers any agricultural commodity. Under the bill that passed the House last session there were only five basic commodities. Mr. JoxEs. And milk was not included? Mr. KincHELOE. Milk was not included in the former bill. Do you think if your organization had any idea at all that milk and butter would be designated as one of these commodities, or two of these commodities, and that they had to pay an equalization fee on them, they would be for this bill? Mr. SExAuEr. The interests we have operated for a period of seven years under a pooling plan, which is very similar to the equalization fee. I suspect there would not be verv much obiection after they fully understood it. Mr. KixcHELOE., Then you think that the members of the Dairymen’s League would be for this law which would take in butter and milk and other products of the cow, knowing when it is done there would be an equalization fee levied upon the producers of those commodities? Mr. SExavEer. Once they understood it, yes. Mr. KiNcHELOE. You think there would? But your organization, if I understand it. has never contemplated anvthing like that happening? Mr. Sexaver. They felt it was not necessary. Mr. KiNncHELOE. Therefore, when you resoluted, if you did on the McNary-Haugen bill, your membership understood at that time that dairy products would never be considered and therefore they would never have to pay an equalization fee? Mr. Sexaver. Well, I think the thing they understood was that other branches of agriculture were in very bad shape and would affect the dairy industry if something was not done for those other branches. Mr. KixcueLoE. They understood that and they also understood there would be no operating period declared on any products of their industry. Mr. SExavEr. It is probably true they understood that from talk. Mr. KincHELOE. Of course, you are just guessing as to what they would think about the matter if they were convinced. that there would be an operating period declared on these dairy products and an equalization fee put on them? - Mr. SExAUER. If there was an operating period declared on these dairy products and an equalization fee put on them, probably the dairy industry would be in such a depressed state that they would desire something like that to happen. . Mr. KiNcHELOE. You guess as to what your membership. would think about that. 6568 AGRICULTURAL RELIEF Mr. SExAuER. If milk would go down 50 or 60 as a farmer I think [ would be glad to have an operating period so as to get a little more money for milk. “Mr. KincHELOE. I am not talking about you but your organization. Mr. SExaugr. Our organization is composed of, a lot of farmers like myself. Mr. KincaeLoE. They do not think like you do on all propositions? Mr. SexaUER. Not entirely; that is true. Mr. KincaeLoe. Has your organization as an organization in convention assembled indorsed the McNary-Haugen bill? Mr. SExaAUER. No; only our board of directors. Mr. KincaeLoe. You do not know what the membership thinks about that? Mr. SExauER. Well, our board of directors rather reflect the views of the membership. Mr. KincaELOE. Not necessarily. I have seen whereasing and resolving around the table of the board of directors when the members they were supposed to represent did not know anything about it, hecause they did not understand anything about it; is not that true? Mr. CLarkE. He is a member of the board of directors. Mr. KinceELOE. I am talking about what the individual members are thinking when their boards of directors passes some resolutions. Mr. CLarkE. Some of the members with whom I have talked, after talking with them a lot, said they did not quite understand it and they were not going to insist on whether they should or should not want to go in. Mr. KincEELOE. Do you think your board of directors had in mind an operating period would never be declared on dairy products? Mr. CLarkE. I think they would defer to the best judgment of fred Sexauer. And I would also say I was not at the meeting of the board. Mr. Jones. And therefore was under the impression that dairy products were not included and could not be included in the bill. Mr. Fort. Two years ago your national board of directors approved the Capper-Tincher bill, did they not? Mr. SExauER. I think they did. Mr. FuLmer. Mr. Sexauer, in fairness to your organization, I think we should get this straightened out. It was your understanding in your present condition that you would not come under the operation of this bill? Mr. SExAUER. That was my general understanding. : Mr. FuLmer. And I so understand that. But at any time because of competition that your business should get in the condition of the other commodities, then you could ask for and get the benefits of this legislation. Then you would be perfectly willing to pay the equalization fee? Mr. SExavER. That would be the general plan, yes. Mr. CrarkE. I want to put this in the record: Mr. Sexauer is one of the ablest men and one of the fairest men in leadership in the cooperatives in the State of New York. I have had him in my district because I believed he would come there and tell my farmers the truth as he saw it. - He and I differ on this proposition, and that AGRICULTURAL RELIEF is all right; and I believe he is just as hon little bit more honest. . estas I am, and maybe a I want to ask you two or three questions: In the first : believe that if our commodity were placed under the eo You and our farmers in addition to suffering the discrimination we now suffer in carrying the load and helping maintain the price, had in addition to pay another burden in the equalization fee that it would tend to encourage or discourage our cooperatives? Mr. SexAvER. I think it would tend to encourage 1t, because prices would be at relatively higher levels than otherwise, and that always encourages 1t. Mr. CrLarkE. But the general commodities and fellows outside would be getting more than we. Mr. SexauEr. No; the relative difference between our organization and the other man would be the same, because, assuming he would have to pay the same equalization fee our members would have to pay, I can not see that it would change the relation between our members and the men outside of the organization in the least. Mr. CLARKE. You are in favor of farm legislation, are you not? Mr. SEXAUER. Yes. Mr. CLarke. We have read the President’s veto and the Attorney General's opinion as to the unconstitutionality; you are undoubtedly familiar with the opinions of others of our leading lawyers about the unconstitutionality. In the light of that, do you believe that if this bill is passed—just your judgment of the thing—that the President is going to change his position and approve this bill? Mr. Sexaugr. I. have not the faintest idea one way or the other. If he does not, I do not know that that makes a bit of difference so far as the principle is concerned. Mr. CLARKE. But as far as one thing, farm legislation is concerned, do you think it makes a great deal of difference? Mr. SExavuer. No. Mr. CLARKE. As to what we try to get as a set-up of machinery for getting started. Mr. SExAUER. If you do not get the thing that is right when the farmers are in such a depressed condition as they are now, you are never going to get it, because if you give them, as some one has expressed, a half a loaf, in the expectation that that half loaf will work, and they go on for three years and continue to be depresesd or temporarily elevated, and that half loaf fails, then you will have persons throughout the country saying, “There, we gave you something that didn’t work. Now, go back and let the law of supply and demand regulate it.” But you do not intend to maintain that the Haugen bill is the only correct solution of this? Mr. Crarke. I maintain that the equalization fee and one or two other provisions are the basic things that have got to be in any farm relief bill to give permanent relief. 6569 70 AGRICULTURAL RELIEF House or REPRESENTATIVES, COMMITTEE ON AGRICULTURE, Saturday, February 25, 1928. The committee met, pursuant to adjournment, at 10 o’clock, a. m., Hon. Gilbert N. Haugen (chairman) presiding. Present: Representatives Haugen (chairman), Purnell, Williams, Thompson, Ketcham, Hall, Fort, Menges, Andresen, Adkins, Clarke, Aswell, Kincheloe, Jones, Swank, Fulmer, Rubey, and McSweeney. The CHAIRMAN. Mr. Sexauer, we will hear you. STATEMENT OF FRED H. SEXAUER—CONCLUDED Mr. ANDRESEN. Mr. Sexauer, I wanted to ask you a question or two. I represent a dairy industry, and I wanted to see if you have the same understanding that I have on the situation of the surpluses. A great many dairy farms in my district were opposed to the McNary-Haugen bill on the theory that it would raise the prices of feed products and other agricultural commodities of which they were the consumers and not the producers. But they have changed their opinion to a great extent on the surplus proposition, fearing that unless something was done to help out the grain and corn farmer and the cotton farmer, that dairying would be extended to such an extent that we would soon have the same situation in the dairy industry as we now have in grain, cotton, and corn. We are selfish enough to want to look out for the future of our own industry. You stated yesterday that probably in a year or two we would reach the point where we would be producing a surplus of dairy products. Now, my support of the bill and I take it your contention on this McNary-Haugen bill is this, that we want to try and prevent the same situation in the dairy industry as we now have in the other surplus agricultural products? Mr. SExauver. That is right. Mr. ANDRESEN. So that we will have to be frank to admit that even though we would have to pay a greater price for the feed we aave to buy on the dairy farms and the other agricultural commodities that we are selfish enough enough to be looking out for our own Future in order to protect ourselves. = Mr. SExaukr. That is right. Mr. ANDRESEN. And that any direct benefits to grain, corn, and cotton farmers to-day is going to be an indirect benefit to us, even though we have to pay more for those commodities. Mr. SExAUER. That is right; yes. Mr. CLARKE. Is there not an economic law after all that, in the long run, rules in the country—that is, if there is any one commodity n- whieh: there is more money for a little time that there-is a temporary: stimulus. that goes along with the production of that commodity and people rush in and after awhile a surplus occurs, prices go down, and they turn again to some other thing? So that after all 1t is an economic balance that is going on with agriculture? Mr. SExAUER. That is true. Mr. CrLarke. Has not that been true since the organization of the Government? | Mr. SExAUER. That is correct, Mr. Clarke, that so long as the economic balance presumes to bring about a condition where agoTi- AGRICULTURAL RELIEF 671 culture as a whole is prosperous it would perhaps be well to let that law work, but when we have conditions which bring about an artificial rise in the cost of labor and other farm costs, and then only one commodity out of a group begins to pay anything like a profit for its production, if we let that law work so it beings about the average the average will be so slow that the production of none of those crops will be profitable. _ Mr. AnDRESEN. You stated before the committee that the dairy industry was the best organized industry in agriculture. The reason for that is this, as I see it—and I am asking this question: Is not the reason for that that there is no surplus of agricultural commodities, and that our entire production is not sufficient to supply our domestic consumption, by reason of the fact that there is no surplus, the cooperative industry is organized and so successful? Mr. SeExaukR. 