And there is also a table showing the interest rate runs from 3 to 5 percent on farm indebtedness. And a further statement that close to 50 percent of mortgage credit to farmers is supplied by a system of self-governing mutual credit associations charging interest to the borrower at the coupon rates of their bond issues, which in 1937 were distributed as follows-that is the rate ranging from 3 to 5 percent.

Further they state:

In addition, the farmer-borrower pays from 0.50 to 0.75 percent annually for administrative expenses and an initial sum of 2 percent of the loan to this reserve fund. The total cost of the loan may exceed these rates as loans are not made in cash but in bonds which have a face value equal to the loan and are to be sold by the borrower at prevailing market rates. At times bond prices are considerably below par.

In other words, 50 percent of the mortgage loans is made by private individuals, commercial banks, savings banks, and insurance companies. That appears in this statement, which I assume is accurate, that the Government directly has very little to do with it.

Dr. ALEXANDER. The Government of Denmark, however, initiated this plan, the entire program, and completely financed the small holdings. That was all done by the Government.

Mr. ANDRESEN. How many farms are there in Denmark?

Dr. ALEXANDER. I do not have the figures.

I cannot answer that.

Mr. ANDRESEN. Denmark, of course, is a comparatively small country.

Dr. ALEXANDER. Yes.

Mr. ANDRESEN. With a small population, hardly the size of the State of Iowa or the population of Iowa. And they have virtually the same problem because it is chiefly agricultural.

Dr. ALEXANDER. Yes.

Mr. ANDRESEN. Of course, when you apply that principle or device to a large population found in a country like the United States with diversified interests, it is an entirely different problem?

Dr. ALEXANDER. Á somewhat different problem, yes; and yet I think the principle holds that the soundness of your democracy is greatly strengthened if you have a great number of family-size farms and landowner farmers. I do not think the principle would be different. Mr. ANDRESEN. I know, for instance, in actual practice I have found a farmer who had a flock of 100 chickens has made a fairly good profit on them, and yet when that man has undertaken to enlarge his flock to 5,000 he went broke.

The CHAIRMAN. This publication, the Agricultural Finance Review, states that for Sweden the mortgage societies hold 27.9 percent of the total farm-mortgage credit. They grant first-mortgage amortization loans for periods of 31 or 602 years, and straight-term loans of 15 years' duration at 3-percent interest.

Mr. ANDRESEN. I suppose because the farm organizations are somewhat similar to the Federal land banks which used to be farmer owned and farmer controlled.

Mr. COFFEE. Mr. Chairman, I would like to ask Dr. Alexander a question, if I may.

The CHAIRMAN. Yes, Mr. Coffee.

Mr. COFFEE. Does the Government of Denmark guarantee these loans?

Dr. ALEXANDER. It guarantees the loans; and makes the loans that are too small to handle.

Mr. COFFEE. What percent of the value of the property are the loans?

Dr. ALEXANDER. One hundred percent; perhaps 90 to 100 percent. I think the requirement is largely to have the equipment to get started with.

Mr. ANDRESEN. I notice the statement in this Review that the law of April 9, 1936, amended March 21, 1937, authorized the state to grant loans to farmers for the liquidation of debts other than first mortgages, provided that they do not exceed 25 percent of the value of the farm. That is the statement contained in this Agricultural Finance Review. Dr. ALEXANDER. That is for second mortgages.

Mr. ANDRESEN. That is for Denmark.

The CHAIRMAN. Dr. Alexander, we desire to thank you, unless you have some further suggestion you wish to make.

Mr. PACE. I have one or two questions.

The CHAIRMAN. Mr. Murray, you want to ask a question?

Dr. ALEXANDER. Mr. Murray asked a question which I could not answer yesterday about the houses.

Mr. MURRAY. Yes.

Dr. ALEXANDER. I have the cost of the houses before me. age is $1,313.

Mr. MURRAY. What is the top?

The aver

Dr. ALEXANDER. $2,600 was the highest average cost of the improvements in any State. That was in Iowa.

Mr. MURRAY. If they can build $5,000 homes in cities, I certainly could not object to $1,300.

I have heard this and I am just stating this to get your reaction to it I have heard there are 83 communities in which you have bought large tracts of land and built new buildings on them. Is that right, Dr. Alexander?

Dr. ALEXANDER. Something like that, approximately.

