Page images


ministration in expediting the farm-relief program, and of giving us a program that is adequate to meet the situation.

Senator McNARY. Bearing upon the conclusion of your statement regarding the necessity of prompt action have you made an estimate of the length of time required for the allotment plan?

Secretary WALLACE. I can say very frankly that we have been considering the tremendous task which the measure would impose upon us. We have not made any definite estimate of the time. We have taken up with the men at the head of the Extension Service, both in our own Department and out in the States, to what extent their people might be thrown into this picture. They have given us assurance that under the law under which they are set up their people can be thrown into a very considerable extent, not in the handling of funds, because that is not sound, but they can be a great deal of help. We believe that in the wheat thing some very rapid action and effective action can be obtained that will affect this year's crop.

With respect to title 1 of the bill

Senator McNARY (interposing). I do not want to get into that. That speaks of the Government control of cotton.

Secretary WALLACE. It also has to do with acreage reduction.

Senator McNary. It is quite the other thing that I want to press. The spring wheat, of course, will be planted within 3 weeks, all of it. Cotton probably will be planted in 3 weeks, and harvested in mid

How long, in your opinion, would it take to set up your allotment plan? Would it be in time to catch up with the first crop of cotton and wheat harvested?

Secretary WALLACE. I think under cotton there is a grave question. I was assured of the fact when the possible signing of the Smith bill was under consideration, that the bill should have been signed last week if effective action was to be had on cotton.

Senator BANKHEAD. Let me interject here, in answer to Senator McNary, the majority of the cotton is planted after the first of May. It is planted as late as the first of June.

Senator McNARY. Someone said around the table that in 3 weeks it would be planted.

Senator BANKHEAD. No.

Senator McNary. What I had in mind particularly was this: Some of those around the table believe we should proceed cautiously in this very important subject and take a few days for hearings, if necessary. Is 3 or 4 days or a week vital to the situation?

Secretary WALLACE. With regard to spring wheat, I would prefer to be guided by the man from the spring-wheat country. I have never lived in that country myself, and in the hearings before the House committee this same matter came up. I asked Representative Hoidale, of Minnesota, and I think one of the Representatives from Michigan, whether or not they thought the thing could be done in tim to affect the spring-wheat situation in the Northwest. Both of expressed their opinion that at any rate we should make the effort. In the Department we have been so pushed by a variety of things that I have not had an opportunity myself to consult with the men who are spring-wheat experts and to get their judgment on it. I will have to say that frankly, and I will say also, equally frankly, with my own particular background I cannot speak ex cathedra.

Senator McNary. I am not speaking of the division of the bill that contemplates the retirement of excess acreage. I am eliminating the Smith cotton provision of section 1. I am taking the socalled “allotment” provision, which could operate only on the finished product.

Secretary WALLACE. You mean allotment as distinguished from rental?

Senator McNARY. Certainly; the allotment plan as distinguished from all other plans. Now, I repeat again, the wheat harvest will probably start in the latter part of July. Have you ample time to set up the machinery and make applicable the allotment provisions of this bill in time to reach the threshing of early spring wheat, winter wheat and the cotton crop ?

Secretary WALLACE. It seems to me the rental plan could be thrown in more rapidly than the allotment plan.

Senator McNARY. I want to know as to the allotment plan. Can you set it up in time to meet the crop of wheat and cotton maturing this summer?

Secretary WALLACE. I would say offhand that my own casual impression is that in order to get prompt action you would probably have to follow the rental scheme. Here is a variation of the rental scheme which has been suggested, which would have the advantage of appealing to the psychology of the farmers, of making the rental vary with the taxes. We will say, for instance, that on a specific wheat farm in the Northwest the tax was 60 cents an acre, and that there were in the base period 100 acres of wheat, and the proposal was to have a 30 percent cut; in other words, 30 acres; that under the terms of our rental agreement we would pay for each of the 30 acres not merely the 60-cent tax but, say, 2 or 3 or 4 times that amount of tax; in other words, let the criterion for the rental be determined by the tax, so as to have the rental vary according to the tax, possibly hedging that around in the case of consolidated school districts, that no more than a certain percentage of the tax would go for school purposes. That has been suggested as a rapid method of throwing the rental arrangement into action. That might speed up the thing sufficiently so that you could have a measurable effect on the situation even with the limited amount of time now at your disposal.

