Farm Relief

A member of this committee has suggested that the members or representatives of the farm organizations might occupy seats about the table, and if Mr. O'Neal and others will sit down at the table in order that you may take part in the discussion, we will be very glad to have you do so.

Is Mr. Taber here, Mr. O'Neal?

Mr. O'NEAL. He is not here. Mr. Brenckman is here.

The CHAIRMAN. In Mr. Taber's absence, you may sit at the table, Mr. Brenckman. You gentlemen may desire to ask questions and it may be that the committee will desire to propound questions to you. When an invitation was issued to the various representatives of farm and public organizations, I inclosed in the letter a number of bills that were pending before the committee in order that those invited to be present might have an opportunity to study them. I selected these bills, being important measures pending before the committee: S. 123, introduced by Senator Brookhart; S. 653, introduced by Senator Byrnes; S. 1197, introduced by Senator Frazier; -S. 1698, introduced by Senator Bankhead; S. 3133, introduced by Senator Thomas of Oklahoma; S. 4323, introduced by Senator Wheeler; S. 3680, introduced by Senator McNary; and S. 4427, introduced by Senator Thomas of Oklahoma, in order that those invited might have an opportunity to study these measures before they expressed their opinion to the committee.

(The Senate bills above referred to are here printed in the record in full, as follows:)

[S. 123, Seventy-second Congress, first session]

A BILL To amend the agricultural marketing act, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 5 of the agricultural marketing act (relating to the special powers of the Federal Farm Board) is amended by adding at the end thereof the following new paragraph:

"(6) To provide (a) for the organization of a stabilization cooperative as soon as practicable after the date of approval of this amendatory act for each of the following commodities: Corn, cotton, wheat, oats, and livestock; and (b) for the vesting in such stabilization cooperatives of the functions theretofore exercised by the corresponding stabilization corporations."

SEC. 2. The agricultural marketing act is further amended by inserting between sections 5 and 6 thereof a new section to read as follows:

66 ADDITIONAL AUTHORITY OF BOARD

"SEC. 5A. The board is further authorized

"(1) To purchase and sell for cash or on credit at prices determined in accordance with the provisions of section 9A the total exportable surplus of corn, cotton, wheat, oats, and livestock through the stabilization cooperatives for such commodities;

"(2) To provide for the transportation in interstate or foreign commerce of commodities controlled by the board or by stabilization cooperatives for such commodities;

"(3) To provide for the construction or for the acquisition by condemnation or otherwise of such storage and other facilities as the board may deem necessary for use in connection with commodities under the control of the board; "(4) To organize, or use the facilities of, such cooperative associations as the board may deem necessary to aid in carrying out its functions;

"(5) To borrow money for carrying out the foregoing provisions from the Treasury of the United States, or from Federal intermediate credit banks, or other institutions engaged in the business of banking, or other sources upon the security of the credit or property of the board;

"(6) To lay an embargo on imports of any agricultural commodity for such periods as the board may deem necessary."

SEC. 3. Section 6 of such act is amended by striking out "$500,000,000" and inserting in lieu thereof " $1,500,000,000."

SEC. 4. Such act is further amended by striking out the words "stabilization corporation" and "corporation" wherever they appear therein and by inserting in lieu thereof the words stabilization cooperative " and " cooperative," respectively. This section shall take effect with respect to any stabilization corporation as of the date of the organization of the corresponding stabilization cooperative.

SEC. 5. Section 9 (a) (2) of such act is amended by inserting after the word territory" the words or in accordance with the provisions of section 16 of this act."

SEC. 6. Such act is further amended by inserting between sections 9 and 10 two new sections to read as follows:

66 PURCHASES AND SALES OF COMMODITIES

"SEC. 9A. (a) The board shall determine for each crop year the average cost of production to farmers of corn, cotton, wheat, oats, and livestock during the preceding 5-year period and shall also determine the financial investment in such commodities, using the official census data as far as possible. The items of cost shall be estimated upon the same principles as in the manufacturing industry, and considering the individual farm as a business unit, and determined on its individual production, including a fair compensation to farm owners for management and labor of themselves and families, together with proper allowances for depreciation of soil, improvements, equipment, stockbreeding animals, work animals, and buildings. The board through the stabilization cooperative for the commodity, shall then offer to the farmers a price equal to the average cost of production so determined plus enough profit to yield 4 per cent upon the capital investment. The board shall also have the right to buy and sell agricultural food products in processed form when such processing is necessary for preservation, but only when the parties so processing them have paid to the farmers the basic price above indicated and have added thereto only enough for a net profit of 4 per cent upon their own investment. The board shall establish an efficient agency to determine compliance with this last provision.

