that it seems to me is before us that we can get through Congress. I am very skeptical as to whether or not it will do the work. I say that the fundamental thing that the Government of the United States ought to do now is to cheapen the American dollar, and until you cheapen the American dollar, any of these schemes or all of them, in my judgment, are going to fail.

You have Japan, for instance, with a depreciated currency of 50 percent, and you have got China with a depreciated currency because of the very low price of silver. Now you know perfectly well, if you are an exporter of flour, that China cannot buy flour from us at the present time and pay in her silver; buy flour from the American producers. She has got to buy it some place where they have got depreciated currency. That is one of the things to be considered. Likewise with reference to India. India with the present low price of silver can sell her wheat and her cotton on the world market at Liverpool, England, for a much lower price than the American farmer can, and one of the things that is depressing the price of wheat and cotton in this country is because of the fact that silver is at such low price in the Orient and throughout the world; but you people come here and say "We don't want this," but you offer no constructive suggestion, excepting the one possibly to reduce freight rates.

Senator MURPHY. May I ask just one or two questions, Mr. Chairman? In your statement that you expected a 10-cent reduction in freight rates to open foreign markets to wheat, was that made taking into consideration what Senator Wheeler has said about the difference in exchange, depreciated foreign currency?

Mr. LINGHAM. My statement was based on what we could buy for in Canada is supposed to be on export basis. They cannot sell all the wheat they want to in the depression, but some days ago I asked the price at which they could buy Canadian wheat delivered Buffalo, in comparison with a comparable grade of wheat from our own northwest, and the difference on different grades ran from 7 to 12 cents a bushel. And that was both brought to an American money basis. Senator FRAZIER. That is including tariff, of course?

Mr. LINGHAM. No; I mean no tariff. I mean without the tariff. Of course, the tariff is 42 cents. I mean we looked up what we could buy it for just to get the comparative values in the two countries, what we could buy our own wheat for as American wheat and what we could buy Canadian wheat for, both delivered at the same dock in Buffalo and on comparable grades, and the difference was 7 to 12 cents a bushel. Now, Canada, generally speaking, is on an export basis. They must be.

The CHAIRMAN. Let me call the committee's attention to the fact that we must try to get through with this witness, because we have got others that want to testify, but if there are any questions that any member of the committee desires to ask, of course, he must ask them.

Senator FRAZIER. I want to ask another question, Mr. Chairman. Mr. Lingham stated that if we could get a reduction of 10 cents a bushel on wheat it would probably open up foreign markets. How does your market compare with the Liverpool or so-called "world market" at the present time?

Mr. LINGHAM. I got this from official sources that, say, our Chicago market as compared with Liverpool, is about 10 to 12 cents higher.

Senator FRAZIER. So 10 cents a bushel freight would not make any difference at the present time?

Mr. LINGHAM. Of course, if you take off

Senator FRAZIER (interposing). On the world market, if we are going to get export business, our market is 10 cents at least too high, compared with the Liverpool market; is that right?

Mr. LINGHAM. Yes.

Senator FRAZIER. Then if we get a 10-cent reduction in freight rates it would not make any difference at all on the present prices? Mr. LINGHAM. I will correct that to say 10 to 12 cents a bushel, and I think without any question if we had a 10-cent reduction some of our export grades would go out for export. But again, I am not an exporter.

Senator FRAZIER. In other words, our price now is and has been. for some months 10 or 12 cents above the Liverpool price, when the freight is considered?

Mr. LINGHAM. Yes.

Senator FRAZIER. That is what I have understood. In these figures that you gave in this letter that you sent to us, 59.6 per bushel or $3 a barrel on flour, is your price of bran and shorts figured in there? Is the mill feed figured out of that $3? Would there not be a reduction in the cent a pound you get for your bran and shorts?

Mr. LINGHAM. Well, we are assuming that under the tax we would not be able to get any more for bran and shorts

Senator FRAZIER (interposing). Than you get at the present time? Mr. LINGHAM. No; we get at the present time no part of the returns on feeds as a profit and no part of that tax could be added on the bran and shorts. The farmer would not buy it at a higher price, so it would have to go to flour.

Senator WHEELER. If you had to pay more for your flour and the price of farm commodities went up the farmer would be getting more and he could pay more for his bran and shorts, could he not?