Senator WHEELER. Let me ask you this, Mr. Wallace: In my section there are large tracts of land that are now owned by counties and also owned by insurance companies and by mortgage companies. Those lands will not be put into operation and planted at this time at all, in my judgment, under any circumstances. Now, would your scheme of leasing land provide that they should go out and lease those lands from insurance companies and mortgage companies at this time?

Secretary WALLACE. It is evident that there is power under the bill to do that.

Senator WHEELER. But it seems to me that that would be rather a waste of money.

Secretary WALLACE. It would be, obviously, foolish to rent land to keep it out of production when it is going to be kept out of production anyway.

Senator WHEELER. Exactly.but un.loubtedly there will be pressure by mortgage companies and insurance companies with the idea of leasing that land and getting some rentals out of it.

Secretary WALLACE. There is a chance for scandal there if the bill were not properly administered.

Senator WHEELER. Exactly. And that part of it worries me Homewhat, because you could go in and rent large blocks of land throughout the northwest.

Secretary WALLACE. And not get any effective reduction.

Senator WHEELER. Get no effective reduction whatsoever. That is the thing that has worried me about the leasing scheme, that made me think it would not work at this partieular time.

Now, on the question of the allotment plan that Senator MeNary asked you about-I was going to pursue the same thing

Senator McNARY (interposing). Mr. Secretary, through the kindness of the Senator from Montana. I want to pursue my question a moment further. Possibly I have not made myself clear. It is wholly my fault and not yours.

In title 2, page 6, under the subheading “Agricultural adjustment provisions. General powers”, section 8. paragraph 1, that undoubtedly embraces all the power granted to you in respect to the allotment plan or the rental plan. I think we both concede that. Is that right?

Secretary WALLACE. Right.

Senator McNARY. Now, assuming that you did not desire the power here designated for the retirement of acreage, but desired exclusively to use the allotment plan such as has been more in detail passed at the last session, and you want to apply it to grain, and assuming that the spring grain is harvested—they claim in Texas it is in July-could you set up the machinery to meet that situation, employing only the allotment plan to make it effective on the spring and winter grain crops?

Secretary WALLACE. Just reading the powers in the bill it looks like it would be possible. As to whether that is feasible, that is a matter that would have to be gone into with the interested processors and producers. It seems to me to be possible. Would you not

Senator McNARY. I have not given any thought to the administration of the act, because my position is wholly one of a legislator, of course. What I want to get at is simply a practical question, the rapidity with which we should consider as important a measure as this. Is the matter of a few days important, or can you get ready to function on that allotment or rental plan—would it take you two or three weeks or a month? Have you made any estimate?

Secretary WALLACE. It is truly appalling to think of setting up something of this magnitude overnight. I will agree with you fully on that. I will also say this, that the expectations of the farmers as to what can be done are probably so high that we will be disappointing to them, no matter how rapidly we get into action or with how great powers. I also agree with you that if you go too rapidly you take the chance of making very serious mistakes.

I will also say, further addressing myself to your question, that there are many things that can be done in view of the manner in which nature works that can be done if the thing is thrown into

say so?

action next week that cannot be done if it is not. A great many things can be done. I mean to say, many farmers will get their discing or plowing done within a week. It might be that we will be blessed with a continuation of cold, wet weather, and we will have a chance to do a lot, and I would like to have a chance to do all we can and invoke the patience of the farmers to bear with us in doing all we can. I think there is a disposition to cooperate in the thing. I think haste, insofar as wisdom will permit it, is to be advocated in this emergency.

Senator McNARY. It is your opinion that it would be necessary in administering this bill, if it becomes a law, to deal individually with the farmers of the country?

Secretary WALLACE. That would depend on which powers are invoked, as to what extent it is necessary to deal individually. It seems to me it would be necessary to deal individually in many of the commodities.

