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Tenancy is low in the hay and dairy regions of the United States, which includes the northern part of the Lake States and New England and is also low in the grazing areas of the West.

Tenancy has shown a progressive increase throughout the United States as a whole. The first tenure census in 1880 showed 25 percent of our farmers were tenants, while the census of 1930, as I have already stated, reported 42 percent tenants, which was an increase from 38 percent in 1920.

Secretary Wallace has already emphasized the fact that tenancy has increased rapidly in many of our latest settled States, such as Oklahoma and the Dakotas, that there is a high percentage of tenancy on Federal reclamation projects, pointing to the conclusion that our legislation for disposing of land into private ownership failed to function in a manner to maintain the principle of owner operation of farm land, which was the essential ideal of our homestead system.

I have, Senators, a map here showing by States the increase of tenancy by decades since 1880. I have a number of copies for all the members of your committee who are here. I will just pass them around. That can't go in the record of course, because it is a map. We will supply them to your committee.

Senator POPE. Have you made any study of the relation of tax rates in the various States and communities as bearing upon the question of tenancy?

Mr. GRAY. I am not sure of what you mean. Do you mean whether tenancy is associated with high taxation, high rates of taxation ?

Senator POPE. Yes.

Mr. Gray. We have no study that I am aware of on that, but it is true to a very considerable extent that tenancy is associated with high land values. In the Northern States particularly, the Corn Belt, the Hog Belt, and the eastern part of the Wheat Belt; the areas where there was a high speculative increase of land values were areas where the tax burden became fairly high. In the South, in general

Senator BANKHEAD. That resulted in loss of ownership and tenancy. Mr. "Gray. That contributed to it. It also operated perhaps in

GRAY. another way in that sometimes the tenants in the Middle West deliberately chose tenancy rather than ownership because they found that the annual carrying charges of the rents were lower than the carrying charges of ownership.

Senator POPE. That is what I had in mind.

Mr. GRAY. Yes. That is somewhat less true today than it was 10 years ago. At that time cash rents in Iowa and Illinois were relatively low as compared with the interest burden and taxes included in carrying owned land. There has been a change in the relationship since that time.

In old-established countries, where families are accustomed to remain for generations on the land and where the habit of speculation in farm lands has not developed to a material extent, tenancy has less serious consequences than it has in the United States. In this country many owners have but a transitory interest in their land, and I think the evils of tenancy are attributable as much to the character of ownership as to tenancy itself. Many owners have

acquired land with a view to resale, and a large proportion of our tenants have migratory habits which are made possible and stimulated by the tenant system.

The 1930 census shows that 32 percent of all tenants had been on the farm they were then occupying for less than 1 year, and that 51 percent had been on their farms for less than 2 years. White tenants appeared to have moved even more frequently than colored tenants. The Secretary gave a figure indicating that, on the average, tenants remained on their farms, taking the country as a whole, for about 4 years. That might cause some confusion by virtue of the fact that the census shows that at the time the census was taken, the average period of occupancy had been a little over 2 years; but of course they remain a while longer after they report to the census enumerators, so that doesn't give you the full period of occupancy. We have no figures on how long they stay, but roughly we would derive from the census the conclusion that on an average for the country as a whole, tenants remain about 4 years. On the other hand, the figure for owners, given by the census, is 14 years. The conclusion would be that owners remain for a considerably longer period than 14 years, just how much we don't know. That brings out the contrast between the relationship of stability of occupancy on the part of the two classes of farmers.

One result of the instability of the occupancy of tenants is that tenant families fail to identify themselves with the social life of the community and to develop a cooperative relationship with their neighbors. Of course there are exceptions to that, but broadly that is true. It is obviously difficult to develop a sound and well-knitted community life in an area largely occupied by tenant families.

For instance, a study of tenancy in a tobacco area of Kentucky showed that the number of grade pupils leaving schools during the year was equal to 43 percent of the average net enrollment. Approximately 56 percent of the children who left school during the year did so during the usual tenant-moving period.

A study in Oklahoma showed that 40 percent of the moves by tenants resulted in a change of school; 43 percent in a change of church; and 39 percent in a change of trade center.

