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raises enough to feed their own people in the Southwest. Why shouldn't she do it? It is true she might have to bring in some other hard wheat, or some other soft wheat for mixing purposes, but it is also true that the producing area is adjacent to where the people live.
I do say this, that we in New York City, which happens to be my home, raise no wheat. When I look at a loaf of bread I never speculate as to whether it was raised in Montana, Kansas, or Pennsylvania. I believe that a man, regardless, who is an American citizen, should get an American price for his product on his American farm.
The CHAIRMAN. The point I was making is that the freight would have to be added. You fix the price all over, the same identical price?
Mr. CLAIR. Yes, sir.
The CHAIRMAN. The man that was farther away would be at a disadvantage as compared with the man that was nearer to where it was to be processed, and from which it was to be then reshipped. That is one of the problems that has come into our transportation system. We cannot base it on the mileage, because it would make it impossible for people that lay a distance from the manufacturing point compete with those that would be nearer the manufacturing point. Here they had to build up a system that would distribute the wealth, the manufactured wealth, of the people at a freight rate that would allow every vendor throughout the country to have approximately the same opportunity to do business and to accommodate the people in that community.
Mr. CLAIR. Well, the Senator is absolutely right. I agree with him on that. But nevertheless, we in industry do not do it so. In industry, the price of a motor car is rated f.o.b. Detroit, and the purchaser pays the freight. If he happens to be in Flint, Mich., or Canton, Ohio, his freight is, say, $8, $10, or $14. If he happens to be in Carolina or Texas, his freight rate is $110, $112, or $114. He has to pay it. I don't know why what is sauce for the goose is not sauce for also the gander. When we have our prices based at our point of production in industry, why parity is not established when agricultural products have their prices based there also.
The CHAIRMAN. I suppose the answer to that would be that each one, no matter where he produces, would be allowed to sell his pro rata of the domestic consumption. Mr. CLAIR. That is right.
The CHAIRMAN. And the other man must look out for the extra charge in freight? Mr. CLAIR. Yes.
Senator Bulow. Mr. Clair, I am in sympathy with your desire to lift the farmers' prices. On the question of enforcement, you would provide it would be a criminal offense to either buy or sell at a price lower than the price fixed ?
Mr. CLAIR. I would impose the same penalty for false oath on that as is provided in the income tax law.
Senator BULOW. Suppose a farmer took a load of grain to town and sold it below the price fixed. Would he violate the law, or would the man who bought it from him violate the law? Mr. CLAIR. Both. Senator Bulow. They would both be subject to a fine?
Mr. CLAIR. Yes; exactly the same as if I went down to the railroad station today and purchased a ticket to New York at less than the legal tariff. The man who sold it to me he and I myself would both go to jail.
Senator Bulow. You apply this only to non-perishable commodities?
Mr. CLAIR. Indispensable, nonperishable commodities.
Mr. CLAIR. That does not include hogs. I would suggest that inasmuch as the corn crop is something that is converted to hog meat, that in order to cover that there should be a proration on hogs. This means about a 1072-cent price on hog meat.
Senator KENDRICK. If, now, Mr. Clair, while you persist in reducing production, which would come through reduction in acreage, and do not include dairy products, would not the farmers who cut down the production of corn produce dairy products?
Mr. CLAIR. No; I don't think that follows. For you know, Senator, it includes practically all the basic agricultural groups, and there would be no shift. Things are being made today where they are being made at the least cost of production, according to climate and soil, according to the nearness of the center of production. I don't believe with the Clair plan in effect, with this in effect-well, you are going back to where you were in 1929, and there is no difference in the world, the price of the agricultural products will be about what they were then. There is no change in the marketing grogram. I don't want to take it out of the board of trade or the cotton exchange. Leave it in just the ordinary channels of commerce that built this country great. Those are the channels which should handle the agricultural commodities in the future as they did in the past. But there will be this difference; that henceforth there will be no speculating in these basic products below what it cost the American farmer to produce.
The CHAIRMAN. He can speculate above?
Senator Bulow. If this is a practical plan, you then establish equality between the industrial producers of the country and the producers of raw materials?
Mr. CLAIR. That is right.
Senator Bulow. And if you succeed in doing that, you eliminate special privilege?
Mr. CLAIR. That is true.
