Page images
PDF
EPUB

then gradually runs off to be utilized by the farms below; whereas, where the mountains have been denuded by overgrazing, in many of these canyons of Utah, which were pointed out to me during the Congressional adjournment, you will find this condition depicted by this picture [indicating] where there have been great deposits of boulders, weighing 2 or 3 hundred tons, washed down on the farms.

This is not an increase of the appropriation I am asking for. This item has the approval of the Budget and the approval of the Forest Service, and my reason for coming before you today is to urge you to leave it just as it is. Certainly you should not decrease it. I would make a distinction between this and the appropriation for the shelter belt. I take no position on that, because I am not sufficiently informed in regard to it.

Mr. UMSTEAD. You are referring to the item of $99,152.

EXPERIMENTAL STATION AT MADISON, WIS.

Mr. MURDOCK. Yes. While I am here I might also say to you that I am particularly interested in the appropriation for the experiment station at Madison, Wis. I think that it is contributing a great deal to the lumber industry of the country, and to wood products generally. Indirectly, if certain researches are made with respect to paint, in connection with wood products, it will be one of the greatest boosts, in my opinion, to the lead industry of this country that it could possibly have. The greatest outlet for lead is its use in lead paint, and I hope the committee will see fit to give that matter very thorough and favorable consideration.

I trust this item of $99,152 will be left intact.

Now, this article by Mr. Bailey is rather long, and I would like not to encumber the record, but if the committee desires it, I would be very willing to have it included in the record, upon the ground of its being very material and pertinent to the discussion.

Mr. CANNON. Suppose you leave it with the committee.
Mr. MURDOCK. I will be glad to do that.

WEDNESDAY, FEBRUARY 5, 1936.

GRADING AND PRICE REPORTING OF COTTONSEED

STATEMENT OF HON. WALTER CHANDLER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE

Mr. CANNON. The committee will resume its hearings on the agricultural appropriation bill. We have with us this afternoon Congressman Chandler, of Tennessee, who desires to address the committee with reference to an item he wishes to have incorporated in the bill. We will be glad to hear at you this time, Mr. Chandler. Mr. CHANDLER. Mr. Chairman, I requested an opportunity_to have Mr. W. H. Jasspon, president of the Memphis Merchants Exchange, of Memphis, Tenn., to appear before the committee and present the subject of the need of grading and price reporting of cottonseed by the United States Bureau of Agricultural Economics.

We in the mid-South regard this subject as being in imperative need of attention by the Federal Government.

Without going into the matter myself, in view of the brevity of time, I would like to ask the committee to hear Mr. Jasspon, who is a pioneer in this work, and who has made a study of it over a period of years. He is interested in giving the committee the results of his own study of the problem and the benefit of his experience as an oilmill man, to show the need for some assistance in this very essential work, involving one of the largest cash crops in all the agriculture of America.

Mr. CANNON. In response to the request of Congressman Chandler, the committee will be glad to hear Mr. Jasspon.

Will you give your name and official connection to the reporter?

STATEMENT OF W. H. JASSPON, PRESIDENT, MEMPHIS MERCHANTS EXCHANGE, MEMPHIS, TENN.

Mr. JASSFON. My name is W. H. Jasspon; I am president of the Memphis Merchants Exchange, of Memphis, Tenn. I also operate two oil mills, one at Memphis and one at West Memphis, Ark.

Mr. CANNON. The item in which you are particularly interested is the item for the market inspection of farm products, with particular reference to the marketing of cottonseed?

Mr. JASSPON. With particular reference to the marketing of cottonseed, Mr. Chairman, and the market news service.

I come before you today, Mr. Chairman, to lay a request before you for an appropriation of $50,000 to be added to the budget of the Department of Agriculture, this fund to be used for a further study of cottonseed grading and price reporting.

Mr. CANNON. That is outside of the Budget estimate submitted to Congress by the Budget Bureau?

Mr. JASSPON. The Department of Agriculture has never asked for an appropriation for any work in connection with cottonseed in recent years.

Mr. CANNON. There is no provision for it in the Budget estimates? Mr. JASSPON. There is no provision in the Budget.

Mr. CANNON. Of course, that is a handicap, but not necessarily a fatal one. But we will be very glad to hear you.

Mr. JASSPON. I am certain that what I will have to say on the subject will be backed up by the Bureau.

Somebody has to pioneer these movements. The need for this supervisory grading only became apparent in the past year or two, when cottonseed got out of the throes of depression prices and became a valuable article of commerce.

I was in Chattanooga, Tenn., on Monday night, passing through, and I picked up an evening paper and I noticed there that there was a price of $29 per ton quoted for cottonseed meal. We are selling it in Memphis at $20, with a $3 freight rate, so that somebody is profiteering.