Mr. MURRAY. Are those communities or just individual houses built on separate tracts of land that are occupied similar to the Russian plan where they all live together and go out on the land?

Dr. ALEXANDER. Well, that varies all the way from scattered farms, of the typical American type, as many of them are. On some of them there will be 100 farms or 50 to 100 farms completely contiguous but separated.

Mr. MURRAY. But, as a policy, do you think it is a good policy to buy tracts of land and build complete buildings when the Government already has hundreds of farms that can be sold on which buildings are already erected?

Dr. ALEXANDER. Let me answer one of your questions at a time. We have four of these farms that are farmer-cooperatives. Mr. MURRAY. Is that like the one out in the Northwest where they all live in one close community and go out to the farms to do the work?

Dr. ALEXANDER. They vary; they are not exactly alike; but there are four of them farmer-cooperatives.

Mr. MURRAY. Where are they located?

Dr. ALEXANDER. One of these is in Arizona; another one in Mississippi. And then a variation from that is in southeastern Missouri; and then one in Indiana.

Mr. MURRAY. Is it not a fact that last year we had several people before the committee who were complaining about the pea-canning industry, and is it not a fact that your organization has furnished money to start cooperative canning factories in which the farmers themselves put in very little money, that the project was Government financed, you might say, 100 percent and used to compete with people who are in the canning industry?

Dr. ALEXANDER. I do not remember any canning factories at all. Mr. MURRAY. I think you have 21.

Dr. ALEXANDER. I do not think so.

Mr. MURRAY. At least, you had that many last year.

Dr. ALEXANDER. We do not have any canning factories.
Mr. MURRAY. None at all?

Dr. ALEXANDER. The cooperatives started little factories for their own consumption. We have set up some types of canning, where there has been canning for the community; the canning is of products for their own home consumption. I do not think they are in the canning business on a commercial basis. Of course, they may sell a little beyond what they can use.

Mr. MURRAY. I have gotten these figures from the Department of Agriculture showing that 23,000,000 quarts have been packed. I do not know whether it is a canning factory or just represents canning for their own consumption; that is, whether any of it was put on the market.

Dr. ALEXANDER. No.

Mr. MURRAY. That is why I raised the question. I can get a lot of information that I do not want but have difficulty getting what I want from the Department.

Dr. ALEXANDER. Of course, they may sell a little of their pack. Mr. MURRAY. But not operating commercial canners?

Dr. ALEXANDER. No; we are not financing commercial canneries. Mr. MURRAY. But the Government has taken a good many of these people off relief.

Dr. ALEXANDER. A great many of them.

Mr. MURRAY. And started them on farms?

Dr. ALEXANDER. A great many people who had been on relief or were near relief.

Mr. MURRAY. Is it not a fact that the Government's money has been put out, and that you have, in some States, canning factories established with Government money?

Dr. ALEXANDER. We have not marketed the canned products, if that is what you mean.

Mr. MURRAY. Just for home consumption?

Dr. ALEXANDER. We have tried to help these people can the commodities for their own use.

Mr. MURRAY. Just one more observation, Doctor

Dr. ALEXANDER (interposing). Most of the canning that you speak of was done in the homes with the pressure cookers.

Mr. MURRAY. There were 21 canneries. I got the information from the Department.

Dr. ALEXANDER. That is in 21 communities?

Mr. MURRAY. Yes.

Dr. ALEXANDER. That is for home use; not for commercial pur poses.

Mr. MURRAY. That is why I wanted to get the information; I did not know what the facts were.

Dr. ALEXANDER. Usually what we try to do is to encourage these people to help themselves. And, if they have got 500 or 1,000 cans of food in their pantry they are not going on relief, and we try to teach them to can the food, can enough to feed themselves.

Mr. MURRAY. Is it not true that in a country like Denmark where you have a purely agricultural country, where their chief industry is farming, you have an entirely different problem than where you have 75 percent of the people, while they live off the farmer do not live on the farm, and it is much easier to take care of a program of their kind when they are an agricultural country.

Dr. ALEXANDER. Perhaps so.

Mr. MURRAY. Than when you attempt to adopt that program for this country?

Dr. ALEXANDER. Of course you cannot superimpose their program on this country. But we can hope to develop one for our own country.

The CHAIRMAN. Mr. Andresen.

