Mr. ROGERS. There is one of two things that is going to have to happen inside of the next two or three years: Either the farmers are going to be placed in the position where they can receive a decent price or a price equal to cost of production for the food products that they produce for the balance of society, or you are going to have a different class of people tilling the soils of this country.

Senator THOMAS of Oklahoma. What is the farmer going to do, I mean the present-day farmer, when that time comes? Will the farmers be converted into a different class?

Mr. ROGERS. The farmer will be forced into a different class of people. I would like to call your attention to some of the corporations that are being operated in the United States and producing foodstuffs.

Senator FRAZIER. You mean corporation farms?

Mr. ROGERS. Corporation farms that are being used in the producing of foodstuffs. You will find on those farms the class of people that come from Russia, Mexico, and Japan. You will find that it will be impossible for an American farmer, maintaining the standard of living that we like to maintain and have maintained, to operate a farm along the line of one of those corporations, without lowering the standard of living of the producer down to the level with those of Russians, Mexicans, and Japs.

There is one of two things that is going to happen: Either you are going to have a class of farmers out here owning their own homes, making a good class of citizens, or you are going to have a class of people tilling the soil that will be made up of the same class that is operating these corporation farms.

Senator THOMAS of Oklahoma. You think, then, that the presentday farmers will have to compete with the class that you have just mentioned?

Mr. ROGERS. Absolutely; and they will have to lower the standard of living down to where those Russians, Mexicans, and Japs are living, if they stay on the farms and produce in competition with that class of labor.

Mr. SIMPSON. Mr. Rogers, do you happen to know how many corporation farms there are to-day in the United States? Mr. ROGERS. No; I do not. That is available here. Any Senator

or Representative can get it.

Mr. SIMPSON. I happen to know how many, and there are over 10,000 corporation farms in the United States to-day.

Senator FRAZIER. You mean corporation farms, farms that have been foreclosed by big corporations or group of corporations and then put in under one overseer and run as a big farm?

Mr. SIMPSON. I got this at the hearing of these economists in Chicago. There are over 10,000 of those corporation farms in the United States, running from an 84-acre one that has 50,000 laying hens on it, up to 300 acres of ranch corporation farms.

Senator THOMAS of Oklahoma. Is it not a fact that one of the high officials recommended that system as a remedy for the farm situation?

Mr. SIMPSON. Yes, sir. It has been stated by heads of governmental departments that the small farm is not an economic unit of production of farm products.

Senator FRAZIER. Have you any report as to the success of these so-called corporation farms during 1931?

Mr. ROGERS. I have no report on it on their success, but there are no farms that have been operated in any way in the State of Iowa or any of the Middle Western States but what would show a loss in their operations during 1931.

Senator FRAZIER. I think you are correct on that. Until 1931? Mr. ROGERS. Until 1931 the corporation farms had been making a little money, according to their figures.

Mr. SIMPSON. 1930 they just about broke even, and 1931 they were bound to show a big loss.

Senator FRAZIER. Yes.

Mr. SIMPSON. Before 1930 they made a little money, but 1930 they just about broke even, and 1931 a big loss.

Mr. ROGERS. I wish I could impress it on the members of this committee and on the Representatives and Senators from the various sections of the Middle West just how serious the farmer is looking at this situation now. If their Senators and Representatives fail to try to get certain legislation passed, such as the Frazier bill and some other legislation that will be proposed, I am afraid that those Senators and Representatives are going to have a hard time to come back down here to Washington representing the people. I think they are more serious to-day than they have ever been in their lives.

Senator FRAZIER. Mr. Rogers, you referred to Iowa as the greatest agricultural State in the Union, and that is conceded by the people of Iowa at least. But what I want to bring out: You in Iowa have practiced diversification of farming probably more than any other State in the Union?

Mr. ROGERS. I think to a greater extent; yes.

Senator FRAZIER. You have raised hogs and corn and cattle and grains and everything else that can be produced there.

Mr. SIMPSON. Dairy and poultry products.

Senator FRAZIER. The people of fowa also boast that they raise more food products according to their area in square miles than any other like area in the world, and I think they can probably bear that out. They have made a wonderful record in their line of diversification, and so forth. I remember some three or four years ago looking up the record in the Agricultural Year Book and it gave Iowa as first in the production of corn, first in hogs, first in poultry and eggs, first in horses, second in beef cattle, third in milch cows, and first in farm mortgages.

