Mr. JACOWAY. Well, take the greatest wheat field in the world, which is in Rumania. What will Rumania do?

Mr. BROWNE. You say the greatest wheat field in the world?

Mr. JACOWAY. I mean the area that produces more wheat to the acre than any of them.

Mr. BROWNE. I do not want to dispute your figures. In all the central countries of Europe where very remarkable agrarian changes have taken place in the way of the distribution of the grain estates into peasantry proprietorships, the first important consequence is a lessening of production because the peasant lacks the concentrated and intensified power of production. In the second place, he diversifies his agriculture, and in the next place he feeds himself and his family better.

There will be less per capita shipment of grains from all of the Central Powers than we have had in the past. They eat more at home, and they raise less.

Mr. KINCHELOE. You are not much in favor, then, of stimulating the export trade in wheat to get a better price for the farmer; you would rather save the surplus here? Mr. BROWNE. I would much rather save that surplus here.

Mr. KINCHELOE. I thought the purpose of this particular bill, the major purpose of this Sinclair bill, was to fix a price on export wheat for stabilization purposes, to enable the farmer to get a better price.

Mr. JACOWAY. To put it in storage.

Mr. KINCHELOE. That is what he says, and he does not agree with all the purposes of the Sinclair bill. His idea is to store it here.

Mr. JACOWAY. That would be like shipping it.

Mr. KINCHELOE. The primary purpose I thought was to fix the price on export wheat so as to enable the farmer to get a better price for his surplus wheat in Liverpool. Mr. ASWELL. If you kept it stored here and held it in storage for a year, or until the price had advanced, would that cost the people anything?

Mr. BROWNE. The stabilization of price would cover that.

Mr. TINCHER. You have no fears at all but what the friends of the Sinclair bill think it will absolutely provide for and take care of this catastrophe if it comes?

Mr. BROWNE. The machinery is there, if you will put it in operation. The machinery is there to take care of it, and a most admirable machinery.

Mr. TINCHER. That would put him, then, in a class with Corey.

Mr. BROWNE. I will say this: It is like a lot of other things. You have in the Federal reserve act one of the most perfect banking acts I have ever seen, but the personnel of the board is such and its administration is such as to make money easy in the big cities and hard for the farmers.

Mr. KINCHELOE. How are you going to provide in this bill for the storage of this product? Have you suggested a provision in regard thereto?

Mr. BROWNE. There is a provision there.

The CHAIRMAN. Your time is up.

Mr. BROWNE. If there is any member of the committee who would like to go into this matter more fully with me personally, I can extend what I have said here.

Mr. ASWELL. I wonder if you think this famine will not strike Sinclair's country first.

Mr. SINCLAIR. I want to say the catastrophe, as far as the farmers in my country are concerned, has already struck; it is already there, and they are not getting a price for their products that will enable them to keep on producing.

Mr. VOIGT. Is there anything further you would like to say about this Sinclair bill? Mr. BROWNE. I think it is a most admirable measure, and I hope it will be adopted, because there you have the foundation for all of this work. Without a word of change in the bill, the storage of wheat could begin.

STATEMENT OF MR. A. D. FAIRBAIRN, SPECIAL WRITER ON AGRICULTURAL TOPICS.

The CHAIRMAN. Kindly give the stenographer your name.

Mr. FAIRBAIRN. A. D. Fairbairn.

The CHAIRMAN. And state your occupation and address.

Mr. FAIRBAIRN. I am a special writer on agricultural topics, and I am here to-day to represent Mr. J. S. Wanamaker, who is president of the American Cotton Association. Some time ago we organized what is called the Farmers' National Stabilization Committee, of which Mr. Wanamaker is vice chairman and Mr. J. W. Moseley, of your State, Mr. Sinclair, is chairman, and Mr. John A. Simpson, of Oklahoma, president of the Farmers' Union of Oklahoma, is chairman of the executive committee and Mr. Vernon Campbell, president of the California Cooperative Canners' Association, is secretary-treasurer, and Mr. Campbell has asked me to look after any little business that might come in this department.