Senator Bulow. You realize you are preaching a very unorthodox doctrine.
Mr. CLAIR. Well, I am not supposed to be very orthodox.
Senator FRAZIER. Will you explain a little further about the surplus that might be carried over on the farm to the next year? How will that be handled?
Mr. CLAIR. Take a farmer who raises 1,000 bushels of wheat today in your country, and he comes in and the postmaster gives him a certificate that permits him to sell 800 bushels of wheat domestically. He finds himself with 200 bushels of wheat on hand.
Senator FRAZIER. Suppose he carries that over, carries it all over to next year?
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Mr. CLAIR. If he can't find a market he has to carry it over. If the next year he finds himself with that 200 bushels on hand, he will say, “What is the use of me raising 1,000 bushels of wheat this year?” So he goes in to the postmaster and declares the following year he is going to cut down his acreage. He comes in and declares he is going to cut his production to 800 bushels. In other words, he is going to balance his personal production to the domestic demand. Do I make myself clear?
Senator FRAZIER. So far.
Mr. CLAIR. Then, he may put that 200 bushels in his next year production and get rid of it.
Senator FRAZIER. After the crop is made and harvested and threshed he would have to make a declaration as to the amount he had for this second year?
Mr. CLAIR. Yes, sir.
Mr. CLAIR. Yes, sir; and he would be permitted to put that in his personal production that year and get rid of it, and henceforth he would be producing for domestic production only, and the second year he would sell his 100 percent. In other words, there is adirect incentive there for some farmers to cut, and get on a direct domesticproduction basis. But those who want to speculate can sell where they want.
Senator FRAZIER. I think the general incentive would be to cut down as much as possible domestic production.
Mr. CLAIR. I don't believe we ought to yield up our foreign markets.
Senator FRAZIER. Of course not, but now there isn't much foreign market. Our home price today is 10 cents over the Liverpool price right now, the world price.
Mr. CLAIR. Senator Frazier, I say this; if there is an American farmer who has got any surplus wheat that he wants to sell in the world market at 20 cents, Godspeed him to it. He will bring that much more money into the country.
Senator FRAZIER. But the farmer is not going to sell it for 20 cents if he can carry it over to the next year and get $1.25 for it. Mr. CLAIR. That is true.
The CHAIRMAN. And suppose you were to fix the price of cotton. We export a little, 5 or 10 percent more than the domestic consumption. Suppose you fixed it at 18 cents and the world price of cotton rose to 1872 cents. Then there would be no prohibition or inhibition, but he could go out and sell everything he had.
Mr. CLAIR. That is right. Let the law of supply and demand become operative there.
The CHAIRMAN. But the minute it drops down to 17 cents, his domestic portion would sell at 18 cents?
Mr. CLAIR. At 18 cents. In other words, there is no sense in asking our farmers to clothe and feed us less than its costs to produce that clothing and feed. It is only going to bankrupt them, inevitably.
Senator THOMAS of Oklahoma. If the Government should fix the price for that portion of our cotton domestically consumed at, say, 20 cents a pound, you would have no objection, in the event the world price should rise to 25 cents per pound, to the farmer selling all his at 25 cents?
Mr. CLAIR. Absolutely not. This 18 cents is the minimum price. I am personally urging 18 cents as the price that is necessary to restore parity between this eastern gold commodity dollar-may I take the time of your committee for a minute and give you an illustration of what is in my mind's eye?
I have a picture in my mind's eye of a little stone building, back in Brockton, Mass., 20 years ago, and in that building was a certain workman, behind a certain machine, taking pieces of leather from Newark, N. J., that originated in the stockyards in Chicago. He took that hide and built a pair of shoes, and sent those shoes to Tyler City, in Texas, to a certain merchant, where those shoes were sold under a certain trade name. Those shoes sold for $2 per pair. The cotton farmer went out into the field and made 20 pounds of 10-cent cotton, came in and got the shoes. That was 20 years ago.
Now, I will bring it right up to date. The same building, the same machine, the same workman with the same hide, from the same place in Newark, from the same stockyards in Chicago, making the same well-advertised brand of shoes that I have got on my feet now, sends it to the same merchant in Tyler, Tex., in the same store where they are put on the same shelf, and the same cotton farmer today must go out and make 120 pounds of 5-cent cotton to buy the shoes, and there is no difference, except everything is 20 years later. But he has to work five times harder, because this fact is pregnant, it took 8 days to pick a bale of cotton 20 years ago, and it takes 8 days today. There is just as much labor now as then, only now he must work five times as long.
