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Senator FRAZIER. Not only the preliminary expenses of making the loan, but he pays the expenses of foreclosure, too.

Mr. TALBOTT. Yes.

Senator THOMAS of Idaho. In all the legislation we have considered here with reference to agriculture, that is one of the criticisms, as I see it. For instance, in relation to the Intermediate Credit Bank, which is a Government agency, let us grant that they are forced to

pay

5 per cent on their debentures. Yet, at the same time, when that money gets to the borrower, it costs him 81/2 per cent. It seems to me that is one of the criticisms of our financial set-ups. While we arrange for some agricultural credit organizations, by the time the money gets to the actual farmer it costs him so much that he can not afford to take advantage of it.

Mr. TALBOTT. That is true. In canvassing the actual farmers, you will find that the Government agencies have been no relief to him. As a matter of fact, they have been just as ruthless in their treatment of him as the commercial sources. In fact, all they did was to set up competition, and in some instances, when they believed that land had some value, there was some little competition as to rates, and so forth.

Now there is not anybody that is in the market to get this land, except at foreclosure. They take it at what they have to take it. A year or two ago there were groups of capitalists that were forming corporations and taking over, at the cost of foreclosure—and even less, in some cases—in our territory, this land foreclosed by the Federal land bank. Of course, there is not anybody looking for land now, and if we do not do something about it, I do not know what is going to become of these farmers.

Gentlemen, there is a human side to this thing. I can understand that perhaps some people on the Atlantic seaboard feel that they should take possession of this land, and I might refer you to the September issue of the American Mercury, in which a very eminent gentleman said that the farmers of this country, if they got one meal a day, would have too much. That may be the attitude of mind of some of our legislators in the Senate and House, that it is time to take the land away from these “worthless” farmers;.that they have no brains, and that they have no business ability. In view of the Socialistic financial help we have given to the bankers, I begin to wonder who has any brains in business.

Senator MCGILL. Who wrote that article?

Mr. TALBOTT. H. L. Mencken. You will find it in the September issue of the American Mercury magazine. I can quote it almost verbatim. It is an outrage and an insult to the people who made this country what it is.

Who carried the flag in the Revolution? The farmer boys did. Why, I resent bitterly such statements by an insolent cur that could not make a living himself, out of this soil if he were given a million acres of it. I resent such a statement as he made in the American Mercury magazine, and I think it ought to be the subject of an investigation by the Congress of the United States. I come from the farm myself, and I am proud of the people on the farms. Again, I am ashamed of them because they have stood for so much from the rest of society in this country.

It is about time that the people who are the directors of this corporation, the United States Government, took some cognizance of the situation out there on those farms, because we are sitting on powder and dynamite. Those people will be the worst rebels in the world if they are dispossessed of their homes much longer, and at the rate at which they are being dispossessed now, I can see revolution. The worst fighters in the world are those who have once had a home, and have had high aspirations, and have seen everything slip away from them, as has been testified to here—old, gray-haired fathers and mothers literally by the thousands are being turned out into the streets, wondering where they are going from there. I see it every day.

Í shall be glad to answer any questions. I do not want to take up more of your time by making statements, because they are duplications, more or less, of facts you gentlemen all know.

Mr. MILO RENO. With respect to this article of Mr. Mencken's in the American Mercury Magazine, the question might arise as to whether or not that was justified in view of the intelligence of the American farmers.

Mr. TALBOTT. To some extent that is true, and perhaps it is a fine thing that he uses the terms he does. He migħt “ blister” them until they revolt. That is one justification.

Senator SMITH. Is not the attitude of the farmers more a question of misplaced confidence than a lack of intelligence ?

Mr. Reno. I should say, Senator, it was inactive intelligence.

Mr. THATCHER. I think you should tell the committee, Mr. Talbott, about the work that your organization has been doing of a charitable nature, in feeding and clothing people in 41 counties in Montana and North Dakota for the past five months.

Mr. TALBOTT. If it would be of any benefit to the record, I would be only too glad to.

Senator FRAZIER. That would be very good. I know about that situation.

Mr. TALBOTT. We have 10 counties in my State that, unfortunately, had no rain this year and very little last year.

Senator FRAZIER. You mean 1931 ?