Mr. SIMPSON. And first in Republican votes.

Senator FRAZIER. I failed to say that that was several years ago, perhaps.

A VOICE. That is Hoover's birthplace.

Senator FRAZIER. I just mention this, Mr. Rogers, to show that even though the farmers have diversified as they have been urged to do by the Department of Agriculture and our State departments of Agriculture and all the other agricultural experts, to diversify and raise all different kinds of products, so that we would not have all our eggs in one basket, yet in Iowa, where they have diversified more than any other place, they have the largest percentage of farm mortgages of all the States in the Union.

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Mr. ROGERS. The average farm mortgage in Iowa is a little over $65 an acre, as given by the economists.

Senator FRAZIER. Yes. You not only have the largest amount per acre but you have the largest amount. At the time I loked it up there was practically one-twelfth of all the farm mortgages in the United States in the State of Iowa.

Senaor MCGILL. You mean $65 an acre on the average of the farm land all over the State?

Mr. ROGERS. No. There is about 67 per cent, or maybe 60 per cent, of the farms that are mortgaged out of the 214,000. The average mortgage per acre as given here is a little over $65 per acre. Senator MCGILL. Of the land mortgaged?

Mr. ROGERS. Yes.

Senator MCGILL. And about 60 per cent of it is under mortgage. Senator THOMAS of Oklahoma. The land that is mortgaged would be an average of the land of the State, don't you think?

Mr. ROGERS. I would say so; the land that is mortgaged would be an average of the land of the State; yes.

Senator THOMAS of Oklahoma. Yes.

Mr. ROGERS. Yes; I would think so.

Mr. HERMAN D. EILERS (South Dakota). Mr. Chairman, I would just like to say that I read something on that. I have the paper at home. I think I might be able to furnish it if you needed it. They said what a wonderful thing corporation farming would be; that they would not need all these little farms scattered all over; that all you would need would be a warehouse and delivery truck. This truck would take provisions out to the farm and gather up the produce, and the farmer could work from Monday morning till Saturday night and would not need an automobile to run around in. Senator FRAZIER. Anything further, Mr. Rogers?

Mr. ROGERS. I think not, unless there are some questions, Mr. Chairman.

Senator FRAZIER. Any other questions? I think that is all. Thank you, Mr. Rogers.

Do you want to make a statement, Mr. Howard?

Mr. T. E. HOWARD (Colorado). I would just like to say to the committee, Mr. Chairman, that one of those corporation farms exist in the Arkansas Valley of Colorado, consisting of over 7,000 acres. A year ago they imported 300 Filipinos in there. They placed them 20 in a shack and housed them that way. Bankrupt farmers and their sons who were looking for work marched on one of the houses one night with their shotguns, and the 20 Filipinos that happened to be in that house resigned from the positions as employees of this great corporation farm.

Senator FRAZIER. Who is your next witness?

Mr. SIMPSON. Mr. E. E. Kennedy of Illinois.

Senator MCGILL. Just a moment. Now, with reference to corporation farming, there is only one way to prevent that, is there not, and that by act of the State legislature that will prevent an authorization for such a corporation?

Mr. HOWARD. No, Senator; that would not be necessarily the only way. If agriculture were shaped up here with the legislation that is now before this present Congress, it would take care of surplus production to the extent that the corporation that acquires thou

sands of acres, destroys the homes, the schoolhouses or two, and the country roads, would not remain in that kind of an occupation.

Senator MCGILL. That is, you mean they could not compete. You mean that you would form such a basis that they could not operate. Mr. HOWARD. That is it.

Senator MCGILL. But the point that I was driving at rather was that the authorization to form a corporation for the purpose of engaging in agriculture, their charter is derived from the State laws, and the prevention of such an organization would have to be due to some enactment of the State legislature.

Mr. HOWARD. That is true, Senator, but after all, don't you know there is always the proposition of the constitutionality of that kind of an act, whereas there could not be a

Senator MCGILL (interposing). Would that not arise under a State constitution?

Mr. HOWARD. Yes; it would be the State constitution.

