to the different cooperatives, "We will lend you 16 cents" they assumed the responsibility and the moral obligation to sustain it.

Mr. CREEKMORE. May I shake your hand, Senator?

The CHAIRMAN. I think that there is something else coming after it.

Mr. CREEKMORE. It is certainly a pleasure, after arguing this thing for 6 years, to find some Senator who gives us that much credit.

The CHAIRMAN. Judge Billings said that he lived 40 years before he found a good place for a boil, and somebody asked him where, and he said, "On the other man."

We always can find some place to place our mistakes. We take credit for all of the good things. I maintain here and now, because I want to be fair to all parties concerned, that the Farm Board with its $500,000,000 capital, was supposed by those of us who framed the legislation, that that capital would be used largely for the purpose of obtaining credit, and being looked upon as being a substantial institution, and that the commodities that they would receive as the agent of the farmers, and producers, would largely liquidate them-I mean finance themselves. Whatever cotton they got, they could borrow sufficient on that cotton that they needed, to carry on their business.

It transpired, for some reason or other, and to my disappointment, either through inability to get to the farmer the real meaning of it, they got very little cotton compared to the crop, and in order to demonstrate the practicability of it they undertook to buy some cotton, and they bought some wheat.

Now, when everything is said and done, let us be perfectly fair: The farmer, not understanding, and being a little chary of just what he did, having been burnt all of his life, he was even scared of smoke, much less fire; he did not rally to it as we expected him to do, and say, "Here is our cotton; we have never been able to sell it at a profit; suppose you take it and with your $500,000,000 see what you can do with it."

But, in order to keep from buying, as cotton was 18 cents at the time, they thought a 16-cent loan would give them a $10 margin and be a pretty good proposition, and no sooner had they begun their operation in lending than it was apparent to everybody, and naturally great opposition to those who did not care to lose their business, and the Federal Farm Board appealed to whatever cooperative organizations there were, and said, "Now, we will lend you", to the growers, "16 cents a pound", and they did it for the express purpose of getting control of the major part of that crop, and demonstrate to the farmers that through cooperative action they could more or less be masters of their own production.

We have a lot of cotton experts around this town, and they concluded that all they needed was a little money and an office, and a place to sit down, and they would run it; and I maintain here today and now, in justice to the cooperatives as they then existed, that the Government or the Farm Board set up by the Government through what was known as the Marketing Act, were morally and financially bound to shoulder any loss incident to the decline of cotton below that 16 cents, and to keep their contract, and it was a contract, and we have something similar to it in this 12-cent loan now, and I want to say this much, because it is a fact, and you can cover it over and mess it up as much as you please, with a whole lot of verbiage, but

the fact remains that the cooperatives were asked to be the channel through which the Farm Board could approach the producer, get his cotton, and therefore they were morally and financially bound to make good.

And the wreckage that occurred was when the thing failed and in the opposition of the market, or whatever it was that put cotton far below the 16 cents. The Government had organized the Army, and assumed the responsibility of victory or defeat, and when defeat came they should have accepted it in good faith and put these people right back where they found them.

Now, it isn't a question for me and you to ask whether or not they voluntarily accepted the 16-cent loan. Their membership, and I recognize that I was probably just as guilty as anybody else, we rushed in to get it, and the officers of the cooperatives had no more chance than those people down there in that village under that Johnstown flood to withstand it, and restitution ought to have been made, and ought to be made. I have said all I want to say about it. Mr. WYLLIE. Is there any further claim pending at the present time by the cooperatives, against any of the governmental agencies on account of any of these past operations?

Mr. CREEK MORE. There are a number of inequities in the 16-cent loan, and the 90-percent loan, and insofar as I know there are no active claims being considered. I mentioned that I thought Congress had a certain moral responsibility to the cooperatives and to the members in regard to the 1929 and 1930 operations, and I do not believe Congress had any obligation to the cooperatives in the 1930-31 operation because we were consulted, and we went into it with a little fear, but with a desire to serve and work with the Farm Board.