1 do not quite agree with that. I think the primary reason why the dairy industry is better organized, perhaps, than any other is the fact that the dairy products are more or less perishable and have to be marketed more or less every day or every month or every year, depending on the particular type of commodity which you are producing, and it is not like wheat or some other commodities that can be stored over a period of years. Consequently, the man who produces milk in fluid form has to provide himself with a market for that milk to-day. He has to have that market to-day. Unless he is assured of what we term in our slogan “A market for every man every day in the vear,” he suffers an irreparable loss. Consequently that has brought about conditions that forced him to organize quicker than the man that produces some of these other commodities, in fact, our organizations were formed when we did have an exportable surplus when we were suffering some of these conditions. Mr. Kercnam. Did you go into the causes that have possibly brought about a maladjustment that you refer to? Mr. SExAUER. No; I did not. I took the position that this committee had been studying that for a period of years and probably knew more about it than I did. Mr. Kercaam. I wondered if in your own mind you assigned any particular things that have been done in a legislative way that you think has created this present price disparity? Mr. SEXAUER. I am not an economist and perhaps all the information that I have gathered can be taken out of one or two publications, or at most three: Business Men’s Reports and Condition of Agriculture by the National Conference Report. Mr. Kercaam. Of course, you are very familiar with the report of Doctors Warren and Pearson? Mr. SEXAUER. Yes. Mr. Kercaam. Have you followed their discussion as to the causes of the present price depression in agriculture? Mr. SExauver. To quite an extent. Mr. Kercaam. Do you agree with the conclusions as to the causes? You recall they mentioned the increase in interest charges, the increase in local taxation, and the increase in the costs of distribution; they classed those factors as important in the present price maladjustment? Do you agree with that? [6160—28—SER E. PT 9— 2 572 AGRICULTURAL RELIEF Mi. SExAUER. I agree with that. But I do not believe that they have gone quite far enough back in that discussion to arrive at the basic things which have caused those. I would think that the things which caused increased cost of distribution are mostly costs of labor and costs of material; which, again, are costs of labor; and costs of labor, perhaps, are brought about by competitive conditions in labor; and then you can trace back, as did the Business Men’s Commission, to certain immigration laws, which were passed for Americanization purposes, that artificially stimulated the demand for labor or decreased the supply of labor in this country; and, consequently, those costs have increased farmers’ costs. Probably certain other legislation which has been passed for the purpose of protecting other branches of industry have also added to the cost, if not directly, at least indirectly. Mr. Kercaam. Labor, as I understand your statement, is the very largest factor in the situation. At the present time the labor index is 228. Mr. SExAUER. Is what? Mr. Kercaam. The idex is 228 for labor. Mr. SExaUER. I make this statement that the largest portion of the cost of anything, except basic raw materials, when you finally analyze it back to the final point, is labor. The cost of machinery is plus the cost of every part of machinery, plus cost of mining it, plus all the other labor costs, which extend back through all of its I piilextions is not the only factor which may cause the high cost of abor. Mr. Kercaam. I am not interested particularly in naming the measures, excepting I wanted to get, if I could, the principal factors in your own mind that cause the present farm situations Mr. SExavERr. I agree that increased taxes, etc., do make farmers’ costs higher. But I think that the things which cause those things which Warren, Faris, and Burnett I refer to, and who also state that the taxes are pretty much all labor. So it traces back to things which are more fundamental than thoes rather superficial things as taxes. Mr. Kercaam. If I recall the figures of Warren and Pearson they run something like this, in expressing the ratio of these various factors that enter into the high farm costs: They place interest as 1, they put local taxes as 2. But they put the costs of distribution at 6; in that same ratio, calling interest 1, taxes 2, and costs of distribution in which index, labor is an important factor, they put costs of distribution as 6-6, 2 and 1 express the index among various items that they put into their explanation as to high costs. Mr. SExaUER. The increased costs of interest comes about there, again, because by fundamental debts which have created other indebtedness. So that, again, is not fundamental. It is a factor which appears at the present time, but there is something back of that which has caused that increased cost of interest. For instance, if a man owned a farm free and clear, and because of agricultural depression found it necessary to put a mortgage on it to pay taxes and pay for his living, his interest costs would be increased, but his costs would not be increased because of interest, but because of some other factors back of that which caused his interest costs to be increased. AGRICULTURAL RELIEF 673 Mr. KeTcHAM. As you know the situation in your section of tho State, about what proportion of the farmers have their farms free of mortgage debts? Are 50 per cent of the farms free from mortgages? Mr. SEXAUER. I really have not any definite figures to base an opinion on. I think probably those figures are available, but I do not happen to have them in my mind. Mr. Kercaam. I think that is generally true, about 50 per cent. Mr. SEXAUER. I judge that it is. I think probably our section of the country is freer from that than some of the other sections, inasmuch as some farms have been handed down from generation to generation and inasmuch as it is in a dairying section and dairying has probably been in a better condition than the rest of agriculture, and 50 per cent of the income in our State comes from dairying. Mr. KercuaM. Right in that same connection, could you give the committee any notion of the relative number of tenant farmers in your section? Mr. SExAvERr. I can not; that information is available, but I do not have it. Mr. KErcuaM. I understand it is gathered, but I have not been successful in getting it right here. Mr. SExavUER. I can not tell you. Mr. KErcEAM. And in this connection I think the general statement is that approximately 30 per cent of the farms of the United States are tenant farms. Now, take first the farms where there is no mortgage indebtedness. Do you think that the interest charge there is a very material consideration? Mr. SExavuEer. Very material. Mr. KercaaM. Where there is no mortgage indebtedness? Mr. SExAUER. You say where there is no mortgage indebtedness— excuse me; I would say that the interest charge would not bother. Mr. KerceaM. Do you think that the interest charge is a very material factor that causes the tenant farmer any considerable loss of sleep at night? Mr. SExauEer. No. Mr. KercuaMm. Then, if it be true that 50 per cent of the farms of the country are owned free of mortgages and another 30 per cent of them are farmed by tenant farmers, why, of course, so far as interest charges are concerned, while it is a mighty heavy burden upon 20 per cent as for the 80 per cent occupying those two classifications, 1t does not cause them to lose much sleep at night. Mr. Jones. It does the tenant farmer in my section, I will state. He mortgages his crop in advance and sometimes pays 10 or 12 per cent interest. . . Mr. KercEAM. Mr. Jones, the point I think is this, of course, if he pays cash money rent, but so far as rents go in our section not very many farms are rented upon a cash basis. Mr. Jones. There are not in our section. But the tenant farmer has to borrow money and to pay high rates of interest and mortgage his crop in advance to buy machinery. oo Mr. KErcHAM. You are misconstruing my question. I meant the mortgage indebtedness upon the land. Mr. Jones. No: not in that sense. 574 AGRICULTURAL RELIEF The Crairman. Mr. Wallace reported that 2414 per cent of the farmers were in fact bankrupt. Mortgage indebtedness was reputed to be $13,000,000,000. Whether he carried a mortgage on his farm or if lie has money invested, he is entitled to a return on the valuation of his farm. Mr. Kercaam. I agree with that, Mr. Chairman, but I do not agree that it makes a man stay awake at night figuring out how he is roing to meet that interest charge. If he owns a farm, of course, it gives him right to it, and in my judgment he is entitled to a reasonable rate of interest as one of the factors in figuring what goes to make up a profit, but that is a mighty sight different than to go and meet that interest in good old hard cash at the end of the year. So far as I am concerned, I will take my property without any mortgage upon it. Mr. Apkins. You said yesterday, I believe, in reply to a question, that your being here was the result of a meeting of the board of directors that took action on this proposed legislation? Mr. SexavER. Yes. Mr. Apxins. How is your board of directors elected? Mr. SExaver. Our organization has 24 districts, and under the law the board must be elected by ballot of the entire territory. But in order that each of these districts may individually know the man that they are electing, we arrange that the various locals in that Jistrict—there are about 800 locals divided into 24 districts—meet sach of them in their own local, and at that local meeting they nominate or vote for examinations for a man for director. They have to vote by ballot; there is no viva voce method; they have got to vote by ballot. They elect a delegate to carry that vote to the district meeting. That delegate must carry the vote, if he is so instructed, as the individual farmer votes it. The individual farmers in that local can vote for 10 men if they want to, and that delegate must carry the votes as they are voted to the district meeting. At that district meeting these delegates carrying the votes for these locals, instructed or not, as their local wishes them to be—every vote on the nomination of a candidate for election as directed from that district. If there is a deadlock in the first or second vote, then he is instructed—then he can vote as he sees fit, because otherwise they might have a deadlock over a long period of time. Then whoever is nominated at that district meeting is then put on the official ballot, which is distributed at a later meeting of all locals, and on that official ballot the individual director is elected. Mr. Apkins. Now, then, your board would naturally be somewhat responsive to what they thought was the will of the fellows back on the farms, would they not? . Myr. Sexavuer. Our board is, I believe, very responsive to what is the will of the members on the farms, and they also, I believe, are students of the agricultural and dairy problems, and concieve 1t to be their duty to do the things which are most