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that high officials in this Government have repeatedly had the following to say about the Sugar Act of 1937:

1. American consumers are obliged to pay more than $350,000,000 per annum in excess of the value, at world prices, of their annual sugar supply (without allowance for net revenues under the act of about $47,000,000). This is equivalent to a tax of approximately $2.70 per capita on the population of 129,000,000 people. It means, on the average, a levy of more than $10 per family, including that one-third of the Nation which is ill-nourished [italics supplied], and it represents an amount of purchasing power equal to more than 50 quarts of milk and 50 loaves of bread for each family in the United States.-Secretary Wallace.

2. In the first place, the domestic sugar-producing industry receives an effective protection, in the form of prices in excess of the world level, of 90 cents per hundred pounds, raw value, from the prevailing tariff on Cuban sugar. In the second place, on the basis of current prices, the effect of the quota system [italics supplied], provided for in title II of the Sugar Act of 1937, is to raise domestic sugar prices an additional $1.15 per hundred pounds, raw value. In the third place, the conditional payments to be made to sugar-beet and sugarcane growers by the Government, under the provisions of title III of the Sugar Act of 1937, are equal to another addition in protection of $0.60 per hundred pounds, raw value. The sum of these protective devices is the equivalent of a specific tariff duty of $2.65 per hundred pounds of sugar, haw value, or on the basis of the current world price of 96 degree raw sugar, New York basis, namely $1.10 per hundred pounds, the equivalent of an ad valorem tariff rate of 240 percent [talics supplied] Secretary Wallace.

3. In fact the total public subsidy per hundred pounds of sugar, raw value, now being received by the domestic-sugar industry as a result of direct governmental action is equal, in terms of the amount of sugar derived from average sugar beets, to approximately $8.40 per ton of sugar beets. This is considerably greater than the entire amount received by growers for the sugar beets they produce, so that it might be said that in effect the public is providing sugar-beet processors with free raw material and a substantial price subsidy in addition.-Secretary Wallace. The committee might inquire into the first point for the reason why the American consumer is vitally interested in sugar legislation. Ten dollars in taxes now being paid by the American family could be used to bolster the market for other American products such as cotton, wheat, milk, and so forth.

If the committee is interested in the reasons why representatives of the beet processors are urging the Cummings bill, inquiry might be made into the second and third points of the foregoing. In this connection, I might say that it is human nature for any processor to protect his source of supply of raw materials, especially when that source of supply, according to Mr. Wallace, is given to him free of all costs, with the addition of a subsidy, the bill being paid by the American public generally.

SUGAR AN ESSENTIAL FOOD AND RAW MATERIAL

All agree that sugar, once a luxury, is now an essential food. It is vitally necessary to the health and well-being of this Nation. In addition, it is an important raw material in time of war. This is a time of war. Sources of world sugar supplies are being cut off daily from European countries. The strength of nations which do not have their own supply of sugar is being adversely affected. Sugar prices on the world market are rising. I quote from an Associated Press dispatch dated April 13, 1940, from New York:

A bullishly inclined sugar futures market appeared still under the influence of war news today.

Both domestic and world contracts advanced. Dealers and speculative buying was influenced by threats to European sugar supplies inherent in the broadening

war together with the high place sugar holds as a war- and peace-time necessity [Italics supplied.]

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Just as important sugar sources are being cut off from European countries, so can they be cut off from this country so long as we continue our present policy of depending upon foreign countries and offshore areas which are vulnerable to enemy attack for 70 percent of our sugar needs.

We are with wisdom spending billions of dollars on national defense, and yet we are overlooking the fact that we have not provided any means whatsoever for the protection of our sources of an essential peace- and war-time commodity. We can protect our source of sugar supply by doing away with the Sugar Act of 1937 and thus allow domestic producers to supply the American market. This action will be the taking of an important step in national defense. It will not cost this Government one cent by way of appropriation or otherwise, and, in fact, as previously shown, will actually save the American people millions of dollars. What greater contribtuion in one single stroke could be made in the interest of national defense and in the interest of the American people generally?