Congress settled that operation for us by directing the Farm Credit Administration, a successor of the Federal Farm Board, to take over the cotton we had on hand, at the loan value, plus the carrying charge, plus the overhead, less any profits A. Ĉ. C. A. made out of the operation. That was practically the same deal that the Federal Farm Board made with the cooperatives in April or May of 1930, but which the Attorney General overruled them on, on the statement that the act did not give the Federal Farm Board authority to make that settlement, so this other settlement was made and nothing but an act of Congress can correct that situation.

Mr. WYLLIE. Apparently; how much would that amount to in dollars and cents?

Mr. CREEKMORE. I think it is about $4,000,000 the cooperatives were penalized, outside of the equities lost by the members in working with the cooperatives and the Federal Farm Board in the 2 years' operations.

The CHAIRMAN. Mr. Creekmore, in view of the fact that your organization has something of a public interest, it is still looked upon as being an organization primarily for the benefit of the grower?

It is a matter of such importance, and the relation that you bear to the grower, and in a way to Congress, that you are not in a class with the wholly private corporation and concerns, and before this session adjourns I want to have a full meeting of the Agricultural Committee and have you and your officers appear before that committee, and we will go into the details of your history, and your present status, and your workings, so that your relation to this

problem that we are studying can be known definitely, as distinct and apart from our investigation of the private concerns, and we will do that before this session adjourns and will make the announcement at such a time when the members of the committee will not be as they are now, pressed so desperately for business other than attendance on hearings.

I thought it was justice to you and to all parties concerned to make this statement, so that all of the facts in relation to the A. C. C. A., and the market, and the farmer can be clearly set forth, without any entangling relations to the operations of purely private concerns. Mr. CREEKMORE. I am sure I voice the opinion of the officers of A. C. C. A. when I say that, to me, that is the most gratifying statement I have heard in 6 years I have been with the cooperatives. It would be a great pleasure for us to come before you, to give you the facts, not alone as to our operations, but our honest opinion about the different things; and then, for God sake, if we are not doing a service, put us out of business; and if we are, recognize us.

The CHAIRMAN. I hope that we will be fortunate enough to do something before all of the growers are put out of business.

Mr. CREEKMORE. Well, put us out of business, and see what happens to the grower.

The CHAIRMAN. I don't have to do that.

Mr. JOHN C. WHITE. There are several questions which I would like the privilege of asking Mr. Creekmore. I have them here, so you can be sure that I won't last more than a few moments.

The CHAIRMAN. Well, Mr. White, we have not yet arrived at a point or I haven't, as chairman, where others and the committee and the witnesses may be cross-examined.

Now, as soon as we are through with our routine business, rather than have it diverted, we will take under consideration the crossexamination.

Now, with all due respect to you and to others that are interested, this committee has a program that it wants to carry out, and it will carry it out, and then the counsel will confer with the committee and the chairman as to the program.

Mr. WHITE. Mr. Chairman, may I suggest

Mr. CREEKMORE. May I interrupt a minute? Mr. White, in some parts of my testimony I have been rather critical of the firm of Anderson, Clayton & Co. For that reason I wish, of course, to follow the desires of the chairman; but because I have been critical, and because I am prepared at any time to explain under cross-examination my views, I shall be pleased at this time, or at a little later date, to return here and submit myself to cross-examination of the attorney of Anderson, Clayton & Co.

The CHAIRMAN. We will have our cross-examinations when we have heard our main witnesses.

Mr. WHITE. Of course, Mr. Creekmore's statement that he would return obviates what I thought was the necessity of asking these questions immediately, because I didn't anticipate that he would be called back.

Mr. CREEKMORE. I make that statement because I have been critical in some instances, and I don't want to seem to evade any crossexamination.

The CHAIRMAN. Let me make this statement here and now: I will repeat again, we are here to try to get the facts, and anyone under oath makes his statement; and if anyone here is prepared under oath to prove to the contrary, why it would become the duty of this committee to see that those misstatements are corrected; and I, as chairman, will be delighted to have all misstatements that are deemed incorrect, rectified; but we are not here to protect or to prosecute anyone, and we want to get the facts, and if the facts are detrimental to anyone, why he will just have to grin and bear it.

Mr. WHITE. Mr. Chairman, of course, these questions would simply take a few minutes, and I believe

The CHAIRMAN. No, no. Let the thing go on now, and you will have your day in court.