Now, I do not pretend to speak for the farmers of the United States, because I do not know much about farming, and I am looking at it rather as an individual who recognizes the fact that it is absolutely necessary to restore the buying power of the farmer before we can bring conditions back to normal. And, by "normal," I mean rather to go forward to a new conception of normalcy, to a new ideal of justice. And, without having any desire to be offensive, or carping, or unnecessarily critical, I want to say to you gentlemen, all of whom I recognize as my personal friends, that there has been introduced into this House-well, into this House and into the Senate-legislation which some people characterize as bunk, but which I will say is insufficient. Mr. JACOWAY. That is, for the farmer it is insufficient?

Mr. FAIRBAIRN. For anybody; because I do not look upon this as an exclusive problem at all. I regard this as an all-inclusive problem, and unless you can stabilize agricultural conditions you can not stabilize the economic conditions of the country at all. That is out of the question.

Mr. JACOWAY. Do you know of any nation that stabilizes farm products?
Mr. FAIRBAIRN. Yes. Australia does it.

Mr. JACOWAY. That is what I thought.

Mr. FAIRBAIRN. And it does it successfully. I do not mean by "stabilizing that it is necessary to guarantee a minimum price for farm products, although there is nothing economically wrong about that.

We in this country have gotten into the habit of thinking traditionally; we have gotten into the habit of looking at the formulas that have been created for us, and we regard anything that is a departure from precedent as somethting that is unsafe. We love the Constitution, and that is natural that we should do so, and proper that we should do so, and some of us have gotten to thinking that it is inelastic and not malleable, instead of something which we can make fit into modern conditions. Now, it is true that this idea of stabilization has not been sanctified by tradition, nor even glorified by the farmers. However, it is very necessary that some system of stabilization be established before we can restore the purchasing power of the farmer. I am not speaking as a farmer; I am talking as an individual who recognizes the fact that agriculture is the foundation of the national structure, and if you impair the foundation you render unsafe the entire structure.

Agriculture is not a class, it is an institution; it is the foundation; it is something upon which you build, and when we ask you to improve the conditions of agriculture, we are not asking you to do something for a class, but we are asking you to do something for the whole people of the United States.

Now, gentlemen, it is necessary to do something bold, original, and unique. It is necessary to take chances; it is necessary to take the chance of perpetrating an economic fallacy, but it is better to do that than to do nothing.

There are two bills to-day before the Banking and Currency Committee, the Capper bill and the Lenroot bill. One provides for the creation of a chain of banks, if anybody is willing to create them, and it also provides-there are one or two things in the Lenroot bill that are quite necessary and good; for instance, that amendment of Senator Heflin, which strikes out that clause in the Federal reserve act authorizing the graduated deflation.

Mr. SINCLAIR. The progressive interest rate.

Mr. FAIRBAIRN. The progressive interest rate. Now, that has been struck out in that bill and the bill is worth while, even though it only accomplishes that. But it is not a farmers relief bill.

Mr. TINCHER. Let us talk about the Capper bill a little bit.

Mr. FAIRBAIRN. We do not want to go far into that; I want to talk more about this bill.

Mr. TINCHER. The only good I understand you to say in the Capper credit bill is it authorizes the creation of a chain of banks?

Mr. FAIRBAIRN. I do not say that is the only thing; that is one of the things it does. Mr. TINCHER. It does this too, does it not, it gives the farmer the same right of rediscount through the Federal reserve bank, on his product, that any business concern has now in the Federal reserve banks?

Mr. FAIRBAIRN. That is true; but what in the name of Heaven is the use of extending credit to the farmer if you do not give the farmer a means of disposing of his products, or give him a living price?

Mr. TINCHER. Are you against extending the credits to hlm?

Mr. FAIRBAIRN. No; and I am not against the Capper bill, because the best that can be said about it is it is harmless; let it go.

Mr. TINCHER. You say you are not against the Capper bill?

Mr. FAIRBAIRN. No; I am not against the Capper bill.

Mr. TINCHER. "But the best that can be said about it is, it is harmless, let it go"?