advantageous for their members, believing that if it is right they can sell it to their individual members back on the farm. ] Mr. Apxins. Then they would not have been very likely—this board—to have taken this action in favor of this legislation unless they thought it would have met the approval of the fellows back on the farms? Mr. SExAUER. That is right. AGRICULTURAL RELIEF 075 Mr. CLArRkE. On the other hand, there is no pro ositi to the representatives of the various locals who voted if thon, put a were not instructed? Mr. SExAUER. That is right. Mr. CLARKE. I am a member of that board, and so far as my membership and directorship is concerned there has been no expression of opinion; it is left to me the same as this is left to Mr. Sexauer——— Mr. SEXAUER. Yes. Mr. CLARKE (continuing). To use his own good judgment; and when you get back to it fundamentally, given anv intelligence on the part of the farmers themselves, they have confidence in us and in our judgment, and when they have not, so far as I am concerned they can kick me out. Mr. Apkins. The point I am making is that the majority of this board will not have taken action unless they thought it would have met the approval of the constituents. Mr. CrarkEe. That is all right; but so far as reflected judgment of the producers is concerned, there is mighty little. Mr. Apkins. That is not what I am contending, but my point is that these men certainly would not have taken this action unless they thought it would meet the approval of the farmers they represent. I got called severely yesterday for amplifying a statement which this man made when he started his statement here by stating that they did not expect to use it, but they appreciated if they didn’t favor some legislation to keep these fellows on their own products in the West that they would have been having them in the same position. Mr. WirLiams. They are not seeking this legislation to take advantage of themselves, but it is good for somebody else. I think everybody understands his testimony as expressing our case. Mr. KiNncHELOE. They would take the sirup of fies and give the quinine to somebody else. The CuHairMAN. I believe we are all agreed that the aim of the bill is to make it possible for the farmers to market their commodities in the way that would give them the benefit of our protective laws already established, more particularly the tariff. I understood you to say that you are getting the benefits of the tariff. Therefore you could not expect to gain anything by this bill. That your organization has brought about a marketing plan that gives the producer the benefit of the tariff now. Mr. Sexaver. I did not entirely claim that. I think that that organization has without question done a great many things which have brought about conditions that give it the benefit of the tariff. The CHAIRMAN. You are receiving the benefits of the tariff now? Mr. SExavER. I believe that they are receiving to quite an extent the benefits of the tariff at the present time. The CHARMAN. But vou believe your people are entitled to the tariff and all protection laws already established. Mr. SexarEr. I think there is no question about that. I do not think we can exist without it. } The Cuamrvan. If you are not getting the benefit of the tariff you would then be in favor of making the protective tariffs effective. Mr. SExAUvER. You mean making this law? The CaairMAN. I mean making our protective laws effective. 576 AGRICULTURAL RELIEF Mr. SEXAUER. You mean making the tariff effective? The CuairmAN. I mean all protective laws. Mr. SEXAUER. Speaking of that in lump sum, I would say that agriculture absolutely has to have the same type of protection that other industry has if it is going to exist under costs that are created by that other legislation. It is absolutely essential; we can not exist without it. The CuatrMAN. Then if it were found that you were not getting the benefit of these protective laws, you would be in favor of operating 50 as to get that benefit? Mr. SEXAUER. Something would have to be done to give that industry the same beneficial results. The CrairMAN. As I understand it, you are getting the benefit of these laws now, and you are satisfied? Mr. SEXAUER. That is right. The Cuairman. And if the others engaged in agricultural pursuits are not getting those advantages you would be willing for them to have that advantage? Mr. SexavEeR. Right. There seems to have been a question, Mr. Chairman, as to whether we wish or do not wish to pay our share toward the maintenance of whatever legislation there may be. It is my understanding—and if I am wrong I wish some one would correct me—that this equalization fee or tax or whatever you wish to call it is to be applied only on those commodities on which the board is operating. The CuAIRMAN. Yes; that is generally understood as it applies to the equalization fee plan. I take it the question had reference to the debenture plan and others where the losses would come out of the Public Treasury. Mr. SeExauer. And that, for instance, when they are operating on wheat that there will be no equalization fee against corn or cotton; that when they are operating on cotton alone there will be no equalization fee on wheat or corn. So that I fail to see just where the criticism arises of the dairy organization which says that at the present time they do not believe it is necessary to operate on dairy products, or that they should be criticized or blamed for or have it said about them that they wish to put a burden on some one else and not assume it themselves. Mr. KincHELOE. You are here advocating this bill, are you not? Mr. SExavuer. Right. Mr. KiNcHELOE. You do not think it will be ever necessary to declare an operating period on dairy products, according to what you have said; and you further concede that the only fellow who will pay the equalization fee will be the raisers of that commodity upon which there has been an operating period declared? Mr. SEXAUER. Yes. Mr. KincHELOE. Getting back to your original statement, that the reason you want that done is because you do not want those people to quit their present vocations and produce certain commodities that come in competition with you? Mr. SEXAUER. Yes. Mr. KincHELOE. Oh, in other words, your position, in the last analysis, is that “as long as we do not have to pay the equalization fee and as long as we do not think it will ever be necessary for us to AGRICULTURAL RELIEF 677 pay the equalization fee, but we know that ; ¢ to have to pay it if benefited under this ba he Sther Jellow 1S going So, you are here f 1 $0 lof thom poy hol, , y e here for a selfish motive—I do not say that in an offensive way—but you are here trying to keep as many as you can out of th dairy business and at their own expense? of the Mr. Soxupes, Yes. r. AsweLL. Mr. Kincheloe, I think when the ti the dairy industry produces a surplus that the dairy hon will be hot Mr. KiNCHELOE. Absolutely; and we all know that is the only reason the tariff is effective, because they do not produce any surplus, Mr. AsweLL. Will not that be time enough to come? Mr. MEenGgEs. I would like you to tell me whether you export milk products? Mr. SEXAUER. Yes, there are some milk products exported—not a very large amount, and just why I am not in a position to say whether it 1s because of a particular special market that some one has built up or not, but there has been some milk products exported during the past year. The amount of exports as compared with the amount of imports 1s at the ratio of about 6 to 1; there are about six times as much imported as there is exported. i MenGEs. What prices are you getting for your export prod-Mr. SEXAUER. I can not tell you that. As an organization we do not export and the companies who do export are not telling us what they get. Mr. Menges. You do not know what products constitute the most of the exports? Mr. SExAavEiR. No; I haven't that information; it is available, but I haven't it. 2k Menges. That would be mostly canned milk and powdered milk? Mr. Sexaver. Most of that would be in the form of condensed milk and evaporated milk. Presumably somebody has a market they have built up over a period of years. It is, however, a preferred market where they sell advertised brands and might be able to get a sufficient amount for a certain quantity to reimburse them for exporting. Mr. MENGEs. Is not that exportation largely to Australia? Mr. SEXAUER. I can not tell you—to Australia? I would not think so. But I can not tell you. Mr. MENGES. What I am getting at is whether the Canadians are not endeavoring to get more of that export trade than we are? Mr. SEXAUER. Practically all the condensers to-day who are exporting milk to establish plants in Canada for the purpose of exporting—I refer to thé large condensers who were built up in this country—are manufacturing practically all of their milk in Canada for export, except such as, for instance, the Carnation Co. under a certain export trust law which we have passed in this country have been allowed to form the American Milk Co.; and they have established some plants in Europe to take care of their export trade; and the Borden Co. operating for the exportation of Borden's Condensed Milk; and practically the entire amount of that is manufactured to-day in Canada. We are losing that business. because we can not compete In costs. 578 AGRICULTURAL RELIEF Mr. Menges Those products go in export? Mr. SExaviRr. In export, yes; absolutely. Mr. MENGES. You are not in the business very strong, are you? Mr. SExAUER. We have been forced out of the business? Mr. CLARkE. Is there anything more you want to say? Mr. Sexavuer. Nothing more. : Mr. CLarkE. Mr. Chairman, he has the right to revise and extend his remarks? The CuairMAN. Oh, yes; they all have that. oo STATEMENT OF WILLIAM H., SETTLE, PRESIDENT INDIANA FARM BUREAU FEDERATION Mr. SETTLE. In a crisis that has continued for seven years, such as has been the case with the present crisis in the farming industry, surely there has been plenty of time to study the cause of this condition, and to reach some conclusion as to the remedy that is needed. You can analyze the trouble for seven years more, and you can only come to one conclusion—that is, that everything the farmer must buy including labor, is too high in comparison to what he receives for that he sells. There is a reason for manufactured articles and labor prices continuing on a high level; and there is also a reason for agricultural products remaining on a lower price level. Artificial means such as the tariff laws and immigration laws are stimulating and maintaining these prices. That has always been the argument in favor of such laws, otherwise, there would have been no demand for them in the first place. Such artificial means of protection as the tariff do not apply to our surplus farm crops and never can apply to them under our present system of distribution. If they could be applied under the present system, it would have been done long ago. As I see it there are two forms of the problem that we are trying to solve. One is best illustrated in the case of cotton, where our exports are sufficiently large to become a dominant factor in the market of the world and in world price. For such a crop, the need is to provide a means whereby we can supply the world markets and world needs in an orderly way, without forcing such markets to take what they do not need or want at a particular time unless they can buy it at a bargain price, as is the case now—and of course, these bargain prices determine