cash sales made at that price. The market price was a little below that.

Now let us consider the situation. At that time 1,000 bushels of wheat would have paid off an indebtedness of $3,890, and I say to-day, without fear of contradiction, that 10,000 bushels of wheat, considering cost of production, will not pay off such an indebtedness. And the most of the farm indebtedness was created during that period of inflation.

Your own Secretary Hyde has told us that in 1930 the cost, and I think I am correct in my figures, of producing a bushel of wheat was $1.24. And we were selling our wheat far below that price.

Some farmers at Hankinson, N. Dak., who marketed No. 3 wheat early received as low as 28 cents a bushel. That is why in one county alone-McLean County, N. Dak.-there are seven pages of tax sales.

And let me tell you this: People do not permit their homes to be sold; they will not lose their homes and farms when they have money that they are hoarding. I think there has been a false impression along that line given to the public. And it is not correct, generally speaking.

Oh, yes, it may be true that here in Washington and perhaps in a few other cities, where there is such a thing as a medium of exchange, that there is a little hoarding here and there. But I will guarantee that there is nothing to be hoarded in North Dakota and South Dakota and in many other States. It may be true that a few of the larger banks or trust companies claim that they have so much money they do not know what to do with it. But the reason that they do not know what to do with it is that the purchasing power of the farmer has departed, and they say they can not and they will not loan him a dollar.

Why, gentleman of the subcommittee, those banks and trust companies would not loan a farmer a dollar in silver if he brought in a dollar in gold without their first having it assayed. That is one reason for our present economic condition.

Another reason is that the banks are afraid to loan money to farmers, and while they have credited on deposit somewhere between forty-four and fifty-two billions dollars, yet there is less than $1,250,000,000 of actual money in all the banks and trust companies. There is no use to camouflage these things. There is no benefit rendered by telling us that prosperity is just around the corner. Why, gentlemen of the subcommittee, we have heard that story so much that we are living in roundhouses because of our ever looking around the corner for the so-called prosperity.

I say to you gentlemen that prosperity can not come back unless and until there is purchasing power again in the hands of 6,000,000 farmers who must support 30,000,000 of our population. Prosperity can not come while there are 28,000,000 people going without enough to eat. Why? If present conditions continue and the present lack of medium of exchange continues, it will be but a short time before one old hen will produce a surplus of eggs in the city of Chicago.

I want to explain what I mean by the terms "overproduction and "underconsumption." In the city of St. Paul recently somebody provided a Thanksgiving dinner in a certain restaurant for the hungry. The doors were opened at 11.50 a. m., but by 9.50 a. m.

a line had begun forming, and there were 723 men, women, and children in that line at the opening of the doors. And that is not. the important part of the story. After they had finished eating it was found that they had consumed over 5 pounds of food apiece. In other words, those 723 people ate more than 3,000 people who had money with which to pay for their food.

And so it is that I contend we have a question not of overproduction but of underconsumption. There can be no overproduction so long as there are hungry people all over our land.

And again right here I might state to you gentlemen of the subcommittee that there is not enough money for the conduct of business, because we have again become Indians in this land of plenty— a race of barter and trade. There are standing advertisements offering commodities in exchange for foodstuffs. For instance, offering automobile tires in exchange for potatoes. Some man has automobile tires, but can not get the money with which to buy potatoes. Another man has potatoes which he can not turn into money and he needs tires. So the one man exchanges automobile tires for the other man's potatoes.

The

Let me give you another illustration: There is a Lutheran college in Minnesota that is exchanging scholarships for wheat. college has its organization set up and is prepared to educate the youth of the country, but they have no money, and having some wheat are trading it Indian fashion for education.

I understand that some of my friends from Kansas are here to-day, and perhaps they will be able to verify what I am going to say. I saw a newspaper report that they have not enough money there to pay marriage fees any more, so that they are paying the preacher with a few sacks of wheat to perform the marriage

ceremony.

And over in West Virginia I read that a young couple wanted to get married. They did not have the dollar with which to buy the marriage license. The young lady had a basket of grapes. So the prospective bride and groom dickered with the clerk of the court to get a marriage license. He had the right to issue the license, but wanted to get his fee for so doing. They did not have the dollar. He saw the basket of grapes in the hand of the bride to be. So they struck up a trade, and the basket of grapes was handed over to the clerk for a marriage license.

