294 
AGRICULTURAL RELIEF 
Mr. KiLgore. And the cost of production was 18 cents, we will 
say. Suppose you had to carry that cotton for 12 months, and it 
cost 114 or 2 cents a pound to carry the cotton. You might not be 
able to sell that cotton for 1815 or 19 cents a pound; and then if 
you carry it two years you have got from 3 to 4 cents. 
Mr. Fort. Have you ever known a year, Doctor, when it sold 
below cost of production, when it was not a purchase, if you had the 
strength to carry it? 
Mr. KingorE. Right then you hit the nail on the head. The 
position I take is that the confidence that traders in cotton have in 
any movement, depends upon the ability to carry, and that depends 
upon the assurance that the loans are going to be taken care of and 
any losses reimbursed. 
Mr. Fort. I appreciate all that, Doctor. But under your bill 
that you are urging, the board can terminate the operation at any 
time it pleases, and withdraw the loans, can it not, and discontinue 
the equalization fee. It can do all those things overnight, if it 
wants to? 
Mr. KiLgorE. Oh, they would not do it in mid-season. 
Mr. Fort. You think this same board—you have got the same 
board under both bills? 
Mr. KiLcore. That is right. 
Mr. Fort. And will they not do it in one case if they do in the 
other? 
Mr. KiLcore. That does not enter into the financial soundness or 
differences of these two propositions: One is financially sound 
in that any losses would be replaced. Without the equalization fee 
there is no way to keep intact and to insure the integrity of the loan 
under a loan bill. 
Mr. Fort. Unless you concede—you shifted away from it a mo- 
ment ago; I do not think intentionally—I would say you are right, 
unless you concede that commodities bought at production costs— 
commodities of human necessity will turn a profit. Every investiga- 
tion I have ever made—and I have made a good many on that sub- 
Ject—has indicated that with sufficient financial strength—— 
Mr. KiLcors. In that there is a big difference between the two 
measures. 
Mr. Fort. Of sufficient financial strength to hold commodities 
purchased at or around production costs and held will show a profit 
some time. 
Mr. KivLeore. I would not want to say that is so, for the reasons 
that I have just given, that a commodity that is purchased at or 
right near the cost of production, has got to have added to it the 
carrying charges through the period it 1s carried, before it is sold. 
If that is a year, two years, or three years you are piling up in the 
case of cotton 114 or 2 cents a pound a year. If you put up 4 or 5 
ents, at 1s $25 a bale, that goes into money mighty fast. 
1926. (ORT. I know it does. But last year if you bought cotton in 
ha a agen i you have had, at 17 cents, which you say is 
ors hog . Pp ocuction hgure, and had to carry it, you would not 
carry 1t two years to get out at 23 cents. 
Mr KirLecore. That is hind sight. 
pal or wien you ton Tome any time in the economic history of 
seen carried and sold at a Dough at production cost could not have