Mr. TALBOTT. That is right; this is 1932. They had no rain in 1931 and very little in 1930. There are many beautiful homes in that section, well improved. However, practically all of them are mortgaged, because of low prices over the last 10 years.

The industrial East says that the panic dates from 1929. We farmers know that it dates from 1921—and how we know it!

They have had no crop in 10 counties of our State, and in about 27 to 30 counties of Montana, which are almost entirely stripped bare. Along the Red River Valley, we have a tier of counties in my State that had an enormous potato crop. I think some of them testified here yesterday before this committee that they would not sell for enough to pay for transportation. Our organization undertook to take care of the transportation. We sent people who paid for their gasoline and oil down to the Red River Valley, and they went among our members and got potatoes and vegetables, loaded them on cars, and sent them into that territory, to the amount of about 200 carloads of vegetables and potatoes. Through our organization headquarters at St. Paul, we moved part of these carloads of produce from Wisconsin out into that area. We are now grinding 50,000 bushels of wheat and distributing it free to the farmers.

Really, it seems like an insult to offer them free food in a territory where they have produced, literally, millions of bushels of the best wheat ever grown in the world, over a period of years. If these people had had such a bill as this in effect five years ago, many of them would be there with their granaries full of wheat, with a surplus to carry them through such times as the present. They are now objects of charity that their organization must feed free with vegetables, with flour, and other commodities. Thank God, that territory is underlain with coal that they can go out and strip with Fresnoes, and dig themselves. Otherwise, their problem would be ten times as serious as it is. This is all in a country where they have some of the best homes in America. Those people have been reduced in the last 10 years to such financial condition that on the first stroke of adverse natural conditions, they are objects of charity.

I would like to see a bill like this go through the United States Congress, so that those people could be self-supporting and meet such a situation as that.

A VOICE. We have had to clothe them and feed their turkeys.

Mr. TALBOTT. That is right. We sent six carloads of clothes into that territory, literally hundreds of thousands of pieces, and we are continuing to send it. We put $40,000 worth of mixed feeds in that territory to feed out their turkeys, so that they could get some selfsupport for the winter out of their fowls.

Numberless things of that kind have had to be done, because we have reduced these people to absolute penury through a system of ruthlessness, as I see it.

If there are any questions, I would be glad to answer them.
Senator FRAZIER. Thank you, Mr. Talbott.

Mr. SIMPSON. We will ask Mr. E. H. Everson, president of the Farmers Union of South Dakota, to make a statement.

STATEMENT OF E. H. EVERSON, PRESIDENT FARMERS UNION OF

SOUTH DAKOTA

Mr. EVERSON. Mr. Chairman and gentlemen of the committee, I am the State president of the Farmers Union of South Dakota. I pioneered in South Dakota 26 years ago. I filed on a homestead in the Rosebud Reservation. I have lived on this farm ever since, so I know something about pioneering in that new country.

South Dakota is somewhat different from some of our other States this year, because of the fact that the continued drought covered a very large section of the State-in fact, a large part of it, only a comparatively small part of the State having raised a crop—and also due to the fact that a large section of our State was seriously infested with grasshoppers.

Since the deflation, as was told you by Mr. Talbott, the purchasing power of our products has gradually declined. In fact, it declined very rapidly, to begin with, after 1920, because the big crops that we produced to help win the war, at the highest cost of any crops we ever produced—because the cost of material and everything was high at that time-destroyed our ability to meet our obligations through that deflation, because our corn went down from $1.60 to 20 cents a bushel. We had a big crop. As I remember it-I think it was the year 1920—they burned hundreds of thousands of bushels of corn in South Dakota, because it was cheaper than coal.

The situation, as I see it, is this: We are suffering, of course, from the effects of the war. We financed the war on credit, on the credit of our people. We sold bonds. I spoke at a meeting this summer, a large gathering at a picnic. Incidentally, I wanted to find out how many of those people had purchased Liberty bonds. About half of these four or five thousand men who were present had purchased Liberty bonds. I said, “How many of you have those Liberty bonds ?" One young lady 17 years old happened to have a bond left. Upon investigating, or inquiring into the matter, I found that she was given this bond with the understanding and agreement that she must keep it until she was 21 years of age, and she had 4 years yet to go.

