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Senator Bulow. For that cotton already produced and off the farm?

Mr. Clair. Yes, sir; give them the benefit of that price. Give them the money, and this Congress will take it away from them in income taxes.

Senator Bulow. How would you divide it? Mr. CLAIR. By the expedient of providing when this new crop comes in we are going to base our new consumption on the new crop.

Senator Bulow. That is 5,000,000 bales the farmers will have, and assuming it will run 14,000,000 bales more, and with 9,000,000 bales already, it would make 23,000,000 bales. All right, with a consumption demand in this country of 5,000,000 out of 23,000,000 bales that will be here.

Mr. Clair. On the 5,000,000 bales that will be consumed they will receive the 18-cent price.

Senator Bulow. Who will?
Mr. CLAIR. The producers thereof.
Senator Bulow. They won't receive it unless somebody buys it.
Mr. CLAIR. The American producers will buy the 5,000,000 bales.
Senator Bulow. You mean the producers will buy it themselves?
Mr. CLAIR. The consumers, rather.

Senator Bulow. Why will they, when they have already got it at the present prices?

Mr. Clair. It is not in the hands of the mills, I understand.

Senator Bulow. It is in the hands of the cotton processors or somebody else.

Mr. CLAIR. That will be stabilized under this plan.
Senator Bulow. Who will do it?
Mr. CLAIR. The mills will buy it.

Senator Bulow. You can't stabilize but 5,000,000 bales a year. If you divide the profits between the farmers and the cotton traders who now own the cotton, you reduce the amount going to the American farmer. If you give them half and half then you wont get the increase on but two and a half million out of the 18,000,000.

Mr. CLAIR. That would be 18 cents in this coming year.

Senator Bulow. Would you just cut him down until you get rid of this present surplus? Mr. CLAIR. That is right.

Senator Bulow. And without reducing the production, instead of getting rid of it, you would constantly incur, as has been done in the last four or five years, a carry-over?

Mr. CLAIR. Not under the plan. A man who plants and does not sell his surplus cotton will have it next year upon his hands. Therefore he will curtail.

Senator Bulow. As I get your idea, you divide half and half between the farmer next year. You give him two and a half million bales and you give the cotton traders and the stockholders that now own the cotton, an increased price on two and a half million bales now in the warehouse.

Mr. CLAIR. Yes, sir.

Senator Bulow. Then the cotton farmer would get about one fifth or one sixth of cotton at an increased price, on his crop?

Mr. CLAIR. He would get 18 cents.
Senator Bulow. On about one fifth or one sixth of his production?

Mr. CLAIR. Nearer one third.

Senator Bulow. Two and one half million bales out of fourteen million.

Mr. CLAIR. Yes; but you would not dump the whole 14,000,000 in the market in one year.

Senator BULOW. That is the normal production..

Mr. CLAIR. The plan provides that 3 percent of the final holdings will be sold—not more than 3 percent of the final holdings will be sold in any one calendar month.

Senator Bulow. Whose holdings?
Mr. CLAIR. The cooperatives' holdings.

Senator Bulow. Would they have an advantage over the farmers next year in the sale of theirs? .

Mr. CLAIR. Three percent at the stabilized price; yes, sir.

Senator Bulow. To that extent you would reduce the quantity of the cotton that the farmers produce that could be sold under the increased price?

Mr. CLAIR. In order to get this surplus out of the market.
Senator Bulow. You would never get it out, would you?
Mr. CLAIR. Yes.
Senator Bulow. How?
Mr. CLAIR. By working it off in that wise.
Senator Bulow. How many years would it take?
Mr. CLAIR. Three years.

Senator Bulow. It would take 3 years to get off what is on hand now?

Mr. CLAIR. Yes, sir.

Senator Bulow. Assuming they did not produce any more than they had each year.

Mr. CLAIR. Twelve million bales, the normal crop.

Senator Bulow. Where do you get that 12,000,000 bales as the normal crop? Mr. CLAIR. Twelve million six hundred thousand we had this year.

Senator Bulow. Yes; but this is the lowest crop you have had in many years.

Mr. CLAIR. Under this plan they would cooperate to reduce.

Senator Bulow. Don't you know that the production of cotton for the last six years has been approximately 15,000,000 bales?

Mr. CLAIR. Yes; because as cotton prices drop they have to make more. They have their fixed charges to meet. When you pay 18 cents, they will normally go to reduced acreage.