all prices. The bill we are now considering and supporting provides a means to overcome this difficulty. The second form of the problem is presented by such crops as wheat corn, hogs, and cattle where our surplus can not become a dominant factor in world markets and world prices. With such commodities the need is to provide a means whereby the smaller surpluses as sold abroad shall not determine the price of the whole commodity as is the case now. The Haugen bill provides the means of overcoming this difficulty. Legislation aimed at farm relief that does not undertake to cope with these two problems, is of no value to the farmers. Any legislation that does not provide a fund for paying losses incurred in dealing with these surpluses is of no value because if crop surpluses are handled intelligently and for the best interests of the producers losses are sure to occur. AGRICULTURAL RELIEF 679 Unless 1t 18 intended to make the tariff apply to the benefits of agriculture, and to prevent world prices and world conditions from establishing our prices 1n staple commodities, there is no need for legislation as far as a great many of the most important Crops are concerned. When you talk about establishing a board to deal with these problems, without providing a sound and dependable source of funds to take care of losses incurred in maintaining a market in this country above world prices as we operate now, it is pure nonsense. To set up another agency to go into the market to buy at a low price and sell at a higher price, would be ridiculous. We have too many agencles operating on that basis now—so many that to maintain them all forces a wider margin than is justified between what the farmer receives and what the world market will pay, in order that those engaged in that business can make a living. The more agencies there are operating on that basis the less the farmer receives in the long run. In the case of wheat we look up the Liverpool quotations, deduct 26 cents or so, depending on the part of the country you live in, for freight, add a little for overhead expenses, estiinate what can be gained by the mixing process, then the price is fixed and quoted, and that almost invariably establishes the price of all the wheat that changes hands in this country regardless of where it is used or consumed. The result is that instead of selling at world price plus tariff, we who grow wheat in this country get world price minus transportation. The result is that the wage earners of Europe generally pay around 26 cents a bushel more for wheat than the wage earners of America, although the European laborer receives only about a third of the wage that is paid in this country. This condition continues throughout the year and from year to year, as long as there is an estimated surplus in this country. It 1s not only a real surplus existing that does the harm, but an estinated one has the same effect. At the end of the year we find there has not been too much wheat, but that it has all been consumed, except the normal carryover and if that is a little larger than average by the end of the next year it is all gone and the world is better off by having it, everyone except the farmer himself. The world is not producing too much wheat or corn or hogs or cattle or cotton. The world production of these crops is all consumed, and yet at times millions go hungry and are poorly and insufficiently dressed. I hope we can get at the problem, that is to provide the means whereby prices can be meintained that will give to the farmer their cost of production plus a reasonable profit. We can only do that by maintaining a price ecuitable with prices of all other commodities, which are maintained by artificial means such as tariffs and 1mmiration laws. } . © If this brings a problem of overproduction—which I do not believe it will—let us meet that problem when it appears. Just a glance backward over the years that we produced too much, as has been argued, should suffice. Where hast all gone to? Where is it to-day? 580 AGRICULTURAL RELIEF HousE oF REPRESENTATIVES, COMMITTEE ON AGRICULTURE, Wednesday, February 29, 1928. The committee met at 10 o’clock a. m., Hon. Gilbert N. Haugen chairman) presiding. Mr. ANDRESEN. Mr. Chairman, the Minnesota delegation in the House, and also in the Senate, have had a meeting and would like to have an opportunity to make a very brief statement in regard to farm legislation, particularly Senator Shipstead and Congressman ague. The CHAIRMAN. We have another matter set specially for this morning. We can not give them much time. Senator SHIPSTEAD. I merely wish a minute, Mr. Chairman. The CEAIRMAN. I was not aware that this matter was coming up this morning. However, we will hear what you have to say if it will not take long. Senator SuipsTEAD. I do not desire to trespass on your time but merely take a moment, with the consent of the committee, to advise you that the State of Minnesota through its legislature, in two separate sessions passed resolutions almost unanimously favoring the McNary-Haugen bill. The Farm Bureau Federation of Minnesota, on several occasions in convention passed resolutions favoring the McNary-Haugen bill. Mr. WiLniams. Does this represent the views of the delegation in the House from the State of Minnesota? Senator SHIpsTEAD. They are here to speak for themselves. Mr. Aprins. Are you for the bill, “with equalization or nothing ’’? Senator SuipsTEAD. I am asking the committee to report the bill with the equalization feature. - Mr. WiLLiams. You want that or nothing? Senator SHIpSTEAD. There has been nothing proposed. Have you anything else to offer? Mr. WiLLiams. There are about 20 bills before this committee. Senator SHIPSTEAD. Not to my knowledge; I am not aware of that. The people for whom I speak want this bill. Mr. Winriams. I wish to get in the record the fact that members of this delegation in the House have talked to members of this committee, including myself, at various times and very earnestly urged that the thing to do was for the committee to report the bill without the equalization feature. Of course they have a right to change their views. Mr. CLague. Present in the delegation this morning from the Senate are Senator Shipstead and Senator Schall, and from the House, Congressmen Knutson, Furlow, Maas, Kvale, Selveg, Clague, and Mr. Carss said he would be here, so did Mr. Goodwin. Our farm organizations of Minnesota are unanimously behind the McNary-Haugen bill with the equalization fee; and, speaking for them, they ask that it be brought out at the earliest possible moment. That is all there is ‘to it. } } Mr. WiLLiams. Mr. Clague, may I ask if the delegation believes that if the bill should be brought out that way it would have any chance of becoming law? Mr. Cracue. That we do not know. We feel that the bill had better now be brought out with the fee in the bill. AGRICULTURAL RELIEF Mr. WiLLiamMs. You would rather have a veto than to have legislation would you? Mr. CLAGUE. Not exactly that, no. Mr. mains, That is what it means. r. CLaGUE. Let it be acted upon and if i we will do the next best thing. P © ean not become law Mr. Apxkins. That is what Mr. Williams meant when he spoke about several members having talked to him. Mr. WirLiamMs. No; I mean just what I said, that Members of the Minnesota House delegation—I am not going to put names in the record—a number of them have stated to me that they were in favor of reporting this bill without the equalization fee. That has been their position up to within the last three or four days—that has been the position of a number of the members of the House delegation. I do not include Mr. Kvale and Mr. Selvig in that. Mr. KvaLe. I think names ought to be specified, particularly because some of these gentlemen have always stood for the McNary-Haugen bill with the equalization fee. Mr. WirLiams. That is what I said, that some of the House Members from Minnesota have always considered that the equalization fee ought to be in the bill. Mr. FurLow. I have never requested any member of this committee to report out the bill without the equalization fee, and I want the record to show that I am in favor of the bill with the equalization fee. That has been my stand ever since I have been in Congress. Mr. Maas. I wish to state that I not only have never requested any member of this committee to report out the bill without the equalization fee but that I have repeatedly urged that the bill be brought out with the equalization fee included. This has been my stand, without change, since I have been a Member of Congress. Mr. Loomis. I am appearing here as secretary of the National Dairy Union to ask the committee to fix the date at the earliest possible moment when we may have a brief hearing on H. R. 10598. We wish to present a very brief amendment that has been agreed to by the dairy interests of the United States. It will not take us over half an hour. The CHARMAN. We have a number of special orders. We could not take your proposition up until we get through with the special orders. Mr. Looumrs. Very well, if you will take it up when you get through with your special orders. 681 STATEMENT OF HON. G. N. HAUGEN Mr. Havcex. For the information of the committee and the House [ desire to insert in the hearings, at this time, certain tables furnished by the Department of Agriculture, indicating the production and net exports of wheat, corn, beef (slaughtered), lard, butter, and tables indicating the world price and domestic price, the tariff, and the net profit to the producers had the proposed bill been in operation for the years 1924, 1925, 1926, and 1927, also tables showing domestic and world production of wheat, corn, cotton, rice, tobacco, lard, beef and veal, butter, and cattle. The net profit to the producers has been ralenlated on the assumption of the whole crop being marketed. no 682 AGRICULTURAL: RELIEF allowances having been made for seed, food, and carry-over. (For instance, the net profit to the producers of wheat for the crop year 1926-27 has been calculated to be $266,737,446, assuming that the entire crop of 871,691,000 bushels had been marketed. If, say 100,000,000 bushels are used for seed, food, an carry-over, the equalization fee would be $0.1066 instead of $0.94, and the net profit would be $226,614,139, instead of $266,737,446.) Wheat {From Department of Agriculture} Crop year * ODI eee mr mm mo mm te (024-25 en TT 005-26 a 1926-27 Production Bushels 91, 797, 381 862, 627, 60C $32, 305, 00% 871, 691, 00C Net exports Bushels 128, 473, 000 251, 915, 000 92, 371, 000 205, 944, 008 Prices.—No. 1 Dark Northern at Minneapolis and No. I Northern at Winnipeg Y ear 2 923-24 meal 1924-2" emcee DZD cm ws vir mwas scons 1926-27 - ve eee ; . Net Minne- |v i i | Equaliza| rofit » Total profit apolis |\Winnipeg| Tarif | Freight | tion fee | Pbushel 58 65 1.51 "1.00 i) 1 51 1.46 $0.03 $0.034 , $0.171 L03) L154 - .376 03 03a | 276 | .03 L094 | .306 $140, 148, 364 324, 347, 752 229, 716, 189 26. 737. 