Mr. WHITE. It is not so much controverting what Mr. Creekmore has to say as bringing out certain additional information which I think would be for the benefit of both the committee and of the hearing, but, of course

The CHAIRMAN. You will have your opportunity to do that.
Mr. CREEKMORE. Now, may I make one very short statement?

In discussing the action of the Stabilization Corporation, and having made a mistake in the sale of spot cotton, and replacing of futures, from the testimony it would seem that I charge the Farm Board with that entire responsibility.

I want to say that I consulted with them, but I, perhaps, had as much to do with it as the Federal Farm Board, and I want to share my full responsibility on that operation.

I stated that I thought it was a mistake, and I have come to that conclusion after observation of 6 years of the governmental operations, and I think that it is a mistake for any governmental operation to deal in futures.

If it is necessary to sell the cotton, I have come to the conclusion that the cotton should be sold, but should not be replaced by futures, because I think it causes too much trouble.

I make this statement in deference to the Federal Farm Board, because I think it right, and I also wish to make the statement that in criticizing the operations of the A. A. A. pool in doing the same thing, that there was no intention to criticize the handling of the pool by Oscar Johnson, and I think he has done a wonderful job, considering what he has, but I did not want to let the record remain as if I had thrown the whole responsibility on the Federal Farm Board.

The CHAIRMAN. I want to make this statement: I don't know, and I don't know what I would have done under the same circumstances, but it does appear to those of us who passed the law, and made the condition possible, there has been given explanations which, to the party that gave them, may have seemed justifiable, but I have failed to understand, and I want this in the record, how in disposing of the physical cotton, the holdings, supplying the demand, receiving the money, and then buying futures I have failed utterly to see just what benefit there could be derived from it because you have disposed of a thing whose value, quality, character, with all that there for the buyer to see, and substitute in lieu thereof an equal amount of cotton, whose value and quality was in the hands of the seller, and

55627-pt. 1-36-52

took the actual cotton that the farmers owned, whose quality and character you knew, and put it on the market and received the price, and then invested in something that he nor anybody else could ever know what was the value of it

Now, of course, there may be an explanation, but I have never seen one that did that thing that didn't have a dozen explanations, but to me it did not seem, and I don't think to the committee it was a very wise thing to convert.

Mr. CREEKMORE. May I have the opportunity of going into that with you and the committee when we and the A. C. Č. A. officers go

into that?

The CHAIRMAN. Yes; and some other things. When we get through with you, God help you. [Laughter.]

Mr. CREEKMORE. Let us hope that the situation will be clarified at that time.

The CHAIRMAN. Mr. Williamson, I understand that you, associated with Mr. Creekmore, desire to make a statement.

Now, you can proceed to make that statement, and I hope that the committee will not take advantage of the chairman's absence while he answers the roll.

Mr. WILLIAMSON. I would like very much, Senator, if I could make the statement when you are present.

The CHAIRMAN. I will be back in just a minute.

Mr. WILLIAMSON. I would appreciate it.

(The chairman left the committee room.)

At the conclusion of a short recess, the following proceedings were had.

TESTIMONY OF N. C. WILLIAMSON

(Mr. Williamson was duly sworn by the chairman.)

Mr. WILLIAMSON. Mr. Chairman, of course, I think I am a farmer, so if I don't follow the usual proceedings it will be because I am not trained along that line, so you can call me if I get out of line.

The CHAIRMAN. I think you are pretty well trained; you can go ahead.

Mr. WILLIAMSON. I believe that all of us, I don't know whether any of us can exactly look at any question from an entirely unselfish point of view. I am a cotton farmer, and I have been all of my life. I realize that my way of looking at this marketing situation is from the viewpoint of a farmer who grows cotton.

I know generally about the marketing system, and I don't know all of the technical phases of it, but I do know how it affects me as a cotton grower, and I believe the group that I represent, as a farmer myself, and as a farmer organization, I think most farmers look at it about like I do.

I believe that we are the largest group interested in the question of marketing cotton. In other words, we are not interested in it from a profit standpoint, but from the standpoint of getting as much as we can out of the cotton after we grow it.

You made the remark yesterday, Mr. Chairman, that the farmers haven't any bargaining power when it comes to selling their cotton, and they never had, and that is generally true. We all know that. However, since the organization of the cotton cooperatives under