if his costs are such that he cannot sell at the regulated price, will be forced to deal with the Government through some board or agency already created. This is not necessary and would not be necessary prices were set with the idea of maximum production. It is my opinion that the departure from a one-price standard is possibly one of the most dangerous features of the bill and should be eliminated. if Finally, gentlemen, I want to emphasize with all the force I can, the absolute necessity of coordinating our entire defense machinery. I need not point out to you that most of the existing defense agencies have been set up by Executive order, either under general statutes passed many years ago with vague authorities, or by Executive order without specific statutory command, as in the case of the present price administration. The division of authority, the overlapping of functions, the lack of adequate control in a single head, are all operating in the direction of inefficiency and confusion. No matter what kind of price-control measure Congress passes and no matter what other measures it passes in the field of national defense, the thing the country most needs today is an effective coordination of all defense agencies under one head, with authority to make decisions, to cut red tape, and to end all friction and confusion among the various agencies dealing with defense. This, of course, would not require any additional legislation. I thank you. Senator BROWN. The committee will be in recess until 2 o'clock this afternoon. (Whereupon, at 12: 15 p. m., a recess was taken until 2 p. m. of the same day.) AFTERNOON SESSION The committee reconvened at 2 p. m., upon the expiration of the recess. Senator BROWN. The committee will be in order. Congressman Patman, do you want to go ahead now? Representative PATMAN. That will be satisfactory to me, Mr. Chairman. Senator BROWN. We are endeavoring to enforce a 15-minute rule on account of the large number of witnesses, and if you can live up to that we will appreciate it. Representative PATMAN. It is satisfactory to me to do whatever the committee desires. STATEMENT OF HON. WRIGHT PATMAN, A MEMBER OF THE HOUSE OF REPRESENTATIVES FROM THE STATE OF TEXAS Representative PATMAN. Mr. Chairman, may I be privileged, before I discuss this bill, to ask your consideration of a credit-union bill that is pending in this committee? Senator Sheppard sponsored the bill until his death. I was able to get the bill passed by the House, and it is now in the Senate committee. That bill is a bill to allow credit unions to invest in shares of building and loan associations and similar institutions. I do not think there could be any possible objection to it. Senator BROWN. All right. We will try to dispose of that at the first full committee hearing we have. Representative PATMAN. Will Senator Bankhead be here this afternoon? Senator BROWN. The Senate is still in session, but I think he will be here. Representative PATMAN. The reason I ask is that he asked me to come over. Senator BROWN. Yes. Representative PATMAN. I want to say something especially about the farm part of this bill. We spent 3 months on this bill in the House-nights, days, Saturdays, holidays, and other times. We know that this is a troublesome, knotty problem. It is my opinion that this will not prevent inflation; it is only a little more than a pinprick in that direction. Senator BROWN. You have in mind principally section 3, do you? Representative PATMAN. Yes, sir. However, it is aimed in the direction of preventing inflation. I think the bill that passed the House covers practically everything that is needed in our nationaldefense program at this time. If you will notice Mr. Henderson's testimony, he said he needed the power to control, most of all, new metals, including steel, aluminum, and copper, and also such things as chemicals, imports, and rents in defense areas. Well, all those things are in the House bill. Now, as to agriculture: I am frank to admit that at first I was opposed to putting agriculture in, but later I was convinced that we should put agriculture in, in order to protect it, because prices could be fixed on the finished products in a way that would crush the producers of raw material. That is the reason why we put agriculture in. This 110 percent of parity is a very small amount. For years we worked on parity. We wanted parity, yes; because it was more than what we had. No one ever claimed that the 1909 to 1914 average was a fair parity; it was not. It was based upon a low standard of living. If you adopt that principle, you are adopting the lowest standard of living. You are not taking into consideration automobiles, gasoline, radio, modern improvements, the increased cost of education, and the