and will pay over the net amount received therefrom less freight, insurance, and interest, as payment in full to the grower and growers named in contracts similar hereto, according to the tobacco delivered by each of them, after deducting therefrom, within the discretion of the association, the sums referred to in section 9; the costs of maintaining the association and of handling, grading, redrying, storing, and marketing such tobacco; and funds for credits, general reserves and other commercial purposes, said funds not to exceed 2 per cent of the gross resale price. Such funds may be used by the association, in its conclusive discretion, for any proper purpose. The books and records of the association shall show the amount deducted from each member each year for such funds; and such funds or any part thereof, remaining in the treasury undistibuted, shall, on dissolution or earlier as determined by the board of directors, be distributed to the members, in whole or in part, in proportion to their contributions thereto in the order in which such deductions were made. Such funds shall be subject to any liabilities of the association.

6. The grower agrees that the association, in its name, may borrow money on any or all tobacco in its possession, through drafts, acceptances, notes, or otherwise, or on any warehouse receipts or bills of lading, or upon any accounts for the sale of tobacco, or upon commercial paper delivered therefor; and that, in addition, the association may pledge any such tobacco as security for any of its obligations. The association shall distribute the money so borrowed, as advances or partial payments, equitably among the growers in proportion to their deliveries to the association, or may use any part thereof in the proper operation of its business, as it may determine.

7. The association may sell the said tobacco within or without the United States, directly to manufacturers or exporters or otherwise, at such time and in such form and upon such conditions and terms as it may deem profitable, fair, and advantageous to the growers; and it may sell all or any part of the tobacco with or through any other agency for the cooperative marketing of tobacco, and any proportionate expenses connected therewith shall be deemed marketing costs under section 5 hereof.

8. The association may federate for any or all purposes with any other cooperative marketing association, the methods and contracts of which are satisfactory to the board of directors of this association; and all costs of operation of such federation and/or central agency, incorporated or otherwise, which may be formed by them shall constitute marketing costs under section 5 hereof. The association agrees that tobacco delivered by members of this association shall not be pooled or mingled with tobacco delivered by members of other associations which may become members of any proposed federation, and that the association will not enter into any agreement obligating it to pay more than its proportionate share of the expense of organizing and operating any such federation or central agency.

9. (a) The association may establish selling offices, warehouses, or plants; statistical, marketing, or other agencies in any place; may acquire by lease or purchase, when necessary, any such warehouses, plants, or facilities; and may acquire, hold, control, and guarantee the evidences of indebtedness, common and/or preferred stock and/or the interest or dividends thereon of any corporation formed for the purpose of carrying on any activity incident to the production, handling, marketing, manufacturing, or processing of tobacco or tobacco products. The grower expressly authorizes the association to have delivered to any warehousing or other corporation or agency, any or all of his tobacco for handling, redrying, processing, manufacturing, or storing.

(b) To finance or pay for any and/or all of the above transactions and the interest on the certificates hereinafter referred to, the association is authorized to charge the cost thereof against the tobacco sold hereunder and deduct such charges from the proceeds thereof. Such charges and/or deductions are to be made as prorated annual deductions or charges running against deliveries of various years upon a basis to be fixed at or before the incurring, by the association, of the indebtedness or obligation, when in the conclusive judgment of the board of directors a single charge or deduction would be inequitable.

(c) The association, after the sale of each crop, shall issue to the grower a certificate evidencing deductions made for the purpose of acquiring such facilities or securities, or for retiring such certificates, which certificate shall bear interest at 5 per cent per annum, callable, in the order in which issued, in whole or in part at par by the association on dissolution or earlier as determined by the board of directors; or in lieu of such payment, the association may

cause to be issued to the grower securities proportionate to the outstanding certificates, evidencing a lien upon the property acquired with such deductions, or common or preferred stock in a corporation or corporations owning such properties.

10. (a) If this agreement is signed by the members of a copartnership, it shall apply to them and each of them individually in the event of the dissolution or termination of the said copartnership, and to their proportionate interests therein under any circumstances.

(b) The grower agrees that no member of his family or his tenants have any control or interest in his share of the crop as indicated below or otherwise.

11. The grower expressly warrants that he has not heretofore contracted to sell, market, or deliver any of his said tobacco to any person, firm, or corporation, except as noted at the end of this agreement. Any tobacco covered by such existing contracts or crop mortgages shall be excluded from the terms hereof for the period and to the extent noted, if the lien holder insists upon the exercise of any right of possession or sale.

