the amended Norris-Sinclair bill will pass without delay. In my judgment it is the first constructive agricultural measure ever proposed in the United States Congress. The CHAIRMAN. I have received the following letter in reference to this legislation:

Hon. GILBERT N. HAUGEN,

House of Representatives, Washington, D. C.

WAUKON, IOWA.

DEAR SIR: The following resolution was unanimously adopted at our meeting to-day and that a copy be sent you with the request that you read it on the floor in the House of Representatives, and that we be informed on what date same took place: Be it resolved by the Waterville Cooperative Association, That we demand the enactment into law of a measure that will stabilize prices of farm produce, to the end that the American farmer shall receive a price sufficient to cover the cost of production and a reasonable profit, so that the American farmer will again become a purchaser and that American industries may be put upon their feet.

President WM. ROOD,
Secretary OLIVER DAHL,
Waterville, Iowa.

(The committee thereupon adjourned to meet at the call of the chairman.)

STATEMENT SUBMITTED TO HOUSE COMMITTEE ON AGRICULTURE BY J. LEE TARPLEY, NATIONAL REPRESENTAITVE OF THE FARM LABOR UNION OF AMERICA, Of Leonard, TEX., REGARDING THE NORRIS-SINCLAIR BILL (S. 4050; H. R. 12966).

The constitution of the Farm Labor Union of America clearly sets forth the object and purpose of the Norris-Sinclair bill to eliminate the speculator in farm products by selling them direct to the consumer, thereby enabling the producer to get more and the consumer to pay less for these products. We have about 250,000 members in the State of Texas, Oklahoma, Arkansas, and Louisiana, and we are now organizing rapidly in Mississippi, Tennessee, Alabama and Georgia. We heartily indorse the provisions of this bill, and ask that it be enacted into legislation before March 4, so the farmers can get some relief promptly.

We stand for home ownership, and that means farmers have got to receive better cash prices for their products and not get more credit merely to load them up with heavier debts.

Hon. George B. Terrell, commissioner of agriculture of Texas, gives out the information that it costs 264 cents on the average to produce cotton in Texas this year. This does not include any profit. Farmers have been getting from 18 cents to 26 cents, and 26 cents does not afford any profit. Peanuts have been bringing 83 cents per bushel and the cost of production runs about $1.20.

We believe that a bill like this is necessary to enable our members and all farmers to get permanently what our constitution calls for cost of production plus a reasonable profit.

COMMITTEE ON AGRICULTURE,
HOUSE OF REPRESENTATIVES,
Thursday, December 14, 1922.

The committee met at 10 o'clock a. m., Hon. Gilbert N. Haugen (chairman) presiding.

There were present: Mr. Haugen, Mr. McLaughlin of Michigan, Mr. Ward, Mr. Voigt, Mr. McLaughlin of Nebraska, Mr. Riddick, Mr. Tincher, Mr. Williams, Mr. Sinclair, Mr. Thompson, Mr. Clague, Mr. Clarke, Mr. Jacoway, Mr. Aswell, Mr. Kincheloe.

STATEMENT OF HON. GEORGE M. YOUNG, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH DAKOTA.

Mr. YOUNG. Mr. Chairman and gentlemen of the committee, I hope you will report out for passage some one of the price stabilization bills referred by the Speaker to this committee, but I wish to present for your consideration the desirability of amending any bill which you choose to report in such a way as to bring about crop limitation. The purpose of all of these bills is to increase prices, the logical effect of which is to increase production. The surplus is the thing which is breaking the farmer's back, and increased production would mean increased surpluses. In fact any bill to arti

ficially increase prices without at the same time checking production will to my mind be uneconomic and will carry within itself elements which may invite failure. Wheat growers should be willing to cooperate with any Government marketing corporation or agency established in whatever bill you report and if they will cooperate with such corporation, success will be assured.

To my mind it would be unwise for a Government corporation to undertake to stabilize the price of any commodity without in advance being assured of the cooperation of the producers. The directors of such corporation should first carefully estimate the quantity which they can sell then advise the producers to limit the acreage to produce that amount. If this is done, they can sell products to decided advantage, but they ought not to undertake to do so until they have asked the producers to file sworn statements with the county agents that they will reduce their acreage and cooperate with the Government corporation. Then the corporation will have its feet upon firm ground and will know what it is doing and where it is going. If the crop should be abnormal in size, the corporation could pay the producers at a level which would represent a normal crop, which should satisfy them, say at 90 per cent, and with the 10 per cent withheld could carry, without borrowing money, the surplus until the following year, at which time a further decrease in acreage could be arranged if thought advisable.

Mr. Chairman, this is what I suggested to your committee at hearings held the first month of this year. Το my mind farmers must get the marketing system upon an economic basis, and first of all they must see to it that their supply does not exceed demand.