increased cost of other things that we now buy that we never had back in 1909 to 1914. So, that parity is unfair. This 110 percent is low. I have here, Mr. Chairman, some tables, if you would like to have them placed in the record, showing 40 major farm commodities, the highest prices in 1919 and 1929, the average prices in October 1941, the 110 percent parity prices, and the Brown amendment prices. There is very little difference in them. Cotton, I think, is the item that increases more. How much does it increase? Senator BROWN. By reason of the Brown amendment? Representative PATMAN. Yes. It increases from about 17 cents to about 21 cents. The actual increase above what Mr. Henderson will agree on is 2.65 cents per pound; that is all. How much is that in a $2 shirt? It is only 114 cents. That would increase a $2 shirt a cent and a quarter. Remember, gentlemen, that we are dealing with raw materials, the cheap things, that mean much to the farmers, between 6,000,000 ́and 8,000,000 farmers, many of whom do not have a good standard of living at all, while half of them have a subnormal standard of living. I do not think we should pass a law that would permit them to have a lower standard than they have now. If someone were to offer an amendment to this bill that provided that no price shall be fixed that will cause a producer of a product to earn less than 40 cents an hour for the hard labor that is produced upon a farm—that is, the bending, stooping, lifting, and everything else, in the rain and cold and hot weather-no one could afford to vote against it. Yet 2112 cents per pound for cotton means 212 cents an hour for labor; that is all it means. Why in the world people can argue that this section 3 is unreasonable, when it will not even allow farmers to make 25 cents an hour, I cannot understand. Personally I should like to go much beyond that in the interest of the country, because it is not in the interest of the country to have such a large group of its population wholly unable to earn a livelihood by doing the hardest kind of work. But I feel that this is as far as we can go. Remember this, gentlemen: Freight rates are going to be increased 30 percent. We know that there is going to be an increase in freight rates a 30 percent increase. Senator CLARK of Idaho. Why do you think that? Representative PATMAN. How otherwise will the railroads be able to take care of this increase in wages? Senator CLARK of Idaho. The committee is hoping that they can absorb that out of increased profits. Representative PATMAN. I hope so. Senator BROWN. I understood the railroads had asked for 10 per cent more. Representative PATMAN. I know, but the farmers' part enters into it in a much larger way. He gets it both ways-what he ships out and what he ships in. It falls harder upon the farmer than upon any other group. Therefore, that should be taken into consideration here. Further, gentlemen, this 1919 and 1929 parity is the same as tobacco is now. Tobacco has that standard, a determined parity. So, if it is fair for tobacco, why is it not fair for other products? As I see it, just certain years that would be favorable were picked out, and those years were used as a basis. I certainly hope, in the interest of the entire country, as well as the sections that produce farm products, especially cotton, that those products will be left in. Senator BROWN. What is your understanding of what the price of cotton would be—that is, the floor or the ceiling or whatever you want to call it under the Brown amendment and under the 110 percent of parity? Representative PATMAN. I have it here. Under the 110 percent of parity it would be 18.82. Under the Brown amendment it would be 21.47. Senator BROWN. What as of October 1, 1941? Representative PATMAN. As of October 1, 1941, 17.04, as compared to about 21.47, a difference of 4.3. Senator BROWN. The highest price is under the Brown amendment, and the next higher price is under the October prices? Representative PATMAN. Yes. Senator BROWN. And the lowest is 110 percent of parity? Representative PATMAN. No; the October 1, 1941, is the lowest. That does not mean, gentlemen, that if you fix this floor, cotton is going to come down. There are many ways of keeping the price down. They could produce more, or they could let these 8 million bales that the Government owns, out into the market. That will keep prices down. We have learned all along that we do not need price control where there is a surplus of the commodity. Senator CLARK of Idaho. How much cotton is now in storage? Representative PATMAN. Approximately 8 million bales, to which the Government has title. If the price were raised to the floor, who would be the winner? The Government would make $13.25 on every bale. There are about 8 million