446 If the bill had been in operation during the crop year of 1923-24, the wheat srower would have received the Winnipeg price of $1 plus the tariff of 42 cents and transportation charges of 3 cents, or a total of $1.45, instead of the Minneapolis price of $1.24, a gain of 21 cents per bushel, minus the equalization fee to cover the discount of 21 cents per bushel on the 128,473,000 bushels exported, or $26,979,330, to be distributed over 791,797,381 bushels, or an equalization fee of 30.034, a net profit per bushel of $0.177, and a total profit of $140,148,364. If the bill had been in operation during the crop year 1924-25, the wheat grower would have received the Winnipeg price of $1.66, plus the tariff of 42 cents and transportation charges of 3 cents, or a total of $2.11, instead of the Minneapolis price of $1.58, a gain of 53 cents per bushel, minus the equalization fee to cover the discount of 53 cents per bushel on the 251,715,000 bushels exported, or $132,514,950, to be distributed over 862,627,000 bushels, or an equalization ‘ee of $0.155, a net profit per bushel of 37,6 cents, and a total profit of $324,347,752. The wheat crop for the crop year 1925-26 has been estimated at 832,305,000 bushels and the exports to May 1, 70,000,000 bushels. The wheat grower would receive, if the bill were in operation, the Winnipeg price of $1.51 plus the tariff of 42 cents and the transportation charges of approximately 3 cents, or a total of $1.96, instead of the Minneapolis price of $1.65, a gain of 31 cents per bushel, minus the equalization fee to cover the dissount of 31 cents per bushel on the 92,371,000 exported, or $28,635,000, to be distributed over 832,305,000 bushels, or an equalization fee of 4 cents, a net profit of $0.276 per bushel, and a total profit of $229,716,180. The wheat crop for the crop year the crop year 1926-27 has been estimated at 871,691,000 bushels, and the exports at 205,944,000 bushels. Assuming that the whole crop had been marketed, the wheat grower would receive, if the bill were in operation, the Winnipeg price of $1.46 plus the traiff of 42 cents and transportation charges of approximately 3 cents, or a total of $1.91, instead of the Minneapolis price of $1.51, a gain of 40 cents per bushel, minus the equalization fee to cover the discount of 40 cents per bushel on the 205,944,000 bushels exported, or $82,377,600, to be distributed over 871,691,000 bushels, or an equalizaa ad, a net profit of $0.306 per bushel, and a total profit} of AGRICULTURAL RELIEF Corn Production. Exports, 1924 Exports, 192 Exports, 1926 _. _____ ______ Exports, Julv to November, 17 ACES Jt cory 583 Bushels 3. 000, 000, 000 23, 000, 000 5, 000, 000 9, 819, 000 3.179. 000 [Chicago prices by Department of Labor, and Buenos Aires prices by Department of Agriculture] \ onr Chicago price Buenos Aires price Export tax Tar: f Ocean freight Total Kqualitation fea Net Jrofit per bushel Total profit 1924 _ 1525 _ 026_ __ 927 _ *N, 972 038 75€ 1} < 101 2114 Rt SAL 0). 001 0003 C17 *0. 129 L1742 . 1818 (3) 3387, 000, 000 522, 827, 500 430, 861, 000 (2) voy 1 January-November, 3 Not vet available ap If the bill had been in force in 1924 the corn grower would have reccived the Argentine price of 33 cents, plus the tariff of 15 cents, plus the export tax, which was 1.54 cents in February, 1926, 1.03 cents in March, and 0.46 cent in April, or say 1 cent, and the ocean freight to Baltimore or New York, say 1114 cents, the rate March last, or a total of $1.10}4, instead of the Chicago price of 97.2 eents, a gain of approximately 13 cents per bushel, minus the equalization fee to cover the discount of 13 cents on 23,000,000 bushels to be distributed over a total production of 3,000,000,000, assuming that the total production had been marketed. If so, an equalization fee of $0.001 per bushel. a net gain of $0.129 per bushel, or a total profit of $387,000,000. If the bill had been in force in 1925 the corn grower would have received the Argentine price of 94 cents, plus the tariff of 15 cents, plus the export tax of 1 cent, and the oecan freight of 1114 cents, or a total of $1.211{, instead of the Chicago price of $1.038 (see ratio table furnished by Department of Labor), a gain of 17.45 cents per bushel, minus the equalization fee of 17.45 cents on 5,000,000 bushels to be distributed over a total production of 3,000,000,000, assuming that the total production had been marketed, or an equalization fee of $0.0003 per bushel, a net gain of $0.1742, a total profit of $522,627,500. If the bill had been in force in 1926 the corn grower would have received the Buenos Aires price of 67 cents, plus the tariff of 15 cents, plus the export tax of 1 cent, and the ocean freight of 1114 cents, or a total of $0.9414, instead of the average Chicago price of 75.9 cents, a gain of 18.35 cents per bushel, minus the equalization fee to cover the discount of 18.35 cents on 24,783,000 bushels, to be distributed over a total production of 2,645,000,000 bushels, assuming that the total production had been marketed, or an equalization fee of $0.0017 per bushel, a net gain of $0.1818, or a total profit of $480,861,000. } Inasmuch as the exports of corn for the year 1927 are not yet available, the full data as to the equalization fee and total profit can not be worked out at the present time. Beef slaughtered 1927 1926 1925 1924 Pred Ey—--[mport: Net ex. i, 358, 000, 00C 38, 000, 000 41. 000, 000 » 146, 000, 000 39, 000, 000 17, 000, 000 22 000. 000 1, 065, 000, 000 40, 000, 000 21, 000, 000 19. 000. 000 Wont avail. 684 AGRICULTURAL RELIEF Prices -on English beef sides, average top price, London; and on choice western dressed at New York [From Department of Agriculture) 0M vm L925... om orm imis OT mmm mi om mem in HR [anuary-November, 1927... New York "0 “1 J 78 London | Tariff 30.1794 "37 71 720 $0. 05 .03 03 S03 Transporta- $0. 015 .015 L015 f.qualzation {fee 30. 00010 . 00014 Net profit per pound $0. 0400 . 0465 Total profit $284, 658, 408 332, 078, 400 If the bill had been in operation in 1924 the producer would have received the London price of $0.1794 plus the tariff of $0.03 and the transportation charges of approximately $0.015, or a total of $0.2244, instead of the New York price of $0.184, a gain of $0.0404, minus the equalization fee, on 19,000,000 pounds, te be distributed over the total production, which would be but a small fraction of a cent, or $0.0001. That is, the producer would have received a profit of approximately $0.04 a pound, or a total profit of approximately $284,658,400. If the bill had been in operation in 1925 the producer would have received the London price of $0.1937 plus the tariff of 3 cents and the transportation charges of approximately $0.015, or a total of $0.02387, instead of the average New York price of $0.1921, a gain of $0.0466, minus the equalization fee, on 22,000,000 pounds, to be distributed over the total production, which would be but a small fraction of a cent, or $0.00014. That is, the producer would have received a profit of approximately $0.0465 a pound, or a total profit of approximately $332,078,400. Lard 1925 1928 Production..... Exports. _..___. eew---.pounds... mmm mmm mr me ON i 2, 211, 000, 000 2, 324, 000, 004 719, 000, 000 717, 000, 000 PRICES 1 Chicago. eevee ee tmemmmmememmeemm———mmme———— Liverpool ...... nel re RE ER EER RR Tariff. oo. re mc SEB Transportation oo. ccc cc oc ccem eo ncecmmmemcmme—mem emo mmeen Tqualization fee. oo. aces ccceammmmcmmemmememeamma——— momo Net profit per pound... . [ Total profit. .____ mmm $0. 168 .183 .01 . 005 . 0097 . 0203 44, 883, 300 | $0.15 .164 .01 . 006 . 0089 .029 46, 712, 400 { From Department of Commerce. The average Liverpool price for lard in the year 1925 was 18.3 cents per pound, and if the bill had been in effect the producer would have received the Liverpool price of 18.3 cents plus the tariff, which is 1 cent, plus the cost of transportation to the port of entry, say, one-half cent, or a total of 19.8 cents, a gain of 3 cents over the Chicago price of 16.8 cents minus the equalization fee of $21,446,700, to be distributed over the total production, which would be approximately $0.0097 per pound, a net profit per pound of $0.203, or a total profit of $44,883,300. The average Liverpool price for lard in the year 1926 was 16.4 cents per pound, and if the bill had been in effect the producer would have received the Liverpool price of 16.4 cents plus the tariff, which is 1 cent, plus the cost of transportation to the port of entry, say, one-half cent, or a total of 17.9 cents, a gain of 2.91 cents over the Chicago price of $0.15, minus the equalization fee of $20,793,000, to be distributed over the total of 2,324,000,000 pounds produced, which would be approximately $0.0089 per pound, a net profit per pound of $0.0201 per pound, or a total profit of $46,712,400. CATTLE, 1925 The average Buenos Aires price for steers, medium to good, averaging 1,320 pounds, in the vear 1925 was $5.66, or 5.6 cents per pound, and if the bill had AGRICULTURAL RELIEF 685 been in operation the cattleman would have received the Argentine price plus the tariff of 114 cents plus the cost of transportation to the port of entry, say 4 cents, or a total of 11.1 cents, instead of the average Chicago price of approximately 10 cents, a gain of 1.1 cents less the equalization fee CATTLE. 1926 The average Buenos Aires price for steers: Choice in the ve 26 w or 5.16 cents per pound, and if the bill had been in nd i bi a would have received the Argentine price plus the tariff of 2 cents, plus the cost of transportation to the port of entry, say, 4 cents, or a total of 11.16 cents instead of the average Chicago price of approximately 9.46 cents less the equal ization fee. BUTTER FROM DEPARTMENT OF AGRICULTURE, YEAR ENDED JUNE 30 POUNDS 1924 ---1925. . ..-. ww 1926. ooo cememmmmmmocececmcememanna 1927 meee. Production 2, 000, 000, 000 2, 000, 000, 000 2, 066, 766, 000 ‘Nn Exports ! 5, 425, 000 8, 354, 000 5, 180, 000 5 046. 000 Imports ! 29, 466, 000 7, 189, 000 6, 440, 000 10. 710. 000 Net imports 24, 041, 000 1,160, 000 ¥ 664 000 Net pxports “7317195. 000 PRICES [ow 192, 1926. 1997 New Tork V 40g London ‘Danish ($0. 417) (- 448) L394 . 392 Copenhagen $0. 397 . 425 . 365 .3aF Tariff 0. 08 08 12 Freight 50. 0) .01 .01 Minus qualization fee 30. 000037 "00016 Net profit per pound Total profit $0. 061 $122, 000, 000 . 061963 | 123, 925,910 .052 6. 952. 072 l! Not available. If the bill had been in operation in 1924, the butter producer would have received the Copenhagen price of $0.397 plus the tariff of 8 cents and transportation charges of approximately 1 cent, or a total of $0.487, instead of the New York price of $0.426, a gain of $0.061 per pound, or a total profit of $122,000,000. Imports were in excess of exports for the year 1924, hence no equalization fee. All that would have been necessary to insure the advance would have been to regulate the importations as provided in the bill. If the bill had been in operation in 1925, the butter producer would have received the Copenhagen price of $0.425 plus the tariff of 8 cents and transportation of 1 cent, or a total of $0.515, instead of the New York price of $0.453, a gain of $0.062 minus the equalization fee on 1,195,000 pounds to be distributed over the total production of 2,000,000,000 pounds, which would be less than fourthousandths of 1 cent per pound. That is, the producer would have received a profit of $0.062 a pound on 2,000,000,000 pounds, or $124,000,000, less £0.062 on the 1,195,000 pounds exported—$74,090—or a net profit of $123,925,910. If the bill had been in operation in March, 1926, the butter producer would have received the Copenhagen price of $0.365 plus the tariff of 12 cents and transportation charges of approximately 1 cent, or a total of $0.495, instead of the New York price of $0.443, a gain of 5.2 cents per pound minus the equalization fee on 298,317 pounds to be distributed over the total production of 133,992,-000, which would be approximately $0.0001 a pound. That is, the producer would have received a profit of $£0.052 a pound on 133,992,000 pounds, or $6,367,584, minus $0.052 on the 298.317 pounds exported—%R15.512—or a net profit of $12.022.432. 