The manufacturer is very careful to brace himself against an excess of supply over demand. He will not produce more than he can sell at cost plus a profit and he knows what his cost is. Merchants do not buy more than they can reasonably expect to sell. Practically all business done in the United States, outside of farming, is done on the principle that business should not be done excepting at a profit and that goods will not be bought or manufactured in excess of the probable demand.

Farmers know the cost of production, but they have not up to this time attempted to limit the production to the demand. That is the first thing they must do. It is fundamental.

Mr. ASWELL. Mr. Young, I do not see the practicability of limiting production. Mr. YOUNG. I realize that is a question for this committee to work out, as to how you are going to do it.

Mr. ASWELL. How would you suggest doing that?

Mr. YOUNG. Of course, we know that while the United States Grain Corporation was in effect, it was able to make regulations and get the cooperation of certain organizations.

Mr. ASWELL. But not limit production.

Mr. KINCHELOE. That was for the purpose of stimulating production.

Mr. YOUNG. They said it was to stimulate production but the fact is that the whole scheme of the United States Grain Corporation was to limit the price, and just as soon as it went into operation the price went right down. The whole idea was not to raise prices but to reduce prices; nobody can get away from that. They thought that the market had gone wild, that the prices were up so high it was thought desirable to reduce prices from the standpoint of the war.

Mr. SINCLAIR. Mr. Young, have you thought of this fact: A surplus is sometimes produced by reason of underconsumption. We have evidence before this committee that while the production remained normal the consumption was greatly reduced in this country.

Mr. KINCHELOE. That was due absolutely to the depression of business all over the country.

Mr. SINCLAIR. Yes; it was during a period of depressed business conditions. Mr. YOUNG. If you want a depression in business in the United States worse than you have now, all you have got to do is to hold the farmers down to the present prices. Mr. TINCHER. Mr. Young, you are a former member of this committee and a valued member of Congress and come from a wheat belt, and I am also from the wheat-raising section, do I understand that you are testifying now that you are willing to support a price-fixing bill in the form of one of these bills pending in this committee, if we will adopt some amendments which you are going to suggest at these hearings?

Mr. YOUNG. I am in favor of crop limitation because I think it is the only possible way to get a stabilization bill that will be workable and that will pass Congress. Mr. TINCHER. You are announcing, then, for price limitation? Mr. YOUNG. I am talking about acreage limitation.

Mr. TINCHER. Then you are offering as a substitute for the price fixing bill the suggestion that we limit crop production.

Mr. YOUNG. That is it. I may introduce a bill myself or I may not; I am working on a bill now, but whether you take that bill or take one of the bills now before you,

it makes no difference to me so long as you perfect some bill that you think can be made workable, but I do not believe you can make any bill workable, and I do not believe you can get any bill through the House if they see staring them in the face losses by reason of a Government corporation getting back of a fixed price, when they see that it is going to stimulate production and is going to increase the quantity of grain, and increase the quantity of cotton and other things that you must buy. That is a pyramiding proposition that almost anyone ought to see is going to create a fear upon the part of the Members of Congress that it will be impossible to remove.

Mr. KINCHELOE. Do you not think that is putting a good deal of "government in business?"

Mr. YOUNG. Yes, sir; but the desperate condition of wheat growers warrants it, and it will cost comparatively little money.

Mr. KINCHELOE. To tell the farmer how much they shall raise?

Mr. SINCLAIR. Further, all the bills presented here contemplate that each year's production will determine what the price shall be. The board that will be set up to constitute and fix the price will take into consideration what the production of this year is in determining what price they shall fix next year. Will not that in itself do the thing you are expecting to do by limiting the price, and in turn limit the crop produced?

now.

Mr. YOUNG. To my mind, that will just practically leave the farmer where he is If you are going to give him the market price and going to permit him to come into competition with the peasant farmers of Europe and elesewhere; if you are going to make him continue to pay the cost of freight from here to Liverpool on every bushel of wheat he raises, you are going to leave him practically where he is. If you limit the production of wheat, for instance, to the necessities of the United States, that would mean about 600,000,000 bushels. We raised about 800,000,000 bushels this year. That would mean a cut of 25 per cent, and that you would not need to ship a single bushel of wheat out of the United States. There would then be no need to pay freight to Liverpool on the wheat we did raise.

Mr. RIDDICK. Under that plan suppose you had very adverse climatic conditions in this country, might we not ourselves face starvation in some sections of the country? Mr. YOUNG. I do not think you would face starvation but it might cause some imports. It seems to me, gentlemen, you have got to put the farmers on a business basis. Everybody else in the United States now is doing business on the theory of cost plus. They will not produce any more than they can sell. A manufacturer will not produce any more than he can sell and he wants cost plus a profit. The merchant will not buy more than he can sell. There is nobody in the United States, or practically nobody, outside of the farmer, who will produce more than he can sell. Now, why on earth should a farmer produce more than he can sell? We know we can not sell 800,000,000 bushels of wheat in the United States, and we know that if we have to export 200,000,000 bushels of wheat, that what we get for that 200,000,000 bushels fixes the price of the wheat we keep at home. Now, let us just wipe that out.

