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we want to equalize the farmer under the tariff," just as people had said they wanted to do. So, in those amendments where the debenture was provided for, it was not provided that this debenture should be paid out of the general fund of the Treasury, but it was provided that it should be paid out of the income that came to the Government from the tariff levied on other articles. If that fund was exhausted, there would have been no money for the farmer. In other words, he was paid out of the same pot that the manufacturer got his profit out of because of the tariff wall. In other words, if you were to eliminate the expense of the operation, it put him on an absolute equality with the manufacturer, if your debenture was high enough to make up the tariff. The manufacturer got the benefit of all the tariff, but, to be liberal about it, we provided in both these bills that the farmer should get the benefit of only one-half of the tariff.
Mr. BOWEN. Twenty-one cents.
Senator NORRIS. Hence, we cut the tariff in two on wheat. That came as near as anything that has ever been suggested, as I think, to putting the farmer on an equal basis with the manufacturer. What is wrong about that?
Mr. Bowen. SenatorSenator NORRIS. Here we have a big tariff system, bringing in lots of money, and here is one class of our citizens that, to a great extent, it injures, because the farmer is selling on a free-trade market and buying everything he has to buy on a protected market.' We said, “We will take some of the benefits that go to this fellow and give them to the fellow who is injured by that same law.”. What is wrong about that?
Mr. BOWEN. Senator, let me finish this. This bill that the farm organizations have agreed to authorizes the Farm Board to use the export debenture provisions if they wish to. They can use the export debenture; they can use the equalization fee; and they can use this plan I am talking about. But I think everybody will admit that even the export debenture would be a 100 per cent failure unless we exported something. In order for the export debenture to be successful, you have to export some wheat.
Senator NORRIS. If we had no surplus, we would not need a debenture. The tariff would take care of that.
Mr. BOWEN. But, Senator, our ability to export wheat is not dependent altogether on whether we have a surplus or not. I look to see the time in the next 10 years, Senator, when we will have a tremendous surplus in this country and we will not be able to export anything at all, because nobody wants our stuff.
Senator NORRIS. That may be; and if that time comes the debenture would not do us any good.
Mr. Bowen. That time is coming rapidly now.
Mr. Bowen. Our surplus can not be sold at a profit to-day, and the farmer does not want to sell his surplus at a loss,
Senator NORRIS. Of course it can not be sold at a profit, and that is the reason the farmer does not get the cost of production on wheat and the other things where a surplus is produced.
Mr. Bowen. I have left the strong point in'my plan until the last. Senator NORRIS. I am not criticizing it. I have always supported every plan that had any merit in it, whether it was mine or not.
Mr. Bowen. The point I am going to discuss now, Senator, is an added argument, or an added reason why you should support it.
I think it is generally admitted that our export of wheat, at least, is going to be nil in the next few years. The foreign market is going to be taken away from this country. The farmer will not be able to export wheat at a price that will pay the cost of production, and it certainly is not profitable for him to raise it below the cost of production.
I come back to the 250 bushels of wheat I produced this year; that was surplus. I turn that into the hands of the United States, and I get this first receipt I told about. The Government stores it for me. There is no foreign market for it. The foreign market is gone, or is so low that I would be foolish to sell. I have 250 bushels of wheat that are mine. My labor created it. I have my investment in that 250 bushels of wheat. The price fixed by law, by the Farm Board, is a dollar a bushel, and I want to get the $250 for that 250 bushels of wheat. How am I going to get it?
I do not know how elaborate the machinery would have to be. I think it could be very simple. The Farm Board could set up the machinery under which I, as a farmer, next year, by reducing my acreage one-third, and submitting affidavits proving that I had reduced my acreage one-third, could take my receipt to the post office and get my dollar a bushel for the 250 bushels of wheat I had there.
Senator FRAZIER. Less the storage charges.