12. (a) The grower is authorized to place a crop mortgage upon any of the crops grown by him during the life hereof, subject to the right of the association to have any such crop of tobacco delivered hereunder, but in settling with grower the amount of any such mortgage with interest shall first be paid to the mortgagee, provided that the association has received actual notice thereof.

(b) The grower agrees to notify the association prior to making any such mortgage and the association is authorized to advise and assist the grower with respect thereto. The association may pay off all or any part of any such crop mortgage for his account and charge the same against him individually.

13. This agreement is one of a series generally similar in terms comprising with all such agreements, signed by individual growers, or otherwise, one single contract between the association and the said growers, but it is mutually agreed that the cancellation of any agreement or agreements in this series shall not operate to invalidate this contract, and that the association may enter into agreements with other growers differing in terms from those contained herein without invalidating this contract, provided that the grower at his request may sign a similar contract as a substitute for this agreement.

14. (a) Inasmuch as the remedy at law would be inadequate, and inasmuch as it is now and ever will be impracticable and extremely difficult to determine the actual damage resulting to the association should the grower fail so to deliver all of his tobacco, the grower hereby agrees to pay to the association for all tobacco delivered, consigned, or marketed, or withheld by or for him, other than in accordance with the terms hereof, the sum of 5 cents per pound as liquidated damages, averaged for all types and grades of tobacco, for the breach of this contract; all parties agreeing that this contract is one of a series dependent for its true value upon the adherence of each and all of the growers to each and all of the said contracts.

(b) The grower agrees that, in the event of the breach or threatened breach by him of any provision hereof regarding delivery of tobacco, the association shall be entitled to an injunction to prevent a breach or further breach thereof, and to a decree for the specific performance hereof; and the parties agree that this is a contract for the purchase and sale of personal property under special circumstances and conditions.

15. By signing this marketing agreement the grower applies for membership in the association and the signing hereof by the association shall constitute an acceptance thereof.

16. The parties agree that there are no oral or other conditions, promises, covenants, representations, or inducements in addition to or at variance with any of the terms hereof; and that this agreement represents the voluntary and clear understanding of both parties fully and completely.

The following telegrams will be inserted in the record:

Senator McNARY,

Washington, D. C.:

BOSTON, MASS., November 23, 1931.

Perishable food interests of Boston vigorously opposed to agricultural marketing and its subsidiary the Federal Farm Board. Indescribable injury has resulted here. The act should be repealed.

ALTON E. BRIGGS,

Executive Secretary Boston Fruit and Produce Exchange.

Senator C. L. MCNARY,

NATIONAL STOCK YARDS, ILL., November 24, 1931.

Chairman Senate Agriculture Committee, Washington, D. C.:

This association is 100 per cent against the Government in business, we ask that the farm-relief bill be repealed at the earliest opportunity and save the taxpayers the humiliation of being sunk where they will be unable to pay any tax whatsoever. Five hundred million is a costly experiment.

E. T. CASH,

President Order Buyers' Association.

At the request of Mr. J. R. Mason, I submit for the record a statement entitled "Russia as Factor in Wheat Production," taken from the Washington Post of Sunday, November 29, 1931:

RUSSIA AS FACTOR IN WHEAT PRODUCTION

TO THE EDITOR OF THE POST:

SIR: Having made two trips around the world and one to South America during the past three years with the primary object of studying irrigation progress and national policies with regard to such public works, in foreign lands, as well as to study agricultural conditions generally in the main producing areas, I take pleasure in setting forth the following observations, which, to my mind, have a fundamental bearing on the task our Congress is facing.

So unprecedented is the condition of affairs that farmers are being driven into bankruptcy in most nations, as never before in modern history. The appeal of farmers to their governments to do something is not confined to the United States of America by any means.

Although the great bulk of the world's fruit, vegetables, rice, alfalfa, etc., are being grown on land enjoying crop moisture insurance (irrigation), assured by vast storage dams, main canals, etc., built by the governments, much as flood-control works are being subsidized in the Mississippi Valley, very little wheat or corn is grown on irrigated land in any part of the world. This fact accounts very largely for the oft-recurring world shortage and oversupply of wheat, corn, and other crops dependent on the seasonal rainfall for their moisture supply.