586 AGRICULTURAL RELIEF Production: United States and world, 1926 and 1927 {Division of Statistical and Historical Research) United States World, countries reporting Commodity 1926 1927 1926 1927 Wheat. ooeeeemmmm oem eea-=-1,000 bushels. _, OT Dhiic ws wom wmswomimmms oman emeeeO POLO oem mam mn _.-1,000 bales... Rice, cleaned. _.__.-. 1,000 pounds... TobacCo. cocoa ..do__.. TUBE. i yeti mem 0 ..do... Beefand veal _..___..___. KD 3utter, farm and factory. ceeo--do__. Cattle, live... _._. _thousands.._ 831, 040 2, 692, 217 17,977 |, 159, 167 297, 889 2. 324, 000 * 418, 000 2, 066, 766 450 148 871, 691 pnt 13,428, 146 ), 786,288 4,421,000 | 3,323,962 12,789 28, 000 14, 340 117,528 39,201,203 | 35,379,253 237,832 2,781,443 | 2,037,135 2 ® ® Cd) 0) J \) (? 57,521 | 5 629,000 8 629, 000 ' World total production, exclusive of Russia and China, estimated to be about 3,549,000,000 bushels. * Not available. + Estimated commercial production in the United States, Argentina, Uruguay, Germany, United Kingfom, and France in 1926 totaled 16,140 million pounds, compared with 15,072 million pounds in 1925. Farm production for United States, United Kingdom, Germany, sud France included for both years. 4 Number on hand Jan. 1. 5 Average estimated world total for the years 1921 to 1925. Production, U nited States and world, 1927 Commodity Wheat _... reememimmmemeanan-nnnn---bUShels_ OTT) sm iii mmm me Er amen mmm mmm si mw Qe Cotton. _____..-- - ieee Dales. Rice, cleaned. cc.cceo oun. eee e-----pDOUNdS. Tobacco. —-- eine —mmeadOe Lard. _..._.- po sn He reli lod mre .-do_._-Beef cecmmemmemammmem—emmemmmmcomm—coemeor hel Butter, farm and factory... --ceeemomemmmunannn- eeemeeeem GO__.-Cattle, live.____ J —————————— -, United States, 1927 832, 305, 000 2, 645, 031, 000 218, 618, 000 1, 139, 066, 000 1,323, EL 000 J 9. 148, 000 World, 1927, countries reporting 13,328,001, 000 3, 516, 106, 000 2 95, 865, 000 39, 201, 203, 000 2,071, 704, 000 d 3 (3) ‘World total production, exelusive of Russia and China, estimated to be about 3,441,000,000 bushels. Bales of 500 pounds gross weight. Not yet available. Number on hand Jan. 1. On hand Jan. 1, 1927, $57,521,000. Production, United States and world, 1 92/4 and 1926 oo ———————— ————— 1026 1024 Commodity | LL ——— United States + World United States World py Wheat. -ooooe-eeeo—n------bushels._ OMB. ooo ememomm mmm eee = G0 CO oeeeeee ree mman-~pOUNAS__ PObACEO - noe ecoe ca meeameme QO Yotton.__ ee eemene-—-bales 364, 428, 000 2, 309, 414, 000 902, 722, 000 [, 251, 343, 000 13, 628, 000 3, 145, 000, 000 3,729, 000, 000 127, 000, 000, 000 3, 258, 270, 000 24. 800, 000 576, 429, 000 2, 916, 961, 000 925, 250, 000 | 1, 376, 628,000 16, 104, 000 3, 400, 000, 000 3, 108, 023, 000 126, 000, 000, 000 3, 287, 000, 000 27 900. 000 AGRICULTURAL RELIEF Trade of the United States in specified products, 1923-1926 Domestic exports General imports 687 Net exports Year ending June $0 Tobacco, unmanufactured. including stems, trimmings, and scrap: 1923... wee-e--_--pounds.. 1924. .00n reemecemmmmccccccnmecc anne. AO. 1925. cee eee mecca. dO __. 1926... .. memes wags Bu me 1927 erccceeacaa-- do._.. Butter: 1923. cc cmnnmmmnn remem meat Ve 1924. __. fmeccccceeccacan._dO___. 102 eee eee emcee emcmemiececeeeeeed On. 026... meme acme memmemcsccceean tmemceceneeeaQO___. 1927... An __. Tattle, live: JODY mmm © mm mmm = ..do___. 199 __ ceeeo-do.__. 1925. eee. recmmmmmmeeneo-.dO__.. 1926. ee ecmeeeaeemnodOo ee eee. do__. 154, 364, 000 597, 630, 000 130, 702, 000 537, 240, 000 516. 588. 000 J, 410, 000 5, 425, 000 3, 384, 000 5, 280, 000 3 046. 000 61, 000 33, 000 06, 000 35, 000 21. 000 75, 786, 000 54, 497, 000 76, 870, 000 59, 974, 000 92° 959 000 15, 772, 000 29, 466, 000 7, 189, 000 6, 440, 000 10. 710. 000 252, 000 155, 000 136, 000 215, 000 267 000 378, 578, 000 343, 133, 000 353, 832, 000 167, 266, 000 £23. 631. 000 16, 362, 00 24, 041, 000 1, 195, 000 11, 160, 000 15 664. 000 + 191, 000 122, 000 1.30, 000 1 180, 000 1 246. 000 Vear ending Dec. 31 Lard:? 1923... 1924. 1925. VOB .ucnnn Reef and veal? 1993... mmmm—————— = IH 102. 16a we--w----pounds.. fcc cmcccmeceeeaea=-dOo_.. mm mim mm sien wn wi no 0 LY ceememea—e--CGO____ emceeeee-ondo. - ceeema-.dOL. ce—a- 30s 775, 000, 000 386, 000, 000 719, 000, 006 717. 000. 000 12, 000, 000 10, 000, 000 39, 000, 000 05 000. 0600 26, 000, 000 25, 000, 000 20, 000, 000 2%. 000. 000 ', 075, 000, 000 386, 000, 000 719, 600, 000 717. 600. 000 16, 000, 000 15, 000, 000 19, 000, 000 5. 000. 000 Year ending June 80 Wheat, including flour-3 1923__._. fi tie-eemeseae- --e-----bushels._. 175 ef meemcemeemaaeaodOoo TUBB ci eee em fr 0 wn ED 0 1926... mmmemeee=- ..dO..-. 1927 eee. do__.. “orn, including cornmeal: 1923_____ 1924___. 1925__..... 197° Sr Rice, including flour, meal, and broken rice: 1923... 1004 ___ 1925... ___ 1926____. 1927... ecm mmm mmm mm ——— Totton, unmanufactured. including linters: 1923... ___. _ Ce eececeera--.-.bales__ 1924 wan wun QO sm 1925 __________ ee eee Ta 1926. «oe eee mem —m—m— mm ——————mat Joao Julv-December. 1926 S 224, 900, 000 159, 880, 000 260, 803, 000 108, 035, 000 219. 180. 000 96, 596, 000 23, 135, 000 9, 791, 000 24, 783, 000 19. R19. 600 370, 670, 000 227, 757, 000 (12, 037, 000 48, 175, 000 203. 934. 000 1 5,253, 000 1 5, 899, 000 8, 439, 000 i 8, 212, 000 11. 559. OK) 20, 031, C00 28, 079, 000 6, 201, 000 15, 664, 000 12’ 964. 000 138, 000 228, 000 1, 617, 000 635, 000 1. 698. 000 69, 536, 000 38, 210, 000 57, 677, 000 129, 966, 000 8. T&S. 000 3 494, 000 305, 000 } 324, 000 3 338, 000 5 400. 000 204, 869, 000 131, 801, 000 254, 602, 000 92, 371, 000 25. G44. 000 96, 458, 000 22, 907, 000 5, 174, 000 24, 148, 000 12 791. 000 301, 134, 000 189, 547, 000 54, 360, 000 81, 791, 000 228 146. 000 t, 759, 000 5, 504, 000 8, 115, 000 7. 874, 000 11 159. 000 + Net imports. . . ! 1923-1925 taken from Meat Production, Consumption, and Foreign Trade in the United States, calendar years 1907-1925 by John Roberts, Bureau of Animal Industry, and 1926 from Monthly Summary of Foreign Commerce of the United States, December issue, 1926. . , 3 3 Exports plus reexports minus imports. Flour has been converted to terms of grain on the basis’ o harrel equals 4.7 bushels of grain. $ Bales of 500 pounds gross. $ Bales of 478 pounds net. 2 _QFR E. PT D J ) AGRICULTURAL RELIEF Trade of the United States in specified products, 1927 .. Domestic exports General imports Tobacco, unmanufactured, including stems, trimmings, and scrap: July, 1926-June, 1927. __.._.___ July-November, 1927___ ._. Butter: TOLY, YI20-TURG, 21027 cv nun somomeimmm ms we sew mm mw mw July-November, 1927 ._. va Cattle, live: July, 1926-June, 1927. _._._. July-November, 1927____ Pounds 316, 588, 000 08, 486, 000 Pounas 92, 957, 000 35, 424, 000 8, 046, 000 1, 546, 000 Number 21, 000 8, 000 0, 710, 000 1, 290, 000 Number 267, 000 248, 000 Wheat including flour:? July, 1926-June, 1927. -July-November, 1927. Corn, including cornmeal: Tuly, 1926-June, 1927. July-November, 192” Bushels 219, 160, 000 .43, 520, 000 Bushels 3, 264, 000 5, 816, 000 1, 098, 000 5, 047, 000 Pounds 38, 788, 000 2, 488, 000 Bales ¢ 400, 000 142. 000 9, 819, 000 3. 179, 000 Rice, including flour meal and broken rice: July, 1926-June, 1927___._.. ern July-November, 1927 mmmmm————— Pounds 303, 934, 000 48, 176, 000 Cotton, unmanufactured, including linters: July, 1926-June, 1927___.__ Tuly-November, 1927... Bales 8 1, 559, 000 3, 637, 000 Net exports Pounds 423, 631, 000 163, 062, 000 1 5, 664, 000 256, 000 Number 1 246, 000 1.240, 000 Bushels 205, 944, 000 137, 704, 000 18, 721, 000 11, 868, 000 Pounds 235, 146, 000 65, 688, 000 Bales 11, 159, 000 3, 495, 000 ! Net imports. ? Exports plus reexports minus imports. Flour has been converted to terms of grain on the basis of 1 parrel =4.7 bushels of grain. 3 Bales of 500 pounds gross. 1 Bales of 478 pounds net. Lard and beef and veal exports for year ending Dec. 31, 1927, are not yet available. Department of Agriculture prices CATTLE (LIVE) aqr 1024, cnn er eemammmmmmmmemmmmmmm—me——as=-ee===(025. <cnamn em ——— Ht 1926 ee eee ee memmmmmmmmeemmmmmmm= om: memmmme-omecs=-eo=1927 eee emmmmmmmeme—mmmmmmmme——ama-mme———eec—esmeese-Chicago price, good beef steers, 100 pounds Winnipeg price, good steers, 1,000-1.200 pounds $9.49 © $5.27 10.19 5.98 9.46 | 26.22 12.10 37.52 Tariff Te COTTON (MIDDLING-Year August-July: 1923-24... _. on om remmmmm——— 1924-25 eee emmmemmmea—mememmmc—-mmmmmmmom—= ame 1925-26_____- ee ecm e—mmmmmmme——memmememcac——ea——===1926-27... New Orleans Tents ™. 32 21 i & Liver- ! : Hott Tariff Cents 30. 2 | 26. 97 21.84 IFT: 16. 06 419 0° Live cattle weighing less than 1,050 pounds 134 cents per pound. Weighing over 1,050 pounds 2 cents = pound. Average January-October. January-November, 1927. Average January-November. AGRICULTURAL RELIEF Department of Agriculture prices—Continued Cy RICE 1924__. 1925. 1926... 1927 Ca) New Nrleans Blue Rose London Carolina Tice Tents 6.9 "0 Tariff Per 1b. $0. 02 .02 .02 02 TOBACCO (LEAR 1924 . 1925. 1926_ _. 1997 Dy, fe mmmecemmmececcaeee-....Per pound._. fe acre memnmeeea GOL emo eea CO. Average virginia-North Carolina Aue cured London Virginia leaf Cents RB. 6 3 5 v2 Tariff we i Average January-November. § The tariff on tobacco is shown below. It is to be observed that there is a wide range on the various tvpes of tobacco. 7. Tobacco: Wrapper— stemmed... Unstemmed.___. ._ _. Filler, when mixed with more than 35 per cent wrapper— Stemmed. _. Unstemm-Filler, n. s. p. stemmed. I 'netemmean Tariff per nontnd 75 10 3x5 Paragraph, act of 1622 501 301 501 301 »() Tobacco—Continn temmeaq. Unstemmed All other tobacco. Scrap tobacco. _ _______ Cigars and cigarettes_ ______. Tariff per nonnd 2.75 210 55 .35 4 50 Paragraph, act of 1922 601 AOL 603 603 £05 Plus 25 per cent ad valorein. WasHINGTON. D. C.. February 28, 1928. Hon. GiLBert N. HAUGEN, Chairman Commattee on Agriculture, House of Representatives, Washington, D. C. Dear MR. Haven: During the six weeks of committee hearings on H. R. 7940 (the surplus control bill) witnesses who appeared before the committee on behalf of the farm organizations in support of this measure have suggested several amendments and modifications. In the judgment of the representatives of the farm organizations who have been in Washington closely following consideration of this measure by the committee, there are some changes which should be adopted. In order to avoid prolonging the committee hearings by further personal testimony, we ask permission to file this outline of the amendments which we believe should be adopted to H. R. 7940, with brief statements of the purpose of the suggested amendments. We respectfully ask the committee to give careful consideration to the following recommendations: [. Advisory councils (sec. 4): In order that the board may avail itself of the cooperation of advisory councils which directly represent the agriculture of each of the 12 land-bank districts, we suggest that the provisions for commodity advisare councils set forth in section 4 be changed so as to vrovide an advisory 6590 AGRICULTURAL. RELIEF council-in each land-bank district, each council to be composed of five members, four to be chosen annually by the cooperative associations and farm organizations in the district and one to be named annually from the district by the Secretary of Agriculture. We recommend that this section provide for: (a) A per-diem compensation of $10. (b) Quarterly meetings of each