"(b) The commodities purchased by the stabilization cooperatives as herein provided shall be held not as a menace to the world markets for such commodities but to supply the world demand therefor, and shall be sold in such quantities and at such times as the board may find to be necessary to carry out such policy, but no competing cooperative to one already existing shall be set up hereafter and any such heretofore set up shall be discontinued. The selling price of any such commodity shall not exceed by more than 5 per cent the purchase price thereof plus the expenses incurred in connection with the holding of the commodity from the date of purchase to the date of sale, and if the board has acquired more than the exportable surplus of any such commodity, it may sell the same in the domestic market at a price which will return a net profit of not to exceed 5 per cent. In the event that it becomes necessary to sell any such commodity at a price less than the purchase price plus expenses of holding the commodity, the amount of the losses sustained as a result of the sales of the commodity, together with the losses already sustained through the operation of stabilization corporations, shall be repaid to the revolving fund as hereinafter provided. For such purpose the Secretary of the Treasury shall issue each month to the board a Treasury certificate of a face value equal to the total duty that would be collectible on imports of the commodity in an amount equal to the exports thereof for such month, except that in the case of cotton the amount of the certificate shall be computed on the basis of 5 cents a pound for each pound of cotton exported during such month. The board shall be entitled to draw out of the Treasury an amount equal to the face value of each certificate so issued or so much thereof as may be necessary to meet such loss; except that if such amount is insufficient to cover the total amount of the losses sustained with respect to the commodity during such month, the balance shall be paid by the board as a loan from the revolving fund as provided in section 9 (d). When the amount of $529,000,000 shall have been paid to the board on such certificates, thereafter the losses sustained as the result of such sales shall be repaid by means of an equalization fee determined as

hereinafter provided. All amounts received by the board on such certificates or from such equalization fees shall be placed in the revolving fund and become a part thereof.

66 EQUALIZATION FEE

"SEC. 9B. (a) In order to carry out the surplus-control operations in corn, cotton, wheat, oats, and livestock contemplated by this act without loss to the revolving fund, each marketed unit of the agricultural commodity produced in the United States and covered by such operation shall, throughout any marketing period in respect of such commodity, contribute ratably its equitable share of the losses arising out of such operations. Such contributions shall be made by means of an equalization fee apportioned and paid as a regulation of interstate and foreign commerce in the commodity. It shall be the duty of the board to apportion and collect such fee in respect of such commodity as hereinafter provided.

"(b) Prior to the commencement of any marketing period in respect of the agricultural commodity, and thereafter from time to time during such marketing period, the board shall estimate the probable losses with respect to such commodity to be paid by the board by means of the equalization fee as provided in section 9A. Upon the basis of such estimates the board shall from time to time determine and publish the amount of the equalization fee (if any is required under such estimates) for each unit of weight, measure, or value designated by the board, to be collected upon such unit of such agricultural commodity during any part of the marketing period for the commodity. Such amount is referred to in this act as the 'equalization fee.' At the time of determining and publishing any equalization fee the board shall specify the time during which the particular fee shall remain in effect and the place and manner of its payment and collection.

"(c) Under such regulations as the board may prescribe any equalization fee determined upon by the board shall be paid, in respect of each marketed unit of such commodity, upon one of the following: The transportation, processing, or sale of such unit. The equalization fee shall not be collected more than once in respect of any unit. The board shall determine, in the case of each class of transactions in the commodity, whether the equalization fee shall be paid upon transportation, processing, or sale. The board shall make such determination upon the basis of the most effective and economical means of collecting the fee with respect to each unit of the commodity marketed during the marketing period.