bales, so that would mean $116,000,000. The farmers would have only a small part of that. The Government would be the winner if the price of cotton were raised. Today is the first time in history that we are consuming more cotton in America than we are producing. It is the first time in history. So, since farm commodities represent surpluses and not shortages, certainly they should be protected in this bill; otherwise prices will be destroyed. If there are any questions any of you gentlemen would like to ask me, I will be glad to try to answer them. Senator BROWN. I think I have the issue of this matter of a ceiling and a floor for agricultural prices pretty well in mind. Your position is, briefly, that you think the agricultural South is quite desirious of retaining the Brown amendment in the bill? Representative PATMAN. Not just the agricultural South. I believe dairy products are produced in every one of the 3,000 counties in this country, with the exception, perhaps, of New York City. Senator BROWN. We had a spokesman for them this morning. Representative PATMAN. Of course, they are just as much interested as the cotton farmer and the wheat farmer. Remember this, gentlemen, that if they could get 50 cents a pound for cotton, they could not make a living, because they cannot produce enough of it. Senator CLARK of Idaho. What is your slant on labor-on including labor in the bill? Representative PATMAN. I am opposed to it. I opposed it in the House. I went into the committee believing that wages should be included. I changed my mind during the hearings. I answered Mr. Gore on the floor of the House in opposition to including wages. Mr. Gore's amendment received only 23 Democratic votes in the House and only 2 Democratic votes in the committee; it received 3 Republican votes in the committee and forty-odd Republican votes in the House. I believe the Members thoroughly considered it. I know that Mr. Gore is entitled to lots of credit for the fine fight he has made, his conscientiousness, and all that, but I think it would be clearly the wrong thing to do. Even the enemies of labor, if they understood it, would be opposed to putting wages in there. It would mean increasing wages several billion dollars a year. You can't have a national prevailing scale without making it the floor. Senator CLARK of Idaho. That is the oddest thing. Only this morning we heard Mr. Brinckman, of the Grange, and other agricultural leaders, who insisted upon wages being put in if agricultural products were. Representatve PATMAN. I am afraid some of them want to do something to labor. Even the fellows who understand it, who want to do something for labor, should not be in favor of putting it in. I hope that the time will never come when we drive a wedge between agriculture and labor in this country. I am afraid that some of our farm leaders have become a little shortsighted in that respect. I hope that they will not further insist on doing that, because it is a harmful thing to the country. Both labor and agriculture have gained in the last few years by working together. I certainly do not like the very short-sighted policy of some of the farm leaders who insist on getting into a fight with labor. I am not going to do it myself. Mr. Chairman, would you like to have these tables for the record? Senator BROWN. Yes; they will be included in the record. Senator BANKHEAD. I am sorry I did not get here in time to hear your full statement. You do not have a prepared copy of it? Representative PATMAN. No, sir. Senator BANKHEAD. Well, I will read it in the record. I am sure that you covered the ground well. Representative PATMAN. Thank you, gentlemen. (The tables referred to are as follows:) Approximate farm-price equivalent of minimum ceilings for prices of selected agricultural commodities under price-control bill as of Nov. 8, 1941 Highest farm price for 15th of month 1eported by farmers to U. S. Department of Agriculture during the calendar years 1919 and 1929. The bill provides that the ceiling on any agricultural commodity shall be not less than (1) 110 percent of the parity price, (2) the price on Oct. 1, 1941, or (3) the average price for the 10-year period 1919-29, whichever is highest. 3 Prices received by farmers as reported in Midmonth Local Market Price Report, U. S. Department of Agriculture, Oct. 29, 1941. Based on parity for Oct. 15 as reported in Midmonth Local Market Price Report. Average of prices received by farmers on Sept. 15 and Oct. 15 as reported in Midmcnth Local Market Price Report. Average of monthly prices received by farmers, July 1919 to June 1929. 1 Contract price for the crop of the year shown. Not currently quoted. 'Seasonal average. 10 Estimated. 11 Adjusted for seasonal variation, see price report. |