Mr. FAIRBAIRN. Surely.

Mr. TINCHER. You said on that "that the best that can be said about it is it is harmless, let it go?"

Mr. FAIRBAIRN. Surely.

Mr. TINCHER. You do not think the farmer ought to have the same treatment by the Federal reserve banks on his products that every other business has?

Mr. FAIRBAIRN. No, I did not say anything about it, and please do not put words in my mouth. You are a friend of mine, and you do not fool me.

Mr. TINCHER. No, and you do not fool me, either.

Senator Capper provides in his bill for giving the man in agriculture the same right to rediscount in the Federal reserve bank that people in other lines of business have. Mr. FAIRBAIRN. That is perfectly true.

Mr. TINCHER. And you say about that "that the best that can be said about it is that it is harmless; let it go.

Mr. FAIRBAIRN. I will stick to that; I will stick to that statement, because that could be accomplished by a simple amendment to the Federal reserve act without writing into a bill 27 pages of superfluous matter. That is my statement.

But the Sinclair bill proposes something unique; it proposes something original; it proposes a means through which we can arrive at some method of stabilization. That is why I am for it.

Mr. TINCHER. You say most of the legislation that is pending in the interest of the farmer is classed by some people as bunk?

Mr. FAIRBAIRN. Yes. Not by me; I do not say so.

Mr. TINCHER. Do you happen to include the Ford Muscle Shoals proposition in that class?

Mr. FAIRBAIRN. No; that is a good bill.

Mr. TINCHER. You are for that?

Mr. FAIRBAIRN. I am for it, but I would rather have the Norris idea of the Muscle Shoals proposition. But if we can not get that, I am for turning Muscle Shoals over to Henry Ford under the conditions provided for under the bill.

Mr. TINCHER. I see on the 2d day of February, on page 2938 of the Congressional Record, that Senator Norris said his bill was killed. It is the Sinclair-Norris bill in the Senate. Do you know whether that has happened or not?

Mr. FAIRBAIRN. Whether the Norris bill was killed?

Mr. TINCHER. Yes.

Mr. FAIRBAIRN. I understaud that they reported out the other bill.

Mr. TINCHER. He says, "I think the bill which the Agricultural Committee reported to the Senate, which was killed a week or two ago"-that is the bill he was talking about, which he said was killed in the Senate?

Mr. SINCLAIR. Here is what happened over in the Senate: It was the order of business in the Senate and it was approved by the steering committee, or whatever they have over there, to lay aside the Norris bill in favor of the Capper bill, and then it was further laid aside in favor of the Lenroot-Anderson bill.

Mr. FAIRBAIRN. The bill has not been killed. It has merely been sidetracked. Mr. SINCLAIR. I am surprised that Senator Norris used the word "killed," because there has never been a vote in the Senate on it.

Mr. TINCHER. He understood it was killed.

Mr. SINCLAIR. It was merely laid aside, of course.

Mr. FAIRBAIRN. You have several good bills before this Committee on Agriculture, and let me compliment this committee. It is a hardworking committee and the most conscientious committee in Congress, I think, and it is earnestly desirous of doing and intends to do something for agriculture. But the fundamentals are sometimes lost sight of. For instance, this idea of giving Uncle Ruben credit-he should have credit upon the same terms and upon the same conditions as the man in ordinary business; that is unquestionably right, but one of the great difficulties to-day is that Uncle Ruben is too much in debt.

Mr. SINCLAIR. To whom does the farmer go out in the country to get credit?
Mr. FAIRBAIRN. He goes to his banker.

Mr. SINCLAIR. Of course, and it lays entirely with the banker whether he can take advantage of the rediscount privilege or not.

Mr. FAIRBAIRN. The fact is, no matter what provision you make for rediscount or anything else, the determining factor with the farmers of the country is his own banker.