"(d) When any equalization fee is collected with respect to cattle or swine, an equalization fee equivalent in amount, as nearly as may be, shall be collected, under such regulations as the board may prescribe, upon the first sale or other disposition of any food product derived in whole or in part from cattle or swine, respectively, if the food product was on hand and owned at the time of the commencement of the marketing period: Provided, That any food product owned in good faith by retail dealers at the time of the commencement of the marketing period shall be exempt from the operations of this subdivision.

"(e) Under such regulations as the board may prescribe the equalization fee determined under this section for any agricultural commodity produced in the United States shall in addition be collected upon the importation of each designated unit of the agricultural commodity imported into the United States for consumption therein, and an equalization fee, in an amount equivalent as nearly as may be, shall be collected upon the importation of any food product derived in whole or in part from the agricultural commodity and imported into the United States for consumption therein.

"(f) The board may by regulation require any person engaged in the transportation, processing, or acquisition by purchase of any agricultural commodity produced in the United States, or in the importation of any agricultural commodity or food product thereof―

(1) To file returns under oath and to report, in respect of his transportation, processing, or acquisition of such commodity produced in the United States or in respect of his importation of the commodity, or food product thereof, the amount of equalization fees payable thereon and such other facts as may be necessary for their payment or collection.

(2) To collect the equalization fee as directed by the board and to account therefor.

(g) The board, under regulations prescribed by it, is authorized to pay to any such person required to collect such fees a reasonable charge for his services.

"(h) Every person who, in violation of the regulations prescribed by the board, fails to collect or account for any equalization fee shall be liable for its amount and to a penalty equal to one-half its amount. Such amount and penalty may be recovered together in a civil suit brought by the board in the name of the United States.

(i) As used in this section

(1) In the case of corn, wheat, and oats the term 'processing' means milling of such grain for market or the first processing in any manner for market (other than cleaning or drying) of such grain not so milled, and the term ‘sale' means a sale or other disposition in the United States of such grain for milling or other processing for market, for resale, or for delivery by a common carrier-occurring during a marketing period in respect of such grain. (2) In the case of cotton the term 'processing' means spinning, milling, or any manufacturing of cotton other than ginning; the term 'sale' means a sale or other disposition in the United States of cotton for spinning, milling, or any manufacturing other than ginning, or for delivery outside the United States; and the term 'transportation' means the acceptance of cotton by a common carrier for delivery to any person for spinning, milling, or any manufacturing of cotton other than ginning, or for delivery outside the United States occurring during a marketing period in respect of cotton.

(3) In the case of livestock the term 'processing' means slaughter for market by a purchaser of livestock, and the term 'sale' means a sale or other disposition in the United States of livestock destined for slaughter for market without intervening holding for feeding (other than feeding in transit) or fattening-occurring during a marketing period in respect of livestock.

(4) In the case of corn, wheat, oats, and livestock the term 'transportation? means the acceptance of the commodity by a common carrier for delivery.

(5) Thet term 'sale' does not include a transfer to a cooperative association for the purpose of sale or other disposition by such association on account of the transferor; nor a transfer of title in pursuance of a contract entered into before, and at a specified price determined before, the commencement of a marketing period in respect of the agricultural commodity. In case of the transfer of title in pursuance of a contract entered into after the commenceinent of a marketing period in respect of the agricultural commodity, but entered into at a time when, and at a specified price determined at a time during which a particular equalization fee is in effect, then the equalization fee applicable in respect of such transfer of title shall be the equalization fee in effect at the time when such specified price was determined. If all or any part of this section is held to be unconstitutional by the courts such holding shall not invalidate any other part of the act."

SEC. 7. The first sentence of section 15(a) of such act is amended by inserting before the period at the end thereof a comma and the following: or under section 16 of this act." SEO. 8. Such act is further amended by adding at the end thereof the following new section:

66 FEDERAL COOPERATIVE ASSOCIATIONS

SEC. 16. Authority is hereby granted under the laws of the United States to one hundred or more persons to organize cooperative organizations or associations upon the terms and definitions prescribed in this section, as follows: "(1) Each member of any such cooperative association shall have one vote, and the capital stock of such association shall not vote in its control. Two or more cooperative associations shall have the right to subscribe for all the stock in an association for the purpose of federation, and when capital stock is so held by other cooperative associations, then the vote shall be in proportion to the membership of each association subscribing for such stock and the stock itself shall not vote, and this provision shall apply to the stabilization cooperatives herein provided for.