Mr. LINGHAM. It would be competing with corn and oats, with which it does compete to some extent. They are not entirely competitors, But we do not believe it would put the price of bran and shorts up.

Senator FRAZIER. Of course, if the price of farm commodities went up generally, the price of oats and rye and other things would go up too.

Mr. LINGHAM. The prices that I gave in that letter, were official figures from a Washington office.

Senator MURPHY. If corn went up, shorts would go up too, would they not?

Mr. LINGHAM. Yes; that would have an effect on feed.

The CHAIRMAN. Now, Mr. Lingham, have you finished what statement you wish to make?

Mr. LINGHAM. I have hardly begun, Senator Smith. If I could have a few minutes without interruption I would be pleased, or I will come back later.

The CHAIRMAN. You can have about 8 minutes if you want to make your statement, and if the committee wants to call you back after lunch they can do so. But we have quite a number that want to be heard, and I would suggest that if they are points which can

be passed over, that the witness be allowed to make his statement continuously, so as to get the picture of it as put forward.

Mr. LINGHAM. I was starting to speak of the danger of the experiment. Under the proposed plan a flour buyer would have no reason for buying ahead because it would, under present conditions, really be a maximum price, so that the flour buyer would have no reason to buy. Then again, the miller on that basis would not be buying wheat, and we believe that when the run of the new crop comes on it might create a very serious congestion, the same as the cattlemen have talked of regarding their situation; that there will be thousands of cars of wheat on track for which there will be no place. Then we believe it will seriously reduce the future trading so it will be very difficult for mills to hedge. Of course, I do not think there would be any great fluctuation in the market, but today we as millers will buy wheat from a farmer any minute he brings it to us at the cash price, but I can see that a situation might develop where we would be afraid to buy, and that again would restrict the farmer's chance to sell.

Then, based on statements that have been made here, the so-called parity price would appear to be just a step toward what may be something much higher that might be wanted. I think Mr. Simpson suggested $1.25 or $1.50 as a fixed price. That would add on another $1.50 or $3 a barrel tax.

I have been interested for a long time to know why the 1908-14 period was chosen, and there is an article in the Harvard Magazine by Dr. John D. Black in which he says:

The base period for these index numbers was 1910 to 1914, the very period which Dr. E. G. Nourse has referred to as "The golden age of American agriculture." Surely, in no 5-year period in statistically recorded history has the ratio of prices of farm and other products been so favorable to agriculture as it was at that time.

Now, we would like to have agriculture have the golden period, but we think that at the same time others should be considered.

Senator FRAZIER. Do you not think it was the golden period for the millers at the same time? During the same period of years did they not make more money by far than they are making today?

Mr. LINGHAM. Yes; all business was doing well, then, I think; all business.

Senator WHEELER. That was because of the fact that your farmers were prosperous and therefore the other industries were prosperous as well.

Mr. LINGHAM. Yes.

Senator WHEELER. It was not only a golden period for the farmers but it was, as a matter of fact, looked upon as the golden period for all manufacturers and business in general.

Mr. LINGHAM. I think it is now well understood by the committeeI doubt if it is by the public generally-that the proposed tax on commodities now in the bill, that is, in the House bill, would amount to about $11.77 per capita; on a family of five, $58.85. Of course, those figures cannot be considered exactly correct but they are based on the best available Government statistics by a first-class statistician, and that would amount to a tax on a family of $1 a week; or $1.17, to be exact.

Senator WHEELER. How much did you say it would amount to? $11.75? What is that for, a year?

Mr. LINGHAM. That is per year per capita.

Senator WHEELER. Then you think it would amount to $1.75 a week?

Mr. LINGHAM. No; what I said, Senator Wheeler, was that it would amount to $11.75 per year. I said it would amount to $58.85 per family of five per year, which would be a little over a dollar a week, which is quite a tax on a family getting today-the average unskilled labor getting less than $750 a year, less than $15 a week. Then that figure of income is based on the best available figures you can get, from the National Industrial Conference Board.

Senator WHEELER. The thing you overlook constantly is that if this condition of the farmers continues your unemployment is going to increase, your wages have got to come down, and will come down to the city employee.