Mr. Bowen. Less the storage and handling charges. I have 250 bushels of wheat there in the terminal in the warehouse, and if it remains in storage and I do not pay the storage charges, it will be eaten up, and I will get nothing for it. If I sell it on the markets of the world, I will get nothing for it. My one desire is to get that $250 for the 250 bushels of surplus wheat, and I can get it. I do not need to wait until next fall after I thresh my crop. All I need to do is, when the planting season is over, and I can not plant any more wheat, to submit the proof that I have reduced my acreage the necessary percentage, and then, as a premium for my reducing my acreage, I can go and get my $250 cash for the 250 bushels of wheat. Every farmer in the United States would do the same thing, and you would have your acreage reduced.
Senator NORRIS. There are two things I want to ask you about now. How do they get the money to pay you a dollar a bushel for the 250 bushels ?
Mr. Bowen. I would expand the currency a little bit to do that. It would not take much.
Senator NORRIS. You have not provided any method.
Mr. Bowen. As I understand it, our surplus of wheat would be 250,000,000 bushels. Two hundred and fifty million dollars would handle that proposition.
Senator NORRIS. If that was just one year, it would not be so difficult.
Mr. Bowen. It would be only one year, Senator, because I have reduced my acreage, and the surplus is wiped out for the next year.
Senator NORRIS. That brings us to another proposition which, it seems to
me, is not a practical proposition, and that is this. You are going to control the production by the limitation of acreage.
Mr. Bowen. But it is a voluntary limitation.
Senator NORRIS. I know it is, and it would have some effect, but everybody knows, taking wheat as an example, that on a small acreage the farmer often produces more wheat than he does on double the amount of acreage. He has to gamble with wind and weather, gales and dry and wet weather, bugs, worms, and everything. You can not regulate production by regulating acreage. I do not believe that is possible. You might overdo it very much.
Mr. BOWEN. It would be better, Senator, to overdo it that way and give the farmer something, than to overdo it the way we are doing it now, and give him nothing.
Senator NORRIS. Yes.
Mr. BOWEN. It would be very much better for the farmers to have many thousands of dollars for just a few hundred bushels, than to have a few hundred dollars for many thousands of bushels.
Senator NORRIS. Very much better. 'I agree with that.
Mr. Bowen. Everybody I have talked to, Senator, except you, thinks that we have to reduce acreage in this country.
Senator NORRIS. That is the present administration's doing, but it seems to me that if a man will think that out, he must reach the conclusion that you can not regulate the price by regulating the acreage of any crop
Mr. Bowen. We are not doing it here. We are fixing it by law here, and then we are letting the farmer's desire to get the most possible for his products, influence him in reducing acreage accordingly. If he did not do that, Senator, if he had a 250-bushel surplus built
this year, and 250 bushels more the next year, and 250 bushels the third year, the third year he would have 750 bushels, which is all of his share of the next year's crop. It would be all right to let it go until he had 750 bushels, and give him a dollar a bushel for that, and then put in no wheat at all. The argument against it would be that the 18 cents a bushel storage would be charged against it each year.
Senator NORRIS. Would you have anything in your law that would compel every farmer who produced wheat, using that only as an illustration again, to come in under the law?
Mr. BOWEN. Yes; I would make it compulsory.
Senator NORRIS. Suppose I would not pay any attention to the law, and I should go out and produce wheat. Would you have anything to prevent me from selling that wheat to an elevator?
Mr. BowEN. You could sell three-fourths of it, and the other fourth would accumulate to your credit, and be eaten up by storage, unless you curtail your acreage the next year.
Senator FRAZIER. The grain buyers would be licensed.
Senator NORRIS. We did it during the war, of course, but a good many people would resent it. However, I think they would have to submit to that.
Mr. BOWEN. Of course.
Mr. Bowen. In closing, I want to say again that I am sold on this idea. I thought this out. This is my child—the details of it. I think it would be simple, easily understood, and would be an economical way to handle it. It is the only plan I have ever heard of, and it is the only plan any member of this committee has ever heard of, that would tend to reduce acreage, as they say now must be done. It would turn the surplus over into the hands of a Government agency, and the farmer would not be paid for it until it was sold, so that the Government would not have to make that investment in the surplus, which is an added argument in favor of it.
