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young man and practicing law, I assisted in organizing some of these drainage districts. I saw that land sell for $1.25 an acre. There has been expended on that land, in the levees that have been built, in the drainage ditches that have been dug, in the lateral drains that have been put in there, and in the pumping plants that have been installed, from $80 to $120 an acre; and all that has been done under the encouragement of the Federal Government and of the State governments. Every time you build a bridge in a navigable river, every time Congress authorizes a bridge to be built across a navigable river, it increases the difficulties of these drainage farmers, who farm back of their levees; it retards the flow of the river and there is more seepage and there is more water to pump. I can call your attention to districts where they have installed, out of money that they got from the sale of these bonds, the largest pumping plants in the world. In Holland they have no larger pumping plants than you can find in some of these districts. Now, these are some of the equities. This is a collective farming arrangement. These districts are all quasi public in character. When they pay their taxes, they pay the assessment on these bonds. The Federal Government has depreciated the value of this land by its policy of liquidating, both of the land bank systems--and this is what they are doing—both of those systems are going on the rocks. I do not want you gentlemen to have any illusions. You are going to have to come to the relief of both the joint-stock land bank system in the next three years, and of the Federal land bank system. They are adopting liquidation propositions under which they institute foreclosure peremptorily when they are 90 days in arrears in amortization payments, and after acquiring title they put these farms on the market and sell them for whatever any purchaser is willing to pay. There are no farm values now, nobody has any money to amount to anything that he wants to invest in farms. Every time that happens, and it is done under the auspices of the Federal Government, it depreciates still further the value of these farms.

This bill does not apply to new projects. There are no further additions possible, under any relief granted by this bill. It only applies to existing projects. The marvel of the world is the prosperity of France at the present time. We wonder how it happened. Her colonies that she obtained during the war are not contributing anything to her prosperity. They are a drain, so far, on her treasury. And yet France has accumulated two and a quarter billion dollars of the world's gold supply, half as much as we have, more of it than any other nation in the world except the United States. Last week the announcement was made that France was proposing to engage in international financing. Her prosperity since the warand no nation suffered more than

she did-her prosperity since the war must be due to something. What is it? I have been making a study of the question and I have obtained all the information that the French Embassy here have on the subject, all the information the United States Chamber of Commerce has on the subject, and all the information our Commerce Department has on the subject. It is an immense volume of information, and it is not yet complete.

At the present time our chamber of commerce is communicating with the Chamber of Commerce in Germany and also in France, at my instance; and our Department of Commerce is doing the same thing, and the French Embassy is doing the same thing for me, and soon I expect to have a lot more information. But from the information I have gathered, I have reached the conclusion, and it is inevitable, that the prosperity of France is due to the prosperity of her farmers. You can not trace it to any other possible source. Her farmers are prosperous. Her land is yielding more per hectare every year. Her submarginal lands, are becoming forest lands, and pasture lands. Her wheat lands are producing more than they have ever produced before. We read the other day, that there was a riot in France because the Government proposed to increase the price of wheat to $2 a bushel, and the farmers were getting $1.50 a bushel. They have a tariff there which is effective on wheat and on all farm products, and so far we have denied that to our farmers.

Now, you can call this what you want to call it. You can call it a subsidy if you prefer that term, but it is nothing alarming if it is a subsidy. But it is not a subsidy, because the Government is going to get 3 per cent on the investment. In France from 1818 down to the present time they have been developing a system of farm credits. In Germany, from the end of the Seven Years War in 1765, they have been developing a system of farm credits. The French system was never successful until 1899, and then the French system of financing farmers became successful, because the French Government subsidized the farmers. It was a clear subsidy.

In 1899 they organized the Credit Agricole Mutual, and the Government appropriated 40,000,000 francs directly from their treasury, and two years later the Government appropriated 25,000,000 francs direct from its treasury. Then they began to organize, as adjuncts to the Bank of France, 800 sub-banks, loaning to the farmers. Now they are floating bonds; the bonds carry slightly more than the interest rate. At the present time the Credit Agricole Mutual system in France has assets of 11,500,000,000 francs-in other words, nearly $2,500,000,000—and that is more money than we have loaned to 750,000 farmers, under both of our land-bank systems, both the joint-stock land bank system and the Federal land bank system. Now, they tax the Bank of France over there for the privilege of issuing notes, and of course that is a subsidy. That tax goes to the Credit Agricole Mutual.

