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of that dollar, and bring the price of the indispensable nonperishable basic agricultural products to that level.

Taking such an index value of the dollar today, we are urging that this Government should proceed at once to stabilize a price on all the cotton, wool and flax, wheat, corn, rice, oats, barley, buckwheat and hay, all of that one particular economic classification of basic agricultural products and place that price upon such an amount of those products as are needful and necessary to United States consumption, without regard to what surpluses a farmer might produce. am urging that the American farmer should be permitted to go out and plant wheat on the roof of his barn, in his tool shed, on his fence posts, if he can grow it there. That is his business. Let us not so interfere with it. But I would urge upon you gentlemen the consideration of the fact that we should place upon his wheat and that portion of it which we consume in the United States a decent stabilized minimum price, based upon American production costs, American land values, American rates of interest, American rates of soil depletion and depreciation on his livestock and on his machinery and do for him what we have done for the other basic industries of the Nation.

I submit, sir, that we have protected our labor in the Eastern market by the enactment of immigration laws which actually forbid a foreigner from coming here and working in competition with his own blood brother against an American bench. We have recognized it with the 8-hour day law, we have established maximum hours of labor and minimum wages for many of our workers. In behalf of our banking interests we have stabilized a price on gold, we have fixed express and railroad rates, the stability of the telephone and telegraph industries are predicated on law. I submit to you gentlemen that we should now proceed to place the industry of agriculture upon the plane with the other economic and basic industries of the Nation by saying that the American farmer shall also be paid by law a certain stabilized price for that proportion of his crop that we need.

One cannot proceed on such a thought without exercising some control over the market. I submit, gentlemen, it is impossible to control acreage or control production by acreage control. If in accordance with this bill the Secretary of Agriculture went out and leased 20 percent of any one farm that I might want to apply my labor to, I guarantee you that I could go back on the remaining 80 percent and make as much production in any of the basic crops as I had done on the 100 percent before.

There is, however, a way of controlling that, and that is through market control. I would suggest that it can be done in this wise. If the wheat farmer or the cotton planter is today producing wheat or cotton, I would say let him go on and plant as much as he chose. Let our Department of Agriculture forecast the crop for next year; let the Department of Agriculture under a bill or stabilizing law set a minimum price to grade and staple on the various products. Talking about wheat, I am urging that we stabilize wheat at $1.25 a bushel on that portion for domestic consumption. If we raise 700,000,000 bushels of wheat and consume domestically 600,000,000 bushels of wheat, let the Department of Agriculture broadcast to every farmer in the United States that he may this year ship that portion of his personal production that American consumption bears to national production, and if the Nation is consuming

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six sevenths of its wheat, let each wheat producer in the Nation ship six sevenths of his wheat through the ordinary channels of trade. I submit, sir, we should take the Government out of the business of buying cotton, wool, goose feathers, and grapes. Restore that business to the live-stock exchanges, back to the cotton exchanges, back to the boards of trade, and to the farm cooperatives. Let each man ship at law six sevenths of his personal production at the stabilized price. The other one seventh he will be obliged to keep on his own farm in his own bins unless—and I say unless advisedly-unless through the ordinary channels of commerce he can find foreign markets without this country, in which event he will be permitted to ship that extra one seventh provided it is evident on the shipping papers that it is for export consumption. Let the man who creates a surplus and who stands to make a profit, if he can find a market for it, remain the punitive creator of that surplus, and be compelled to keep it on his own farm if he can't find a market and thereby take away from the market the distress that that surplus wheat causes.

Under that plan this would be the result, as I see it: There are certain so-called marginal lands or high productive cost areas in the country where it costs 12, 15, or 17 cents to make a pound of cotton. There are other areas where cotton possibly can be made at from 8 to 10 cents a pound. Let the cotton planters go our and plant what cotton they will. Let the Department of Agriculture prorate that crop to each individual producer. If a man at the end of a crop year makes a hundred bales of cotton and he finds a domestic market for 60 bales of it, he would sell the 60 bales at the stabilized price. The 40 bales would be his personal surplus production, which he would be compelled to keep on his own property unless he could find foreign markets. If conditions continued and we found no further foreign market for our cotton, the man the next year would simply go in and declare that he was going to cut his personal production of cotton to 60 bales. In other words, that individual chooses to make cotton for domestic purposes only, and in succeeding years he turns the surplus in. If there is a low-cost production area, such as west Texas, and he wants to raise cotton for export or surplus purposes, let him go ahead and raise it. If he sells the cotton at 5 cents à pound abroad, he will bring that much money to our country:

We feel, Mr. Chairman, it is not quite as much a question of free trade and high tariff that is affecting agricultrual prices today as it is fair trade in our own country. When I say fair trade, I mean fair trade between this industrial East country and that great agricultural West and South country. In our East country today our workmen are being paid high rates of wages for every productive hour of labor that they spend. In the great motor industry in Detroit, Mr. Ford today is paying the minimum of $5.80 per day for wages for all productive labor expended in building an automobile, and I say that we can't hope to restore the automotive industry of Detroit as long as the American farmer in the cotton patch or the wheat field is compelled to work at wages of less than $2 a day. For 40 years they have been out there making the fat, food, and fiber needful and necessary to our lives at an average of $2 a day wages. They have made their wheat, cotton, rye, oats, barley, buckwheat, and hay on that basis, they have sold it on that basis, and they took the proceeds of their labor on such basis, and when they got it they turned around and bought

window glass made in Pittsburgh by a ten-dollar-a-day worker who received that for 8 hours of work. They have bought their hats from Danbury, Conn., and their alarm clocks out of Ansonia.

Every dollar of property sold to them was made at the high eastern scale. I am not urging that the eastern standard should be cut. God forbid that there should be any further wage cutting in the Nation. We need high wages in order to maintain the high ideals and plane of living. When wages come down, the rents must come down. When rents come down, mortgages become endangered. When mortgages are in danger, banks fail and insurance companies go. We have either got to go through this period of depression and bankrupt every institution in the East down to the bankrupt condition of the western and southern farmer or else we are going to put out a helping hand and help him up to our level.

I am urging that we should proceed at once to stabilize wheat at a dollar and a quarter a bushel, cotton at 18 cents a pound, wool at 32 cents a pound, corn at 87 cents a bushel, oats at 42 cents a bushel, and other farm prices proportionately thereto on such amounts as are needful and necessary to domestic corfsumption, hoping that in so doing we are going to restore not eight hundred million but five thousand million dollars at once to the purchasing power of 53,000,000 American citizens engaged in agricultural industries. I submit, sir, that in doing that you will not raise the cost perceptibly on any article in American life today.

I have followed the proceedings of your committee with a great deal of interest and heard it recited about the increased cost that might accrue if this so-called tax was levied against bread. Let me say that I had the pleasure of being in the little town of Lamar, Iowa, which I believe is in Senator Murphy's county, several weeks ago and I saw a wagonload of corn sell at 4 cents a bushel at the elevator. Later I sat in a modest restaurant in that town and bought a package of Post Toasties that cost me 10 cents for half an ounce. That makes 20 cents an ounce, or $3.20 a pound or $192 a bushel that I paid for Iowa corn myself when I ate it in the city of Lamar. I was here in Washington, D. C., yesterday and bought a package of wheat, one half ounce of Puffed Wheat, which cost me 10 cents in a popular restaurant. That is something like $300 for a bushel for wheat. Uneeda Biscuit, Mr. Chairman, was selling for 5 cents a package when wheat was $3.65 a bushel and they are 5 cents today when the Kansas farmer is swapping a bushel for a package of eastern cigarettes. There is so little raw material that enters into the finished product that the dollar value is almost negligible.

Speaking of bakeries, Mr. Brice Smith, of Kansas City, prominent in the baking industry, told me that there was so little wheat in a loaf of bread that it was almost negligible and he didn't figure it as entering into the price factor. I was in Chicago at a bakers' convention 6 weeks ago and there I saw a new device offered to the bakers to slice bread before it was furnished to the housewife; and after some 2 hours spent with the manufacturer of that machine, I was able to calculate that this one little new device, a machine to cut bread, cost more per loaf to slice it than the farmer got for the raw material entering the bread stuff. What is true of the Uneeda Biscuit is true of a suit of clothes. I submit, sir, there here is a suit of clothes that cost me $55. I am not gainsaying the fact that it contains $15 or $18 worth of cloth. That cloth is a manufactured article. If you take the cloth off my back and weigh it on a scale at the price prevailing for wool today, you will see that the farmer did not receive 55 cents out of the $55 that I paid for the suit. So I urge you that when you begin to stabilize the prices of raw materials that you are not going to perceptibly increase the price of the finished product. What is true of the wool is true of the Post Toasties and is true of the Puffed Wheat and is true of everything in life as to raw materials.

In conclusion, let me say that I submit this plan as one that is at once going to restore not only $5,000,000,000 to the purchasing power of our farmers but it is going to immediately stop the foreclosure on our farms. Our American farm lands are worth only as much as they will produce; and when we in the cities recognize our debt to the American farmer and pay him a decent price for his products, it is going to stabilize the price on land values throughout the country. Not alone that, but it is a commonly known truth that security values have always followed commodity prices; and that when wheat goes up a couple of cents a bushel, stocks go up. When corn and hogs drop, stocks drop.

