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lation, making it scarce and high resulted in falling prices? Do you concur in that sort of reasoning?

Mr. PEEK. I think that credit rather than money perhaps has a great deal to do with the situation. I think that under present conditions with the farmer, it makes little difference whether the medium is gold or silver or paper or something else, as long as he never gets any of it, and that the immediate problem with him is to get something out into his hands, which is some kind of money.

Senator WHEELER. But, Mr. Peek, just remember this, that after the war, when these other countries inflated their currencies they did bring up farm products within their own country. When France depreciated her franc she brought up the price of commodities, farm commodities, within her own country, and made it possible for the farmers to pay off the indebtedness that they had. The same thing happened in Germany, the same thing happened in Austria. They went to the extreme, but when anybody says that the amount of money in circulation does not affect commodities—it is the only way you can bring up commodities, in my judgment, at the present time, is to get more money into circulation.

Mr. PEEK. But, Senator, I do not pretend to know very much about this money question, but I fail to see how, if you put out a billion dollars more in currency tomorrow through the usual channels, to be fed down through the top, that it will be very long before it will be right back where it started from.

Senator WHEELER. Unless you put out tomorrow—supposing you started on a program tomorrow to expend $5,000,000,000 in currency in putting people to work in this country, commodity prices would very rapidly and very soon go up. There would not be any question about that at all. It would not affect world commodity prices, but you could, by the issuance of that paper to pay those people, you could raise the commodity prices within the country. Mr. PEEK. You mean all commodity prices? Senator WHEELER. All commodity prices within the country. Mr. PEEK. But the unorganized industry of agriculture would remain subject to the same influences in the situation as it does now.

The CHAIRMAN. Mr. Peek, if there are no other questions, we are very much obliged to you.

Senator FRAZIER. Mr. Chairman, I wanted to ask Mr. Peek about his statement in regard to unpopular laws. I take it he referred probably to the Farm Marketing Act and the Farm Board ?

Mr. PEEK. No; I referred particularly to the eighteenth amendment and the Volstead law. [Laughter.]

Senator FRAZIER. Well, that is similar in a way. I want to get your opinion as to whether or not this Farm Marketing Act would be popular with the processors, with the exchanges and the boards of trade, and so forth?

Mr. PEEK. You mean this new law here?
Senator FRAZIER. Yes.

Mr. PEEK. I think it would be opposed by them. I think it would not be popular with them; no. I think you must divide them, however. I do not think you can include them altogether. I think that the exchanges are interested in the volume of business; they are interested in the world influences on the market, to get the maximum

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amount of trade, regardless of what the price is. I think that there are some processors-in fact, I know there are some-who would welcome an opportunity to improve the general situation, although at the same time they are just a little apprehensive of what might happen under this bill. But again I say that with sympathetic administration, such as I am sure this act will have under this administration, the cooperation of a great many of them will be secured, enough to insure successful operation of the law.

The CHAIRMAN. Mr. Peek, have you ever had any personal experience in farming? Mr. PEEK. Yes, sir. The CHAIRMAN. To what extent? Mr. PEEK. I was raised on a farm. The CHAIRMAN. You were raised on a farm? Mr. PEEK. I left the farm when I was 16 years old. The CHAIRMAN. You left when you were 16? Mr. PEEK. Yes, sir. The CHAIRMAN. Have you farmed any since ? Mr. PEEK. Well, I own 4 farms and try to operate 1 or 2 of them now.

The CHAIRMAN. You are making money on them? I just wanted to know if you had some practical experience, because I, together with other members of the committee, have been desirous to have those testify here that know the practical thing itself, that depend on farming for their living, absolutely depend on the farm for their living, and I just wanted to know about that. You are not connected with any farm organization ? Mr. PEEK. I am a member but not officially connected.

The CHAIRMAN. Now, if there are no other questions to ask Mr. Peek, we will hear Mr. Simpson.

Mr. PEEK. Senator, I would like to answer your question about eggs. In 1932 the figures stood on eggs at 74, with wheat at 44, and with hogs at 48. So eggs did not come down to the extent that other products did.

The CHAIRMAN. That must be the reflection of the price after they had reached the general market. I know that throughout the country eggs got down to where they were 10 cents or lower.

