Agricultural relief: Agricultural relief

Bibliographic data

Multivolume work

Identifikator:: 1831932415

Document type:: Multivolume work

Title:: Agricultural relief

Place of publication:: Washington

Publisher:: Gov. Pr. Off.

Year of publication:: 1928

Collection:: Economics Books

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Volume

Identifikator:: 1831934884

URN:: urn:nbn:de:zbw-retromon-232132

Document type:: Volume

Title:: Agricultural relief

Volume count:: Pt. 6

Place of publication:: Washington

Publisher:: Gov. Pr. Off.

Year of publication:: 1928

Scope:: III S., S. 429 - 520

Digitisation:: 2022

Collection:: Economics Books

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AGRICULTURAL RELIEF Mr. KiLcore. Then I think it is possible they{might not operate but one year. Mr. Fort. So that the only difference to the producer, then, between the two plans, in so far as the price he will receive, is that you think that under a second year they might not operate under the Crisp bill and they would under the Haugen bill. Mr. KILGORE. Yes, sir. They would have a guaranty in the equalization fee for taking care of any losses and for keeping the revolving fund loan intact, which they would not have in the loan bills. Mr. Fort. How much of the revolving fund do you think would be needed in the case of cotton even in the worst year—even in 1926, we will say? Mr. KiLcore. Well, at 12 cents a pound, which was the average price for cotton in 1926, a bale of cotton would have been worth $60 and a million bales of cotton would have cost $60,000,000. Mr. Fort. Of which $48,000,000 could have been borrowed at 41% per cent from banks. So that they would have used $12,000,000 out of your revolving fund, would they not? Mr. KiLgore. Sixty millions would have bought a million bales of cotton outright, and $90,000,000 would have bought a million and a half bales outright, or 3,000,000 bales at 50 per cent. I think 3,000,000 bales perhaps is the maximum that anybody thought of as likely to have been taken off of the market in the crop of 1926. Mr. Fort. Then any such quantity as that would have been neces- sary to purchase only in a 19,000,000-bale crop year? Mr. KiLGore. Such an one and under such conditions as we had in 1926. Mr. Fort. Now, then, with the Government advancing the margin and the balance being borrowable from the banks as the margins are put up, it would only take, say, 25 per cent of the total cost of 3,000,000 bales out of the revolving fund, would it not—75 per cent parbvied from the banks and 25 per cent advanced from the revolving fund. Mr. KiLGork. I think you are putting your bank loans entirely too high, if you will pardon me. Mr. Fort. How high do your banks loan you now? Mr. KiLcore. From 60 to 65 per cent. Mr. Fort. Yes; but they have no such assurance as this bill offers with an organization in good standing to stabilize the price. Mr. KiLcore. They might do that, but the maximum under the intermediate credit acts is 75 per cent; you can not go beyond that. Mr. Fort. Let us take it in round figures 6624 per cent. Mr. KiLcore. All right. Mr. Fort. Three million bales on your figures would cost $180,- 000,000, of which a third, or $60,000,000, would be borrowed from the revolving fund and $120,000,000 would be borrowed from the banks. In buying 3,000,000 bales of cotton at $60 a bale, do you think the corporation would have any losses? Mr. Kirgore. Of course, if we take the 1926 experience, which is behind us and which we can see and know about, no. But if we were attempting to stabilize the price at 16 or 17 cents, assuming 18 cents to be the cost of production instead of 12 cents, there would be a much narrower margin, a greater possibility of loss. 437

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