I just want to call your attention to the fact that cottonseed is the second greatest cash crop of the South, and it may interest you to know that it is the sixth agricultural crop in volume and money value in the United States, and is exceeded only by corn, cotton, wheat, oats, and tobacco. It is the only large agricultural crop which

the Department of Agriculture has never serviced in the interest of the farmer-producer, the processor, or the consumer.

Mr. CANNON. It has not been very long since it was a drag on the market.

Mr. JASSPON. In my own lifetime I have reclaimed many tons, in my early days, from the gutters around the gins.

In the past 2 years cottonseed averaged over $40 a ton. This year the crop, small as it is, will net the producers over $100,000,000.

Several years ago the Department of Agriculture did set up a system of grading by analysis and by which the grade of parcels of cottonseed may be determined, but because it had had no funds to promote grading and since these so-called standards are permissive only, grading is only practiced in a few sections of the Cotton Belt, and there it is entirely without any official sanction. Thus grading, where it is done, is entirely in the hands of the individual mill who now determines the grade by its own chemist or through regular commercial laboratories from samples taken by the mill's own employees who are also under no supervision of any kind. Under these conditions it is not surprising that grading where practiced has led in many instances to dissatisfaction, suspicion, and unfair competition.

I want to say this, that about a year ago, when I was vice president of the Memphis Merchants Exchange, which is a nonprofit institution, and is Federally licensed to inspect and grade all the grain that comes to Memphis, I sought to get a Federal license for the impartial grading and inspecting of cottonseed for the Memphis Exchange.

The Department said they would be very glad to grant such a license if they had the funds by which to supervise the work of the licensee, but without any funds appropriated by Congress for that specific purpose they would not grant a license because they could not supervise it.

I have before me last year's Agricultural Department Appropriation Act, H. R. 6718, and on page 32 there are two paragraphs, for the "Market inspection of farm products", and for the "Market News Service", which provides for grain, hay, seeds, tobacco, and so forth. If the word "cottonseed" were inserted in both the first paragraph I refer to, and in the second paragraph, under the heading "Market News Service", where it provides "For collecting, publishing, and distributing" the price information on grain, hay, tobacco, seeds, and so forth-if the word "cottonseed" were included there, with an appropriation, to enable the Government to perform this service, I think it would be one of the most forward steps that has been taken to aid in better marketing not only of the large agricultural crops just as the Government helps with many other agricultural crops of less value.

Mr. BUCKBEE. About how much money would be required for Federal inspection?

Mr. JASSPON. In discussing this matter informally with the Bureau from time to time since they turned down our licensing request because they could not follow it through, we figured that they could make a beginning for approximately $50,000.

But I want to add to this statement. It has been the policy of the Bureau of Agricultural Economics, I am told, to make these services. of price reporting and grading self-supporting. The Department, due to the request of the industry, established formal grades on soybeans,

and soybeans is a crop which, in value today, has less than one-tenth of the value of cottonseed. Practically all the soybeans are being sold today on Government grades and Government inspection There is no friction. The seller knows, when he gets his grade certifi cate from the Government, that his grade is all right.

There is also this to be said. The supervisory work will unquestionably lessen the spread between what the mill pays and what the farmer or original seller receives.

You gentlemen from the cotton territory know that the average producer of cottonseed gets his price only from the gin where he does his ginning, and the market news reporting service will give him s greater fund of information as to the markets at various points.

I say, in behalf of the merchants' exchange, that we would be happy to undertake this work and service if we can be licensed and supervised by the Government.

Mr. Chairman and gentlemen, I do not want to take up any more of your time. I have a prepared statement which I would like to have you gentlemen read. I am not a fluent talker, but this statement epitomizes the story as I know it.

(The following statement was submitted by Mr. Jasspon:)

STATEMENT OF W. H. JASSPON, PRESIDENT, MEMPHIS MERCHANTS' EXCHANGE, MEMPHIS, TENN.

I appear here today to lay before your committee a request for your effective approval of Government supervision of grading and price reporting of cottonseed and to show the need for it. Next to cotton it is the South's most important cash crop. It is also the Nation's sixth agricultural crop in volume and money value and is exceeded only by corn, cotton, wheat, oats, and tobacco.

In one form or another cottonseed forms part of our daily diet. It supplies both human food and clothing, feed for all farm animals, and fertilizer for our soils. It, therefore, directly or indirectly affects the distribution and price of all other farm crops. Beginning as a byproduct waste of the cotton plant and once considered worthless, it has continued to be a byproduct officially even though its value to the farmer-producer this past crop year, in spite of reduced volume, will gross over $100,000,000. Yet this very important item of our agricultural wealth has no Government standing in the form of supervision of any kind either as to the grade, which varies considerably, or any accurate publicity as to actual market prices.