Senator NORRIS. I want to pursue that just a little further. You have, as I understand it, until about the 1st of July, the time when the southernmost part of the country will have its wheat ready to harvest, to set up the allotment plan, if you desire to do that. That would be sufficient time?

Secretary WALLACE. I would not calculate the allotment plan in that case.

I would calculate the plan for which there is no name. It would be more nearly like the "Clair” plan, if you are familiar with that. It will not be the allotment plan.

Senator McNary. Suppose Congress changed the bill. Suppose when it became law you had no discretion, you had only the allotment plan left; under that plan you would have until the crop was ready to harvest to get your machinery ready.

Secretary WALLACE. Not under the so-called Wilson allotment plan.

Senator McNARY. I am not familiar with that.

Secretary WALLACE. That is the plan as it was originally, essentially the plan as it appeared in the Jones bill as it was first introduced.

Senator MONARY. And the Norbeck bill?
Secretary WALLACE. And the Norbeck bill and the Hope bill.

Senator NORRIS. You are familiar with the plan advocated by Mr. Simpson? I have particular reference to the plan he is advocating.

Secretary WALLACE. You are speaking of the allotment plan that would have to do with the control of marketing rather than the control of acreage?

Senator NORRIS. I am referring to a plan by which there would be no attempt to limit acreage, but when the farmer came to sell his product he would have a price that you had found was the cost of production on that part of the product that was consumed in this country.

Secretary WALLACE. That would involve

Senator NORRIS (interposing). If you would apply that to wheat, it would give you until the first wheat in the United States is produced, which would probably be in Texas.

Secretary WALLACE. As I understand that plan, it would be the compulsory control of marketing in order to effect the price.

Senator NORRIS. Yes; as I understand it, that would be one way. There might be other ways that I do not know about, but I am assuming that you would have to license the dealers, the elevator men, for instance, and under that license agreement they would pay to the farmer when he brought it in-taking wheat, for illustration—they would have to pay him the price you have fixed after you have investigated and found to be the cost of production for that part of the crop that you had estimated under your investigation would be consumed in the United States, and pay no attention to the balance of the crop.

Senator CAPPER. Eliminating all taxes on the proposition.

Secretary WALLACE. That would, in order to effectuate that price, the damming back on farmers of rather large quantities of material.

Senator NORRIS. You refer to the Clair plan?

Secretary WALLACE. It would seem to me that if you are carrying that out, something in the nature of the Clair plan would be necessary in order to make sure that the excess wheat would not find its way into the terminal elevators, because if it found its way into the terminal elevators it would immediately have an embarrassing effect and defeat your purpose, just as the operation of the Farm Board defeated their purposes.

Senator NORRIS. I have assumed that the farmer would be through when he has been paid a certain price for that part of the crop that you had estimated would be consumed here, he would have no further interest; there would be no certificate issued to him, or any further division; but would that leave him in a difficult position about some crop getting into domestic use?

Secretary WALLACE. I would think that you would have a very definite, strictly controlled segregation in order to make that possible.

Senator NORRIS. Why would you have to segregate the wheat, using wheat as an illustration? Your wheat would take the natural course as it does now. The production and pay for it would all be over with, and it would be divided on that basis. If the farmers of the country produced 800,000,000 bushels of wheat when your estimate was that it would take only 600,000,000 bushels to supply the domestic market, there would be 200,000,000 bushels for which he would have no guaranteed price, and every farmer who produced wheat would share in that 200,000,000 in proportion to the amount of wheat that he produced. It would not be necessary to segregate the wheat, would it?

Secretary WALLACE. That would invoke some such conception as the equalization fee in that case.

Senator BANKHEAD. Mr. Secretary, right at that point let me ask you this. There is a carry-over of about 370,000,000 bushels of wheat?

Secretary WALLACE. It is estimated there will be about 350,000,000 on the 1st of next July.

Senator BANKHEAD. That supply will be provided for, available in the market, before the producer would get the benefit of the sales?

Secretary WALLACE. That is a thing that is seriously bothering some of the wheat people, that situation.

Senator CAPPER. Mr. Secretary, it is argued that this plan, which is sponsored by Mr. Simpson and others, was used successfully dur

« PreviousContinue »