I fear that Russia is a far more important factor in the present world price of wheat than many people at home understand. Having returned late last month to New York, direct from Russia, I am far from convinced that our farmers deserve the blame that some have sought to level at them. In Russia I found the people eating rye bread only, just as we were obliged to do in 1917 to help win a war. Russia is normally a wheat-consuming nation. With 160,000,000 mouths being denied wheat, which would normally eat it as we do, and with Russia claiming to have had some ninety million acres in collective farms last year, instead of 52,000,000, estimated at the end of the 5-year plan, would it be possible for the world price of wheat to-day to be other than what usually follows international, competitive warfare, be it in army, navy, or wheat?

I do not agree at all with those who contend that the present government in Russia is, from choice, depressing the market value of its wheat, lumber, manganese, oil, etc., being exported and sold for whatever it will bring. It is my opinion that even if the price of wheat in Liverpool dropped to one shilling a bushel Russia would continue selling.

In Russia butter costs in the markets from $2.50 to $5 a pound. Yet I saw 11,000 barrels of butter delivered in Hamburg by a Soviet boat at 10 cents a pound. The losses, it is claimed, are absorbed by the government, and not at all by the farmer in Russia, alone. Being without credit abroad, Russia must pay cash for the machinery called for in her 5-year plan, and she has had to export if she got the cash.

The total area shown in Russia in 1929-30 is stated as 319,000,000 acres, or more than 3,700,000 acres more than the increase estimated for the end of the 5-year plan. The 1930-31 figures show about 25,000,000 acres more. The area sown in 1930 was 36,000,000 acres more than in 1913. The grain harvest was 7,000,000 tons more than 1913. When the 1930 harvest returns were in, it is claimed that the net income of farmers in the collective farms was more than double their income during the last few years they farmed as individual

owners. If the Russian wheat were all or mostly consumed at home, the world price of wheat would jump overnight and largely end the wheat problem. J. RUPERT MASON.

SAN FRANCISCO, CALIF.

I desire to publish in the record a letter dictated by C. T. Revere, of Munds & Winslow, 25 Broad Street, New York City, which discusses very interestingly the cotton situation from the viewpoint of an experienced member of the stock exchange:

COTTON

In our recent letters, dealing with the cotton situation, we have tried to emphasize two points: First, that the unfavorable position of this commodity is not due in chief measure to an adverse statistical position; that, after all, this feature can be and always has been corrected by the demand inseparable, under normal conditions, from the attraction of low prices. Second, that the only sound method for correcting this condition is to give free play to that demand, and that resort to organized artificial holding expedients, particularly those sponsored by Government agencies, tends to produce congestion, give a false impression of value, and ultimately defeat the beneficial purpose that motivated the undertaking.

Again we refer to the notable utterance of ex-President Coolidge enunciated in July, 1930: "When a consumer buys a product it goes out of the market and disappears. When private or public agents buy to fix an arbitrary price the product is still in the market; every consumer knows it and waits for the resale."

It is with no spirit of harping on the old string of attacking the Federal Farm Board and its affiliates that we call attention to certain trade and market developments which we believe have militated regrettably against the recovery not only of cotton prices but of the textile industry itself. In attempting to analyze this phase of the situation we make no charges of misconduct or irregularity in dealings. The harmful effects are merely those proceeding from and inherent in the very nature of artificial interference with the normal working of supply and demand forces.

In this connection we express the unreserved belief that the high basis this season has worked strongly against the free and unrestricted absorption of cotton by consuming manufacturers, not only in the United States but other countries as well. It is mere quibbling to hold that the basis this season, while the highest in many years, imposed only a moderate price penalty on the spinner. Undoubtedly it has been offensive to the business judgment of the average manfacturer to pay an almost unprecedented premium at a time when trade conditions were unfavorable and the supply was of record proportions. All market psychology was against liberal buying, and it can not be questioned that hundreds of manufacturers, who had counted not only on providing for current requirements and laying in supplies for extended deliveries, were deterred from undertaking this operation by a basis for which they could see no reason or validity. The very artificiality of the basis alone was a reflection on the character of the market and could not help arousing suspicion regarding the price structure in general.