Mr. ANDRESEN. Just one other question: The average figure and the maximum figure you have given us for the cost of construction of homes does not take into consideration the expenditures made by the Resettlement Administration?

Dr. ALEXANDER. No; this is under the tenant purchase program that I am talking about.

Mr. ANDRESEN. We had some very expensive building under the resettlement program and under the rehabilitation program.

Dr. ALEXANDER. There were some higher cost buildings put under the resettlement program.

Mr. ANDRESEN. I know there was one in my district where the average cost was $5,200.

Dr. ALEXANDER. Yes.

Mr. ANDRESEN. And they are now being sold by you for around $1,450. I am glad to see you liquidating them.

The CHAIRMAN. Doctor, were you in Sweden while you were

overseas?

Dr. ALEXANDER. I was not.

The CHAIRMAN. Sweden loan rates, according to this publication, runs from 22 to 32 percent. The others are a little higher. Dr. ALEXANDER. Yes.

The CHAIRMAN. Mr. Pierce.

Mr. PIERCE. Dr. Alexander, if we get back of this program, in your opinion it will involve approximately how many farms, and how much money?

Dr. ALEXANDER. The authorization is $350,000,000 over a 3-year period.

Mr. PIERCE. You think it would involve that much?

Dr. ALEXANDER. That is authorized in the bill.

Mr. PIERCE. Do you think it would reach that amount?

Dr. ALEXANDER. According to the applications that we have there would be no difficulty in carrying out a program of that size. The CHAIRMAN. Mr. Pace.

Mr. PACE. Dr. Alexander, in your investigation, do you find any definite policy on the part of the insurance companies, with regard to

farm loans; that is, have they declared a policy of getting out of the farm-loan business?

The reason I asked that question is I notice in this publication, the Agricultural Finance Review on pages 54 and 55, that the Federal land banks now own approximately 39 percent of farm mortgages. Dr. ALEXANDER. Yes.

Mr. PACE. With the private loan companies the percentage has dropped from around 22 percent, in 1930 to 12.6 percent in 1939.

The thing that interests me is whether they have adopted a policy of getting out of the farm-loan business due to the fact that the Federal land banks could offer cheaper money.

Dr. ALEXANDER. The insurance companies have become the owners of a great deal of land on which they had loans. I think in my own State the John Hancock Co. had a great many farm liens and they had to take over a great many of those farms. And, I think they did not expand that business.

Mr. PACE. And I think that is true, is it not, with the Metropolitan? Dr. ALEXANDER. Yes; I think the big insurance companies have not made many farm loans recently.

Mr. PACE. Do you know whether they have adopted a definite policy to get out of that business?

Dr. ALEXANDER. I do not know what their policy is.

The CHAIRMAN. Mr. Gilchrist.

Mr. GILCHRIST. The figure you gave as the average of $1,300 was the average for the whole country as the cost of buildings?

Dr. ALEXANDER. Yes.

Mr. GILCHRIST. That was the cost of building the house?

Dr. ALEXANDER. Yes.

Mr. GILCHRIST. Of course, you could not build much of a house in the northern part of the United States-Iowa and Minnesota-for $1,300, could you?

Dr. ALEXANDER. In Iowa the average figure is the highest, $2,600. The northern section of the country requires more costly homes. They have to build a little better house; and I have that broken down by States and will be glad to put that in the record if you wish it.

Mr. GILCHRIST. There again it depends upon the locality and the kind of house required.

Dr. ALEXANDER. Yes; for instance, we have some houses on farms in Mississippi, five-room houses, that have been built for around $800. Those were none too good; but it runs all the way up to $2,500. Mr. GILCHRIST. They do not have foundations?

Dr. ALEXANDER. No full foundations.

Mr. GILCHRIST. Or cellars?

Dr. ALEXANDER. No. The highest average figure is $2,600.
Mr. GILCHRIST. They all have basements?

Dr. ALEXANDER. Yes. Of course, there is this difference, Mr. Gilchrist, the farms that we bought in the North have much better buildings on them and a much smaller percentage of new buildings have to be constructed, than in other sections of the country. The average for repairs on homes that we have repaired is a little less than $400.

Mr. GILCHRIST. I saw some of the buildings and improvements you were making in my district and I was very much pleased with what I saw. In Emmett County I saw four farms, and I drove by three more farms that I did not go upon. Those buildings that I saw could not be built for the average you have given.