Senator MCGILL. There could not be any result unless there was a conference?

Mr. KENNEDY. No.

Senator MCGILL. So you agree that the President should call a conference?

Mr. KENNEDY. If that was the purpose for calling it and getting it done; yes.

Senator MCGILL. That is the primary purpose. That would be almost necessary in addition to an inflation of the currency of this country, would it not? I do not mean that inflation would not help; I do not mean that; but the two combined are necessary, are they not? Mr. KENNEDY. I am not so sure that it would. I am rather of the opinion that we should get our own house in order in the United States.

Senator MCGILL. Is not that one way of helping to get our house in order? Suppose you had wheat to sell; how would you sell it to a merchant in China if it cost him four or five dollars to buy what would be a dollar's worth of wheat over here? That is due to the exchange value of the dollar, is it not? It looks to me as if those two problems, more or less, are to be considered together.

Mr. SIMPSON. But we can remonetize silver and be ready to trade with China without having an international conference.

Senator MCGILL. To a certain extent. To quite an extent, I think you are correct, but on the other hand, I do not believe we could exchange on a basis of the value that we could exchange on as a result of a conference.

Senator FRAZIER. Is there any further statement?

Mr. KENNEDY. That is all, unless there are some questions, Senator. Senator MCGILL. You spoke of corporate farming in your State. Have you quite a bit of corporate farming in Illinois?

Mr. KENNEDY. Yes; we have quite a number of them, Senator. There is one right at Kankakee, a farm of about 1,200 acres. On that farm there were at least six families displaced. It is being operated now by one man who does not live on the farm more than just a few months in the year, and hires some men to put in the crops and harvest them, and so forth, and the balance of it is done with machinery. Senator MCGILL. Do you know what percentage of the farms in Illinois are operated by tenants?

Mr. KENNEDY. I think the figure is 47 per cent, Senator. I am not just sure about the exact figure.

Senator FRAZIER. We thank you for your statement.

(Witness excused.)

Mr. SIMPSON. We would like to have Mr. E. B. Schultheiss, Wisconsin, speak for a few minutes.

STATEMENT OF E. B. SCHULTHEISS, BARRON COUNTY, WIS.

Senator FRAZIER. Are you from Wisconsin?

Mr. SCHULTHEISS. Yes, sir. I live in Barron County, in Wisconsin. I am a farmer living on a 240-acre dairy farm. I am president of the Barron County organization and I am a member of the national board of the Farmers' Union.

Senator THOMAS of Oklahoma. How much of your lands is under cultivation?

Mr. SCHULTHEISS. We practically have 85 per cent under cultivation. Well, we have more than that. It is not all cultivated in Wisconsin. We use a lot of it for grain and pasture and hay. Senator THOMAS of Oklahoma. What do you grow?

Mr. SCHULTHEISS. Alfalfa, hays, oats, corn; mostly feed for dairy

Cows.

Senator THOMAS of Oklahoma. What do you produce in the way of livestock?

Mr. SCHULTHEISS. We are producing dairy cattle and hogs and sheep, mostly.

Senator THOMAS of Oklahoma. Do you sell your product in the form of dairy products?

Mr. SCHULTHEISS. Dairy products entirely, and poultry products; some livestock in the form of hogs and sheep.

Senator THOMAS of Oklahoma. What is your land assessed at on the tax rolls?

Mr. SCHULTHEISS. It is assessed at about half the cost, the sales price of 1920; 50 per cent of the sales price of 1920. I know that to be a fact, because I bought my farm in 1919. I was one of the lucky ones that followed the advice to feed the world for years to

come.

Senator THOMAS of Oklahoma. What do they tax you?

Mr. SCHULTHEISS. About $325 each year, since 1919. They have never come down until this year, to about $285. I have not paid yet. Senator HATFIELD. What is the assessed valuation of your farm per acre?

Mr. SCHULTHEISS. I would not be able to exactly state that. It is about $60, I would judge. It amounts to about $1.50 per acre. Senator FRAZIER. Proceed with your statement.

Mr. SCHULTHEISS. You have had a report from Wisconsin. Since there was some mention made about seeing red I just wanted to talk about the red that I have seen, and that is the red on the wrong side of the ledger, the balance at the end of the year. This balance is not only among the farmers; it has extended into business houses in small towns, in bigger towns, in local communities, and county organizations. If this condition of agriculture proceeds unremedied, I feel that it is going to the State government and National Government. We have a national red figure of close to two billion per year now; and I believe that the only salvation and the only remedy to be applied is at the bottom-the basic industry, agriculture. Bring it back to a profitable basis, before we can see any improvement anywhere along the line.