Those bonds were disposed of because of that deflation, destroying our purchasing power, and our inability to meet our obligations, at around 80 to 90 cents on the dollar.

Since then, those who invested in those bonds have been tax exempt, and it just seems to me that they are trying to take the total cost of the war out of the production of new wealth in the country, making it impossible for those who produced the wealth to continue on the farm.

I have heard and read some statements made that we must put some-steel beams in our financial structure. I firmly believe from my experience, that what we need is a concrete foundation under our basic industry, agriculture, to restore the purchasing power of the farmers, and thereby stabilize all industry. "I firmly believe that under present conditions our farmers are all going to lose their homes unless something is done.

Something was said here yesterday about gold. In the State of South Dakota, we have the greatest gold mine in the world, they tell

I understand that about $8,000,000 of gold was taken out last year.

Senator THOMAS of Oklahoma. How much?
Mr. EVERSON. Something like $8,000,000.

Senator THOMAS of Oklahoma. That is a mistake. There is only eleven billions in the world.

Mr. EVERSON. $8,000,000; something like $8,000,000. I think that is correct. That is what I was informed.

The question arises about security. It seems to me that the land itself ought to be the best security on earth, because it is the earth itself, and if our land is not security for the obligations, then it seems to me we are in a hopeless condition.

I have a statement here that I got from a farmer in about the richest section of our State, that I would like to read into the record. This genleman years ago, during the war or immediately following the war, sold hogs at $19.75 a hundred net. That was the amount he received. He says: Ten days ago I sold 30 head of hogs at $2.75 a hundred net.

That is, after taking out the cost of marketing, freight, and so forth.

My 30 hogs brought, in 1919, $702 net. Now they gave me $78. In other words, I got nine times as much for my hogar in 1919 as I got 10 days ago. I paid my taxes with that amount of money both years.

us.

That is about the amount of money required to pay his taxes. If I paid my 1931 taxes with 1919 hogs, it would cost me $6,066.

That is what it would cost him to pay his taxes in 1919, and now his taxes are $674. In other words, they have multiplied his taxes by nine through depreciating or decreasing the purchasing power or the debt paying power of his commodity.

We farmers must pay our debts in the commodities that we produce, and we can not meet these obligations on that basis. I believe that we will have to do two things, perhaps. We will have to reduce the size of this load that we have placed upon the farmer, or else we will have to increase his power to bear it, and perhaps both. I think we will have to do both. I think we will need to make money more available. I believe that money increases or decreases in proportion to the volume in circulation, and just as the lifeblood in the human body is retarded in circulation, it affects the condition of that body. I think that this bill will help to remedy the situation because it will lighten that load that now can not be borne by the farmers.

I have some other data here. I have just a little data here to give you an idea of conditions.

Here is a letter from Spink County, S. Dak. A careful survey of the mortgage foreclosure sales records was made, as shown in the office of the sheriff of Spink County. It reveals that during the years •1929, 1930, and 1931 the sheriff held and struck off at public auction a total of 307 mortgage-foreclosure sales. Careful examination of the records also shows that the total number of acres thus sold within the county of Spink, represented by these sales, was not less than 69,183 acres.

Senator THOMAS of Idaho. What was the class of land sold in those sales?

Mr. EVERSON. Agricultural land.
Mr. TALBOTT. It is one of the finest counties in your State.

Mr. EVERSON. Brown County is the best wheat county, they tell me, in the United States. I have been told that. I do not know whether that is true, but I think that is about right.

These figures include farm lands only. The foreclosure sales of property within cities and towns have been omitted.

For the three years previous to this time there were only 150 foreclosures. That should give you an idea of the increase in the number of foreclosures that have taken place.

With reference to money, what is money? A little boy asked his father, What is money? Then the question arises, What is the Government?

Government is organized society. When an individual, or a group of them, renders a service to society, they get a duebill from society for services performed or materials furnished. When society renders services to individuals or groups of them society redeems these duebills. When duebills are plentiful there is not so much incentive for individuals to serve society as when duebills are scarce. chasing value of these duebills is determined very largely by the amount of them in circulation. I think that is true.

I do not think this, in itself, will solve the problem, but it will go a long way. It will inspire those farmers, as was said here before,

The pur

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