Mr. KINCHELOE. How can the farmer know what he can sell in this country when it depends altogether upon the general business conditions?

Mr. YOUNG. You are proposing to create corporations here to handle this proposition and I say they are never going to get anywhere unless they estimate how much they can sell and how much they ought to undertake to sell, and how much we ought to raise in the United States.

Mr. TINCHER. You want to do away with the exporting of wheat.

Mr. YOUNG. I would only export wheat when we can get cost plus a profit. If we can not get cost plus a profit for wheat we sell abroad, I do not think we ought to raise it. There is nothing in it for the farmer to do that.

Mr. SINCLAIR. According to the statement of Mr. Barnes, we do not export as much wheat as you suggest. He says that for a period of 10 years we have only been exporting something like 6 per cent.

Mr. YOUNG. You will have to get his figures over his own signature and put them in front of me because we know that 6 per cent is absolutely out of the question and is not according to facts.

I thank you very much, gentlemen, for this opportunity to give you a little outline of a policy which it seems to me is what you have got to work out with respect to any bill, and I would like at some time in the future to get about 15 or 20 minutes to elaborate on this proposition.

Mr. ASWELL. Mr. Young, I do not see how you can make a bill to limit acreage workable.

Mr. YOUNG. I would like to reply to your question fully, but Mr. Owen, editor of Farm, Stock, and Home, Minneapolis, is waiting to speak and must catch a train at 1 o'clock.

Mr. SINCLAIR. Mr. Chairman, will the committee hear Mr. H. N. Owen, of Minneapolis?

The CHAIRMAN. Is it on one of the bills before us?

Mr. OwEN. Of course, I can address my remarks, just for the sake of having something to talk about, on the Christopherson bill.

Mr. ASWELL. Are you for it?

Mr. OWEN. Yes; I am for that bill or a similar bill. As I understand it, there are about 15 bills pending.

The CHAIRMAN. How much time do you desire, Mr. Owen?

Mr. OwEN. It will all depend, gentlemen, upon the committee. If I am permitted to make my statement and do not have to answer and pay attention to three or four questions all put simultaneously I think I can get through in about half an hour. Mr. LAUGHLIN of Michigan. I suggest the gentleman be permitted to make his statement without interruption.

The CHAIRMAN. Without objection, the witness will proceed with his statement without interruption.

Mr. SINCLAIR. Mr. Owen, it has been suggested that some of the members of the committee do not know who you are and just what your business is.

Mr. OwEN. Harry N. Owen, managing editor Farm, Stock, and Home, Minneapolis, Minn.

The CHAIRMAN. You may proceed with your statement, Mr. Owen.

STATEMENT OF MR. HARRY N. OWEN, MANAGING EDITOR OF FARM, STOCK, AND HOME, MINNEAPOLIS, MINN.

Mr. OwEN. Mr. Chairman and members of the committee, I have got to hit the high spots here, and I do not know that I am going to be able to develop all that I expected to develop when I came down here this morning, so I may not be able to get through in time to answer all the questions that you would like to put to me.

Mr. CLARKE. You asked for a half an hour in which to make a statement. Do you think you can finish in that time?

Mr. OWEN. I believe I can, unless I am interrupted with questions.

Mr. CLARKE. Then I suggest, Mr. Chairman, that he be permitted to make his statement without interruption, and if there is time after he has completed his statement, that questions may then be put to him.

The CHAIRMAN. You may make your statement without interruption, Mr. Owen. Mr. OwEN. First of all, Mr. Chairman and gentlemen, I want to lay down the proposition that in advocating the stabilization of farm prices to the end that farmers may get profits, I am not down here entirely as a special pleader for farmers. It is necessary for every one of us, from the peanut vender on the corner up to the biggest banker in New York, to have a profitable agriculture.

If you will go back and recall the years prior to the panic of 1893, when farmers were operating continually on a falling market, I think you will agree with me that the underlying cause of the collapse of 1893 and the disastrous years that followed, was the fact that agriculture was unprofitable. At that time, in 1893, we were not all as aroused to the truth of that situation as we are aroused now to the necessity of a profitable agriculture. We have hundreds or merchants, manufacturers, retailers, and wholesalers in our part of the country, at least, and I think that applies pretty well to the entire Mississippi Valley, and it may apply clear to the Pacific coast, and it may apply to this part of the country-we have, as I say, hundreds of those men who are simply hanging on by the grace of their creditors. Now unless times change, unless these mercantile and manufacturing interests can begin to show a profit, the time will come when they will have to go through the process of settling up through bankruptcy. We are, I believe, facing a more serious situation, as far as our material prosperity is concerned, as far as the danger to our social system is concerned-we are facing a greater crisis to-day than we were just prior to the second Marne. I am not saying this to be sensational, but I am simply giving out what I believe is a cold statement of conditions.

