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The retailer sells, and he buys from the wholesaler, who buys from the jobber, and the jobber buys from the factory. When the factory gets the order, it makes the goods. It hires men, and when it hires these men, it pays them salaries or wages. When these men get their salaries or wages, they buy the butter and eggs and the other stuff the farmer produces.

All we need in this country to-day is to have money circulating, and the only way I know of to put money in circulation is to pay it to the farmers of the United States for the products they produce on their farms. To start that money any other place, Senators, in my opinion is just as ridiculous as it would be, if this river went dry at its source, to build some more power plants down here among the power plants we have already.

That is what we think is wrong with the legislation that has been passed this winter by the National Congress. Legislation should have been passed to help the farmer, to help the man who is the source of wealth, who originally creates that wealth. We have been passing laws for bankers, the railroads and the moneyed interests of this country, instead of the farmer.

Senator NORRIS. In other words, as Governor Roosevelt said, we commenced at the wrong end.

Mr. BOWEN. Absolutely. At least, we commenced in the middle. That is the most we could claim.

I am going to outline to you a plan that I think will save this country. Let the Farm Board, or any other board or commissionanybody that has the authority-ascertain the cost of producing farm products in the United States. We can not illustrate everything, so we will take wheat. I have talked about wheat for 25 years. I would like to talk about it. We will say the price of wheat, under this allotment plan, is fixed at $1 a bushel. It ought to be more than that, but I am using these figures as an illustration. The farmer is entitled to that $1 fixed cost price, on the percentage of the wheat that he raises that is consumed in the United States.

By no manner of reasoning can the farmer be entitled to the cost of production on the exportable surplus that he produces, and that is my criticism of the export debenture plan. The International Harvester Co. never asked for an export debenture on the surplus farm machines they produce. They had the American price. They got all they could in this market, and if they wanted to sell across the ocean, they sold, probably, for what they could get. They did not ask for any debenture.

Senator THOMAS of Oklahoma. They did not have to, for the reason that they had a monopoly.

Mr. BOWEN. I do not think the American farmer ought to get the cost of production, and I do not think that he ought to ask for a nickel out of the United States Treasury, or that he ought to ask that a nickel be kept from coming into the United States Treasury on the surplus he produces, and I am going to show you how it could happen.

Mr. BRENCKMAN. May I ask a question at this point?

Senator THOMAS of Oklahoma. If the witness will yield.

Mr. BRENCKMAN. Take cotton for example. You say the farmer should not get a debenture on the surplus that he produces for sale abroad.

Mr. BOWEN. Yes, sir.

Mr. BRENCKMAN. We sell from one-half to two-thirds of the cotton abroad.

Mr. BOWEN. Yes, sir.

Mr. BRENCKMAN. The man who grows the cotton pays higher prices occasioned by the tariff in producing his crop. Why would ît not be fair that he should have a debenture to equalize it?

Mr. BowEN. I will answer that when I complete the line of thought I am carrying out.

Mr. BRENCKMAN. Pardon the interruption.

Mr. BowEN. We will say the price of wheat has been fixed at a dollar a bushel on that part of the crop that is to be consumed in the United States; and the amount to be consumed in the United States is three-fourths of what we produce, I think that is the way it has been running over a period of years. I am a farmer. I raise wheat. I thresh a thousand bushels of wheat. I haul it to the elevator, and three-fourths of that, or 750 bushels of it, is my share of what is to be consumed at home, out of that thousand bushels. I am entitled to a dollar a bushel on that, or $750. The other 250 bushels, one-fourth of it, is my share of the exportable surplus. I am not entitled to the cost of production for that 250 bushels, and I am not entitled to anything for it until it can be sold.

So, under the plan I have outlined, which the organization I have built advocates, when I haul my thousand bushels of wheat to town, I would receive a check from the elevator. The elevator agent, of course, would be a licensed purchaser of this grain, licensed by the Government of the United States. I would receive a check for $750 for my 750 bushels of wheat. I would receive a receipt for 250 bushels. That is all I would receive for it.

That 250 bushels of wheat would be taken by the Farm Board, or a Government agency, whatever it is, and placed in storage. If I wanted to sell that wheat on the world market, I would take this receipt for the 250 bushels of wheat and go to the post office and exchange it at the post office for what I have termed a duplicate receipt, another receipt in a different color, showing that I had turned my receipt in and I had this other receipt to show for it.