As the commissioner of Texas said to you, when we in these United States only give 53,000,000 people a pittance for their labor, they can only have a pittance to spend with us, that if you pay the farmers justly, they can buy justly from you.
I have heard it recited that cotton might be stabilized at 8 or 9 cents a pound. Let me urge this upon you, that there are two types of distress clearly evident in the country today. In the East it is human rights that are suffering. Here are men, women, and children who are hungry. That is not true in the South or West. Out there it is property rights that are suffering. Land values have depreciated from 77 billions of dollars to 44 billions of dollars, in the last 12 years. Thirty-three thousand million dollars lost on the value of American farm land. Agricultural commodity prices have been depressed from $12,800,000,000 in 1929 to $5,200,000,000 today.
I don't know why society today decides that a bushel of wheat is worth only 20 cents, when it was worth $1.25 in 1929. The wheat is just as needful to my stomach. My appetite is just as keen, and my teeth just as sharp today as they were then.
Senator NORRIS. I wish mine were.
Mr. Clair. But it is the value we place on it. If we give the Southern States 8 or 9 cents for their cotton, if we talk about 88 cents for wheat, let me offer this suggestion; 88 cents is going to enable the Kansas wheat grower to pay his taxes, pay the interest on his mortgage, maybe buy a pair of work shoes, but take it from me, gentlemen, it is not going to enable him to support our motion-picture industry, which is a $3,000,000,000 industry itself. It is not going to permit him to buy generously of our industrial city of Detroit, Mich. Our problem today is to get sufficient money to him to enable him to buy
prosperity back to our mines and mills and factories, because I see this one thing staring us in the face. I distinctly trace this problem back 40 years to a time in this Nation when grass was free. When free grass obtained in this country we had one cycle of economics under which we all lived. In the day of free grass nature bred cattle; the cattle roamed the open range country, and nature fed it and nature finished it, and the agriculturalist went out, caught it, slaughtered it, smoked it, and sold it and got the money for it. When our Government had deeded all our public lands to private titles things in life changed for the farmers. The first thing they had to do was to fence their lands. To fence their lands they could no longer go down to the fork of the creek and put down fence posts and split them. They had to buy those fence posts and plant them, and buy hog wire, nails, and staples to hang on the fencing, and with that purchase of hog wire, nails, and staples, there started a new industry in the United States. The wire industry was given birth to with the building of wire fences.
Time was when man came along and sold shares of stock in packing plants, and they built those institutions in little towns like Chicago and Omaha, and Kansas and Missouri State, but after the packing town was established cities grew around them. Why? Because this new industry of the packing plants became one of the things that took a job away from the farmers, and the profits that he made began to be paid out in our cities.
Then along came the industrialized creameries. They sold shares of stock and built that. I will grant you that progress was made, but we must be reminded of the fact that when city workers began to work up the butter-fat of the Nation that agriculture had lost another job to industry, and with it went the profits from the agriculturists.
Time was—when I was a boy I was raised in socks knitted in my home; I was raised on profits that my women folk made by saving rags and tearing them into strips and sewing them end on end and weaving them on community looms. ' That work is taken away from the American family today. Today our rugs are made at Hartford, Conn., or Amsterdam, N. Y.
Time was when the farm wife went into the county seat and bought yard goods and ran them up on the sewing machine into bedding and clothing for the family. That has been taken away from the farmer. Today our farm ladies wear Learned blouses and the farm men wear Hart, Shaffner & Marx or Kuppenheim suits.
I could go on all afternoon, but let me give you this thought: When the internal-combustion engineer came along, and with his mind and skill put a cylinder on an automobile engine, and put that engine on front of hundreds of thousands of drays, and trucks, that ride the great streets of New York, Buffalo, Chicago, smash went the agriculturists' market for oats and hay; smash went the western market for horses and mules. More work taken away from the American farmer, and that cycle has gone on today until we in the industrial East, and I say it for every manufacturer here, by and with the consent of the Illinois Manufacturers Association, have taken over every job that nature's god ever intended them to have in life, we have said to him, “You raise the seed and the fat, the fibre, and we in