Now we have a great many bills before us dealing with the stabilization plan, or if not the stabilization plan, with an idea of increasing the prices to farmers. Senator Norris has a bill to form a corporation, or use the War Finance Corporation, or possibly the Federal Reserve System, to finance European purchases. Now, that may be good, but whether Europe is buying food products or not, they are leaving the country at an unprecedented rate.

For instance, in the three years, 1919, 1920, and 1921, the United States exported to Europe 873,343,567 bushels of wheat. We exported that much to bankrupt Europe. We exported that much to Europe that is in financial chaos.

In the five years from 1914 to 1918, inclusive, including the war years, when it was not a question of price, when it was a question of getting the grain, we exported 814,728,353 bushels.

In the three years, 1919 to 1921, inclusive, we exported 111,653,000 bushels of corn. In the five years, 1914 to 1918, inclusive, including the war period, we exported 187,157,587 bushels of corn.

Our rye exports show a corresponding increase over the war years. In the three years, 1919 to 1921, inclusive, we exported 144,000,000 bushels of rye.

Now that does not indicate that our trouble lies in the shape of a bankrupt Europe. Possibly it is true, as they say, you can sell more on time than you can on credit. But if the people of Europe, if the individuals of Europe are not able to buy, then extending credit, governmental credit, or getting indorsements of the Government on exporters' paper, I don't see how you are going to relieve the situation for a minute that way.

Personally, I rather like the Christopherson bill, although I am not necessarily tied up with any of these bills. I like the Christopherson bill for the reason that it contemplates the purchase of the surplus. The Peak plan or the Johnson plan, which has received a good deal of consideration, and which is receiving a good deal of consideration by Secretary Wallace and Doctor Taylor, contemplates the purchase of the entire crop.

Now it seems to me that any plan that will raise prices without a corresponding balance wheel to adjust, restrict, or control production, is going to lead us into very grave difficulties. In fact, I believe that a system of price raising without the adoption of a balance wheel of controled production, would by the very nature of the workings of economic law compel the Government to eventually repudiate the plan. Now Congressman Young wanted sufficient time to tell you gentlemen this morning that he has a plan which he admits he has not gotten entirely smoothed_out, but a plan that he has in preparation. His plan is to form an organization and say to the farmers: "Now if you will join this organization and agree to make whatever reduction in acreage we recommend, then the Government will pay you so much money for your wheat or corn or oats, or what not." Now if the man does not want to come into that, if he says, "No; I won't come into that; I am an American citizen, and I am going to do as I please," all right, he will have to take his chance on selling his wheat at whatever price he could get. It will be worked out very much as it was worked our during the war, when the Government said to these elevator men and millers: "Of course you can buy your wheat wherever you please; we don't care anything about that; but we have got the wheat. Now, what are you going to do about it? You don't have to come into this." But as a matter of fact they did have to come into it. They did have to buy their wheat from the Grain Corporation, because there wasn't anything else available. And I believe fully that Congressman Young has the germ of an idea there that will make the control of production possible.

Now, I know, gentlemen, that a good many of you around this table and in this room have an idea that controlled agricultural production is uneconomic, that it is not sound. Now, as a matter of fact, I believe the fundamental trouble with American agriculture to-day is that it has been proceeding all these years, ever since the Pilgrim Fathers planted corn in New England, along absolutely uneconomic lines. It has been producing blindly without any idea of what was going to become of its products after they were produced.

Now, any other line of business that will proceed on such a basis as that would go into the bankruptcy courts, and its executive officers would go to the insane asylum. A manufacturer does not place his orders for raw materials until he has gotten from his traveling men a very good idea, a very clear idea of how much that factory is going to sell. The jobber does not place his orders with the factory until he knows what he is going to sell to the retailer. And the retailer adapts his orders to his jobber not only to the population in his trade area, but also and this is particularly true of the country merchant-he adapts his orders of the probable crop returns in his district. If he did not do that he would soon go bankrupt. If the mills in Minneapolis, granting they could get the wheat, would work to their full capacity 365 days in the year, those mills alone up there could produce almost half of the flour that we need for the entire United States. Now, they do not do that. They are very careful about that. They do not pile up a surplus. A shoe manufacturer does not pile up a surplus, nor does a clothing manufacturer.

Now, you will say that there can not be any overproduction of any of these things as long as anybody in the world wants anything, whether it be food or shoes or clothing. Now, let us make a distinction there which is very vital. An unsatisfied demand, a demand that can not be satisfied, is not an effective demand. The economists define