I have a few statistics here that are closer to the present day than any statistics that we have been able to get.

The 1930 statistics shows us comparatively prosperous, considered with the conditions as they are and as I left them when I left Wisconsin.

I just want to give you one illustration. I found in trying to get in touch with the membership in Barron County alone, a number of farmers have discontinued their phones, have discontinued their daily papers by reason of the fact that they can not afford to keep those expenses up. They are begging the town chairman in our town to extend the tax paying time until June 1 in order to be able to meet taxes which should be paid during January.

Senator THOMAS of Oklahoma. Has the legislature done anything in this respect?

Mr. SCHULTHEISS. I am not sure whether they have legislation to extend it to June 15. Our taxes are payable in full during January of each year.

I would like to read into the record the prices of milk products comparable with 1920 and earlier, which are over 50 per cent of the Wisconsin farmer's income. Is that permissible?

Senator FRAZIER. Yes; proceed.

Mr. SCHULTHEISS. This is taken from the Wisconsin Crop and Live Stock Reporter, dated January, 1932, volume 11, No. 1. It states that in Wisconsin the farm price of milk means more to the farmer and to the business groups dependent upon farmers than any other price item, for over one-half of the farm income of the State is obtained from milk, and the welfare of agriculture of the State is very closely linked with milk prices.

For the past year the average price of milk received by farmers of the State was $1.15 per hundred pounds, as compared with $1.63 in 1930 and $2.05 per hundred in 1929. The 1931 price was 29 per cent below 1930 and 44 per cent below 1929. The 1931 average milk price of $1.15 per hundred is the lowest price since 1911, when the average was $1.14 per hundred.

In 1900 the average price was 82 cents per hundred pounds. During 1931, in the highest months' the average market price reported was in January, when it stood at $1.35. From January to June there was a gradual decline in prices, reaching an average of 99 cents per hundred. This was the first time the market in Wisconsin had averaged below $1 since 1911.

Following the low point in June market prices again rose, reaching the high of $1.29 in October. Since October they have declined to an average of $1.21 for December. This is the lowest December average since 1905, a period of 26 years.

The 1931 average market price of $1.15 per hundredweight is 41 per cent below the 1920-1924 average, 8 per cent below the 19101914 average price, and 31 per cent above the going market price in Wisconsin in 1900 to 1904.

Mr. SIMPSON. Mr. Schultheiss, interpret those prices per hundred pounds in quarts. About how much a quart does that mean they got in 1931 Less than 212 cents a quart, is it not?

Mr. SCHULTHEISS. Yes; and the consumer pays from 10 to 12 cents according to the cities.

Senator HATFIELD. That is the middleman's rake-off?

Mr. SCHULTHEISS. Somebody's profit in between.

I would like to read a little more of that information. It is very good to have on the record at this time, because it brings us up to date more than the 1930 census figures. [Reading:]

Prices of other Wisconsin farm products have declined much more sharply than milk. This loss in value of farm products has cut the buying power of Wisconsin farmers almost in half in two years. The present business depression is undoubtedly the most serious one which has ever faced the farmers of the State. Agriculture never recovered as completely from the 1929 depression as did other industries. In 1929 farm prices were relatively much lower than other prices. From October, 1929, to December, 1931, Wisconsin farm prices have fallen 48 per cent, which makes readjustments necessary. Such

readjustments are harder to make in modern agriculture than they are in other industries.

The changes in farm prices which have occurred during the last three years are best shown by comparison with prices from 1910 to 1914. In 1928 Wisconsin farm products were worth more than 56 per cent more than at this early period. The year 1929 was not much different from 1928. Prices broke appreciably in the autumn of that year, but the average price of Wisconsin farm products for the period were still 55 per cent above the pre-war level. The full force of the down-swing was first apparent in 1930, when at the beginning of the year prices were 45 per cent above pre-war.

By December prices had fallen to only 13 per cent above, with the average for the year at 29 per cent above pre-war.

The decline during 1931 was more severe than for 1930, for the level of Wisconsin farm products for that year dropped 10 per cent below the 19101914 level. In 1931 Wisconsin farm prices were 30 per cent below 1930 and 42 per cent below 1929.

