My chief income on the farm is milk and eggs. I have 300 hens, and those 300 hens for the last 5 years have made far more money, in the whole 5 years, than all those 12 cows that have to be milked twice a day and fed and cared for. As I told you, I have cows that I am not ashamed of. I am not ashamed of them.

Mr. SIMPSON. I saw them.

Mr. YOUNG. You saw them.

Senator THOMAS of Oklahoma. We up here in Washington believe that the salvation of the country is for the folks in town who have nothing to do, to move to the country and get a little farm. Is it not a fact that if they did that they could not produce enough on their farm to pay taxes?

Mr. YOUNG. Yes.

Senator THOMAS of Oklahoma. So that is hopeless.

Mr. YOUNG. And another thing, three-fourths of those fellows know nothing about farming, and it would just be so discouraging for them that it would create a greater lack of hope than in the city. In fact, they would not do it, because they would say "Here, if business picks up in the next two or three years, I want to be here to get my job back."

Senator THOMAS of Oklahoma. There is one other fact I want the record to show, if we can agree on it-and I think we can. The papers are carrying now a lot of information, or would-be information, relative to the general condition throughout the country. Our local paper carried the story, I think yesterday, that the States, the counties, and the cities, and subdivisions owe a total bonded indebtedness of $40,000,000,000.

Mr. YOUNG. The States?

Senator THOMAS of Oklahoma. All the States, the Federal Government, the municipalities, counties, and school districts.

Mr. YOUNG. Why didn't they state the truth? The best economists that we have state distinctly that the total indebtedness of the country in general is $150,000,000,000.

Senator THOMAS of Oklahoma. This is just public indebtedness. It does not embrace loans to the banks, around $40,000,000,000. It does not cover corporate indebtedness, which is around $50,000,000,000. You are correct in your statement. This is the public indebtedness that the people owe $46,000,000,000. Do you think the people can pay that indebtedness under the present system, with the present value of the dollar?

Mr. YOUNG. Absolutely not. I am going to make this prediction. I am an old cuss. This problem is never going to be solved-this economic problem for this country is never going to be solved until finally the slate is wiped clean of all indebtedness.

Senator THOMAS of Oklahoma. I was going to ask that question next. Unless something is done, do you see any alternative to a general repudiation of all indebtedness?

Mr. YOUNG. There is no alternative, and the fact is that that has been practiced in history many times. I think it was Edward III, when the debt of England got so great, who just wiped it off the map entirely.

Senator THOMAS of Idaho. Did not Germany and France, by depreciating the currency, wipe out private debts since the war? Mr. YOUNG. Yes.

Senator THOMAS of Oklahoma. Germany wiped out her entire indebtedness, and France wiped out four-fifths of her indebtedness by depreciating the franc from 19 cents down to 3.91. If something can be done to get the holders of these $150,000,000,000 of securities to realize that they stand a chance to lose all, it might be that they would cooperate to bring about some kind of relief.

Mr. YOUNG. If they would listen to me about five times out in the country, if I could not convince them, their heads would have to be pretty thick.

Senator FRAZIER. There are a lot of individuals, business men and others, who have repudiated their debts through bankruptcy methods.

Mr. YOUNG. And the bank repudiates its indebtedness just as soon as it is forced to close its doors by the bank examiner. Senator FRAZIER. It certainly does.

Mr. YOUNG. If our farm does not satisfy the mortgage they can go on and get a judgment against us besides. That is the most damnable thing that was ever instituted.

Senator FRAZIER. And they do not fail to do it, either.

Mr. YOUNG. They do not fail to do it.

Senator FRAZIER. Your only alternative is to go through bankruptcy in a case of that kind, if you are going to have any chance to start over again.

Senator THOMAS of Idaho. I think, on the subject of depreciating the value of currency, Germany, France, and England could depreciate the value of the mark or the franc rather easily, but in this country, if you will look at your obligations, you will find that practically every obligation you have is payable in gold. I think as much as 80 or 85 per cent of our obligations are payable in gold.

Senator THOMAS of Oklahoma. I would like to get some figures on that, Senator.

Mr. YOUNG. I would like to ask-you are an intelligent audience here what damned excuse is there for making gold the basis of money?

Senator THOMAS of Oklahoma. That gets into another subject.

Mr. YOUNG. It is nothing on earth but a relic of barbarism, handed down to us throughout the ages-a relic of barbarism, I say, and I mean just what I say. Why should we have gold as the basis for money in this country?

Senator THOMAS of Idaho. I am not making any defense of the gold standard. I am simply stating the condition of our contracts, our debts.