Senator MCGILL. There could not be any Federal legislation that would prevent that sort of a corporation, could there?

Mr. HOWARD. Oh, I am not so sure but what the public policy of this Nation might as well be established right now; yes, to protect the family-unit farm.

Senator MCGILL. What I am getting at is: Suppose there would be some act of Congress that would declare such a public policy. Would that render a charter otherwise by State law not in conflict with the State constitution null and void?

Mr. HOWARD. For those that are already existing; I am sure I am not an attorney.

Senator MCGILL. Well, suppose they were not in existence, but that the State still permitted the corporation, and there is nothing in the State constitution to make it void.

Mr. HOWARD. I think you are right on that.

Senator MCGILL. I feel that the prevention of corporations of that character at least it is true in my State-would have to be by State enactment of the legislative body of the State. I agree with you. I do not have any use for this corporation farming, but I am getting at the method of getting rid of it.

Senator FRAZIER. Of course, there is no question but what the State legislature could tax them out of existence, the same as they do some other corporations.

Senator MCGILL. The State legislature could go farther than that. By enactment they say what sort of bodies can be incorporated, and by virtue of State legislative enactment they can prevent this sort of a corporation. In other words, they do not need to authorize it.

Mr. E. H. EVERSON (South Dakota). Mr. Chairman, I do not like to interrupt, but I would like to ask the Senator from Kansas if the legislature could dissolve those corporations that are already existing, and if it could enact any law that could prevent those from growing larger through other groups joining with them?

Senator MCGILL. I seriously doubt whether they can. It might be possible for the States to pass laws which would wind up the affairs of that sort of a corporation. At least, I feel that the authority that created the corporation is the only one that can dissolve it. And I am not in sympathy at all with cooperative farming, but I am

rather trying to suggest the method of getting rid of it and preventing it.

Mr. PAUL D. MOORE (Iowa). Mr. Chairman, I would just like to offer a little suggestion there. I think that you will find the States when it comes to be necessary to handle the land corporations it is very easy for them to establish a graduated land tax that will absolutely make it impossible for the large land corporations to work. In other words, I think you will find that the Farmers National of the State of Iowa and the national policy of the Farmers' Union wou'd be graduated land tax, and each State can establish that to their own selves and eliminate through taxation the possibility of large farms.

Senator MCGILL. I think the time has come that it is necessary; that the time has arrived and the necessity is already here for that sort of enactment by the States. There are farms in my State as high as 20,000 acres of that kind, and it is strictly against the interests of the individual farmer or individuals who might be farmers, where that sort of condition can prevail.

Senator FRAZIER. Mr. Kennedy, you may proceed.

STATEMENT OF E. E. KENNEDY, SECRETARY NATIONAL FARMERS' UNION, KANKAKEE, ILL.

Mr. KENNEDY. Mr. Chairman and gentlemen of the committee: I wish to make a very brief statement first concerning some of the conditions that exist in the State of Illinois.

Last fall, during the months of August and September, oats were going to the threshing machine at a price of 11 cents a bushel to the farmer. The market, however, was quoted higher, about 14 cents per bushel, but when he took his discount for grade he was getting but 11 cents per bushel for his crop.

Now, it made no difference to this farmer if prices were up a little afterwards. His crop of oats was gone for the year, and the income from that crop determined.

The point I wish to make in this is that if at the time the farmer is forced to go to market with his crop the price is low at that time, his income on that crop is determined for the year, and that is all with which he has to pay taxes and interest from that particular land. This would give these Kankakee County farmers about $3.30 an acre gross income.

The average fixed charge of interest and taxes alone in Kankakee County is more than $4.95 per acre, or more than $1.65 more than his gross income from his crop. The figures on taxes and interest here are taken from the Bureau of the Census figures for 1930. However, I think probably those figures are a little conservative.

We must remember that only about one-third of Illinois is farm land-and this is true of at least eight of the States in the Middle West-does not produce a cash or a tangible income. But twothirds of the farm land carries fixed charges of interest and taxes.. So in the case of this farmer that got a gross of $3.30 per acre from his oats off of a certain portion of his farm, he had a still larger portion on his farm on which he had to pay interest and taxes out of that $3.30 gross. Last week eggs were bringing the farmer around Kankakee 9 to 10 cents per dozen. To the Illinois