"(2) The net earnings of all cooperative associations for the purpose of dividend upon the capital stock shall not exceed 5 per cent per annum, but deficiencies in any year may be made up in subsequent years, but the capital stock shall not upon liquidation or otherwise receive any dividend in excess of said sum of 5 per cent per annum.

"(3) All of the earnings of a cooperative association over and above the earnings of capital and the operating expenses shall be held either in surplus or for the purpose of trade dividends. Unless directed by a vote of the membership 25 per cent of said net earnings shall be kept in the business as a surplus for the enlargement, growth, and safety of the business. This surplus may be used to reduce the capital stock upon a vote of the membership. The other net earnings may be distributed back to the members in trade dividends in proportion to the amount of business each member shall transact with the enterprise. In the case where the membership is composed of other cooperative associations the trade dividends shall be paid in the same way to such association and by them distributed to their members as provided for other profits and earnings.

"(4) Cooperative associations engaged in trade and merchandising shall transact their business for cash or its equivalent.

"(5) Individual memberships in any cooperative association having individual members shall not exceed $100 in cost, and memberships of cooperative associations in federated associations shall not exceed $1,000 in cost.

"(6) Cooperative associations shall be composed of individuals who voluntarily join.

"(7) There shall be unlimited membership. No reason shall exclude a person from membership except that his purpose may be injurious to the society.

"(8) Persons who have not sufficient capital to pay for initial stock may be permitted to join the society and they may permit the savings returns accruing from their patronage to be applied to the share for their capital.

"(9) Cooperative associations shall have the right to set off not exceeding 5 per cent of the surplus savings for educational and organization purposes in the field of cooperation.

"(10) That at each inventory depreciation shall be charged off against the property of the society in conformity with sound business principles."

SEC. 9. The Secretary of the Treasury is hereby authorized to issue the certificates provided for in section 9A and to make such advances or loans to the Federal Farm Board as may be necessary to carry out the provisions of section 5A of the agricultural marketing act, as amended. Such advances or loans shall bear interest at not to exceed per cent per annum and shall be repaid in such manner and at such times as the Secretary of the Treasury and the Federal Farm Board, acting jointly, shall prescribe.

SEC. 10. Section 202 (a) of the Federal farm loan act, as amended, is amended by adding at the end thereof a new paragraph to read as follows:

"(4) To make loans or advances to the Federal Farm Board upon the security of the credit or property of the board for the purposes authorized by section 5A of the agricultural marketing act, as amended."

SEC. 11. (a) Paragraph 2 of section 1 of the act entitled "An act to authorize association of producers of agricultural products," approved February 18, 1922, is amended by striking out "8 per cent" and inserting in lieu thereof "5 per cent."

(b) Section 2 of such act is hereby repealed.

[S. 653, Seventy-second Congress, first session]

A BILL To abolish the Federal Farm Board, to provide for the discontinuance of surplus control operations under the agricultural marketing act, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Federal Farm Board created by the agricultural marketing act of June 15, 1929, is hereby abolished, and all authority, powers, and duties vested in the board by such act are hereby transferred to the Secretary of Agriculture. The Secretary of Agriculture is authorized and directed, except as herein otherwise specifically provided, to wind up the affairs of the board, so far as they relate to the surplus control operations of the board and the surplus control operations or other operations of stabilization corporations, at the earliest practicable date, and to provide for the disposal of all commodities held by stabilization corporations; but no such commodies shall be disposed of at a price less than the cost of production at the time of sale, as determined by the Secretary of Agriculture. Any funds received in the process of such winding up shall be covered into the Treasury as miscellaneous receipts; and thereafter the provisions of the agricultural marketing

« Previous Continue »

Books

Farm Relief: Hearings, Seventy-second Congress, First Session