they won't work." That was one of the plans to make him work. You put wages up to $15 a day and you cannot get men to work as many hours in a day as when wages are $1 a day. When our harvest hands used to cost us $7 a day, we could not get them to work over 5 days a week, and a lot of them only 4 days, they wanted to go to town the rest of the time; but with wages now about 50 cents on the farm they will work every day in the week, including Sundays. Senator FRAZIER. And glad to get the work.

Mr. SIMPSON. Yes; glad to get a job at 50 cents a day. Those are fundamental things that a farmer understands who has been in the hiring business.

Senator SHIPSTEAD. According to your line of reasoning, low cost increases production.

Mr. SIMPSON. Increases production, yes. If you would make wheat $3 and cotton 40 cents you would wake up some morning and find that the farmers were not producing enough to feed the people of the whole Nation. If you have those prices in vogue for a period of 10 years for two or three years I will admit he is so far behind with his taxes and interest that he would work pretty steady, but after he got out from under he would want to have some fun like the rest of folks, and he would not work all the time.

Senator FRAZIER. There is no reason why he should, is there?

Mr. SIMPSON. He is entitled to it, Senator, with exception that he has never had the moral courage to rise up and tell the rest of the world that he is going to have it. Some of these days he will do it. Senator FRAZIER. That is what your holiday movement is leading to.

Mr. SIMPSON. I want to say this, Senator Frazier: I am just from two big nation-wide farmer conventions. I called a meeting of the National Farmers Union in Omaha for the 11th of this month. That was a week ago last Saturday. It was one of the biggest conventions we ever held in the way of representatives from all over the United States of our organization. The only States that did not send their representatives were the ones that were so far, like yours, Senator McNary, out in Oregon, that they could not get enough cash to pay transportation, the banks all closed, and they sent us wires to that effect, but from those that were close enough we had 14 States represented.

We unanimously passed resolutions condemning this bill as we had read it in the papers, and we found out afterwards that was tolerably accurate. We wired the chairman of the House Agriculture Committee our opposition. There was no division among us. They were there from Oklahoma and Kansas and Colorado and Nebraska and the Dakotas and Iowa and all over the country, and there was no division. Those farmers said, "Nothing less than cost of production is a fair deal to us. Any bill that you put up that does not get that is not even fulfilling the terms of the Democratic platform." And I want to say to you Democrats that I hold right under your eyes the contract that we made with the Democratic Party, we farmers, on the 8th of November last, and if you will look at it you will see that it promised us that you will do everything possible to get cost of production for our products. That is one of the agricultural planks, and Senator Wheeler, you wrote the plank. [Laughter.]

Senator FRAZIER. And you are one of the good Democrats yourself!

Mr. SIMPSON. We expect fulfillment under that contract of the Democratic Party.

Senator BONE. How often would whatever agency was set up to determine the proper market value, make findings so as to fix the price?

Mr. SIMPSON. Once a year.

Senator BONE. By the season?

Mr. SIMPSON. Once a year.

Senator BONE. In other words, on the 1st of January, or whatever time is selected, the price of wheat would be fixed at $1.10, or $1.25 for the year?

Mr. SIMPSON. Not the 1st of January on wheat.

Senator BONE. No; I am just using that as an illustration.

Mr. SIMPSON. At the proper time. The Government act has all the figures, you know, and they could make those announcements. Senator BONE. Then during that entire year that price would obtain on the domestic consumption?

Mr. SIMPSON. On the domestic consumption; yes.

Senator BONE. That seems certainly a far simpler plan that you suggest.

Senator MCGILL. It is your idea, Mr. Simpson, that with reference to the amount of commodities consumed in this country you would make it unlawful for the purchaser to purchase the commodity unless he paid the minimum price established by law? Mr. SIMPSON. Yes.

The CHAIRMAN. You would not penalize him above that?

Mr. SIMPSON. Not the farmers; I would not. [Laughter.] And Senator Capper was chairman of an investigating committee that investigated the big bakers a little over two years ago, and the big bakers testified that the price of wheat is never reflected in the price people pay for bread. They testified that if you gave them the flour they could not reduce the price of a loaf of bread more than a penny.

Senator CAPPER. Yes, and the prices of bread today are just about what they were two or three years ago when wheat was two or three times its present price.

