and set up 3 cooperative institutions, 1 livestock, 1 in grain, and another on the buying side, setting up cooperative bulk oil stations, and the like.

We set up about 100 of those cooperative bulk oil stations in the Northwest, so-called Farmers Union cooperative associations.

We built our cooperative grain organization, known as the Farmers Union Terminal Association, of which I was general manager. We built that to be the largest cooperative grain marketing organization in the United States, up until the time the Farmers National Grain Corporation was set up. I was one of the committee of 16 who set that up, under the auspices of the Federal Farm Board, and have been one of its directors ever since, and for the past year a member of its executive committee, up until April 15 of this year,

1932.

I was drafted by the Farmers National Grain Corporation board of directors, agreeably to my own associates in the Northwest, to represent the Farmers National Grain Corporation in Washington, as its Washington representative, until such time as our affairs here were in a more acceptable position to the Grain Corporation.

That relates to three things. That relates to our financial situation with the Federal Farm Board; matters pending before the Revenue Department; and in connection with affairs here at Congress for the time being. About 95 per cent of the force that drove us and impelled us to arrange for this assignment were the first two reasons I have given. The third is very minor.

Does that answer your question?

Senator NORRIS. That answers it.

Mr. THATCHER. The Farmers National Grain Corporation, which I have the pleasure to represent, is indebted to Congress and the farm organizations for the farmers national grain cooperative marketing act, and for farm organizations. The marketing act, and the Farm Board, in my judgment, would have been a colossal failure if it had not been for the farm organizations who picked up the work with the Farm Board under a law which none of the farm organizations prescribed, to take what we got, for its size, for its character and quality, no matter how far short it was of what we wanted-to take it and make the most out of it, with the hope that we would get further legislation to strengthen it.

It has been a boon to the cooperative movement. All the four farm organizations, known as the Farm Bureau, the Grange, the Equity Union, and most of the Farmers Union, particularly those in the grain States, have given the Farm Board loyal support in setting up the national marketing institutions. The farm organizations, and the little cooperatives spent their time and money trying to build something further in the cooperative field, and made possible whatever success the large national cooperative institutions have enjoyed. That I know of my own knowledge to be particularly true of the Farmers National Grain Corporation. It has relied upon the strength of the cooperative movement and the farm organizations as a whole, whatever value there appeared to be in the marketing act, to get further support of farmers to the cooperative movement.

I have been very much interested. Like yourself, this has been my first opportunity to hear these discussions before the Senate Committee on Agriculture and Forestry. I have had some 29 years of

experience in business, finance, and commerce. The longer I study all these questions, the less I know about them, the less I know of any definite thing to be done to put agriculture on a parity with other institutions. It is such a complex and involved thing, that the more I study, the harder it is for me to see a way out. I try to keep away from a lot of statistics, and many of the different formulas that are presented. I am interested in all of them. In most of them I am very much interested. I see value in more or less all of them, but, when it comes to thinking the thing clear through, as a practical business proposition, as a whole, and seeing all the wheels go round, and the thing balanced to the eventual satisfaction of agriculture, it is difficult for me, but I try to keep along a few fundamental lines of business, as I learned it in actual operation. I have handled grain, and I have operated mills, and I have organized farmers. I have been comptroller in large business institutions, and I have audited large business institutions in about half the States of the Union. I try to keep a few fundamentals I learned out of that experience in mind, and that is, the capital requirements, the industry involved-of course, that means efficiency as to equipment and character of work, type of machinery, and so forth-land, and everything involved in agriculture; and the distribution of the product into sale satisfactory to the industry itself.

As I see it, agriculture has been depleted, to some extent exploited, into a position where there are many things that need to be done, and of a rather heroic nature, if the farmers on the presently occupied farms and those who formerly owned the farms and now partially own the farms, are to have any continued ownership in those farms.

Speaking of the capital situation of the farmer and his depleted capital, the only thing that I have seen and given limited study to, that will make restitution to the farmer for his depleted capital, to some extent exploited from him, is the Frazier bill. I was very much interested in your questions, Senator Norris, to Mr. Lemke, as to what will happen under this.

