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Kit CARSON, Colo., March 27, 1933. Senator John B. KENDRICK,
Senate Office Building, Washington, D. C.: Please lay this message before Senate Agricultural Committee as my protest against agricultural relief bill that is now before committee. Evidently the intent of this bill is to legislate value into commodities. If such a thing is possible then the economical problems of the world will have been solved. If it is possible to accomplish this desire by legislation it seems strange that through all the world's history that such a simple remedy has never heretofore been successfully accomplished. It is impossible and in the end will do more harm than good. What agriculture needs most is a good rest from agitation. The remedy lies in cheapening of the currency, lowering of taxes, railroad rates, and marketing expenses, lowering the cost of all governmental units clear down to the local schools, and scaling down overcapitalization of all industries. If we must try out this wild experiment please leave livestock out for at least a year.
CHARLES E. COLLINS. (Whereupon, at 4:55 p.m., the committee adjourned until 10 a.m., Tuesday, March 28, 1933.)
AGRICULTURAL EMERGENCY ACT TO INCREASE FARM
TUESDAY, MARCH 28, 1933
UNITED STATES SENATE,
Washington, D.C. The committee met, pursuant to adjournment, at 10 a.m., in its committee room in the Senate Office Building, Senator Ellison D. Smith presiding.
Present: Senators Smith (chairman), Kendrick, Thomas of Oklahoma, McGill, Bankhead, Bulow, Caraway, Murphy, Pope, Norris, McNary, Capper, Norbeck, Frazier, and Shipstead.
(Senator Smith left the room for a few moments just as the committee was called to order and Senator Kendrick took the chair.)
Senator KENDRICK. The committee will come to order and the secretary will call the first, witness.
STATEMENT OF F. E. MOLLIN, SECRETARY OF THE AMERICAN
NATIONAL LIVE STOCK ASSOCIATION, DENVER, COLO. Mr. MOLLIN. My name is F. E. Mollin. I am secretary of the American National Live Stock Association, with headquarters at Denver, Colo. Our association is the national spokesman for the range-cattle producers located largely west of the Missouri River. Your chairman expressed the other day a desire to know the qualifications of the witnesses appearing. For 22 years, beginning in 1906, I was in the employ of a large ranching concern in Nebraska, starting in as stenographer and ending as general manager. They fed about 4,000 cattle annually and handled a great many hogs, feeding and shipping to market on an average of about 5,000 head annually. In 1928 I was employed to liquidate another large ranching concern, and for the past 4 years I have been secretary of the above-named organization. During all of these years I have given a great deal of thought to the marketing problem and have had extensive opportunity to study conditions relative to same.
Before going into detail in regard to our opposition to the inclusion of cattle in the bill now under consideration, I would like to say that it appears to me there are certain sound reasons why no attempt should be made artifically to raise prices until all means have been exhausted to reduce the cost of operation. When that has been done, your problem will be very much simpler than it is today.
I have in mind particularly the question of freight rates. Any action taken by Congress to establish an artificial basis of prices would be used by the railroads as an argument against the necessity of reducing freight rates, and the same would be true, to a certain extent, of other items that have so far successfully resisted the substantial downward trend that is an absolute necessity to put us in all an equal plane.
I testified last Friday before the Interstate Commerce Commission urging a general reduction in freight rates, and closed my remarks with this statement:
Congress is today considering a gigantic farm relief bill. I do not believe that any bill which that great body in all its wisdom can adopt will do so much to restore normal conditions, to again start the wheels of industry turning, as a general reduction of 25 percent in freight rates.
I wish to here reiterate that statement. The effect of such a reduction would be pyramided in the many finished articles that each of us must buy every day. Your chairman can tell better than I how many freight rates are included in the beefsteak that you eat in a restaurant. Many of the cattle are moved four or five times before they leave the packing house and then there are 1 or 2 movements of the product.
Utility rates should be reduced. Farm-mortgage relief should be applied. Implement prices should come down and everything else that is still artificially high. I was amazed the other day to hear your first witness testifying in behalf of this bill in one breath and defending the present prices of implements in the next. One of the high crimes against American agriculture today is the price the farmer has to pay for the implements he uses.