TI relation of the migratory tenant to the soil, as Secretary Wallace has indicated, is clearly unfavorable to the maintenance of soil fertility. In many parts of the country tenancy is associated with serious soil erosion, exhaustion of soil fertility, and the decay of buildings and other improvements. I do not mean to imply that this is universally true of all tenants, but it is certainly very largely the rule. As the Secretary indicated in his statement, there are many landlords, particularly in the North, who are related to their tenants or who live near the farms they operate and who insist upon the maintenance of the property. Nevertheless, the general rule throughout the country, and particularly in the South, is that tenancy is associated with soil depletion and general deterioration of the farm plant.

Even more serious than the effects of tenancy upon community life and on the wastage of soil resources, is its deteriorative effect on the farm population. People who have no permanent connection with the farm and with a community necessarily develop unstable

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qualities of character. They are likely to have the feeling that they do not have a definite place in the social system, and to lack the sense of responsibility which the ownership of property and continued residence in the same community engender. The proverbial statement that “A rolling stone gathers no moss applicable than it is to the migratory tenant. From a long study of farming conditions and rural life I am convinced that the process of accumulation in farming largely takes the form of the gradual improvements that a man makes on his own farm, employing his spare time labor and the gradual accumulation of livestock through the natural methods of increase, rather than through the accumulation of money obtained from the profits of operation. I think that is the way most farm people get ahead, is by gradually building up a place and improving it and through the growth and accumulation of livestock rather than saving a lot of money.

Senator BANKHEAD. A process of accretion.

Senator MURPHY. Heretofore it has largely been the accretion of land values, hasn't it?

Mr. GRAY. To a considerable extent that is true.

The tenant problem has its most serious manifestation in the South, where in 1930 there were 1,790,783 families working as tenants or croppers. This is not merely a Negro problem, as many people think, for over a million of these families were whites and between 1920 and 1930 the white tenants increased by 200,000, while the Negro tenant families decreased by 4,000. The acuteness of the tenant problem in the South is due to the disintegration of the old plantation system and the customary arrangements and relationships that characterized it. I won't go into that, because I think you gentlemen are familiar with the characteristics of the old established plantation system in the South before the changes that began to occur just after the World War. It is a sufficient commentary on the system that during the nearly three generations that have elapsed since the Civil War, tenants and croppers in the South have never been able to accumulate enough capital to live from one year to the next while making a crop. The landowner, in turn, obtained credit from the local store or bank against a crop lien, and chronic indebtedness was, in a measure, the portion of both landlord and tenant. I think it can be said that we have various figures brought up to date from time to time showing that the rates of interest that the landlord charges on advances and on the indebtedness of the tenants are unusually high. But broadly speaking, it is true that a very large proportion of the Southern planter class has, from time to time, gone broke on this system. Needless to say, while it has been hard on the tenant, it has been hard on the owner class also.

It is clear that much of the proverty of the rural South and the deterioration of its soil is tied up with the old system. The large planter was interested only in the cash crop and the profit from * furnishing” his tenants. The cropper and tenant had neither the tools nor the seed nor the work stock to use for purposes other than the raising of cotton, even when land was available for any other purpose. There were exceptions, of course, but as a whole the failure of the South to develop a system of diversified farming, even for the bare necessities of a decent diet, were defeated by the commercial character of the system and the essential dependence on credit.

The Department of Agriculture has been preaching diversification in the South through its county agents and extension forces for many years, but the result has been that as soon as cotton begins to bring a price, the people go back to the old system.

Senator BANKHEAD. You can't hold them off of it.

Mr. GRAY. It was inevitable that the system made for an inadequate and unbalanced diet with insufficient vegetables and an inadequate supply of milk for growing children. It was associated with an exceedingly migratory tenant and cropper population which moved on the average of every 2 years. With all of its shortcomings, however, the system was one of social and economic stability. The workers were poor, ignorant, and migratory and their lives were meager, but they had an element of certainty in the opportunity to make a crop, to have a cabin, and to receive some food. This system, however, began to crumble several decades ago. Its disintegration was particularly rapid in the decade following the World War, and it has gone to pieces with even greater rapidity during the acute years of depression following 1929. The credit structure of the South was struck a succession of serious blows by the periodic low prices in the decade following the World War, by the ravages of the boll weevil, and the gradual deterioration of the soil.