Several elements have entered into the creation of this season's basis. We think it entirely fair to dismiss the holding by individual producers-a feature which we regard as sound and certainly a matter of personal judgment and risk-as well as the buying by the Far East, as minor factors in the situation. The major contributing influence has been supplied by the Federal Farm Board element, chiefly the cooperatives.

As we view the situation, two motives were behind these operations. In the first place, it looked like bad politics to face the new session of Congress with reported holdings of several million bales of cotton, and then have it disclosed that a large proportion of this accumulation consisted of future contracts. Moreover, the cotton trade generally has believed that it was bad business to have sold out spots and bought futures when the carrying charges involved in the purchase of these future contracts represented a penalty in excess of the cost of carrying the actual cotton. At any rate, there was an incentive for the reversal of this operation, thus calling for the purchase of cotton. and the liquidation of contracts.

agriculture," it would seem that the Farm Board has deliberately sought to discredit the whole subject of farm relief in the minds of the masses, and certain it is that it has achieved this objective. In the ardent hope that the next administration will be honestly sympathetic to agriculture and appreciate its basic importance to all our people, we do not at this time demand the repeal of the agricultural marketing act, but we do earnestly ask that it be so amended that the Farm Board can no longer place an iron collar around the necks of our farm cooperatives, and we also suggest that Congress appropriate no further funds to be wasted by this agency and charged up to agriculture.

Under the present monetary system centralization and concentration of wealth has reached the place where 4 per cent of the people of the United States own 80 per cent of the total wealth of the Nation. Each year sees the present system increasing the concentration of wealth. At the rate it is now increasing it will only be a few years until a handful of families in this country own practically all of the wealth.

We believe that an income tax with rates so high on the larger incomes that it will provide revenues sufficient to pay the expenses of the Government, and an inheritance tax that will break up the big fortunes are two of the most potent factors at hand to decentralize the wealth that has been centralized.

The Constitution provides that Congress shall have the power to issue money and regulate the value thereof. Congress, in the national bank act and Federal reserve act, has transferred this power to a handful of international bankers, and as a result the money of this country, now in use by the people, is of a crop made and controlled by national bankers and Federal reserve district bankers. It is issued on the basis of the Government paying interest to have bankers sign the money of the country. Under this system the interest debt of the Nation and the people is more each year than the gross receipts from the sale of all farm products.

We therefore demand that Congress restore to itself the constitutional authority given it of issuing and regulating the value of money.

We also recommend that the National Government discontinue the issuing of bonds to further enslave the people through debt, but issue instead legal tender currency to be used in public works and improvements, thus helping to relieve the deplorable unemployment situation and at the same time building a volume of currency sufficient to meet the needs of agriculture and industry.

May 1, 1920, wheat was more than $3 per bushel on the Chicago market. At that time 1,000 bushels of wheat in Chicago would pay a $3,000 farm mortgage. To-day it takes 5,000 bushels of wheat delivered in Chicago to pay a $3,000 mortgage. In other words, a 1920 $3,000 mortgage is now a $15,000 mortgage all of which means that the present dollar is a dishonest dollar and makes it impossible for farmers or anyone to pay their debts. We demand a dollar restored and stabilized in debt-paying power at what it was in 1920 when the international bankers started deflation.

We urge the adoption of legislation making it unlawful to trade in farm commodities of all kinds and stocks and bonds on a marginal basis.

We also ask that the next Congress lose no time in revising the HawleySmoot tariff act which is the most indefensible measure of the kind ever enacted into law, and which is exacting untold millions of tribute from our consumers on the one hand, and building up a world-wide hate against the United States upon the other.

Finally, we ask that through the Federal land banks or through some similar agency, Congress make loan funds available to the farm cooperatives of the country, such loans to bear an amount of interest that will fully reimburse the Government, and likewise to be based upon collateral that will fully protect the Government. We make this request because ordinary banking channels are no longer available to the cooperatives, it makes no difference how adequate the security. HARRY C. PARMENTER, Secretary.

Mr. E. N. Puckett, manager of the Union Equity Cooperative Exchange (Inc.), Enid, Okla., has requested the insertion of the following letter:

Hon. CHARLES L. MCNARY,

ENID, OKLA., November 14, 1981.

Chairman Agricultural Committee, Washington. D. C.

DEAR MR. MCNARY: We just noticed through the press that your committee are going to be in session right away, possibly investigating the activities of