Senator WHEELER. Six cents. Mr. PEEK. I know that is true, but the statement is generally made that the unprotected commodities, like wheat and cotton, have not suffered any more than some of the other commodities, and I think that is not correct. I think that the livestock and grain areas have suffered more than any of the others. I think the figures will show that.

Senator MURPHY. The failure of prices that are monopolistically fixed, the failure to reduce fixed charges made by, we will say, the Interstate Commerce Commission, the failure of those prices to go down commensurate with other prices has driven further down the prices of things that are uncontrolled. Eggs would not be so cheap if all other prices had declined proportionately.

Senator POPE. Just one question, Mr. Chairman. Mr. Peek, I think I received a letter from you saying that you had some amendment to the House bill that you would like to suggest ?

Wr. Peek. Jo, they were amendments I suggested to the Senate Finance Committee, to the House bill that passed in the last session, which was then pending before the Senate.

Senator POPR. Then you favor this House bill substantially as it passed the House

Mr. Prek, I think that the broad powers are necessary-without diseussing them word for word. I would say yes." I have raised the question as to certain constitutional provisions, but aside from that I think that the broad powers are absolutely necessary to any successful correction of the situation.

The CHAIRMAX. We will now hear Mr. Simpson. Please give your name and address and whom you represent. Mr. Simpson.

STATEMENT OF JOHN A. STOSON, PRESIDENT OF THE NATIONAL

FARMERS UNION, OKLAHOMA CITY, OKLA.

Mr. SIMPSON. My name is John A. Simpson. President of the National Farmers Union. Washington address, Cavalier Hotel : home address, Oklahoma City, route 3. I also represent the Farmers Vational Holiday Association.

The CHAIRMAX. That is universal, is it not! Laughter.)

Mr. Simpsox. It has more members than any other farm organization that ever existed.

The CHAIRMAX. Farmers voluntarily and involuntarily! Mr. Simpsox. Yes, sir. This bill—and I want to analyze it, H.R. 3833 is the one I am reading from, the Horse bill-section 1 of that bill is a price-fixing section.

Senator WHEELER. What section!

Mr. SIMPSOX, Section 1, and paragraph 1 of section 2, on page 2. It is a price-fixing bill, and it violates all precedents for legislative price fixing. It sure is an experiment, not only in this section but in others, as I will get to them. You can hunt through the history of price-fixing legislation and you will find that it has always been based on cost of production, including interest on investment. This bill does not pretend to get cost of production to the farmer. The facts are, this bill would not get half of the cost of production, on an average, for the products named in the bill. Now, why the farmer, when Congress comes to legislate price fixing for him, should be given half of the cost when all other folks for whom prices have been fixed get cost is more than I can understand. It sure is an experiment.

On that same page there is another experiment. Paragraph 3 of section 2. That paragraph is well worth studying. It is really a consumers' bill. This section 3 guarantees to consumers that they can eat the farmers' bread and butter as long as this law is in existence, and wear his clothes, wear the clothes made out of his cotton, at less than cost of production. That section guarantees that the price shall not go above that parity price. Ridiculous. It sure is an experiment. In connection with that section we will go over to another section.

On page 8, at the bottom of page 8, paragraph (b), you will discover a paragraph there that permits the Secretary of Agriculture to reduce the price to the farmer below this parity. It is mandatory on him to make it above, but it is optional whether he maintains it

at this parity price or, if he finds out certain things, he can reduce it. It sure is an experiment.

Now, going back to page 3, title 1—and I am going to offer just one suggestion about title 1, and that is under section 3, paragraph (a). You should have a provision that the Secretary of Agriculture shall not pay more than the market price for the cotton he buys; otherwise there would be no chance for a profit to the farmers whom you turn it over to. With that one suggestion I leave title 1.

Senator WHEELER. What was that suggestion again?

Mr. SIMPSON. That you do not leave the power with the Secretary of Agriculture to pay just any price he wants to for that cotton.

The CHAIRMAN. Shall not pay in excess of the market price? Mr. SIMPSON. Yes. I might have a thousand bales to sell to him; he ought not to pay more than the market price for that cotton if you want it to be of real benefit to the farmers who are going to purchase it.

Senator SHIPSTEAD. You mean if he purchases it in the finished product ?