The farmer pays interest on his loan, if it is a short loan, just for farm development, like our intermediate credit loans, of 41/2 per cent if they do not exceed one year, but for longer term loans the farmer pays from 212 to 234 per cent. Now, that is the secret of French prosperity at the present time. Two and a half per cent is the minimum interest charge. A cheaper rate of interest is given to those that have families of children, two or more children. The cheaper interest rate is given to young men who are also pursuing their studies in school. So as a result they are getting, under this system, on long term loans, interest at the rate of from 21/2 to 234 per cent. That is the secret of French prosperity.

The CHAIRMAN. Don't you think there are some other things to add to that secret; for instance, the fact that they have people that

work over there and do not spend anything at all? Does not that help to add to the national prosperity as well as to the individual prosperity?

Mr. RAÎNEY. I think conditions are improving very much. Recent statistics compiled by one of our great statistical organizations show that the money value of wages in France is increasing since the war more than the money value of wages in the United States, and that their standard of living is also increasing. I understand they have good standards of living in France, probably not quite as many automobiles per hundred as we have here, but they have all they want to eat and they are all employed.

The CHAIRMAN. Well, that is one thing I wanted to bring out, the fact that they are all employed, working every day, every member of the family helping to add to the national resources and prosperity,

Mr. RÄINEY. But even that fact, if it is true, if they all worked, working all the time, including the members of their families, that does not give them as much work as they need, because they have been encouraging immigration until this year, and most of those immigrants go to work out on the farms at the wages that they are able to pay. Now, I do not know of any reason why we should be afraid of this legislation because it gives the farmers cheaper money. Farming is, after all, the basic industry. The farmers have got to have cheap money if we are to proceed along in a prosperous course as a nation.

Mr. MICHENER. But the distinction is that you are not dealing with the farmers as a group, but you are dealing with a group of farmers.

Mr. RAINEY. Yes, sir.

Mr. MICHENER. That is the thing I have been inquiring about. You are dealing with a certain small group of farmers, to the detriment of the great mass of farmers who produce in competition with your small group.

Mr. Rainey. Now, I do not agree with the gentleman at all that any aid given to any class of farmers is a detriment to the other class of farmers. The other class of farmers are those who farm upon lands that are intrinsically valuable, without the addition of these extra works which the State and Federal authorities have encouraged. That is the difference. Their land is worth, whatever it is worth, $50 or $60 or $100 an acre, or whatever it is, not on account of anything that the Government has permitted to be done to it, but on account of the facts that this land is valuable; it has no rivers to overflow; there are no swamps there. This drainage land is valuable because these farmers have made the value, they have taken it when it had no value and have built up a value, and that value is disappearing rapidly on account of the fact that they can not get cheap money.

Mr. "O'CONNOR. A man who had a 200-acre farm has still got his farm; if he has paid for it, he has his investment.

Mr Rainey. Well, he may have the land, yes.

Mr. O'CONNOR. But he has got his investment, as compared with the man who spent $100 to improve it.

Mr. Rainey. Yes, but the $100 that he spent to improve it is absolutely wasted unless he can keep the water from destroying his crops, keep the river off of it, otherwise it is of no more value than it was

before he expended his $100 or $120 per acre on it, encouraged by State governments and by the Federal Government.

The Chairman. Mr. Rainey, it is 12 o'clock now, but we will continue these hearings, if Mr. Smith has something more to present.

Mr. Smith. There are several other members who would like to speak very briefly, and present their views upon this matter. I might say that as Mr. Rainey referred to the interest rate, the interest rate under the Federal relief act is not less than 4 per cent and may be as low as 2 per cent.

The CHAIRMAN. We will adjourn until 10.30 o'clock to-morrow morning

(The petition signed by 135 Members of Congress, submitted by Mr. Smith, is as follows:)

Petitions signed by Members of Congress from the following States are herewith submitted : Arkansas.

7 Montana... California

11

North Carolina. Colorado

North Dakota..

3 Florida

4 Oregon Idaho

South Carolina.

6 Illinois 13 Tennessee

10 Louisiana

8 Texas Minnesota

10 Utah. Mississippi 8 Washington.

4 Missouri.16 Wisconsin

3 Individual letters were written to the (Chairman of the Rules Committee by the Representative from Arizona, Nevada, and New Mexico.