council within each district. (c) Authority for the chairmen of the district councils ot meet upon call of the board frequently enough for the formulation and execution of plans for cooperation between the board and the councils and for coordination of the work of the councils. (d) if the board finds it advantageous or necessary a joint meeting of the district councils. To represent the producers and to assist the board in connection with technical operations with any agricultural commodity during a marketing period, the board should be required to arrange for a commodity committee of not more than seven members who would be named by the district councils. The board should should be required to determine what land-bank districts produce the commodity in such volume as to entitle them to representation on the committee, and the number to be chosen by the advisory council in each district so designated. The choice of the members of a commodity committee would not be limited to members of the advisory council. : This arrangement of farmer-elected district advisory councils is favored for several reasons. Last year’s bill provided that each board member must be chosen by the president from a list of three nominees agreed upon by the farm organizations in the land bank district. This would have given agricultural interests a direct connection, which is not provided in the present bill, with the administrative body. It is felt therefore that such advisory councils as are created should be chosen by organized farmers rather than by the board, and that this representation can best be provided on a district basis. The advisory councils would serve as connecting links between the farmers and the board. They would represent the producers’ interests in matters within the board’s jurisdiction, and on the other hand, would represent the board and its policies in contact with the farmers of the several districts. We consider this recommendation important because we recognize that this legislation to be permanently successful must be administered in a manner to receive public approval and especially farmer approval. We believe that farmers will cooperate more effectively and will be better satisfied if they have the deciding voice in the selection of the advisory councils in a formal way rather than to have the appointments made by a board. in whose selection they have had no voice. The provision for commodity committees is suggested in order that the board may not be deprived of the technical assistance of a producers’ committee familiar with the marketing problems of any commodity for which marketing agreements as provided in section 7 are undertaken. A commodity committee, therefore, would advise the board particularly on matters relating to marketing agreements with that commodity, and the method of collecting equalization fees. II. Loans (sec. 5): It is recommended that the provisions for loans state more definitely the purposes for which loans may be made, and instruct the board that such loans are to be only on terms that adequately guarantee their repayment. In addition to the loans, provided in (1) section 5 to assist cooperative associations in controlling the surplus of any agricultural commodity, this section now provides (in (2) of sec. 5) for loans which can not in the aggregate exceed $25,000,000, to assist cooperative associations in acquiring necessary facilities. It is recommended that this second purpose for which loans may be made under the aggregate limitation of $25,000,000 should be amplified to permit loans to cooperative associations for use as capital for agricultural credit corporations to function in connection with the intermediate credit banks. This provision was in the bill which passed Congress last year. Also, in order to provide a way in which the board may assist sound cooperative associations, it is recommended that a small portion of this aggregate sum of $25,000,000 be made available for loans to cooperative associations fo assist them in extending their membership, but loans for this purpose should also be on such basis as assures their repayment, and the amendment should specifically limit their aggregate amount. III. Clearing house and terminal market associations (sec. 6): It is recommended that this section befchanged so as to apply only to cooperative associations. Specific mention of ‘perishable’ agricultural commodities should be AGRICULTURAL RELIEF A01 eliminated. It is also recommended that the reference ij i i Capper-Volstead Act be eliminated, since if the section. Co limited to on outs to cooperative associations, the reference to the Capper-Volstead Act is ay ory ml ee section can thus be shortened. ’ ha . Marketing agreements (sec. 7): 1. It is recomme i i be amended to provide for an investigation by the oe GA Soot finding upon which operations with any commodity through marketing agreements and equalization fees are to be based. The amendment should provide that this investigation shall be undertaken by the board upon the request of the leading cooperative associations and farm organizations representing the producers of a commodity for which assistance in handling the surplus is sought, or upon request of the advisory councils representing districts having a majority of the production of the commodity, or by the board upon its own motion. : This change in section 7 would thereby eliminate the following finding required of the board: “Third. That the advisory council for such commodity or a substantial number of cooperative associations (or other organizations of producers) of the commodity favor the full cooperation of the board in the marketing of the surplus of the commodity.” This change is recommended to remove one of the constitutional questions raised by the Attorney General, who objected that the provision in the former bill which required the consent of cooperative associations or advisory councils to operations by the board with any commodity, constituted an unconstitutional delegation to unofficial bodies of the power to determine when the regulation of commerce intended in section 7 would go into effect. This constitutional question will be entirely removed if the amendment which we recommend is adopted. 2. We recommend that the second finding in S. 1176 be included as one of the findings in this section of the House bill. That provision is as follows: “Second. That the operation of the provisions of section 5 relating to loans to cooperative associations will not be effective to control such surplus because of the inability or unwillingness of the cooperative associations handling such commodity to control such surplus with the assistance of such loans.” If this finding is required to be made, marketing agreements would be undertaken and the equalization fee imposed only when the board found them to be indispensable to the regulation of commerce outlined in the declaration of policy. If cooperative associations were found to be able and willing with the assistance of loans, to handle the surplus so as to carrv out the purposes set forth in the declaration of policy, the board would not he required to emvlov the marketing agreement and the equalization fee. 3. The term ‘surplus’ should be broadened in this section so as to make it clear that anv domestic national surplus, whether it is seasonal or year’s total in nature, can be dealt with by the board through marketing agreements, and the power of the board to treat as surplus any portion of the crop which it may become necessary to handle through marketing agreements in order to carrv out the policy declared in Section 1, should not be restricted. V. Insurance (new section): It is recommended that a new section be inserted to provide for insurance agreements with cooperative associations of the character recommended to the committee by representatives of the Mississippi Staple Cotton Cooperatives Association, and indorsed by the other cooperatives and farm organizations. This section should be drawn in such detail as to set forth explicitly the nature of the insurance agreement which the board is authorized to make. The insurance section should provide: } (a) That an insurance agreement may be applied only to such staple agricultural commodities as are regularly dealt in on an exchange or market in such volume as to establish at all times a recognized market price for its market grades, and then only when such market or exchange has price records covering a sufficient number of vears to constitute a basis for the insurance. } (b) That an insurance agreement may apply only to a 12-month period commencing with the delivery season for such a commodity. (¢) That an insurance agreement should cover only the difference between (1) the average market price for a basic grade of the commodity in the market designated in the agreement, weighted for the days and volume of sales bv the association insured, and (2) the average price for the same market and grade weighted for the dave and volume of deliveries to such association bv its mem bera 692 AGRICULTURAL RELIEF (d) ‘That for such insurance cooperative associations be required to pay a premium adequate on the average to cover the risks involved. (¢) That an insurance agreement which provides that insurance payments may be made out of the stabilization fund for the commodity during any marketing period, may be entered into by the board only in case the board determines that the effect of such an insurance agreement will be to enable such cooperative association to stabilize the market substantially in the interest of producers whether or not they are members of the cooperative association insured. It is recognized that over a period of years and in most of the years during the period, the market price for a commodity which is capable of being stored and held with safety will average higher during the period from the end of one harvest to the commencement of the hext, than it does during the harvest or delivery period itself. This must be true or those agencies which purchase and store commodities for later resale could not remain in business. But there are seasons which are exceptions to this rule and it is against those exceptional seasons that the cooperative associations are seeking the insurance which this section would provide. VI. Cooperative associations (new section): As a precautionary provision a new section is recommended substantially as follows: “Nothing in this act is intended or shall be construed to repeal or modify any provision of the act entitled ‘ An act to authorize association of producers of agricultural products,” approved February 18, 1922.” VII. Procedure if enjoined: The language of the act as drawn specifically requires the board, whenever certain findings of fact have been made, to put into effect marketing agreements provided in section 7 that will secure the objects set forth in section 1, and to finance the agreements by equalization fees. It might well be that under certain circumstances produced by litigation, as, for instance, the enjoining of the collection of the equalization fee in substantial amounts, the board would find it a wise policy to suspend entirely the collection of the fee upon the commodity. It may be that the present language of the bill does not deprive the board of discretion in such a contingency. In that event, however, it is determined that the board is not vested with such discretion, it is suggested that the committee consider the desirability of the inclusion of a specific provision upon the