Mr. BESTOR. Yes.

Mr. SIMPSON. And you do not know anything you can do to help raise the price of farm commodities?

Mr. BESTOR. No. I do not know anything that can be directly done by any of the banks in the farm loan system to improve the price of commodities.

Mr. SIMPSON. You have not been able to do anything, have you, to stop the falling prices?

Mr. BESTOR. The banks in the system have done nothing but try to extend credit where they could properly do so.

Mr. SIMPSON. Now, you say you are convinced the Farm Board is doing its best to raise the prices of farm commodities?

Mr. BESTOR. Yes, I am satisfied that it is.

Mr. SIMPSON. Do you know what the price of wheat was when the Farm Board took charge of it a little less than three years ago? Mr. BESTOR. No, I do not remember.

Mr. SIMPSON. Do you know it was at least $1.40 a bushel? You know it was that high, do you not?

Mr. BESTOR. It was a fairly good price, as I remember it.

Mr. SIMPSON. Has there been a gradual, continuous declining market ever since then?

Mr. BESTOR. It has varied some, but, generally speaking, it has declined; yes, sir.

Mr. SIMPSON. The trend is downward, with little ups and downs, but the trend is downward. Do you know what the price of corn was about three years ago?

Mr. BESTOR. Probably around 50 cents a bushel.

Mr. SIMPSON. Oh, it was more than that.

Mr. BESTOR. I do not remember what the price was.

Mr. SIMPSON. It was at least 80 cents a bushel. What is the price to-day?

Mr. BESTOR. About 25 cents on the farms, I believe.

Mr. SIMPSON. And that has been a declining market, has it not? Mr. BESTOR. Yes.

Mr. SIMPSON. Do you know what the price of cotton was three years ago?

Mr. BESTOR. Around 12 cents, was it not?

Mr. SIMPSON. You remember that it was about 18 cents?

Mr. BESTOR. Three years ago?

Mr. SIMPSON. You know they stabilized the first price on 16 cents? The Farm Board did. You will remember that, do you not? Mr. BESTOR. I believe you are right.

Mr. SIMPSON. It was up around 20 cents three years ago. Do you know what the price is to-day? You have told what you were offered.

Mr. BESTOR. It is pretty low.

Mr. SIMPSON. Five cents for good white cotton. So that has been a steadily declining market.

Mr. BESTOR. That is right.

Mr. SIMPSON. Do you think the Farm Board are going to be able to save this situation under the present policy and plan?

Mr. BESTOR. I think they would have a pretty big job if they did.

Mr. SIMPSON. You realize there has to be something added to what we are doing if we are to save the price of the farm commodities; is not that right?

Mr. BESTOR. If you want a quick return; certainly.

Mr. SIMPSON. Have not we got to have a quick return?

Mr. BESTOR. As quick as possible.

Mr. SIMPSON. Do not you think, as president of the land board, that you ought not to be objecting to plans offered by Members of Congress and okayed at least by some of the farm organizationsyou ought not to object to them if we have not something else to do the job.

Mr. BESTOR. Mr. Simpson, I am not objecting to anything that Congress wants to do. I was asked what I thought about it and I gave my personal opinion as to what I thought of it.

Mr. SIMPSON. I am glad to hear you say that. I am through.
The CHAIRMAN. Any other questions?

Mr. BOWEN. I have a question I would like to ask.

You have objected to the Frazier bill on the ground that it was not sound, at several different times, in your testimony. Is it not a fact that in the United States to-day we have plenty of everything we need except money?

Mr. BESTOR. That is rather a sweeping statement.

Mr. BowEN. Is not there plenty of food? Is not there plenty of cotton? Is not there plenty of everything to feed the people and clothe the people?

Mr. BESTOR. It would appear that we have too much of a good many things. That may be what is wrong.

Mr. BOWEN. We ought to be having a picnic instead of a panic, then. Is not there plenty of factories in this country to make the raw material and the finished product that the people need?

Mr. BESTOR. Probably.

Mr. BOWEN. Are there not plenty of railroads to transport the raw materials? Are there not plenty of men to make the raw materials and the finished product?

Mr. BESTOR. Yes.

Mr. BOWEN. Is it not a fact we have everything we want except money?

Mr. BESTOR. No; we lack some things. We lack confidence for one thing.

Mr. BowEN. When the farmer gets only 5 cents a pound for his cotton, confidence does not do him much good. When he is offered only 5 cents a pound, no amount of confidence will help him so far as selling that crop is concerned.