Senator Bulow. Then, you can't figure on 12,000,000 as the normal production. You recognize that this will not apply to cotton like it will to commodities that have practically no export surplus, don't you?

Mr. CLAIR. Well, I submit we should put the American cotton planter on a domestic production price also, even though it be above the world price. Give him the benefit of it.

Senator BULOW. That is what I am figuring with you; how little of his crop he gets the benefit on.

Mr. CLAIR. He will get the benefit on every bale consumed in the United States.

Senator Bulow. After they consume the nine and one half million bales already here, which he don't own.

Mr. Clair. Let them declare their stocks today, and they will be compelled to find a market for that portion for domestic production.

Might I submit that Senator Thomas gives us Irving Fischer's commodity dollar. It takes the dollar as we value it here in the East now, makes use of it, and says that commodity prices be commensurate with the gold dollar. If that is done, we will have a commodity dollar henceforth in the country.

Senator THOMAS of Oklahoma. Would you favor that?
Mr. Clair. Yes, sir, absolutely. I want a commodity dollar.

Senator KENDRICK. The dollar was getting cheaper all the time from 1920 or 1921 to 1929, in terms of commodities. Mr. Clair. In terms of commodities, yes.

Senator NORRIS. Have you there the variation in the gold dollar since 1879?

Mr. Clair. No, but I have the index prices on farm products compared with the index prices on commodity products, and they were pretty much in parity. They were exactly in parity in 1911. Then your farm commodity index was 101, your index for general commodities was 101.

Senator KENDRICK. What I would like to ask you is this: If we should cheapen the dollar and permit our maladjusted methods of exchange of commodities between the East and West to continue, the disparity would still exist, wouldn't it?

Mr. CLAIR. That would be an idle thing. The ideal thing would be to take Senator Thomas' idea and evaluate gold slightly, and get your increased commodity price and keep it there. If the index value went up, bring up commodity prices. If they went down, bring down commodity prices.

Senator KENDRICK. One parity of exchange? Mr. CLAIR. Parity of exchange. I say it is not a question of international trade. It is a question of fair trade between 53,000,000 people, who create the new wealth annually, and the balance of us back here who sell service, the mill and the manufacturer. We have the greatest market out there in the world, in the South and Southwest, for our commodities. Heavens, if Texas was a foreign nation, they would be sending ambassadors out of New York to build trade. It is there, but they can't trade with us any longer. They went broke in 1920. They had no money than. They went out and mortgaged their farms, and their cattle and their chattels. Now all that money is gone. They have bought so much from the industrial east country that they are exchanging produce on a $2 basis and paying at the rate of $14 to $15 for what they buy.

Senator KENDRICK. And paying the freight both ways. Mr. CLAIR. Well, it is unfortunate that the railroads are an American institution. We pay for them and we have to keep them

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Senator McGill. A while ago in response to Senator Capper I understood you to say you had a brief bearing upon the authority of Congress to enact a price fixing law?

Mr. Clair. Yes, sir; I have.
Senator McGILL. Is that included in this group?

Mr. CLAIR. No, sir; it is a separate brief. I will see that there is one of them placed in your hands.

Senator Bulow. I read that brief. I don't think it is the law, though.

The CHAIRMAN. Was their any court decision fixing the price of wheat in 1919?

Mr. CLAIR. Yes, sir.

The CHAIRMAN. In 1919 you remember we fixed a minimum price on wheat. That was after the war was over. I don't know whether there was any court decision on it or not.

Senator BULOW. I don't think there was, Senator.

Mr. CLAIR. I am speaking out of turn perhaps, but I am advised it is under the guise of public necessity, and strictly in accordance with the Constitution, and under the guise of public necessity that we fix railroad rates, that our States are permitted, under the guise of convenience, to fix telephone rates and electric light rates, and that under the guise of public policy we do certain other things in life. But I submit to you, Mr. Chairman, there is something in life that is more necessary than the railroad or the telephone. Our forefathers built this Nation great without railroad systems. But wheat is indispensable to human life. We would die without wheat. We would die without corn. I submit if the Government has the power to fix these things, it certainly will recognize the indispensable products of farms. I urge another class of economic commodities, basic raw materials that are nonperishable and indispensable, and I repeat they include cotton, wool, flax, wheat, corn, rice, oats, barley, buckwheat and hay.