Mr. SIMPSON. Yes; and on that same basis I am sure that wheat could be put up to $1.10 a bushel and bread would remain right where it is, not a chance in the world for bread to go up. When the war price of wheat was $2.20 in Chicago, in 1917 and 1918, they added 6 cents to cover freight rates; then when the 1919 crop came on after the war and we had this made a minimum and the speculators put it up to $3 a bushel, that crop was at least 75 cents a bushel higher, yet the price of bread was the same, and Congress appropriated a billion dollars to back up that guarantee, and they never had to spend a dime of it. It did not cost the Government anything, and it did not cost the consumers anything.

Senator FRAZIER. During the World War they fixed the price and the Government made money handling wheat.

Mr. SIMPSON. Yes; during the two years of the war the Government made about $60,000,000 in handling the farmers' wheat. They never did give it back to the farmers, either.

Senator WHEEL. They lost a la of it on manufactured products. Mr. Stres. Well here is a principle to remember also: That the price that the producer of the raw material gets. I do not care whether it is wheat or copper or cual or oil or what it is, is never reflected in what the processed article sells for. In the last two or three months the price of crude oil has been eut in two in the middle. It had gotten up to 80 cents, and it is down to 40 cents

LOW.

Senator SHIPSTEAD. Is that on account of the tariff we voted last. spring?!

Mr. SIMPSON. No; it is on account of some decisions on proration which they have not been able to control as well as they wanted to, I guess. They are an unorganized group, the oil companies are, just like the farmers.

Senator WHEELER. We put a tariff of 4 cents on copper, and copper is selling for about 5 cents.

Mr. SIMPSON, Yes. But what I wanted to say is that the price of crude oil has dropped from 80 cents to 40 cents, and I pay just as much for gasoline as I did when crude oil was selling for 80 cents. The facts are that about 4 years ago crude oil ran from $2 to $2.50 a barrel, something like that, and it went down to as low as 10 cents a barrel, and yet there was practically no difference in what the consumer paid for a gallon of gasoline or a quart of oil.

Senator NORRIS. Mr. Simpson, suppose we were going to pass a bill along those lines, what would you suggest as to what farm products should be included?

Mr. SIMPSON. Well. I think this bill is pretty fair. Somebody here said a while ago that it did not include sheep, and so forth, but it does.

Senator FRAZIER. It includes sheep but not wool.

Senator NORRIS. I am not speaking of this bill.

Mr. SIMPSON. All I was going to say-I have no objection to the commodities included in this bill. I think it includes wool. I have no objection to the list. And then, as I understand it, it is left flexible so that they could include other things. The bill that Senator McNary introduced for us and got a favorable report on from the Senate Agriculture Committee, provided that any time a group of producers came in and complained that they were not getting cost of production, their products could be included. I am sure that you will have to include farm commodities that we do not export. Senator Smith, I will add one thing to your list, flax. Flax is selling almost as cheap, relatively, as wheat and yet I do not suppose we produce one third of the flax we use in this country. There is no exportable surplus.

In the census reports from 1920 to 1930, that 10-year period, we lacked a billion pounds of exporting as much wool as we imported. So it does not follow that if you were to reduce the production of wheat down to domestic consumption, farmers would get cost price for it. It might sell just as cheap, because the farmers are an unorganized group and have nothing to say about the price of their product. This Government must regulate the marketing of farm crops, not buy and sell them, but regulate the marekting just like they regulate the marketing of transportation. The reason I was not here ready for this committee meeting was that I was over

before the Interstate Commerce Commission with the other farm. group in a hearing over there to see whether or not there would be a general investigation of freight rates at this time.

Senator NORRIS. I would like to ask you this I asked a previous witness this same question; a question that has always seemed to me to be one of the important-I think vital-questions connected with particularly the farmers, but in reality with all the consumers as well: What about freight rates? Is it not true that the Canadian farmer, for instance, on wheat, makes from 10 to 12 cents a bushel by the saving in freight between the exchange points?

Mr. SIMPSON. Yes; he has a much lower freight rate than we have in this country.

Senator FRAZIER. The Canadian freight rate is 60 per cent of our freight rate. That is the figure commonly given.