Personally, I feel that the welfare of agriculture in this country will be benefited in many respects if farm mortgages are made a basis of credit, and can be stabilized, and I think it will be desirable and beneficial if farm mortgages, at least temporarily, for a few years, can be made the basis for the issue of currency.

I am not an expert on currency matters. I make no claim to any great knowledge about it, but I have never been able, within my own limited understanding, to see why we had to be entirely on a metal basis, and why the most valuable thing to us in this country, the land from which the food and clothing come, on which we all depend, should not have its proper place in relation to the scheme of things. What the dangers are, more expert people than myself can determine, but from my own limited understanding and the study I have made of it, the Frazier bill is the only measure that has been presented that, in my judgment, offers restitution of capital to the people from whom it has been taken, putting them on a basis of confidence and hope and making it possible for them to hope to operate with a limited capital charge that will carry them through to eventual debt. payment.

Even at that, I would not be very much heartened about the Frazier bill, if it were passed and signed by the President, if at the same time, in the industry of agriculture, there was not simultaneously provided a way of protecting the farmer in the marketing of his agricultural products, to give him the cost of production, which, of course, is the only thing that would enable him to pay off the principal, and, as you stated a while ago, probably a rate of interest as small as 1 per cent per annum. Unless he has that provision, unless there is an arrangement made whereby the distribution of his production can give him, within reason, on a sane and sound basis, the cost of production and protection in the markets of the country, there is not any need of his producing, because he would just waste away, just as he has in the past. But certainly the smaller the interest rate, the easier it is going to be for him to work that out. The smaller the interest rate, the less the cost of production, and, resulting therefrom, the less the cost to the consumer, which, of course, is his market.

Furthermore, if we give agriculture the benefit of the so-called Frazier refinance bill, and give also along with that the bill as proposed by the three farm organizations-and I want to pause to state that the Farmers National Grain Corporation's board of directors has also gone on record in support of the work of the farm organizations, which is found expressed in this bill approved by those three farm organizations. But if we give agriculture the so-called Frazier refinance bill, and we should further give to agriculture this bill drawn by the three farm organizations, still there may be the question left of much more legislation along the lines of currency, tariff, and so forth, to protect the consumer demand in this country, on which the farmer must depend to sell those products.

We could quite easily pass legislation giving guaranteed prices by the Government. We could quite easily get into the position of doing that, and on Government credit, packing the warehouses, the storehouses, and the terminals full of goods at guaranteed prices, and there they would remain, with nobody, on the other hand, able to buy them and consume them; and we would be in a worse position than we are to-day.

As I say, I do not see all those things that a Congress can do to straighten out the whole scheme of things, that will give to the farmer the financial set-up that he needs to start on a long-time program of working out of his debts, and a market price for his products that will pay the cost of production and let him work out. That does not end with me. Something more has to be done to make it possible to get the largest amount of consumption in our natural consumer market.

Senator NORRIS. Is it not fair to assume, Mr. Thatcher, that this larger consumption will take place immediately if the country goes on a basis of prosperity, and haven't we the right to assume that if we make the farmer prosperous, that will occur? To put it in another way, this overproduction slogan, I think, is very much exaggerated because, standing alone, it does not take into consideration that what we have in this country is underconsumption on the part of most of our people.

Mr. THATCHER. I heartily agree with that.

Senator NORRIS. If we did not have that, we would not be bothered with the question of overproduction.

Mr. THATCHER. It is a criminal paradox, that we should have too much for one man, and not enough for another.

Senator NORRIS. Yes; or that we should have too much for everybody, and everybody suffering.

Mr. THATCHER. With the granaries full, the packing houses and coolers full, and people empty, that want to fill up with it. Will Rogers says, "the monkeys have never suffered because of an overproduction of coconuts. They have some way to get along. They get to the coconuts. But our difficulty with our monkeys is that we can not get to the coconuts."

Senator FRAZIER. They are blaming Congress for it.

Mr. THATCHER. I do not blame Congress for it. Congress twice gave what we asked. We asked for the McNary-Haugen bill, and we got a stone for that, because there were no corrections made down through the years, because those corrections Congress attempted to make were vetoed. We have this accumulated situation to-day, which has got to a point that business has strangulated.