At the beginning of 1931 the index of Wisconsin farm prices was 105 per cent of pre-war. During the first six months of the year the decline of milk prices forced the index downward, so that by June prices were 83 per cent. During the four months following June the drought caused the milk price sharply to advance. By August the prices had generally risen, but after August the decline in livestock and grain prices canceled out whatever increase had been realized in the milk prices.

In December, 1931, the level of all Wisconsin farm prices was 16 per cent below pre-war, while grain prices were 36 per cent below; livestock 41 per cent and milk 40 per cent below. Poultry prices were 9 per cent above the 1910-1914 prices. The price level for all Wisconsin products except milk was 27 per cent below 1910-1914.

Senator MCGILL. You have a great many cooperative creameries and cheese factories in Wisconsin?

Mr. SCHULTHEISS. We have a lot of cheese factories and condenseries that are very much in danger financially, due to the fact that the producers are in the same condition.

Senator MCGILL. The farmers of Wisconsin have the reputation, especially in dairy products, of having more cooperative organizations than any other State?

Mr. SCHULTHEISS. Yes; they have.

Senator MCGILL. Therefore they are getting as much out of it, or more out of their dairy products, in comparison, than farmers do in other States?

Mr. SCHULTHEISS. That is true.

Senator MCGILL. And yet they are going broke?

Mr. SCHULTHEISS. Going broke. The total farm mortgage indebtedness in Wisconsin is $355,029,993. The average farm mortgage is $4,095 per farm; the number of farms, 181,767. Total acreage in farm lands is 21,874,155.

Senator HATFIELD. Do you mean to say that the farmers in Wisconsin owe in the way of mortgages $350,000,000?

Mr. SCHULTHEISS. That is the report direct from the Wisconsin State Department of Agriculture.

Senator HATFIELD. Your State indebtedness is about $160,000,000? Mr. SCHULTHEISS. Yes; $47 per capita.

The taxes in the State of Wisconsin, according to the Wisconsin Tax Commission, were $1.05 per acre on all lands included in farms, and $1.53 on all agricultural lands including cut-over lands not being farmed, but used for pasture and cattle raising.

Senator HATFIELD. These mortgages are held by life-insurance companies largely?

Mr. SCHULTHEISS. By life-insurance companies and the Farm Loan Board, and some by State funds, and so on, the teachers' retiring fund, and by private parties. I have a Federal loan on my own farm.

Senator FRAZIER. Are there any other questions?

(No response. Witness excused.)

STATEMENT OF WILLIAM LEMKE, FARGO, N. DAK.-RESUMED

Senator FRAZIFR. Mr. Lemke, we want you to explain the bill, if you please.

Mr. LEMKE. Before I start in explaining the bill I wish to file with the committee some of the tax advertisements in our newspapers and some other documents, and to call your attention also to other matters that I have here.

First, I wish to file a copy of the Bowbells Tribune of Friday, November 2, 1931, a paper published at Bowbells, Burke County, N. Dak., located in the western part of the State where the farms are still large, and therefore there will not be so many items, but, at the same time, for our State it is a rather large item to see three solid pages of tax sales published in that paper for this year. That does not include those in 1929 or 1928.

Senator THOMAS of Oklahoma. Does that cover town lots and cities?

Mr. LEMKE. Yes, sir.

Senator THOMAS of Oklahoma. What per cent is town lots and cities and what per cent is farm land?

Mr. LEMKE. I will state to you that I have not figured that out, but you can very readily tell by the description, township, and so forth, in the paper. In our State in many of the smaller cities and towns they are about the same as the farms, because they exist only because of the farms.

Senator MCGILL. How large a city or town is Bowbells in which that paper is published?

Mr. LEMKE. The largest city or town there would have about 600 population.

Senator MCGILL. Then the delinquencies are practically all in real estate depending upon the agricultural conditions surrounding the village or town?

Mr. LEMKE. Absolutely.

It is not necessary to print this, because I have a number of them here.

Senator FRAZIER. These papers will be filed with the committee as exhibits. They will not be printed in the record.

Mr. LEMKE. Then I will show you Polk County, Iowa, which takes the prize.

Here [exhibiting] is the McKenzie County Farmer and Watford Guide, that is published at the county seat, Watford City, McKenzie County, N, Dak., one of the largest counties in our State. In that county there are still large ranches, cattle ranches, consisting of 5,000 or 10,000 acres. In that paper we have 5% solid pages of