I say to you gentlemen that there is not enough money in this country with which to do business. There are from time to time many erroneous statements given out about the amount of our money in circulation.

Before the war there was about $4,100,000,000 on paper. I have gone into that subject somewhat, and I believe it has been said that there was $1,000,000,000 in foreign countries. We had a big bunch in Mexico and a lot in Cuba and in other foreign countries. Senator Ladd told me he saw hundreds and thousands of dollars stacked up in vaults in Russia. I mean hundreds and thousands of dollars of United States currency. So that there was not over $3,000,000,000 in circulation, and that was increased to approximately $5,700,000,000, representing a per capita circulation of $53.01. We were told to buy Liberty bonds and to grow more agricultural products. We did. And they kept on increasing the circulating medium. The

banks for instance, your local bank-would take your note and ⚫would take Tom, Dick, and Harry's note and guarantee payment, and with the proceeds of those notes we bought $22,000,000,000 of Liberty bonds, we bought new homes.

And what did it all amount to? When we got through with the war we were sailing along beautifully, under what was called the blue sky of prosperity, and everything seemed nice and lovely. And then all at once deflation began to take place.

Why, gentlemen of the subcommittee, if things had gone on that way for a while the farmer would have paid for the entire war. But the farmer has broken down and he can not do it. He has no money. He can not sell what he produces for cost of production. His mortgages are coming due, and debts have piled up, and what is to be the end if the farmer is not given much-needed relief?

This Frazier bill is intended as a remedy for that situation. First, by reason of the United States Government refinancing the farmer. And I wish to suggest to Secretary Hyde that we intend to refinance the farmers of this country the same as the bankers are being refinanced in the case of their foreign bonds. But with this difference, that we have land to put up as security, while they have $2,000,000,000 of worthless paper to put up, foreign bonds already defaulted and worth little or nothing. As a matter of fact there may be about $2,000,000,000 more if we continue in the present condition of world depression.

And so it is that I say, this bill is intended to refinance the farmer. The object of the bill is, that the United States Government shall refinance the farmer at 112 per cent interest. Originally we had the provision in the bill of 212 per cent interest, but we discovered that the Federal reserve banks were making loans to banks holding watered securities, not growers of food products, at 12 per cent.

We are not criticizing them for it, but we feel that in view of that fact we are now entitled to come with an appeal to the Government for the relief of 6,000,000 farmers, representing more than 30,000,000 of our population. We say we are just as good as they are, and if they are getting money from the United States Government indirectly through the Federal reserve banks at 12 per cent, why can not the farmers get money in the same way?

We may not understand the banking business, but we do understand this much: We do not see why there should be any discrimination. We do not see why New York bankers should get money at 112 per cent to bolster up thirty-five to fifty-six billions of dollars of worthless paper that they sold to the world at the height of prosperity, and the farmer, who grows things that everybody considers are necessary for the people to eat, should not get money on the same terms. So we feel if the New York bankers are to get money at 112 per cent, the farmers of the Nation are entitled to the same rate of interest.

Therefore this bill provides that the United States Government shall refinance the farmer at a rate of interest of 12 per cent and 12 per cent amortization on the principal, which shall be secured by first mortgages on farms, on lands that produce things essential to the human race, products that have been considered esesntial to the welfare of the people ever since the world began.

It has been well said, and we believe it has been truly said, that the most important element in this Nation of ours is the farmer. They represent 6,000,000 families or 30,000,000 of our population. If the Government can do this for the bankers, why not do it for the farmer? If the Government can do it on the security of those bonds, why not do it on the security of farm lands? Why I understand that the Treasury Department recently made a ruling that the banks could carry those securities at face value, whereas they knew that some of them were not worth the paper they were written on. Then why not grant the same relief to the owners of agricultural lands, to the people who are trying to produce things that we live on, the people who produce the things that we wear, the things that we all must have if this Nation is to continue healthy and prosperous.