I am in favor of this bill that the three organizations have agreed on, because it authorizes somebody to work out the details, and bring about the handling of the crops, giving the farmer the cost of production. Let them try this plan. If they try this plan, and there is some weakness in it, they can switch to some other plan on 24 hours' notice. They would not have to come back to Congress and wait another 10 years to change the provisions of the law.
The National Producers Alliance, of which I am the organizer; the Farmers Union, for which I speak, representing Mr. John Simpson here to-day; and the organization represented by these gentlemen here, have agreed to ask the Congress to pass this bill authorizing the Farm Board, and commanding the Farm Board to ascertain the cost of production, and after they have ascertained the cost of production, to give the farmer the cost of production on the percentage of the crop that is to be consumed at home, and authorizing the Farm Board to resort to this or any other plan to give the farmer relief.
We pray the members of the committee to report that bill favorably.
We believe the time has come when the farmers are in such dire need that something has got to be done for them. Something has got to be done. I know you Senators get a lot of letters. I know that last summer, Senator Norris was at home, and Senator Frazier was at home, and probably some of the rest of you were, and you know how deplorable, how desperate the situation of agriculture is. The entire Nation is just in the same situation. Here in the Ways and Means Committee of the House I sat, day after day, when the hearings were going on, and they were trying to study how to get money. That was the thing. The question was not," Is this a good thing? But,“ Will it raise money?” The Finance Committee of the Senate to-day, and for days, has been discussing ways and means of raising money.
The only way to get a nickel is out of a dollar that rolls by. The only way the Government can get any money is out of the income of the people. The only way for the people to pay taxes is out of income. There is no other place to get it." Ultimately, the taxpayer has to pay taxes out of his income.
The only way to give the American people an income, and the only way to make every man engaged in any business in the United States prosperous, is to make the farmer prosperous. When you
put the cost of production in the hands of the farmer, the merchant, the lawyer, the banker, the doctor, the working man, and everybody, will have money to spend, and the raising of money to pay the expenses of the Government here will be a very simple proposition. Unless you do it, in a few years you will not even be able to draw your own pay as United States Senators, because the people can not pay the taxes. We will not be able to pay the salaries of our county officers. In Chicago they can not pay their school teachers. The time is going to come, if this thing goes on, in the next five years, as it has gone on in the last five, when there will not be money enough to maintain the Government of the United States. You will be like the dead man that has a blood clot on his brain. He has plenty of blood, but no circulation.
Senator NORRIS. That may be true, but we take all the money to build battleships and keep up an army.
Mr. Bowen. I could make another speech on that.
Senator THOMAS of Oklahoma. Does any member of the committee have any questions to ask Mr. Bowen?
STATEMENT OF M. W. THATCHER, ST. PAUL, MINN., REPRESENT
ING FARMERS NATIONAL GRAIN CORPORATION
Senator THOMAS of Oklahoma. Give your name, residence, and occupation.
Mr. THATCHER. M. W. Thatcher; representing the Farmers National Grain Corporation.
Senator Thomas of Oklahoma. Where do you reside?
Senator THOMAS of Oklahoma. Where is your permanent residence ?
Mr. THATCHER. St. Paul, Minn., where I have been located for the past 18 years, all of the time during that period closely related to the cooperative movement, and for the past 9 years giving all my time to the cooperative movement.
Senator NORRIS. In what capacity, Mr. Thatcher?
Mr. THATCHER. In 1923, I was asked by the Hon. James Manahan, former Member of Congress, to come in and assist him as receiver of the largest grain cooperative concern in the Northwest, known as the Equity Cooperative Exchange, and help him liquidate the affairs of that institution, and if possible to build another cooperative out of it.
I left my practice as a public accountant to undertake that work with him. We have liquidated that receivership, and paid all its debts, $1,087,000, and built, along during that time, the Farmers Union in the Northwest. I was the chairman of the northwest committee that built the Farmers Union in Minnesota, Wisconsin, North Dakota, and Montana, during a period of nine years.
We organized the Farmers Union and set up four state-wide organizations during that period. We liquidated that receivership,