I want to make that plain, because that is a new thought. It has never been expressed to anybody in the United States before. I have reserved it for this committee. I would not even tell Senator Frazier about it on the street the other day, when he wanted to know what it was.

I have 250 bushels of wheat. It belongs to me. It is in the hands of the Government. I want the Government to sell it for me. I do it by signing on the back of it an authorization that the Government sell that 250 bushels of wheat. I take it to the post office, and there in exchange for it I receive another receipt showing that I have turned that one in. When the Government gets my 250 bushels receipt, authorizing it to sell the wheat-and other farmers might do the same thing, so that the Government might get 1,000,000, 10,000,000, or 100,000,000 authorizations to sell wheat-they do not need to sell my 250 bushels. Any 250 bushels is just as good. They sell it, and they get all they can for it. They pay the transportation and storage charges out of it, and then they announce that they have sold it on the world market at 50 cents a bushel, and it cost 15 cents

to sell it. That leaves a balance of 35 cents. I take my duplicate receipt to the post office and get my 35 cents a bushel for it. It has necessitated no red tape. It has not required any bookkeeping at all. The Government does not have to write me a letter. I do not have to write them a letter. All they need to do is to accumulate receipts, sell that much wheat, notify me how much it brought, and what the balance on hand is, and I go there and collect my money. Senator NORRIS. There would be a good deal of machinery, however, with the system; some quite complicated machinery.

Mr. BowEN. There would be some.

Senator NORRIS. Similar to the machinery set up in the McNaryHaugen bill.

Mr. BOWEN. Some, yes.

Senator NORRIS. It would be easy to work on wheat.

Mr. BOWEN. We will take cotton.

Senator NORRIS. If you were considering pork, for instance

Mr. BOWEN. On the dairy products

Senator NORRIS. Or dairy products.

Mr. BOWEN. Of the dairy products, or cattle; we do not produce a surplus in this counrty.

Senator NORRIS. We produce a surplus of pork.

Mr. BowEN. We do produce a very small surplus. If you took care of wheat, corn, and cotton, you would not have any surplus of anything in the United States. I do not believe you would even have a surplus of them.

Senator NORRIS. You bring to my mind another difficulty that we have always had, and we have never been able to meet it satisfactorily. That is the difficulty of deciding upon what farm products we should apply our remedy to, because there are a lot of people in the Senate and the House representing various interests, and they are just as honest in their convictions as we are. They say, is our product. Put that in."

"Here

Mr. BOWEN. Senator, I think that ought to be left to the Farm Board. If you try to put it in a bill, one man says,

rice in," and another says, "Let us put this in." Senator NORRIS. That is the difficulty.

"Let us put

Mr. BOWEN. Let us have a body authorized to decide it. Senator NORRIS. Unless we put it in, we can not get the votes. Mr. BOWEN. That is true. We think it is a good idea to have this bill authorizing the Farm Board to go down the line and do it, and authorizing them to go further than any commodity you mention, if they can find a simple, direct, and profitable way to handle that or any other crop.

I want to answer the gentleman's question about cotton. The only difference between cotton and wheat is that there is a larger percentage of the crop of cotton exported than there is in the case of wheat. So, if I took my cotton to market, and it was estimated that one-half of it was for home consumption, I would collect my 25 cents a pound for the half that I took in-and that is what it ought to be. I think wheat ought to be $2 a bushel, and cotton ought to be 30 cents a pound, but whatever it was, I would get the price, and I would get a receipt for the balance. If I wanted to sell it on the world market, I would assign my receipt over to the Government, and you would assign your receipt over to the Government, and the Government

would have one-half of the cotton to export. The Government agency, with one-half of the cotton of the United States for export, has within its hands and in its control 65 per cent of the world's supply of cotton the day they get it, and they could certainly get a good price for it. They could certainly sell it more economically and more fairly, and they could certainly get you more money for your cotton than a thousand different cotton exporting associations can get for it now.

This plan I have outlined is simple, because after the cotton had been sold, all the Government would do would be to publish the fact that it had brought so much per pound above the cost of transportation, storage, and everything, and you would take your receipt down and get paid for it. That is so simple that a 6-year-old child can understand it.

Senator NORRIS. Let us go back to wheat, if you are through with your cotton illustration. For this 750 bushels of wheat in your illustration, you get a dollar a bushel?