7

+

3

2

12

2

PETITION OF REPRESENTATIVES IN CONGRESS FROM THE STATE OF OKLAHOMA, IN

BEHALF OF S. 4123
Hon. BERTRAND H. SNELL,
Chairman Committee on Rules,

House of Representatives. MY DEAR MR. SNELL: The undersigned Members of Congress respectfully request a hearing before the Rules Committee on H. Res. 330, introduced by Mr. Smith, chairman of the Committee on Irrigation and Reclamation, to give a special rule for the consideration of S. 4123.

We believe the proposed legislation is very much needed as farm relief
will prove a direct and immediate aid to the large number of farmers who are
living in drainage, levee, water, and other improvement districts.
We favor the passage of this legislation before the adjournment of Congress.

Tom D. McKeown,
J. V. MOCLINTIC,
JED JOHNSON,

WILBURN CARTWRIGHT. I concur in above.

WM. WILLIAMSON, (S. D.).

PETITION OF REPRESENTATIVES IN CONGRESS FROM THE STATE OF ARKANSAS, IN

BEHALF OF S. 4123
Hon. BERTRAND H. SNELL,
Chairman Committee on Rules,

House of Representatives. MY DEAR MR. SNELL: The undersigned Members of Congress respectfully request a hearing before the Rules Committee on H. Res. 330, introduced by Mr. Smith, chairman of the Committee on Irrigation and Reclamation, to give a special rule for the consideration of S. 4123.

We believe the proposed legislation is very much needed and as farm relief will prove a direct and immediate aid to the large number of farmers who are living in drainage, levee, water, and other improvement districts. We favor the passage of this legislation before the adjournment of Congress.

D. D. GLOVER.
TILLMAN B. PARKS.
W. J. DRIVER.
C. A. FULLER.
HEARTSILL RAGON.
PEARL P. OLDFIELD.
EFFIEGENE WINGO.

JANUARY 21, 1931. Hox. BERTRAND H. SXELL, Chairman Rules Committee, House of Representatives,

Washington, D. c. My DEAR Mr. SNELL: Senate bill 4123 is of vital interest to my State as well as many others and I shall therefore greatly appreciate it if a rule can be granted on this legislation so that it may be considered at the present session. With kind regards I am Very sincerely yours,

L. W. DOUGLAS.

PETITION OF REPRESENTATIVES IN CONGRESS FROM THE STATE OF CALIFORNIA IN

BEHALF OF S. 4123

Hon. BERTRAND H. SNELL,

Chairman Committee on Rules, Capitol Building. MY DEAR MR. SNELL: The undersigned members of Congress respectfully request a hearing before the Rules Committee on H. Res. 330, introduced by Mr. Smith, chairman of the Committee on Irrigation and Reclamation, to give a special rule to S. 4123.

We believe the proposed legislation is very much needed and as farm relief
will prove a direct and immediate aid to the large number of farmers who are
living in drainage districts, levee districts, water districts, and other im--
provement districts other United States Reclamations.
We favor the passage of this legislation before the adjournment of Congress.
HARRY L. ENGLEBRIGHT.

A. M. FREE.
H, E. BARBOUR.

C. F. CURRY.
ALBERT E. CARTER.

PHIL D. SWING.
W. E. EVANS.

RICHARD J. WELCH.
FLORENCE P. KAHN.

CLARENCE F. LEA.

PETITION OF REPRESENTATIVES IN CONGRESS FROM THE STATE OF FLORIDA IN BEHALF

OF S. 4123 Hon. BERTRAND H. SNELL,

Chairman Committee on Rules, House of Representatives. MY DEAR MR. SNELL: The undersigned Members of Congress respectfully request a hearing before the Rules Committee on H. Res. 330, introduced by Mr. Smith, chairman of the Committee on Irrigation and Reclamation, to give a special rule for the consideration of S. 4123.

We believe the proposed legislation is very much needed and as farm relief will prove a direct and immediate aid to the large number of farmers who are living on drainage, levee, water, and other improvement districts. We favor the passage of this legislation before the adjournment of Congress. Respectfully,

HERBERT J. DRANE,
RUTH BRYAN OWEN,
TOM YON,
R A. GREEN,

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