Mr. LINGHAM. I agree with you, Senator Wheeler, that wages will have to come down, and especially those now getting wages that are out of line with other wages.

Senator WHEELER. If you bring wages down, you again deflate and cut down purchasing power of your people.

Mr. LINGHAM. There is no question about that.

Senator WHEELER. And then you have got your debt structure and fixed charges that must be paid, and you are just getting into a vicious circle.

Mr. LINGHAM. A man came to me on the street at home the other day. He had done some work tiling my bathroom some years ago— I think I paid him about $2 an hour-and he came to me and begged me for work in the mill, saying he would be glad to work for $10 a week. He has deflated certainly, and that is one reason, of course, why I think this proposed tax is very serious for a man in that position. Senator MURPHY. You have reduced salaries and wages?

Mr. LINGHAM. Yes, sir.

Senator MURPHY. That inevitably reduced the consumptive power, did it not?

Mr. LINGHAM. Yes; of course.

Senator MURPHY. That is what has happened then-reduction of the money is going to the farmer?

Senator WHEELER. Taxes have not come down any, have they? Mr. LINGHAM. Yes; our taxes have come down somewhat in our section in the last year. We have an organization up there that has been working on that.

Senator WHEELER. Have electric light rates come down any?

Mr. LINGHAM. No; I think they are unchanged, although there is talk of reducing them.

Senator WHEELER. The price of aluminum has not come down any has it?

Mr. LINGHAM. Well, I do not buy any aluminum. There is just one other statement I would like to make. A statement was raised in my mind as to the number of processors and manufacturing concerns and dealers that would be necessary to license under this, or rather, that would be permissible to license. Here is a statement I would like to put in the record. It is too long to read but I think it might be of value or very considerable interest, and if the committee

wishes I would be glad to have copies mimeographed, or made and sent to you, to go in the record.

Senator NORRIS. What is the statement? I do not mean to read it, but just give us an idea what it is.

Mr. LINGHAM. Well, just this first sentence will tell the sense of it: There are at least 110,000 processors and manufacturers who will be subject to license under the provisions of bill H.R. 3835.

Then it gives the title

In addition the bill would include a total of 62,500 wholesale establishments engaged in handling one or more of the nine basic agricultural commodities and competing commodities.

Then it goes on to say that if the retailers are included it might take in 911,000 additional licenses.

The CHAIRMAN. Have you copies of that printed so that you can give each member of the committee a copy? You might have it typewritten. Can you do that?

Mr. LINGHAM. I will be very glad to, Senator. I think we have sufficient copies. We had it run off on the mimeograph.

The CHAIRMAN. You can file that, then, with the stenographer. Mr. LINGHAM. I do not know that there is anything further that I can add to my statement. Now, Senator Smith, I will be glad to answer any questions that I can.

The CHAIRMAN. It is now 1 o'clock. What is the pleasure of the committee?

Senator FRAZIER. Mr. Chairman, I have some figures here that I want to put into the record. I had a letter from a farmer in North Dakota a few days ago, in which he said that he was getting 30 cents a bushel for his wheat and paying $2.70 for a 98-pound sack of flour. I happened to be looking over some old papers last week and found a diary that my mother kept in the year 1898. Wheat at that time was selling at 46 cents a bushel; flour that we bought at that time cost us $1.90 for a 98-pound sack. We got 16 cents more for wheat when we paid $1.90 for a 98-pound sack of flour than we do today when flour is $2.70.

(Whereupon, at 1 o'clock p.m., recess was taken until 2 p.m. this

day.)

AFTER RECESS

The hearing was resumed at 2 o'clock p.m., pursuant to recess.
The CHAIRMAN. The committee will come to order.

We finished with Mr. Lingham. For a few minutes we will hear from Mr. W. F. Jensen.

STATEMENT OF W. F. JENSEN, SECRETARY-MANAGER OF AMERICAN ASSOCIATION CREAMERY BUTTER MANUFACTURERS, CHICAGO, ILL.

The CHAIRMAN. Please state your name, address, and occupation. Mr. JENSEN. W. F. Jensen, manager American Association Creamery Butter Manufacturers, 110 North Franklin Street, Chicago, Ill. We have in our association approximately one half of the butter manufacturers in the United States and our membership is Nationwide. As to this proposed plan, in our business as it applies today