subject. Pursuant to your suggestion, we are cooperating with the legislative counsel in drafting the foregoing recommendations as amendments to H. R. 7940, for the committee’s consideration. We wish to take this occasion to thank your committee for the interest it has shown, and for its courtesy during the extended hearings upon this measure. Respectfully submitted. American Farm Bureau Federation, by S. H. Thompson, its president; the Corn Belt Committee, by William Hirth, its president and py F. M. Murphy, chairman of its legislative committee; Indiana Farm Bureau, by W. H. Settle, its president; Central State Soft Wheat Growers Association, by W. H. Settle, general manager; North Dakota Wheat Growers Association, South Dakota Wheat Growers Association, Minnesota Wheat Growers Association, Minnesota Council of Agriculture, by F. W. Murshy, their legislative representative; North Central States Agricultural Conference, by Forge N. Peck, its chairman; Nebraska Farm Bureau, by C. B. Steward, its secretary; Committee For Agricultural Service, by Chester C. Davis; Illinois Agricultural Association, by Earl C. Smith, its president; Amercan Cotton Growers Exchange, by B. W. Kilgore, its chairman -egislative committee; Burley Tobacco Growers Association, by J. N. Kehoe, its vice president; Dark Tobacco Growers Asso--iation, by Reams D. Farmer, its secretary; Mississippi Staple Cotton Cooperative Association, by its president. H. R. 7940 OVERWHELMINGLY INDORSED BY FARM ORGANIZATIONS AND INDIVIDUALS During the first session of the Seventieth Congress H. R. 7940, known as the McNary-Haugen farm relief bill, has been indorsed by the farm organizations, a partial list of the indorsements of the bill, including the equalization fee, filed with the committee during the present session of the Seventieth Congress, includes the following besides thousands of individuals from all parts of the United States. especially from the South and West: AGRICULTURAL RELIEF 593 Minnesota Farm Bureau Federation, Owatonna, Minn. Nebraska Farm Bureau, Lincoln, Nebr. Kansas Farmers Union, Salina, Kans. Lyon County Council, Nima Council of Agriculture, Marshall, Minn. Brotherhood of Locomotive Engineers, Brotherhood of Locomotive Firemen and Enginemen, Order of Railway Conductors, Brotherhood of Railway Trainmen and Ladies Auxiliaries, convention Fort Wayne, Ind., January 29. 1928 Indiana Farm Bureau Federation, Albion, Ind. | ’ Farmers Union, local of Prairie Center, Morrison, Okla. yr local No. 103. Farmers Educational and Cooperative Union, Dawson. Minn. [deal Creamery Co-Operative, Wheaton, Minn. Minnesota Council of Agriculture, St. Paul, Minn. Lac qui Parle Co-Operative Oil Co., Dawson, Minn. Hon. W. T. Bulow, Governor of South Dakota, Pierre, S. Dak. N. T. Emmons, secretary, Prairie Farmers Mutual Insurance Association, What Cheer, Iowa. Hilton R. Rickinbrode, president, Bedford Shipping Association, acting secretary-treasurer Avalon Produce Exchange, president Pleasant Vallev Farm Club, Bedford, Mo. State Farm Mutual Auto Insurance Co., Bloomington, Ill. Texas Farm Bureau Cotton Association, Dallas, Tex. Executive Council of Illinois Bankers Association, Chicago, Ill. Hon. Anton Holly, Wisconsin State Legislature, Tisch Mills, Wis. American Farm Bureau Federation, convention, Chicago, December, 1927. Oklahoma Wheat Growers Association, Enid, Oklahoma. Northwood Cooperative Live-Stock Shipping Association. Northwood, Iowa. Thayer County Farm Bureau, Hebron, Nebr. Clinton County Farm Bureau, Dewitt, Iowa. Kiwanis Club, Olivia, Minn. iad Wheat Growers’ Cooverative Marketing Association, Minneapolis. Minn. Nebraska Wheat Pool Campaign, Lincoln, Nebr. Hanlontown-Fertile Shippers Association, Hanlontown, Iowa. [ndiana Farm Bureau Federation, Indianapolis, Ind. P. P. Cedar, Nebraska Farm Bureau Federation, Lincoln, Nebr Farmers Union of Colorado, Denver, Colo. Renville County Farm Bureau, Olivia, Minn. South Dakota Wheat Growers Association, Aberdeen, S. Dak. Rockwell Live Stock Shippers Association, Rockwell, Iowa. North Dakota Wheat Growers’ Association, Grand Forks, N. Dak Rock County Council of Agriculture, Luverne, Minn. Missouri Farmers Association, Columbia, Mo. Colorado Wheat Growers Association. Greene County Farmers Association, Springfield, Mo. South Dakota Farm Bureau Federation, Huron, S. Dak. Farm Bureau, West End, fourth conzressional district, Iowa, Clear Lake, lowa. Mortan County Farm Bureau, Martinsville. 1nd Illinois Farmers Union, Pontiac, Ill. [ndiana Farm Bureau, Indianapolis, Ind. [owa Farmers Union, Des Moines, Iowa. Missouri Farmers Union, Columbia, Mo. Kansas Farm Bureau, Manhattan, Kans. Nebraska Farmers Union, Omaha, Nebr. Oklahoma Farmers Union, Oklahoma City, Okla. North Dakota Farmers Union, Forbes, N. Dak. Montana Farmers Union, Roberts, Mont. Wisconsin Creamery Association, Elroy, Wis. [owa Farm Bureau Federation, Des Moines, Iowa. } During all the hearings on this legislation, covering months of time over three previous years, it has been overwhelmingly indorsed by farm and cooperative marketing organizations. A partial list of the indorsements of the bill, including the equalization fee, filed with the committee during the second session of the Sixty-ninth Congress, appeared on page 8 of Report No. 1790 on H. R. 15474 and is herein set forth for ready reference: American Farm Bureau Federation. American Cotton Growers’ FExchance 694 AGRICULTURAL RELIEF Corn Belt Federation of Farm Organizations. Executive committee of 22 of the North Central States Agricultural Conference. Iowa Farm Bureau Federation. Each of the 11 districts of the Iowa Farm Bureau Federation. Association of Commerce, Crowley, La. Association of Commerce, Jennings, La. Association of Commerce, Lake Charles, La. Association of Commerce, Abbeville, La. Association of Commerce, New Iberia, La. Rotary Club, of Crowley, La. Rotary Club, of Jennings, La. Business Men’s Club, of Welsh, La. tlllis Community Club, Louisiana. Farmers’ mass meetings, Abbeville, Gueydan, Bayou Teche, New Iberia, and Mamou, La. American Rice Growers, of Lake Charles River, La. Farm Bureau Rice Growers, of Baton Rouge, La. Rice Farmers’ Credit Association of Crowley, La. American Rice Growers, Beaumont, La. American Rice Growers, Houston, La. Southwest Louisiana Credit Association, Plice, La. Juries of St. Martin Parish, Calcasieu Parish, and Vermillion, La. Farmers’ Livestock Commission Co., National Stockyards, Illinois. Evansville Producers’ Commission Association, Evansville, Ind. Peoria Producers’ Commission Association, Peoria, Ill. Missouri Farmers’ Association, Columbia, Mo. North Dakota Wheat Growers’ Association, Grand Forks, N. Dak. Alabama Farm Bureau Cotton Association, Montgomery, Ala. Alabama Farm Bureau Federation, Montgomery, Ala. Arkansas Cotton Growers’ Cooperative Association, Little Rock, Ark. Dklahoma Cotton Growers’ Association, Oklahoma City, Okla. Producers’ Cooperative Commission Association, Buffalo, N. Y. Board of directors, the Producers’ Commission Association, Indianapolis, Ind. National Livestock Producers’ Association, Chicago, Ill. Farmers’ Union of Nebraska, Omaha, Nebr. Tennessee Cotton Growers’ Association, Memphis, Tenn. Indiana Farm Bureau Federation, Indianapolis, Ind. =. Central States Soft Wheat Growers’ Association, Indianapolis, Ind. Texas Cotton Growers’ Association. Missouri Cotton Growers’ Association. The committee held no extended hearings on the bill in the second session of the Sixty-ninth Congress, but when the previous measure similar in purpose was ander consideration there appeared before it favoring this legislation, in addition to the above list, representatives of the Farmers’ Educational and Cooperative Union of America; the Equity Cooperative Exchange of St. Paul; the Illinois Agricultural Association; the American Council of Agriculture; the affiliated farm organizations of Colorado; the South Dakota Wheat Growers’ Association and the Governors of Iowa and South Dakota. The legislation was indorsed by the American Federation of Labor, whose spokesman testified for it before the committee. } } During the hearings many States have by legislative memorial urged its enactment, and it has been indorsed by thousands of individuals from all parts of the United States, especially from the South and West. AGRICULTURAL RELIEF Corn 683 Production_._ Exports, 1924 Exports, 1925 Exports, 1926____________________ Exports. July to November 1927 2 Bushels N00, 000, 000 23, 000, 000 5, 000, 000 J, 819, 000 3.179. 000 Prices of corn [Chicago prices by Department of Labor, and Buenos Aires prices by Department of Agriculture] Yaenr Chicago price Buenos Aires rice Txpor LE. Ny Tew Ocean freight Total FE quali zation fee Net profit per bushel Total profit on 0 on QO - 0 ¥ « Q Rr © v a € Le] QO ~ << ~ oo ~ oO 024, oc imnannn nn B25... ssn me a 1926_ __ o_o 927 972 38 9 “31 il. 1014 2114 941g, ai 0.001, 30.129 . 0003 1742 .0017 . 1818 [OQ] (2) $387, 000, 000 522, 627, 500 430, 861, 000 (3) 1 3 -— oO oN oo 1 January-November, 1927 3 Not vet available 0 oOo If the bill had been in force in 1924 the corn grower would have received the Argentine price of 83 cents, plus the tariff of 15 cents, plus the export tax, which was 1.54 cents in February, 1926, 1.03 cents in March, and 0.46 cent in April, or say 1 cent, and the ocean freight to Baltimore or New York, say 1114 cents, the rate March last, or a total of $1.1014, instead of the Chicago price of 97.2 eents, a gain of approximately 13 cents per bushel, minus the equalization fee to cover the discount of 13 cents on 23,000,000 bushels to be distributed over a total production of 3,000,000,000, assuming that the total production had been marketed. If so, an equalization fee of $0.001 per bushel, a net gain of $0.129 per bushel, or a total profit of $387,000,000. If the bill had been in force in 1925 the corn grower would have received the Argentine price of 94 cents, plus the tariff of 15 cents, plus the export tax of 1 eent, and the oecan freight of 1114 cents, or a total of $1.2114, instead of the Chicago price of $1.038 (see ratio table furnished by Department of Labor), a gain of 17.45 cents per bushel, minus the equalization fee of 17.45 cents on 5,000,000 bushels to be distributed over a total production of 3,000,000,000, assuming that the total production had been marketed, or an equalization fee of $0.0003 per bushel, a net gain of $0.1742, a total profit of $522,627,500. If the bill had been in force in 1926 the corn grower would have received the Buenos Aires price of 67 cents, plus the tariff of 15 cents, plus the export tax of 1 cent, and the ocean freight of 1114 cents, or a total of $0.9414, instead of the average Chicago price of 75.9 cents, a gain of 18.35 cents per bushel, minus the equalization fee to cover the discount of 18.35 cents on 24,783,000 bushels, to be distributed over a total production of 2,645,000,000 bushels, assuming that the total production had been marketed, or an equalization fee of $0.0017 per bushel, a net gain of $0.1818, or a total profit of $480,861,000. i Inasmuch as the exports of corn for the year 1927 are not yet available, the full data as to the equalization fee and total profit can not be worked out at the present time. Beef slaughtered —-26 32 Production Zxports_. _. ‘mports._.. Nel exports. . 35%, 000, 00 38, 000, 000 41, 000, 000 146, 000, OW 39, 000, 000 7, 000, 000 -065, 000, 000 10, 000, 000 21, 000, 000 19. 000. 000 13 Wot available i ¢ 8 8 ” aD o o ~— + 3 = a Le - -— © -— Pe J 0 — QQ ~N 0 « Ve] [+9] J oN @ oN QO il — q -— sa] .