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Washington, D. C. The committee met pursuant to adjournment at 10 a.m. in room 324, Senate Office Building, Senator Arthur Capper (chairman) presiding:

Present: Senators Capper, Aiken, Bushfield, Young, Thye, and Hoey.

The CHAIRMAN. The committee will come to order.

The committee is here to continue hearings on Senate bill 2318, introduced by Senator Aiken and others.

- We will start this morning with a statement by Charles W. Holman, who is the secretary of the National Cooperative Milk Producers Federation, Washington, D. C.

Charley Holman, I will say, is one of the old-timers here. I came here myself very nearly 30 years ago and Charley Holman was on the job at that time and he has been here ever since. I doubt very much if we could run an agricultural committee without Charley Holman. At any rate, he knows his stuff and we are fortunate in having him here as a witness on this important bill proposed by Senator Aiken.



Mr. HOLMAN. Senator Capper, I deeply appreciate the compliment and I will say that if I am of any real service to farmers it is largely because I sat at your feet and got a great deal of tutelage on how I should think clearly and how I should operate.

The CHAIRMAN. In the early days we had some pretty good men around here. You were one of the best.

Mr. HOLMAN. Thank you, sir.

Mr. Chairman, this is a rather unusual appearance in that it is a double appearance. Mr. Louis Herrmann, economist for our organization, and I will appear here. I will take the first two subjects in the joint brief and Mr. Hermann will take the third and the fourth subjects.

The National Cooperative Milk Producers Federation, which we represent, now consists of 84 member associations and some 600 submember associations cooperatively owned and controlled by more than 430,000 farm families in 47 States. These associations handle fluid

milk and fluid cream, and make every type of manufactured dairy product including butter.

I might say that last year the total dairy products handled by our member associations in terms of what dairymen call whole milk equivalent—that is, all dairy products turned back into whole milk at the farm-was more than 17,500,000,000 pounds, which was about 18 percent of all the whole milk and cream that left the farms in commerce during the year.

By direction of the federation's executive committee we are appearing to discuss certain provisions of S. 2318. This discussion will be brief and will be confined primarily to four major points.

1. The proposed reorganization of the Department of Agriculture.

2. The proposed National Agricultural Council.
3. The parity formula.

4. Price supports. With respect to the reorganization of the Department of Agriculture, it would seem to be more appropriate to permit the Secretary of Agriculture to organize or reorganize the Department, whichever is needed and we sometimes think both are needed, and hold him responsible for the results.

Reorganization by legislation would be justified only where the benefits of such action would be clearly discernible. Reorganization by legislative action tends to freeze the functions and ranks of respective divisions of the Department and makes it difficult to expand or shrink when needed or to consolidate these entities or to make transfers from one branch of the service to another.

Section 105 (c) of the bill puts the Secretary of Agriculture in an embarrassing and really impossible position. Under its provisions the Coordinator of Research and Education is to be appointed by the Secretary for a 7-year term but can only be removed by the President.

Consequently, once the Coordinator takes office he is independent of and with respect to his functions and is virtually superior to the Secretary. The two officials would come inevitably into conflict and we predict a recurrence of the same sort of unhappy relationship which existed during the last war between the Secretary of Agriculture and the Administrator of the Office of Price Administration.

The committee will recall that certain functions were assigned to the Price Administrator but the Secretary of Agriculture was given the veto power over certain decisions by the Price Administrator. Bitter conflict ensued which was quelled but not extinguished by the creation of the Office of Economic Stabilization directly under the President.

If, however, the Congress decides to create the new position of Coordinator we cannot see any advantage whatsoever to the Nation of making the Association of Land-Grant Colleges and Universities the recognized agency to make nomination for appointment to that office.

We are inclined also to question the advisability of transferring the functions of the Farmers' Home Administration, performed at State and county levels, to the State and county agricultural councils provided in the bill.

It seems to us that these State and county councils as set up will inevitably become political machines wielding great power; and this power will be particularly enhanced by the recognition and financial support to be given them by the Congress. To add to this the authority to make and collect loans under the Farmers' Home Administration Act would indeed put these associations in a most powerful position.

If these bodies are to be set up, their functions and powers should be so prescribed that they cannot bud and bloom into political-action organizations dealing with State legislatures and with Congress itself. They should be purely working bodies, carrying out the day-to-day jobs which may be assigned to them.

In other words, the same limitations which today apply to employees of the Government with respect to political action should be made to apply to the members of these county and State councils.

Even if these limitations on the functions and powers of the State and county agricultural councils are prescribed, and even if the Congress does not create a national agricultural council, we are constrained to predict that in a very short time they, that is, the State and county councils, will set up their own national association of State and county agricultural councils which will be bound to have considerable political and legislative influence.

However, the Nation would at least be protected by the fact that such an association would not have any legislative authorization nor any financial support from the funds of the county and State councils, if proper precautions are taken in the legislation.


Our chief concern with this new system is the proposed National Agricultural Council which would be set up by section 110 of the bill. The committee will note that the Secretary of Agriculture is to recommend four members who are to be appointed by the President with the advice and consent of the Senate. One is to represent producers, one processors, one distributors, and one consumers. Four are to be elected on a regional basis by the chairmen of the State agricultural councils.. One is to be selected by the Association of Land Grant-Colleges and Universities.

It should be noted that the members of the State councils may or may not he farmers.