I was out in your State, Mr. Tincher, last fall, and I went into some little grocery stores and drygoods stores around there, and I would see marked up in them a warning, "We go on a cash basis after October 15," and when I would go up and ask those men what was the reason for that, "Is not Uncle Reuben good any more?," they said, "Oh, yes; of course, Uncle Reuben is good, but the banks are loaded up with his paper and

can not dispose of his products at a reasonable price and we can not carry him any longer. So the result is he either has to quit this community or pay cash for what he gets. That was the same way in Sumner County, one of the wealthy counties and one of the finest counties in one of the fairest States of the Union, and the same way in Butler County, and other counties through which I traveled.

Mr. JONES. Do you not think the provision in one of these bills which gives him a nine months' credit instead fo the shorter term will do him much good?

Mr. FAIRBAIRN. That is an acceptable thing; anything which will improve present conditions is an acceptable thing, but it does not meet the situation at all. The situation of the farmer do-day is that he is not getting enough for his toil; he is not getting a sufficiently high price for what he produces.

Mr. JONES. There is no question about that.

Mr. FAIRBAIRN. That is the point.

Mr. JACOWAY. I want to ask you this question: You, as I know, have studied the history of Australia?

Mr. FAIRBAIRN. Yes.

Mr. JACOWAY. You have been peculiarly interested in that, and that is the reason I asked you the question awhile ago on that.

Mr. FAIRBAIRN. Yes.

Mr. JACOWAY. I want to ask you if in your judgment the whole matter is not summed up and, in your judgment, the problem will be solved as near as we can solve it, if the Government of the United States will give the farmers of this country a far-reaching, detailed, comprehensive system of marketing?

Mr. FAIRBAIRN. That is it; the whole thing is in marketing. The whole thing is in marketing and you can not add $1 of wealth to the farmer by giving him additional credit unless you provide the means through which he can market his products at an additional price or at a price high enough to pay him a reasonable return upon his labor and capital invested.

Mr. JACOWAY. If you give him the market, won't the credit come?

Mr. FAIRBAIRN. If you give him the market, the credit will come automatically. The real need is not a governmental agency through which he can get credits or anything of the kind but markets.

Mr. ASWELL. Is the Sinclair bill sufficiently broad to give them what they need? Mr. FAIRBAIRN. I am not so sure, but it is a splendid experiment. It is not claimed-I understand the author does not claim it will meet all the conditions or correct all the conditions, but it is a fine experiment, a bold experiment, in the right、 direction, and if we go in the right direction we can not go far wrong.

Mr. JONES. Do you think it is the best measure that has been presented up to the present time, looking to the end you speak of?

Mr. FAIRBAIRN. Well, if the gentleman who just preceded me is right in his calculation of what is going to happen in the future, it is possibly the best measure so far presented; but I think the Sinclair-Ladd bill, introduced some time ago, which this committee did not act upon, is even a little better than that. And there is another bill in Congress introduced by one of your earnest and sincere members of this committee, Mr. Williams. Of course that is before the Banking and Currency Committee of the House, and you will hardly deal with it, but it is just as well to call attention to it, and that is the bill to provide a credit or a buying power for Germany to the extent of $1,000,000. When you say that first, it looks like a mouthful, and it looks as though it is absurd and nobody seems to want to support it; but here I call your attention to section 6 of that bill, "That whenever any credit is granted under this act the Government of Germany shall deliver to the Secretary of the Treasury its bonds in like amount in a form approved by him, which shall be secured by adequate collateral or industrial obligations sufficient to guarantee the prompt liquidation of any credits extended hereunder, and the security so given shall be in such form and of such character as the Secretary of the Treasury may require.' Now, I saw a letter from the Secretary of the Treasury the other day saying that bill was unsound because the securities offered would not be sufficient. Well, as he will be the judge of the kind of securities to be offered and as it will be unlikely he would accept anything insecure himself, then he himself becomes responsible for any credit extended to Germany.

Mr. MCLAUGHLIN of Michigan. Did not the Secretary go a little further and say that Germany could not, or that it would be very doubtful if she could furnish sufficient security?

Mr. FAIRBAIRN. I happen to be in a position to know, and I

Mr. MCLAUGHLIN of Michigan. I am asking you the question, if he did not say that? 32018-23-SER O- -2D SUP - 12

Mr. FAIRBAIRN. Yes; that is true; he did say that.