I ask you to visualize with me what will happen to the shares on the big board in Wall Street the day the Government stabilizes the price on basic agricultural products and places $1.25 on wheat and 18 cents on cotton. So I submit that that day billions of dollars will be added to their value, that United States Steel with its potential market opened up will rise to $100 a share, that the A. T. & T. will return to normal and the assets of the Nation will again become liquid. I submit there is nothing intrinsically wrong with this country today except one pregnant fact, and that is this: In the year 1929 the new wealth of the Nation which was represented by the agricultural crop of that particular year came into the market, and in 1929 society put a value on that crop of $12,800,000,000. Society in general said our new wealth that year with which to work was $12,800,000,000. When a farmer put a thousand bushels of wheat in a freight car, he had a bill of lading for it. When a cotton planter put 10 bales in the warehouse, he got a warehouse receipt. The total of the warehouse receipts for commodities that year was $12,800,000,000. This year the same crop of hogs and of cotton and of wheat and of milk and of all the agricultural crops came in and society this year for some reason says it is worth only $5,200,000,000. To what end? This year when the bills of lading are signed, you can't borrow $1,000,000,000 at the bank. I submit to you, sir, that the day you stabilize these agricultural commodity prices in accordance with the technique worked out in that plan that the farmer will be able to take that bill of lading or warehouse receipt and go in any bank in the United States and borrow money on it. Why? Because this Government will have stabilized at law the agricultural commodities of this Nation which are indispensable to human life and will have stabilized only that portion of those indispensables which are going to be consumed in the next 12 months, and he will be able to borrow immediately. To what end? Somebody asked in the committee what portion of this money would be used to pay off mortgages. I submit, Mr. Chairman, that when these values are accomplished and this stabilization effected that the insurance companies will be going

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back to the farmers happily to renew their mortgages. They won't want to get out from under then, once agriculture has been stabilized.

And to what end? To this end, Mr. Chairman, that we in the East country today are absolutely working on a dollar basis and a gold basis at that hut our agricultural products are being sold in the world market off the gold basis. We will either have to thin out our money, we will either have to go to revaluing gold and breaking down our gold standard or else bring up our commodity levels commensurate with that gold standard today. We should do that, and we should do it annually. To what end? That if next year the prices spread, if we have created parity today and next year a manure spreader or farm wagon goes up, then agricultural prices should come up. If automobiles or manufactured goods come down, let's bring down commodity prices commensurate with next year's index value of the eastern commodity dollar, but keep that in parity and keep it annually. Don't let our agricultural products be up here and our industrial products down there. Don't let our agricultural products be down here and our industrial products up there. Keep parity between them. I am confident that once that is obtained, these 53,000,000 farmers stand ready, and willing to buy prosperity back to every factory and mill and mine in this country.

I urge this upon you, sir, that it will have been the first time in the history of this Nation that parity has been established between the great industrial East and the agricultural South and West. I find in the South there are millions of homes which on today's replacement value are not worth $165 apiece, those little cotton cabins in the cotton patches. Those people want bath tubs, electric lights, radios, portieres, and Grand Rapids furniture. See that they are paid a decent price for that portion of their cotton we consume in these United States and we haven't enough mines and mills and factories in this land to supply their needs and wants for the next

Senator CAPPER. Mr. Clair, how does your plan differ from the one proposed by Mr. Simpson?

Mr. CLAIR. The technique of the Clair plan has been worked out to the last detail. I insist, Senator, that it will be needful and necessary to segregate that portion of our crop which is surplus, to this end: First, we cannot mix them together and establish one price in common. It is perfectly legal and right as a domestic problem for us in the United States to fix a price on that portion of our crop which is consumed in the Nation. I understand it would be a matter of international discussion if we endeavored to subsidize that portion which we have for export. You cannot say to the farmer we are going to pay you a dollar and a quarter for all the wheat you are going to raise, or he will go out and raise it all over the world. You can pay him dollar and a quarter for that portion of his wheat which is going to be consumed domestically and make him who creates a surplus remain the punitive creator of it. If a man finds himself with a surplus of 500 bushels at the end of the year, he will cut it down for the following year.

Senator CAPPER. You agree with Mr. Simpson that the Congress can, by act of Congress, arbitrarily fix a price on these commodities?

Mr. CLAIR. I would like to say with reference to that that there is a group of lawyers that insist that you have that power.

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