It is well to review carefully the powers which are given to this body. Briefly summarized they are:

1. Make studies and investigations of agricultural matters as it deems appropriate.

2. Advise the Secretary and Congress with respect to such agricultural matters as it deems appropriate.

3. Determine need for change in price-support programs.

4. Make recommendations to the Secretary of Agriculture and to the Committees on Agriculture of Congress.

5. Hold hearings for the purpose of carrying out the provisions of this section. Here then, Mr. Chairman, is the fine flowering of interlocking American super bureaucracy. An articulated group of councilmen is to be set up with official recognition and official duties, including the making of reports and recommendations to the Congress. They will be in a position of superior influence without necessarily any superior knowledge as contrasted with local, State, and national groups of farmer cooperatives and general farm organizations who pay their own way as. free citizens without receiving financial support from the public purse..

Senator THYE. Would you mind if I interrupted you at this point ?

Mr. HOLMAN. Not at all.

Senator THYE. You note that the bill provides for a National Agricultural Council, consisting of four members appointed by the President, and confirmed by the Senate, one member to represent the interest of producers, one to represent the interest of processors, one to represent the interest of distributors, and one to represent the interest of consumers. The person representing the producer group might be you yourself, and I would trust you to speak most forcefully for all of agriculture.

It would be either you or someone else equally as well qualified as you are to represent the producer group. I do believe that unless we give some thought to the consumer phase, the program will be short-lived. However, I wanted to point out the provision for appointment of a producer member.

Mr. HOLMAN. I would hate to be the one producer member of such a board.

Senator THYE. Of the four appointed by the President, one is a producer. Another is a processor and of course he might not in any sense be favorable to the farm program. I admit that, but then the distributor member would again be a producer member. Then you

have a consumer. You have one out of the entire council who would be the voice of the consumer groups.

Mr. HOLMAN. Senator, you have not had as much experience with consumers' councils as we have had.

Senator THYE. I admit that we have not had the experience you have had.

Mr. HOLMAN. The consumers' council of the Department of Agriculture was the most complete and total pest that America ever had, irrespective of personnel that occupied the post. Nothing of a really public-spirited character came out of the advice of the consumers' council, but only propaganda inimical to farmers came out.

Now our thesis lies in two regards here. First, we do not believe there is any necessity for the Congress creating a national agricultural council. Secondly, if it should be created, we do not think it would be an agricultural council whatsoever.

Senator AIKEN. Not even, Mr. Holman, if elected by the farmers themselves? I cannot conceive of a more democratic way of getting representation of the farmers than by election from the grass roots. Do you

think that the farmers would not elect men to the council who would represent them?

Mr. HOLMAN. Senator, from the very construction of the act, the county councils are not necessarily farmers, the State councils are not necessarily farmers.

Senator AIKEN. But they are elected by farmers.

Mr. HOLMAN. A few of them; not all of them. Some of them are appointed bodies like the men who are handling conservation and things of that kind.

Senator AIKEN. I mean under this bill.

Mr. HOLMAN. Under this bill is what I am describing. If you examine the bill, you will find you have not provided for a purely agricultural operation.

Senator AIKEN. You are worried for fear that the farmers of a county would elect lawyers and doctors?

Mr. HOLMAN. I have no doubt that there will be bankers, lawyers, board of supervisors, that might not be farmers.

Senator AIKEN. They could not be elected without the vote of the farmers.

Mr. HOLMAN. They might.
Senator AIKEN. How!

Mr. HOLMAN. The towns would have votes for county supervisors down in my county.

Senator AIKEN. This bill would restrict the votes to farmers.

Mr. HOLMAN. I have not found any restriction as far as the language is concerned.

Senator AIKEN. Oh, yes. There is no intention to let anybody but farmers vote for these committees. Personally, I think farmers, the ones right on the farms, have the right to elect their own representatives. I cannot conceive of any more democratic process than having the farmers themselves elect their committees.

Mr. HOLMAN. Senator, I cannot conceive of a democratic process being set up by the Congress to set up an agency of persons who are in a quasi-official position in the counties and the States and a highly official position in Washington, D. C., which is to be recognized as the agency which the Congress and the departments will refer to when here are the organizations of the farmers' ownership and choosing which will be shoved aside.

Senator AIKEN. If they were doing good work they would not be shoved aside.

Mr. HOLMAN. That is the question.

Senator AIKEN. And if they are not doing good work they ought to be shoved aside.

Mr. HOLMAN. I do not see how a small body of men of this kind could possibly be more representative than what we now have in these great farmers' organizations, the great cooperative organizations which are doing their best and they are paying for it themselves, and they are not getting anything out of tax money. We fundamentally are opposed to this move because we think it is a move to fascism.

Senator AIKEN. Do you consider it is a move toward fascism to let the farmers choose their own representatives instead of having a half-dozen directors come in here and choose the representatives?

Which do you think is the more representative of the farmers?

Mr. HOLMAN. I think the farm organizations of today choose their own representatives.

Senator AIKEN. I think it is time for the farmers to choose their own representatives. They would get better representatives.

You object to the farmers voting for their own representatives, that is what it amounts to, Mr. Holman.

Mr. HOLMAN. I object to this method of setting up the pseudo agricultural organization.

Senator AIKEN. Which provides for election by the representatives themselves.

Mr. HOLMAN. And giving official status which they should not have according to our own people's views on it.

Senator AIKEN. Anyway, I think the testimony is clear on that point, but I say, let the farmers have the right to run their own affairs as far as possible.

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