Our association met in convention at Ogden, Utah, on January 12 to 14. After careful consideration, the following resolution was passed relative to the domestic-allotment plan, even though at that time cattle were not included in the plan:
Whereas Congress is attempting to legislate for agricultural relief; and Wherevs this association is vitally interested in and favors such legislation; and
Whereas we believe that the so-called “domestic-allotment” plan is economically unsound: Therefore be it
Resolved, That we are unalterably opposed to this plan as a medium of relief.
The only objection to the passage of this resolution was based on a desire not to oppose agriculture in general. The fact that cattle are again under consideration in such a plan proves the wisdom of our going on record.
Our objection to the bill under consideration as applied to cattle is based on the extremely sensitive condition of the cattle market and the dressed-beef market; the fact that these markets operate on a strictly cash basis; that beef is of such a highly perishable nature that little storage of the product is practicable; that our industry has to operate in the face of constant propaganda by the manufacturers of substitutes which can compete with our product, by health faddists and quacks who like to get their names in the papers, and by a host of self-seeking individuals and institutes who have something else to sell and
that the eating of meat is harmful. Only the fact that nothing quite takes the place of beef in the public favor enables us to preserve a proper place in the dietary of most of our people.
When the bank holiday was declared meat prices advanced immediately in our big cities, as an illustration of the extremely sensitive condition of these markets. I fear that the passage of this bill, as it now stands, would serve as an excuse for a similar advance in retail prices, even though livestock had not as yet been touched.
In this connection, however, I wish to call your attention to the fact that we have never entirely recovered from the meatless days prescribed during war times. The average consumption of beef for the 5 years, 1910 to 1914, was 64.8 pounds per capita. It has been declining ever since. In 1930 it was 50.1 pounds and in 1931 it was 49.6 pounds. This continuing decline the last 2 years has been in the face of an increase in production.
The Agricultural Outlook for 1933, issued by the United States Department of Agriculture, states that the number of beef and dairy cows combined in this country is now the largest on record. The number of all cattle on hand January 1, 1933, was 65,129,000, an increase of approximately 8,000,000 since January 1, 1928.
Senator KENDRICK. May I interrupt you there? Is it not true that this increase is more largely found in dairy cattle than beef cattle?
Mr. Mollin. No, sir; the next statement covers that. Practically all of this increase has been in cows and heifers, about half of the dairy breeds and half of the beef breeds. There is a little variation of a couple of hundred thousand but they are practically the same,
Under these conditions we are fearful of the consequences of any attempt to artificially raise prices, holding with it the possibility of turning to one of the numerous substitutes for our product. If, in order to prevent this, you are going to go into the entire field of meat and meat substitutes, my mind refuses to grasp the tremendous machinery that would be thus involved and the complications that might easily result.
I testified two years ago in the food investigation conducted by Senator Capper. The Senator will recall that tue charts presented at that time indicated a close relation between the composite price paid for beef animals and the compoiste price charged for carcasses at wholesale, and that the spread between them was not unduly high. He will further recall that the spread between the wholesale price and the retail price widened out considerably about 10 years ago and has been maintained ever since on about a comparable basis.
I call your attention to the statement on the circular marked “No. 1” which is before you. You will note that the table shows the average price of live steers per 100 pounds, the average price for 58 pounds of carcass beef at wholesale derived from 100 pounds of live steer weight, and the average for the retail cut which come from the 58 pounds. The statement shows in the next to the right-hand column that with the exception of the months of September and October, in 1931, for the entire period 1929 to 1931, inclusive, there was a minus wholesale margin between the sale price of the carcass beef and the cost of the live steers. In making this comparison, no credit is allowed for byproducts. Today, however, these byproducts are very low in value and the accuracy of this table is attested by the financial statements of the large packers during the same period.
Senator KENDRICK. Will you illustrate that with a little fuller statement so that we can all have the benefit of it?
Mr. Mollin. If you will go back to 1929, you will see that the minus margin runs from a minimum of 45 cents to a maximum of $2.21. During that time byproducts were not as near valueless as they are today. Hides were worth something and oleo was worth something. They are the two principal byproducts. Up to that