People say “Why hay?" Our hay crop is worth in excess of $1,000,000,000 a year. When we stabilize that billion dollar value it will permit of the farmer discounting that bill of lading at a fixed price and enable us to use that bill of lading as specie or currency in the Nation.

With reference to corn and livestock, let me say the hog is a perishable product, but that we have one commodity in corn that is sort of wrapped up in the hide, and walked off the farm on the hoof. So therefore I urge we stabilize corn at 87 cents a bushel, but inasmuch as it is fed to hogs, that we should have a proration on hog meat. That is, a farmer raises 3,000 bushels of corn. If our domestic consumption is 80 percent, he may sell 2,400 bushels of corn as grsin, or he may sell it as pork meat, or he may sell it as a combination of both. I am urging that in order to keep the Kansas wheat farmer from feeding surplus wheat to hogs in competition with the Iowa and Illinois corn markets. It puts every American farmer on the same basis, one with the other.

I am urging that the price of $1.25 for wheat be paid on the farm. It is immaterial whether the farm is in Montana, the Dakotas, Nebraska, or in Pennsylvania. It should be $1.25 on the farm, and not at the terminal point.

Senator FRAZIER. All of these prices of yours are on the farm?
Mr. CLAIR. All these prices should be on the farm.

The CHAIRMAN. And you would have these stabilized prices fixed annually?

Mr. ČLAIR. Fixed annually; yes, sir; and they should be fixed in conjunction with the American value of the gold dollar that year. If the value is low, down go agricultural prices. Again, I say if the value of farm wagons, taxes, and so forth, go up, it is folly to keep the farmer down that year. We have to bring him up so that he can buy from us.

We, in America, have standardized our living and lives. We wear Stetson hats, Hart, Shaffner & Marx clothes, we eat Uneeda Biscuits, and listen to Crosley radios. We ride in automobiles. The price of Uneeda Biscuit is the same in New York as it is in Montana. The price of a Stetson hat is the same in Philadelphia as it is in Nebraska. The price of a Ford automobile is based f.o.b. Detroit. You are out of luck if you have to pay $100 freight. It doesn't make any difference to the American people who provides that portion of the wheat he needs to live on. The farmer in Nebraska is entitled to $1.25 for the wheat from his farm just as much as the man in Pennsylvania from his farm, or shipping point.

The CHAIRMAN. According to your theory, under the application of our tariff system, where the tariff was applied and the manufacturer raised his prices up to the tariff price, he automatically would raise the farmers' price?

Mr. CLAIR. Yes, sir.
The CHAIRMAN. And that would do away with the tariff.
Mr. CLAIR. Yes, sir.

Senator NORRIS. I would like to ask one question or two about your proposition to fix the price the same all over the United States. So far as I am personally concerned, it seems to me that would be a good thing, if it were possible, but don't you realize, as a practical man, that is an impossibility, that we could not get that kind of a law through Congress, in my judgment, in a thousand years.

Mr. CLAIR. It is what should be done.

Senator NORRIS. We ought to face the facts. It is what we can do that we should stick to.

Mr. CLAIR. Well, there is a differential in freight rates alone of 53 cents a bushel at Chicago on grain out of Kansas points and Montana points. I say let these fellows on the board of trade trade all they want, let them speculate on that difference in freight rate all they want. They can push the price of wheat where they want, but there shouldn't be any trading below that price that is fixed, and the farmer in Montana is entitled to the same price for his grain needed to feed a man in New York City as the man in Kansas is. If he is far removed from the terminal point and the center of population, his land is cheaper.

Senator NORRIS. Well, it is a peculiar thing, but true, about our civilization that in a great many of our products the reverse of what you say is true.

Mr. CLAIR. That is right.

Senator NORRIS. You could go into a sugar factory in Colorado, and you could buy sugar out of the factory itself, and you would have to pay a price to which has been added the freight to some terminal point somewhere.

Mr. CLAIR. That is wrong. When you set up this law you ought to face that intrinsic fact.

The CHAIRMAN. Well, wouldn't you have any commodity grown in a far distant State, where it is processed or where it is consumed, not being used; that they would buy all that right nearby?

Mr. Clair. That is true. In Texas our per capita consumption of wheat is approximately four and three-quarter bushels. Texas

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