Mr. SIMPSON. And that leads me into another thing. I believe you could fix the price of farm products just like you fix the price through the Interstate Commerce Commission of freight rates and passenger rates, and then we farmers would still be down in the depths of the depression. Why? You could double freight rates and it would not save the railroads. Why? Because there is no business. You could fix the price, and with the present conditions, things growing worse and worse and worse, the army of unemployed growing larger and larger and larger, and while we would have a good price for what the folks did consume, the consumption would be reduced to such an extent that it would be of very little benefit to us.

Primarily, to make any of these laws work, you must have a medium of exchange with which to do business. It is all taken from us, the medium of exchange. You can talk about the medium of exchange, but the banks control it. They have it and they can withdraw it any time they want to and paralyze business. I do not care how many laws you pass, you give me control of the volume of money and of the credit of the country, and you can just pass any kind of side-issue laws you want to, and I can ruin you any time I want to. The fundamental thing is that you should furnish the citizens of this country a medium of exchange that is not controlled by private individuals. You have got to come to that or none of these things will work.

Senator SHIPSTEAD. Mr. Simpson, you do not believe, then, in what has been preached here for years, that if people only realized it, they can go down with their money and get gold for it any time they want it, and that will solve all our troubles?

Mr. SIMPSON. Not exactly; no. It has developed that it does not operate that way.

The CHAIRMAN. Mr. Simpson, how much longer would you care to testify? It is now 5 o'clock, and we will have a session tomorrow and would be glad, if you want to finish, to have you come on immediately following the Secretary of Agriculture.

Mr. SIMPSON. I want to come back. I do not want to finish tonight, Senator.

Senator WHEELER. I would like to ask one question. You accused me awhile ago of writing the platform. I think you wrote that portion of it and I got it into the platform. [Laughter.] Your or

ganization-at least, I was informed that your organization at their convention in Omaha recently-was that the Farmers Union? Mr. SIMPSON. Yes.

Senator WHEELER. That they went on record with reference to the question of money, did they not, and endorsed unequivocally the bill to remonitize silver?

Mr. SIMPSON. Absolutely. The farmers are for the remonetization of silver. And I want to go just a little further and then I am through for tonight.

I was telling about the Omaha convention. I went from the Omaha convention to the first Nation-wide farmers' holiday association convention. They had never had anything but State conventions before. The first State organization was established on the 3d of May of last year, and they have been organizing all over until they had their first national convention a week ago Sunday in Des Moines. That was the biggest farm convention I ever attended. There were thousands of farmers there from 17 States, and with other States farther away wiring the same thing, that they were prevented from coming on account of not being able to get cash.

Senator KENDRICK. Did they take any action on this bill?

Mr. SIMPSON. They unanimously condemned this bill. They unanimously condemned it and sent wires in here to that effect.

Senator CAPPER. There was nothing in it that they approved? Mr. SIMPSON. Not a thing. The holiday association organized on ́the basis, Senator Capper, of saying they will stop the minute you pass a bill that provides for cost of production for farmers. They are to keep up their efforts until Congress gives them a bill that provides cost of production, just like the railroad gets, just like the telephone, and so forth, gets. When you pass that kind of a bill, they automatically go out of existence. They are an organization that has the spirit of 1776. They have taken courts by the arm and led them into a room where there was no telephone, and locked them up, and then told the sheriff he was needed at the other end of the county, and he went, and they have thrown ropes around the necks of the attorneys that brought the foreclosure proceedings, until they begged for mercy and made settlement according to the terms of the farmers.

The CHAIRMAN. Are there any symptoms that they are moving toward Washington? [Laughter.]

Senator FRAZIER. Give them time.

Mr. SIMPSON. Senator, they talked about those things. They said:

We don't need to go to Washington. All we need to do is to get well enough organized so that we can stop the bread from flowing in and the cotton from flowing in, and let the folks have Washington.

The CHAIRMAN. That is very refreshing. [Laughter.] Mr. SIMPSON. No; they will not march on Washington. Senator BONE. Mr. Chairman, I want to ask Mr. Simpson one question, to see if I get this straight in my own mind.

The desire of yourself and your organization is this, reduced to simple terms: That the Government by legislation which you suggest, this valorizing scheme, shall do for the farmer in this area that