Senator THOMAS of Oklahoma. I sent a letter to Ogden Mills yesterday asking that very question. As soon as I get an answer I shall be glad to put it in the record-what percentage of the public and private indebtedness is based upon gold of the present weight and fineness.

Senator THOMAS of Idaho. I think that is an important matter. Senator THOMAS of Oklahoma. If I ever get a reply, I shall be glad to put it in the record.

Mr. YOUNG. That is too much for me.

Senator FRAZIER. Mr. Simpson has a telegram to put in the record.

Mr. SIMPSON. I just received this a few minutes ago, and it is right in harmony with the statement that has been made by Mr. Young, of Wisconsin. [Reading:]

Hon. JOHN A. SIMPSON,

Mangum, Okla., February 1.

Care Senator Elmer Thomas, Senato Office Building:

City View local and the Greer County Farmers Union send greetings and wish to stress the fact that if nothing constructive is done during this session of Congress to relieve distressed condition of agriculture, they can not blame the farmers if they see red, turn bolshevik, and refuse to be further hypnotized. JAMES H. HART, Secretary.

That is the feeling.

Senator FRAZIER. The hearing will stand adjourned until 10 o'clock to-morrow.

Mr. SINCLAIR. Mr. Chairman, I just wanted to say, for the benefit of Mr. Simpson and the rest of the gentlemen here, that I have, at the request of Senator Frazier, introduced a companion bill to this in the House. Although it is a farm bill and deals with agriculture entirely, under our rules there it did not go to the Agriculture Committee, but it went to the Banking and Currency Committee. The Banking and Currency Committee, as you know, is overworked, with the President's reconstruction program and the various bills that are involved, and I could not get from the chairman of the committee a statement as to any time that he would say he would give a hearing. He said not for a couple of weeks. I told him about this delegation coming down here, and that we were anxious to have a hearing while the men were here, but he said it was absolutely impossible. They were billed up ahead with other matters.

Mr. SIMPSON. They are too busy with the international bankers. Mr. SINCLAIR. They are too busy with the international bankers, perhaps. I do not know. They could not give us a hearing. I will say this, that the chairman of the committee is friendly to agriculture.

Mr. SIMPSON. We will get one later.

Mr. SINCLAIR. He would give a hearing as soon as he could.

Senator FRAZIER. We will stand adjourned until 10 o'clock tomorrow morning.

(Whereupon, the subcommittee adjourned until to-morrow, Wednesday, February 3, 1932, at 10 o'clock a. m.)

TO ESTABLISH AN EFFICIENT AGRICULTURAL CREDIT

SYSTEM

WEDNESDAY, FEBRUARY 3, 1932

UNITED STATES SENATE,

SUBCOMMITTEE ON COMMITTEE ON
AGRICULTURE AND FORESTRY,
Washington, D. C.

The subcommittee met, pursuant to adjournment, at 10 o'clock, a. m., in room 424, Senate Office Building, Senator Lynn J. Frazier presiding.

Present: Senator Frazier (chairman of the subcommittee), Thomas of Idaho, Smith, McGill, and Hatfield.

Present also: Senators Thomas of Oklahoma and Nye of North Dakota.

Senator FRAZIER. The hearing will come to order.

I want to state briefly, for the benefit of those who were not here yesterday, that this hearing was called on Senate bill 1197, which is a bill to provide a means of refinancing the farmers at a low rate of interest. The point that those of us make who are in favor of this bill, is that it is the one means of refinancing the hundreds of thousands of farmers and helping them to retain ownership of their land, which, under the present system, they are losing rapidly. We believe that it would be of great benefit to the agricultural districts in general.

I want to read one or two telegrams I have received. The first one is from Governor Olson, of Minnesota :

Impossible for me to leave Minnesota. Am sending Gaarenstroom, who will appear as official representative of the State. Good luck.

FLOYD B. OLSON, Governor. I have another telegram from A. J. Olson, president of the Minnesota Farm Bureau:

Minnesota Farm Bureau favors Frazier's farm relief bill. We passed such resolution at last two annual meetings. If farmers could be refinanced on such plan as your bill provides am certain that depression recovery would come fast. The farm is the starting point. All other groups would be benefited if the farmers are on good footing. Sorry can not be there.

A. J. OLSON, President Minnesota Farm Bureau.

We have with us this morning Mr. Paul Bestor, chairman of the Federal Farm Loan Board. He tells me that he has some other work that he must attend to a little later. I am going to call on Mr. Bestor now for any statement he wishes to make in regard to this bill.

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