Thousands of landlords and supply merchants found it impossible to continue the supply system. Tenants and croppers were thrown adrift. Thousands of them migrated to cities in the period of active employment, and there was a general loosening of the former sense of responsibility of the landowner for his laborers. With the advent of the depression thousands of these families drifted back to the South, but were confronted with the fact that many of their former landlords or supply merchants were no longer in a position to furnish them the means of making a crop.

As Secretary Wallace indicated in his statement, the curtailment of acreage accentuated the lack of opportunity available for the increased tenant population of the section. As the Secretary indicated, the curtailment of acreage under the Agricultural Adjustment Administration program tended to emphasize or accentuate this lack of opportunity. It is essential inherent in tenancy areas that reduction of the cash crop must reduce the working opportunity of the laborers; whereas in an area of landowning farmers a reduction of cash crops is a stimulus for the farmer to grow more feed crops and diversify his economy. The offer of rental and parity payments, in spite of efforts to make the sharing of rentals and parity payments equitable between landowners and laborers, provided an inducement to the landowner to convert his tenant or share cropper into a laborer. The better the contract is drawn from the viewpoint of the cropper and tenant, the more inducement is provided to the landowner to reduce his tenant or cropper to a wage laborer who will have no claim on rentals or parity payments.

A relief program has provided the southern landowner and supply merchant with the means whereby it becomes possible to obtain the services of the laborers when wanted and have them provided for by relief agencies during the remainder of the year. The landlord and supply merchant may undertake to furnish only the working members of families and cease to assume responsibility for the unemployables among tenant and cropper families.

This is no condemnation of the landlord class or supply-merchant class. It is just the natural action that any man would take under the circumstances.

Senator BANKHEAD. In the protection of his own financial interests?

Mr. GRAY. Precisely. All of these forces have set large numbers of tenants and croppers adrift, separating them from the security of livelihood, however, meager, which they enjoyed under the old plantation system.

It is obvious that we cannot depend indefinitely upon the extensive system of relief, which has become an integral part of the southern agricultural system in the last several years. It is equally obvious that we cannot go back to the old plantation system. Some fundamental solution of the situation must be found.

The Bankhead bill is not proposing a new and untried program. The United States is virtually the only civilized nation of consequence that has not set up some system to correct the evils of tenancy.

Generally speaking, there have been three main ways in which other countries have met the problem. Some have accepted tenancy as a permanent institution, as the predominant form of land tenure, and have provided for regularly safeguards to correct potential abuses. England is the classic example of a country following this plan, although it is not uncommon in other European countries. English law assures the tenant fair and equitable rents, judicially determined when necessary, guarantees against unwarranted disturbances in occupancy of the farm and, most important of all, compensation for improvements to land and buildings made by the tenant in case of termination of the tenancy. Thus, the tenant is given the incentive both to remain on the farm and to make improvements.

I am speaking in rather general terms, because there are a very large number of countries that have acted on this problem and to give all the details about each would take quite a long time. If the committee desires, we shall be glad to provide for the record a summarized statement of policies in various foreign countries.

Senator BANKHEAD. We will be very glad to have it.
Senator POPE. Is Ireland a good example?

Mr. Gray. Yes; I was going to go into a little detail about the Irish system, which the Secretary adverted to this morning.

Senator MURPHY. Is there a limitation on the amount of acreage that may be acquired?

Mr. Gray. Yes, sir; in many countries there is. In a great many European countries the policy has been one of creating small holdings rather than trying to deal with the problem of all sizes of farms. In many of the countries of Europe, especially central and southern Europe, the policy has been one of deliberately breaking up the large estates that came down from feudal times and subdividing them and making them available to the actual working population on the soil.

Ireland, as the Secretary indicated, began about 1870, and by a series of acts that were passed from time to time they have succeeded in converting some 425,000 tenant families into owners at a total

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