Mr. MCLAUGHLIN. I am not approving that; I am simply asking the question. Mr. FAIRBAIRN. I happen to be in a position to know that the collateral security, unless the information I have is unreliable-but, from the information I have, I happen to know the collateral security will be ready immediately this bill will be passed— the collateral security.

Now, these purchases under this bill would amount to something like $29,000,000 a month, so that you would not float a billion dollars in bonds right away, but you would float them in the course of three years at an average of $28,000,000 or $29,000,000 a month, and $29,000,000 of bonds floated on our market a month would make no more than a ripple on the surface. I am not saying the Williams bill will accomplish everything agriculture hopes for, but it is at least a step in the right direction; it is a step toward the effort to stabilize international credit, and if we can create a market in this country for the German buyer-we do not care whether he is a German who buys of our stuff or whether he lives in Tibet, China, or Australia-if a market is created under those conditions, and if this security that would have to be satisfactory to the Secretary of the Treasury is forthcoming, then there is no reason why the credit should not be established.

Mr. JONES. Now, Mr. Fairbairn, do you think the committee should try to report out all of these bills to which you are referring, or that it should select the one they think will accomplish the most and report that?

Mr. FAIRBAIRN. Oh, no; I am only making a summary of what is before the House, and what I think is reasonable and what I think ought to be called to the attention of the committee.

Mr. ASWELL. You are for the Sinclair bill, though?

Mr. FAIRBAIRN. Yes, sir; I am for it.

Mr. ASWELL. Above all of the others?

Mr. FAIRBAIRN. No, not necessarily above all of the others, but I am for it, for this reason: I believe this committee is pretty nearly ready to report a bill of that kind, and I am not going to introduce anything else that will prevent your doing a thing that will be obviously for the benefit of the country.

Mr. ASWELL. Have you in mind something which you think is better? If so, we ought to have it.

Mr. TINCHER. If you have anything in mind half-way as good, or if you think that the Norris bill, if that bill has been killed in the Senate, should be passed, this committee is constructive and wants to pass a bill which is constructive and has no ambition to put its own bill on the calendar just so we get a bill which is constructive. Mr. FAIRBAIRN. I do not think it is a justifiable assumption to say the Norris bill has been killed in the Senate.

Mr. TINCHER. I do not say it has been killed. I simply quote the author of it. Mr. SINCLAIR. Do you not think the moral effect of this committee reporting favorably such a bill would have the effect of resuscitating it?

Mr. FAIRBAIRN. That may be, although it is a pretty hard thing to effect resuscitation of a thing on the other side of the Capitol. When a thing is dead over there it is usually dead.

Mr. TINCHER. I do not know whether it is dead or not, but the author of the Norris bill says himself it is dead.

The CHAIRMAN. The committee has two bills referred to it, which are under consideration now, one, H. R. 11776, to promote agriculture by stabilizing the price of certain agricultural products, and the other, a bill introduced by Mr. Sinclair, to provide for the purchase and sale of farm products.

Mr. FAIRBAIRN. Yes.

The CHAIRMAN. What assurance will you have that this will stabilize the price? In your opinion, what is there in this bill to stabilize the price of farm products? Mr. FAIRBAIRN. It stabilizes, some such a system as is established-do you mean the bill we are discussing now, or the bill which guarantees a minimum price?

The CHAIRMAN. H. R. 12966, introduced by Mr. Sinclair, is entitled a bill to provide for the purchase and sale of farm products and says nothing about the stabilization of prices; it simply gives authority to purchase and sell.

Mr. FAIRBAIRN. I presume, of course, the position taken by the author of this bill is that if a market is found for all farm products and all surplus products, it will automatically raise the prices. The natural thing, of course, when you can sell everything you can produce, is that you can get a little more than if you had a whole lot of surplus.

Mr. SINCLAIR. Is not this true, that the farmers are practically the only great industry in this country that is not concentrated in its buying power, or selling power?