SUMMARY OF FLORIDA'S POSITION

Representatives of other sugar-producing areas will, no doubt, think thus far that my purpose is to attack the position that each has taken. Far be my purpose from that. I can say to those from the beet area that Florida is not interested in doing away with normal protection for them. We are willing to see them continue to have adequate tariff protection. Florida stands for this, and if anyone doubts it, let them take a look at our vote on the reciprocal trade program. I would point out in this connection that, with the abandonment of the Sugar Act of 1937, domestic areas would be automatically protected with a $1.50 per hundredweight tariff. And so we of Florida say to the representatives from the beet areas, and from the other sugar-producing areas, and to all persons and parties generally that, so long as they recognize Florida's right to produce sugar for the American market, Florida, and we of Florida, will get along with them perfectly. On the other hand, for those who want to continue to stifle an industry that these United States need and refuse to recognize that right by concrete actions, then Florida, and we of Florida, will fight to the end. Our position may thus be summarized as follows:

1. We will vigorously oppose the reenactment of the Sugar Act of 1937, or any legislation of similar nature, which curtails domestic production and Florida's production.

2. We will vigorously oppose any legislation which provides three different and cumulative means of protection and are against such cumulative means of protection which are quotas, tariff, and benefit payments.

3. As to tariff, we contend that we do not need any protection whatsoever on sugar nor benefit payments, but say that if the beet producers need protection we are perfectly willing to see the $1.50 tariff be reinstated and continued.

The reasons for our position have been heretofore stated.

WHAT SHALL THIS CONGRESS DO?

You ask me, Mr. Chairman, what shall this Congress do? The answer is simple. Take no action, and the situation is solved; quotas,

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benefit payments, and all other injustices under the present act will be ended. The beet growers will have their protection with a $1.50 tariff. In this connection, several things have happened during these hearings which bear out my contentions.

First, the President did not express satisfaction when he signed the Sugar Act of 1937. In fact, he expressed considerable dissatisfaction upon signing that act. It is well to note that he has not asked for sugar legislation at this time. I have already given you some of Secretary Wallace's views of this act. Secretary Ickes' views on this point are well known. He said in 1937:

It will be recalled that during the administration of President Wilson, the Congress decided, after careful consideration of the basic question of continuing to subsidize domestic sugar production, that the whole matter was indefensible, and forthwith provided for the elimination of all subsidies. [Italics supplied.] But there probably would be some improvement in efficiency in the continental areas, if restraints were removed, through the tendency of production to move to the lower cost and better adapted locations.

Nothing has happened which would show us that the considered opinion of Congress under President Wilson was not correct, and, in fact, the chain of events convince us that its action was better advised than the action of Congress in 1937 in enacting the present law.

Second, only one correct and sure conclusion can be drawn from these hearings and the various hearings which have taken place all over Washington in various hotel rooms and other places during the past 3 days. That conclusion is that there is a great deal of confusion among all sugar interests as to the kind and type of legislation which, if any is adopted, would satisfy all interests.

Therefore, I say that if various and sundry sugar interests are at loggerheads over what legislation to adopt, and it is impossible for them to get together, why should this committee endeavor to settle the controversy? This committee certainly cannot ask Congress to agree to legislation which sugar interests themselves cannot and have not agreed to. The wisdom of this argument is more particularly true when we know that the refusal of this committee to act will be to the betterment and benefit of the people of these United States.

In conclusion, I can assure you in no uncertain terms that Congress is yet to see its biggest fight of the year in the event it is asked to reenact the Sugar Act of 1937 or any legislation which smacks of provisions similar to that act.

The CHAIRMAN. We will hear Mr. Lenz.

STATEMENT OF HERMAN LENZ, REPRESENTING THE SUN RIVER AND PONDERA BEET GROWERS' ASSOCIATION

Mr. LENZ. Mr. Chairman, my name is Herman Lenz, Great Falls, Mont. I am president of the Sun River & Pondera Beet Growers Association and also a director of the Western Beet Growers' Association. I have a statement that I would like to have permission to read.

The CHAIRMAN. Is it a brief statement?

Mr. LENZ. It is brief.

The CHAIRMAN. All right, you may proceed.

Mr. LENZ. There are over 200,000 acres of irrigated land in the three counties of Pondera, Tetor, and Cascade near Great Falls,

Mont., known as the Sun River and Pondera area. Two-thirds of this land is well adapted to the production of sugar beets. The farmers are anxious to grow beets as is indicated by the fact that in 1938 they signed contracts with their associations to grow over 11,000 acres of sugar in 1939. They were stopped from doing so by the administration through the Sugar Act. Those same farmers and their neighbors would like to plant 20,000 acres of sugar beets in 1941, providing they can get a price for them which will give them a profit above cost of production and providing a processor can be given the privilege of making and selling the sugar from those beets.

Our growers have been given assurance that if legislation is passed which will assure them that the sugar industry will be allowed a normal expansion in our section and that such expansion will be allowed to stand, they will be provided with processing facilities.