Senator NORRIS. You think, then, that if at the beginning, before this depression took in everybody, when the farmer alone was in the depressed condition, and we could not convince anybody except the farmer of it, and hence could not get any relief-if we had brought about relief then-we would not have the condition that now exists?

Mr. THATCHER. We would not have this condition. It would have been relieved. And furthermore, Senator Norris, we would have had experience by this time that would have been very helpful to us in telling us what further was required in the way of remedial legislation. That is all in front of us. All we have had is the short time experience of the Farm Board, laboring under a piece of legislation which never was farm relief, which was never conceived to be farm relief, and, as far as I know, never was conceived to be anything except just a marketing act to aid cooperatives in setting up their marketing machinery.

I want to go further and state that I do have quite a belief that these two proposals, the refinance bill as proposed by Senator Frazier, and this other, will do just as you suggested, start the wheels going, and I think it starts at the right place, and starts at the only place where a safe, sound start can ever be made, right back with agriculture.

I further see this, going a little more in detail. I see this money that would be made available under the so-called Frazier bill, going into the subdivisions of Government, paying taxes. I see these fields, staying in the realm of utilization instead of being put off on the side. I see them sharing in the tax debt, instead of piling it up on the smaller number of farms that would be utilized. I see it paying interest into the banks on money, becoming a part of the credit system. I see a lot of advantages that no doubt have been recited to you many times over, that I do not need to repeat.

I do not think I am ultraconservative, but I just wanted to make the observation in my testimony that while I am heartily in accord with the Frazier bill, and support it fully, believing it is sound, and believing it is most constructive and helpful, and am thoroughly

in accord with the measure that is put in here by the three farm organizations, I still want to make the observation that I do not see that clear through, going on and taking care of the consumer, who wants and can not buy. How long that will take, I do not know. I certainly think the consumer is going to be hard put so long as this country operates under the present system of financial control. The refinance bill that was put through-I have heard testimony about it here. Bonds are being bought, and circulations being increased, and confidence is being restored. I lack confidence in the agency to put things back in shape which, in the first instance, put us in such bad shape. I think that clears up what I have in mind in that regard.

That encourages me to believe that we must start taking the right to issue money, or part of the right, out of their hands, and put it in other hands, under Government control, and based on land, which is needed for the welfare of all of us. The more I think on this thing, the more I believe in that. I have drifted away from what I wished to talk about.

I want to answer a question that Senator McNary propounded to Mr. Simpson, the president of the Farmers Union, this morning, as to what effect this large amount of credit extended under the provisions of Senator Frazier's bill, might have on the general interest structure of the whole Nation. He mentioned his sympathy toward the urban home builder and owner, who is trying to acquire a home and pay off the mortgage on the home. I am sure all of us sympathize with him. Certainly I think that in the general market of credit and demand for credit, a bill as pretentious as this one proposed by Senator Frazier, with a large amount of credit involved, would certainly fall into that market place. There would be a demand for that sort of security by those who are afraid to put their money in banks, which, history has shown, sometimes carelessly run out of money, and the depositor loses his deposits. I think there would be a very large field, particularly at this time, for investments on the part of people who have savings and who want to know they are safe, and who would be glad to put them out and get 12 or 2 per cent. They are more concerned about the safety of their accumulation than they are about the rate of return. I think the effect of this bill would be entirely wholesome. The effect would be to reduce generally the whole interest structure over the whole Nation, and I think that is desirable. I believe in that very much.

Senator NORRIS. I agree with you entirely on that proposition, Mr. Thatcher, but I presume you take into consideration the fact that the most powerful influence in this country is against that.

Mr. THATCHER. I understand that.

Senator NORRIS. And we have to contend in various ways, both on the surface and under the surface, where it can not be seen, with an unseen power that is almost unlimited in its influence. The people do not realize just what it all means.

Senator FRAZIER. They are in the vast minority, however.

Senator NORRIS. They are in the vast minority, but they own pretty nearly all the property, and the money is the most powerful interest in anything on earth, and always has been.