Mr. SIMPSON. No; title 1 provides for the Secretary of Agriculture buying cotton, not buying cotton goods, but buying cotton, and I suggest that you limit him to the market price that he can pay for the cotton he buys.

Senator SHIPSTEAD. Of the farmer?

Mr. SIMPSON. No; he can not buy it of the farmer; he has got to buy it from the Farm Board or other agencies of the Government.

Senator WHEELER. That is, you think that after the words “to sell ” should be the words “at the market price”?

Senator McGILL. After the word “upon” in line 7, insert "not in excess of the market price." Mr. SIMPSON. Yes.

The CHAIRMAN. In the negotiations he will attempt to bring that about now, but I think that is a good suggestion.

Mr. SIMPSON. If you do not put that in, you will have a scandal in it, is my prediction.

Then on page 6 you have started another experiment when you attempt to regulate 30,000,000 men, women, and children on the farm,

There is no price-fixing legislation in the world that has such a regulation in it. Here you are going to regulate production by regulating acreage. It is impossible. You would have to have God on your side to be sure that it would work. I know that last year, in round numbers, the total wheat crop was 700,000,000 bushels, and there was not much difference in the acreage of the year before, which produced over 900,000,000 bushels, or about 900,000,000. There was more than 20 percent decrease in production, but not nearly so much difference in the acreage. I have seen years in my State, Oklahoma, when a less number of acres produced more than twice as much wheat as the year before.

The commodity marketing organizations, the cotton growers, the wheat growers, have had experience regulating the farmer through a contract-we had the biggest cotton growers' association in the United States and handled more cotton than any other association-we got to the point where we handled a third of it, where we handled much more in percentage and more in number of bales even than Texas, and we had an ironclad contract that a farmer

signed up for 7 years that he would deliver all his cotton to the association, and we could not make it work. Some farmer that did not like the treatment he had received or imagined he did not like it, the next year he was not farming, but his wife was farming, or some of the children, and they would go out and attempt to make him pay the penalty, even sue him, and so on and so forth. It caused lots of commotion, and they had to give it up as an unworkable provision—their contract—and for the Government to go out and attempt to regulate the acreage of these farmers—the production through acreage—will be doomed to failure.

Another thing, these farmers are not producing too much. We need all this. What we have overproduction of is empty stomachs and bare backs. If you ever get 12,000,000 men and women that are out of employment to work, earning a daily wage, getting a nice check at the end of the week, you will find that the farmers need to produce what they are producing; that they will need to produce more dairy products, Senator Shipstead.

Senator SHIPSTEAD. They will need to eat the butter, too.

Mr. SIMPSON. They will eat more dairy products, eat butter instead of oleomargarine, eat these eggs and this bacon that now as objects of charity they can not eat even when the eggs get down to 7 cents a dozen. They eat soup.

Senator McGILL. Mr. Simpson, with reference to the wheat land in this country, applied to this provision with reference to renting land and having it lie idle for a year, how much land capable of being used in the production of wheat do you say there is in this country that is not being tilled at this time?

Mr. SIMPSON. Well, I could not give the acreage, but it is untold acres.

Senator McGill. Probably about half of it is being used at this time?

Mr. SIMPSON. I could not say, but there is lots of wheat land yet that is undeveloped. But that was my next topic; it was the renting section of this bill. If you do it fairly, you must provide in the bill that every farmer shall have an opportunity to rent his proportion of his land, otherwise you will have a scandal that stinks to high Heaven, because if you do not put that in the big insurance companies and mortgage companies will come in saying, “I have 200,000 acres here in North Dakota, Mr. Secretary of Agriculture, and we will rent you that.” Why should a Secretary of Agriculture go out and deal with 2,000 farmers when he can get just as much land out of production by one lease with the Union Central Life Insurance Co. ?

The CHAIRMAN. Why could not a provision be put into the bill restricting it to those that are actually engaged on their farms in the production of whatever commodity you want to reduce ?

Mr. SIMPSON. It must provide that every little farmer shall have an opportunity to rent his land. I have control of 700 acres of land, as productive land as there is any place in the United States; I will be glad to rent it at some of these prices that I see floating around, or half of those prices and it is not marginal land.

Senator McGILL. It would also have to provide that the big farmer could not break new land and start planting it in the same commodity.

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