The importance of the value of sugar beet production and its effect. on crop production on irrigated farms in Montana, is clearly illustrated in a comparison of the crop values on the Huntly project in Yellowstone County and the Sun River project in Cascade and Teton Counties. At Huntly in 1939, 25 percent of the cropland was in sugar beets and the average gross per acre value of the entire project including all crops, was $43.23. The Sun River project on the other hand had less than 1 percent of its land in beets and had a crop value of $13.21 per acre. (Figures from Bureau of Reclamation Crop Report.)

Irrigation facilities and the water supply for these lands are excellent as is shown by the fact that the Valier project in Pondera County has storage facilities for 142,000 acre-feet of water and an irrigated area of about 65,000 acres. The Sun River project has storage facilities for 143,640 acre-feet of water for a present irrigated area of about 65,000 acres. The balance of the irrigated land in this district is served with water from rivers and streams from private water rights and private irrigation systems.

The Government is spending vast amounts of money for reclamation projects and to rehabilitate stranded farm families. We think these are worth-while national projects and are approving them, but we cannot understand the inconsistency of building and setting up these farms and then depriving the farmers of the privilege of raising the only crop which will make it possible for them to repay their obligations and to build and maintain from plants capable of providing a good family living and keeping these folks permanently off the relief rolls.

Let me summarize our case briefly:

First, we have in the Sun River area 200,000 acres of good land with plenty of water available for it now.

Second, farmers want to grow sugar beets for sugar.

Third, sugar beets are the one cash crop that can be grown successfully in our section of the country.

Fourth, with the passage of satisfactory legislation processing facilities are assured for our growers.

Fifth, we believe the American farmer is entitled to the privilege of producing more than 30 percent of the sugar the American public eats. We also believe the American people are willing to pay a price for sugar which will allow us a profit for raising the beets and the processor a profit for making the sugar, and that the development of

this home industry will result in the creation of a large undeveloped market for manufactured goods. We do not believe it is good business for the Government to deny farmers on irrigation projects the right to raise the only cash crop they can raise which will enable them to pay for their farms.

Finally, the farmers in the 11 Western States want and insist on having their share of this sugar industry and we won't take no for

an answer.

The CHAIRMAN. That completes the list of witnesses that I have. Mr. King desires to make a statement.

Mr. KING. With your permission, Mr. Chairman, I will file my

statement.

The CHAIRMAN. Without objection, you will be permitted to do so, and it is so ordered.

May I state to the committee that I have had several concise tables prepared by the Department, and I would like to have permission to insert the appropriate tables here in the hearings at the appropriate place. They will not take up much space. Those tables give the figures on the prices, income, payments, and so forth.

Without objection, that may be done.

May I say now

Mr. HORTON. May I ask what became of the suggestion of yesterday that the growers get together and iron out all of their difficulties and report back to this committee and tell us exactly what they want to present in a bill for our further consideration?

The CHAIRMAN. Well, I have had no report from that suggestion. I do not think it is a part of my functions to check up on it. Mr. CUMMINGS. Would the gentleman like to stay here until that report comes? [Laughter.]

The CHAIRMAN. A number of statements have been filed by different interested people and organizations, which will appear in the record.

MINNESOTA-DAKOTA SUGAR BEET DEVELOPMENT ASSOCIATION. STATEMENT TO COMMITTEE ON AGRICULTURE OF THE HOUSE, APRIL 11, 1940, BY CLARENCE W. ORR

It is my privilege to represent the Minnesota-Dakota Sugar Beet Development Association, an organization consisting of about 1,200 farmers, all located in the Red River Valley of the North, covering a territory about 40 to 50 miles in width and about 200 miles in length, about equally divided between Minnesota and North Dakota. In addition to the 1,200 members of our organization, there are hundreds of other farmers in our territory interested in sugar-beet production. This territory was first opened up to agriculture about 70 years ago. For a good many years following it was termed the "bread basket of the world." due to the fact that wheat was their main crop. Finally, due to many causes, elements, etc., they had to change from the one-crop system.

In 1923 they started raising sugar beets. A processing plant was built at East Grand Forks, Minn. This plant has a capacity which will take care of about 25,000 acres of sugar beets. This acreage is scattered up and down this vast valley. You can readily see we have only combed the surface as far as potential acreage is concerned. We have learned that sugar beets can be grown successfully in the valley from one end to the other.

The farmers of the valley have been alert to the possibilities of the crop. Year by year they have been increasing their tonnage per acre. Year by year they have improved their manner of farming, until now-and I venture to say without fear of contradiction-they are the most mechanized of all beet areas. In this semiarid area they have made a very enviable record as sugar-beet farmers.

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