Mr. BOWEN. Yes.

Senator NORRIS. Who pays that money?

Mr. BOWEN. Senator, you might just as well ask the question, when the Government fixes passenger rates on the railroad at 2 cents a mile, or 3 cents a mile, who pays it? It is paid by the person who purchases the service. It is paid by the miller who buys the wheat to make it into flour.

.

Senator NORRIS. Suppose the miller did not want to pay a dollar a bushel?

Mr. BOWEN. He could not get anybody else's wheat.
Senator NORRIS. He would have to pay it.

Mr. BOWEN. He would have to pay it, because the American people are going on eating bread.

Senator NORRIS. I am wondering why, if you put that plan into effect, it would not go above a dollar a bushel?

Mr. BOWEN. I think it ought to be fixed at $2.

Senator NORRIS. For the illustration, let us confine ourselves to the dollar.

Mr. BOWEN. I will answer the question this way. I know exactly what you are going to ask. Let me answer it. If the Government of the United States, the political machinery of this Government that is ours and belongs to the people, is used to guarantee the farmer the cost of production for the wheat he raises, it ought, by the same argument, to limit what he gets for his grain to the cost of production. If we are going to take wheat from a price of 25 or 50 cents a bushel in Chicago now, and raise it to $1.50 or $2, it ought not to be permitted to go above that fixed price.

Senator NORRIS. Your plan would fix a definite price?
Mr. BOWEN. Yes.

Senator NORRIS. It would not sell for more, nor less?

Mr. BOWEN. No, sir. It would not be fair to permit it to go higher. It would not be fair to take the farmer up out of the depression he is in now, and give him an undue advantage over the rest of the people.

Senator NORRIS. Would you fix the price in the bill, or let the Farm Board do it?

Mr. BOWEN. I would let the Farm Board do it.

Senator NORRIS. You would expect them, in using their judgment in fixing the price, I presume, to take all other conditions into consideration, so that it would not necessarily follow that the price would be the same each year?

Mr. BOWEN. No. The price would be different each year. The price would change each year.

Senator NORRIS. I would like to ask you a question, Mr. Bowen. What is your objection to the debenture plan?

Mr. BOWEN. Well, I think it is putting the cart before the horse. I have no objection to it if it will increase the price to the farmer. Senator NORRIS. Don't you think it would? Is there any doubt about it?

Mr. BOWEN. Yes; I think it would.

Senator NORRIS. Í do not believe anybody can argue that it would not increase the price, even though he may be opposed to that method of doing it.

Mr. BowEN. I think it would, but I think the proper thing to do, Senator, is to ascertain the cost of production, and then fix it by law so that there will not be any doubt about it, or any unnecessary red tape.

Senator NORRIS. The first time I ever heard of the debenture plan was a great many years ago, when I was chairman of the committee, and I think I was the only member present when an economist from the State University of Illinois spent an entire day discussing it. I was very much interested, but I remember, when he got through, I talked with him privately about it, and I said, "It is impracticable. There is no use talking about it. We never can pass such a thing through Congress." I believed that. Times got worse, and conditions were not remedied by any other method, and it began to be considered by other people, and economists talked about it. One man on the committee who took great interest in it was Senator Caraway, and I had a great many interviews with Senator Caraway, going over it, until I reached the conclusion that perhaps it would be practicable if we could get it through, and although I had no belief that we could do it, to begin with, in a few years, six or seven years after it was first proposed, I offered that bill myself in the Senate, and it was agreed to by the Senate after extended debate, on a roll call. It went out in conference, on President Hoover's present bill, that was going to remedy everything for the farmer. They said it properly belonged in the tariff bill. When the tariff bill came along, I offered it then. It passed the Senate again, and again it went out on conference, through the influence of the administration.

The theory of the debenture plan, as I have always understood it, seems to me to be fair. Here was a tariff and the manufacturers got the benefit of it. Everybody conceded that. The farmers did not, on all those products upon which he produced a surplus. That is agreed to by everybody now. Here was wheat, to use that as an illustration. We always produce a surplus. The tariff did not do the farmer any good on wheat, because the surplus fixed the price of all the wheat that was consumed here.

The debenture plan said, "There is a country based on a protective tariff. Most people believe in a protective tariff, but we have discovered now that the farmer is not getting the benefit of it and

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