My question that I would like to ask is this: What is there sound about a financial arrangement, what is there sound about a monetary system that puts the control of the money in the hands of a little group of international bankers on Wall Street and puts nothing in the hands of the farmer out here who feeds the world? These farmers out here are some of them hungry. The farmer who raises food can not get enough for his food to buy clothes. The farmer who raises cotton to sell can not get enough money for the stuff his clothes are made of so he can buy food for his family. He can not pay his interest and he can not pay his taxes. What is there sound about a financial arrangement of that kind? That is what the farmers of

the United States are asking of you, and that is what the farmers of the United States are asking of this community. This system has fallen down. This system is bankrupt. The Government herethe Ways and Means Committee in the House and the Finance Committee in the Senate-are trying to figure out some way to raise a nickel and some way to raise a dollar. It does not seem to have dawned on the Congress yet that the only way you can get a nickel is out of a dollar that goes by. It does not seem to have dawned on the Congress yet and on you gentlemen who are in positions of responsibility that the agriculture is the source of all wealth. The prosperity of a nation is just like a broad river that flows down from the melting snows and the rain that falls on the mountain side. We build dams along that river. The water flows over the dam, and as it comes down the flow is greater and we build another dam. We keep on building dams. When the river dries up at its source it does not do any good to build more dams along the river. That is what Congress is trying to do with the Reconstruction Finance Corporation and other legislation it has passed this winter. What we have to have is the source of wealth, and the source of wealth is the farmer with his team and his plow, the woodman with his ax and his saw, and the miner with his pick and shovel; and until the Congress of the United States realizes that and it passes some legislation to put money in circulation in this country and to fix the price of staple farm products, we are going further and further into bankruptcy and into revolution.

The CHAIRMAN. Does any member of the committee have any question to ask?

Mr. O'NEAL. Senator, I would just like to ask one question. I do not like to delay this committee.

Mr. Bestor, have you any suggestions to make? In your statement this morning you said something about the background of the Federal reserve system and the Federal land banks. Do you consider that if we could rediscount with the Federal reserve system it would be helpful to the land banks?

Mr. BESTOR. Whether the land banks could do that?
Mr. O'NEAL. Yes, if they could rediscount their paper.

Mr. BESTOR. Well, the reserve banks can now purchase and are purchasing, when occasion demands, the Federal land bank bonds at the maturity the Federal reserve act permits; that is, six months. The reserve banks have been willing to do that, and the banks have taken advantage of it where occasion demanded; so that as far as that part of it is concerned, unless you wish to amend the reserve act to permit them to take paper of longer maturity, there would be nothing gained by it.

Mr. O'NEAL. In other words, would it not give the public the same class of maturity now issued by the Government through the Federal reserve bank? I gathered that from your statement agriculture would probably get 12 per cent interest rate if that could be done. Mr. BESTOR. Senator, I do not know whether it was the chairman or another Senator that asked the question as to whether if land bank bonds were guaranteed by the Government, that would not mean a lower rate. Of course it would. There is no question about that. Rediscounting with the reserve banks would be something different.

Mr. O'NEAL. Now, Mr. Bestor, you say that $9,000,000,000 is the reported figure of the capital indebtedness of agriculture. You are only serving half a million farmers. Why is that? You know the country banks have failed. We have not any banks in large sections of the country. Can not you liberalize? What suggestion would you make, in other words, to liberalize this system so that we might have a financial system for the American farmer and some constructive way that we might spread out to give this service to the American farmer? What do you have in mind?

Mr. BESTOR. Of course, there would be possibilities. I do not know whether it should be done or not, but there would be possibilities of enlarging the group to which the Federal land banks might make loans by changing some of the restrictions. For instance, the act provides that farmers may borrow for only certain specific purposes. They can not borrow, for instance, just to pay off any debt.

It must be for an agricultural purpose; to buy a farm, buy machinery and so forth. There would be possibilities there of enlarging the group who could get help from the Federal land banks by enlarging the purposes for which a borrower may obtain a loan. Mr. O'NEAL. Would you have to do that by law?

Mr. BESTOR. That would have to be by a law, Mr. O'Neal.

Mr. SIMPSON. I want to clarify your statement about lack of confidence. You say that is the reason for this thing?

Mr. BESTOR. No. Mr. Bremen asked me if we had everything we need but money, and I remarked that we do not have confidence. Mr. SIMPSON. We have a lack of confidence. That is the thing. It is not a lack of confidence in this Frazier bill, is it?

Mr. BESTOR. I do not know anything about that.

Mr. SIMPSON. The people have not a lack of confidence in the Frazier bill; it is the present system we have lack of confidence in, is it not? It is these sound principles that you talk about that people have no confidence in to-day?

Mr. BESTOR. No; I do not believe I can agree with you, Mr. Simpson. I think the great mass of American farmers are thoroughly in sympathy with sound institutions and principles.

Mr. SIMPSON. The reason that the bank would not loan many of my friends out there in Richardson County, Nebr., was that they did not have confidence that those people could make any money feeding those cattle and hogs. That is the reason.

The CHAIRMAN. Mr. Bestor, can you be with us to-morrow?
Mr. BESTOR. If you wish, Senator.

The CHAIRMAN. Mr. Stone, if agreeable, will take the stand tomorrow at 10 o'clock; and if you can, I will ask you to be here as one member of the committee to hear him testify, because no doubt he will cover a good many of these points, and this is one point that we are trying to solve if it can be solved. So, if agreeable, the committee will stand recessed until to-morrow at 10 o'clock, at which time we will hear Mr. Stone.

(Whereupon, at 11.53 o'clock a. m., an adjournment was taken until Wednesday, April 27, 1932, at 10 o'clock a. m.)