Several years ago the Department of Agriculture did set up a system of grading by analysis and by which the grade of parcels of cottonseed may be determined, but because it has had no funds to promote grading and since these so-called standards are permissive only, grading is only practiced in a few sections of the Cotton Belt and there without any official sanction. Thus grading where it is done is entirely in the hands of the individual mill who now determines the grade by its own chemist or through regular commercial laboratories on samples taken by the mills' employees who are also under no supervision of any kind. Under these conditions it is not surprising that grading where practiced has led in many instances to dissatisfaction, suspicion, and unfair competition.

However, the giving of premiums for better quality has intensified interest in the desirability of selling seed on grades; as before any seed were graded, or even now in sections where seed are sold on a flat basis, only deductions for off quality are the rule.

Surely no one would again wish to go back to this type of trading in other agricultural products and it is obvious that there is genuine need for a more impartial practice than at present exists in the marketing of cottonseed. This need has been recognized by several farmer organizations, and at their annusi meeting in Chicago last December, the American Farm Bureau Federation passed the following resolution: "We favor the establishment of official standard grades on cottonseed and price reporting thereon."

I, therefore, request that your committee approve an addition to the budget of the Department of Agriculture for the coming fiscal year of $50,000, this fund to

be used for a further study of cottonseed grading and price reporting, with authority to secure from both buyer and seller information as to prices paid, quantity and quality of the seed bought and sold in those sections where seed is now being graded. The Department shall also license all samplers, chemists, and others in accordance with their standard practice and supervise their work, as well as determine final grades in case of dispute or appeal. The Department has for many years performed this very service and your committee has heretofore authorized expenditures for this work in connection with practically all other farm crops, many of which are much less important than cottonseed.

The Bureau of Agricultural Economics is aware of existing conditions in the marketing of cottonseed and recognizes the need for its inclusion as one of the crops it should service in the interest of producer, processor, and consumer alike and I believe this request will have the Bureau's endorsement.

This Department of the Government issued an official pamphlet in June 1935 under the title, "Development of Standards for Grades of Cottonseed." I shall take the time of your committee to quote just three paragraphs from this report. "It is obvious that producers who control large supplies of seed, either personally or through tenants, or through the ownership of private gins, are able to sell their seed on grade and to demand premiums whenever due. (Of course this only applies in sections where seed are bought on a grade basis.) Producers who pool their seed either at cooperative gins or in other cooperative associations are also able to secure the full benefits of seed grading. Small individual producers will receive the average premiums of their community if and when the community average grade is systematically determined and published, but competition for business, even in the absence of a system of determining community average grades, has caused ginners in some sections whenever the average grade is premium to base the price they offer for seed on the value of the average grade of the seed handled, rather than on the value of the base grade.

"Small producers would certainly be in a much better selling position if they could have and use impartial information as to the average grade of the seed of the community in which they live. Quality and price information are so interrelated that quality information is practically futile without price information, and comparative price information is impossible without quality comparisons, Price and quality information to be of greatest usefulness must be general; must be universal; not scattered or spasmodic; systematic, not discontinuous. Adequate and authoritative quality and price information on cottonseed has never been available to producers.

"The grading of any heterogeneous commodity, such as cottonseed, in which the entire mass cannot be directly classified, depends upon representative samples and accurate analysis and classification. The grading of cottonseed is technical and it is hampered by traditions and customs. The average sampler is likely to ignore the necessary precautions, not only in drawing the samples but in handling and preparing the samples for analysis and classification. The classification of cottonseed is based on chemical composition, since the quantity and quality of the valuable constituents cannot be determined by a physical examination. The accuracy of chemical analysis depends upon strict adherence to a definite technical procedure. These conditions of usefulness and the difficulties of operation lead to but one conclusion, and that is that the sampling, analyzing, and classification of cottonseed and the collection, interpretation, and dissemination of price information relative to cottonseed should be supervised, coordinated, synchronized, and made universal throughout the market."

I shall also ask your indulgence to quote from an article on this same subject entitled, "Cottonseed, a Leading Cash Crop" by Fletcher H. Rawls, Chief, and Charles E. Lund, edible oil specialist, Foodstuffs Division of the United States Department of Commerce:

"Manufacturers are alert in developing uses and markets for the various cottonseed products, which, in turn, result in a better market for cottonseed. But the industry is still in a somewhat confused condition, owing to unavoidable speculative conditions surrounding the marketing of cottonseed and finished products. "The future progress of the industry and the maintenance of a satisfactory relationship between the growers and manufacturers would be fostered, no doubt, by the establishment of a system of trading on official standards and the collection and dissemination of adequate trade information. The available price data on cottonseed at the present time, while fairly representative and indicative of the monthly trend, are not promptly available to the growers in the hundreds of places where cottonseed is bought and sold and hence are of rather limited use.

« PreviousContinue »