Now, then, the question arises: Where will the Government get this money? To begin with it will not get it, but we provide that the Government shall take these bonds, and if there is no ready sale for them it shall present them to the Federal Reserve Board, and it shall issue Federal reserve notes, dollar for dollar, secured 100 per cent by these mortgages, in place of the 40 per cent gold

reserve.

We feel that a 100 per cent mortgage on a farm is better security than 40 per cent gold reserve, because if we go out into the desert and put up 40 per cent gold in one place, and a farm that produces all things we eat in another as security, and then ask the man who has several millions of dollars to loan whether he would rather stay in the desert with the gold or on the farm that produces the things he eats, he will take the farm as his security.

And so it is in the long run farm land is better security than gold. We can not eat metal. After all it is only useful to stamp as money; and when it comes to the matter of money we are not interested whether it be gold certificates, or silver certificates, or Federal reserve certificates.

This bill provides, as the subcommittee knows, that the United States of America shall order the Federal Reserve Board to issue Federal reserve notes, secured by first mortgages on farm lands. Now, then, after that has been done, if the United States Government will do that, and will put two or three billions dollars of actual money out, it will create a new purchasing power among our agricultural people, and every dollar will do its full part toward paying off at least 10 obligations.

ness.

This bill is only for existing indebtedness, not for new indebtedThat is important to keep in mind, it is to take up existing indebtedness by means of putting two or three billions of dollars in circulation. Not at the top where it is not needed, not to gamble in foreign bonds, but to protect the homes of these 6,000,000 farm. families.

And what will be the result? They will once more get their heads above water; they will regain their hopes and aspirations. They will again have the same feeling that our fathers had when they went out into the wilderness and amidst great hardships and many tribulations made it bloom like the rose; when our fathers filed claims on those lands they were filled with high hopes and aspirations, and they were willing to undergo the necessary hard

ships and trials. But now when there is a mortgage on your farm that you can not meet, and taxes past due that you can not pay, and when by the greatest effort and the hardest toil you bring forth from the soil what is necessary to eat and sustain life to feed the world, and yet you can not sell it at a profit, no, not even at the cost of production, then how are you going to exist?

We are faced with a condition of underconsumption instead of overproduction; with the entire agricultural fabric crumbling to pieces, not only in America but throughout the world, it is high time that the United States should adopt a remedy and put into effect a measure of relief that will do some good to the American farmer.

Let us assume that you will put out there two or three billion dollars. Then the rest of us will have plenty of money to use to buy bonds at 112 per cent interest. There is to-day not over $10 in actual circulation among the people. I am not talking about banks or trust companies or international bankers, but I am talking about the people of the United States of America. There is not $10 of actual money in circulation in my State, among the people of our State and the people of this Nation; I mean not over $10 per capita as compared with $31.18 on June 30, 1865. There is not one-third as much money in actual circulation now as there was then.

As a matter of fact we have been forced to become a nation of check kiters. And that condition has been brought about because there has not been for years enough money with which to do business. And every dollar that is in circulation is deposited and redeposited in the banks, and continually checked out again; and of course most of the people have no money to deposit. They borrow and put down as depositors.

And so it is that I say, gentlemen of the subcommittee, how are these hardworking people, stricken down by an economic condition that they can not meet, to survive and take care of their families? They must be helped so that they can go on, with some hope of the future, sustaining themselves and their families, and continue to grow and sell the things that the people must have if they are to live. We are confident that the best interests of the whole of the American people dictates that the farmer must have enough money to carry on and continue production, and this bill provides for just that. It will save his home and farm.

Now, let us go a little further: The farmer was made the shock absorber of the economic breakdown. The platform of the administration promised that it would put the farmer on an equal basis with other industries. All right, we accept that promise, and we are here now simply asking that the administration make good that promise.

Now, we will take the Federal reserve bank. That is for all practical purposes a private institution. Its stockholders, member banks, get 6 per cent interest or dividends, and those are virtually guaranteed to them. Uncle Sam prints Federal reserve notes and hands them to the Federal reserve bank at 2 per cent of cost of printing, not interest. When Uncle Sam gets $2,000,000,000 in the hole or red, as he is now, then he borrows his own money back and pays interest on his own money. If we can do that for the Federal reserve then why not do it for the farmer at 11⁄2 per cent interest?