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Mr. Mollin. We have all the State organizations west of the Missouri River affiliated with us except the one in Kansas. We work closely with Mr. Mercer but the Kansas association is not officially a member. Of course, there are more farming operations in the West now than used to be.
Senator KENDRICK. Isn't it true that your State associations who are accredited members of the parent association include almost every small producer of cattle and sheep in the State?
Mr. MOLLIN. As a range producer. I took Senator Capper's question to be directed to the farm producer. We don't have so many of those, the man who has a few cows and pigs, we don't have so many of that kind even through our affiliated membership.
Senator KENDRICK. I had much to do with that association a few years' ago and I think it is reasonable to say that you include now a thousand small producers?
Mr. Mollin. Oh, we have lots of small ranchers and all these small ranches do farm some but we think of them as ranchers and not farmers. We have fellows that have only a hundred or two cattle, and they naturally conduct farming operations along with their cattle operations in many parts of the West, but we think of them as cattlemen and not as farmers.
Senator CAPPER. Have you mentioned here everything that you believe can be done as far as Congress is concerned that would help to get a better price for livestock?
Mr. MOLLIN. I think I mentioned the principal things; I think the restriction of imports of fats and hides and the reduction of freight rates and the reduction of mortgage interest through the bill that I understand is just about to be introduced. I think those are things that will benefit. I believe Senator Norris yesterday asked Mr. Farr about the loans made by the R.F.C. I think we would have disastrous liquidation of the livestock industry if it hadn't been for those institutions, largely because the banking situation was such that even banks that are good won't carry their people that have been doing business with them for years. I know of ranchmen that have done business with one bank for 20 years and their loans were called, and the bank that called these loans when this crisis came were 85 to 95 percent liquid.
Senator NORRIS. I hope you didn't misconceive the point that I had in mind when I was asking that question. He had been talking against the Government going into business. I was wondering whether he objected when the Government went into business in the instances I named.
Mr. Mollin. It is true, as Mr. Farr explained, that the feeder has a better means of credit than the producer. A feeder loan is a liquid loan and you put an animal in the feed lot and he is consuming 20 pounds of grain a day and he is supposed to be getting more valuable every day, and those loans are desired. As bad as conditions have been this fall, banks in Denver and Kansas City have advertised they wanted feed loans. They get a pretty fair rate of interest and it is a short-time loan. Those same banks that finance Mr. Farr and are financing him today wouldn't loan a dollar to a rancher that is just as good security and in just as good shape, because they don't want that kind of loan. We have to have some means of getting long-time loans. The ordinary means has been the Federal intermediate credit banks
which is not Government money, but they have been too conservative and haven't done the job they should have done.
Senator CAPPER. And the rates are still too high?
Senator CAPPER. I think you are right about the interest charges being a factor in this and right about the transportation costs and that applies to the small farmer as well as the big cattle producer? Mr. Mollin. Yes, sir.
Senator Norris. Ít applies to the consumer, too; everybody that has anything to do with this product. There is a whole lot of price that the consumer pays that is eaten up with some form of transportation. The illustration that the witness gave doesn't complete it, there are transportation costs in the feed that go in, all the way from the beginning?
Mr. Mollin. Yes. There is a transportation cost in that little clip.
Senator NORRIS. There is nothing from the cradle to the coffin but has transportaton costs in it?
Mr. Mollin. I would like to say that I think the trouble maker in this bill is the compensating tax on other domestic commodities.
Senator Norris. Assuming we are going to pass the bill, we have to have it in it somewhere?
Mr. Mollin. I don't know. In the case of hogs, supposing the thing worked, you could raise the price of hogs $2 a hundred and still, according to the figures given, they wouldn't any more than be on a pre-war parity with cattle and sheep then.
Senator NORRIS. You can get the hogs produced from the beginning much quicker than you can cattle?
Mr. MOLLIN. Yes.
Senator Norris. Probably the hog industry doesn't present the same difficulty that yours does right now. It wouldn't take very long to change it if they went to raising hogs?
Mr. MOLLIN. Yes, of course the diminished outlet for lard would keep them from doing that. They used to export so much more lard,
Senator FRAZIER. If hogs were left in the bill and cattle and sheep taken out and there was increase in the meat products of pork, that would tend to increase use of beef and mutton. Wouldn't a compensating tax be necessary if they were going to continue in the hog business without hindering them?
Mr. Mollin. The way the Secretary explained the matter, until at least you had reached the parity I don't see why there would. As I understand it, roughly, there is about $2 on cattle and $2 on sheep and $4 on hogs below the pre-war parity.
Senator FRAZIER. The theory is that if the people are used to buying pork chops at a certain price and they are ruised, they will look for something else. On this freight-rate question, I agree with you that freight rates should be reduced by all means. However, up across the border in Canada they have cheaper rates. Are their stockmen any better off?
Mr. Mollin. I don't know that they are, for the reason that they haven't got the consuming market that we have got. They are producing a surplus and having to export it to England since we put up our tariff bars. We are on a domestic basis on cattle and they are not
Senator FRAZIER. Yes; that makes some difference. But, of course, more than freight rates has to come in here to clear up this situation.
Senator MURPHY. Have you made any computation in dollars of the benefits to cattle industry and hog industry from putting a duty on competing vegetable oils, those that compete with our animal fats?
Mr. Mollin. No; I haven't. But I do know that the total imports are over a billion pounds, and that is one of the reasons that we are having this bad situation with lard. You know lard sold as cheap as 5 cents a pound or less. Senator MURPHY. I realize that. I wondered if
express in dollars
Mr. Mollin. No; I don't think I could, Senator. It is a pretty involved subject.
Senator MURPHY. It is a very formidable competitor?
Mr. MOLLIN. Yes, it is, and it is reponsible in some measure for the condition of lard, I think.
Senator FRAZIER. Mr. Chairman, I have a telegram this morning from Charles A. Ewing, president of the National Live Stock Marketing Association. The tenor of his telegram is so contrary to what Mr. Mollin says that I would like to place it in the record. He says:
We strongly endorse this bill and urge its enactment into law, and
To leave livestock out of farm relief is unthinkable.
(Senator Smith had returned to the committee room during the examination of Mr. Mollin and had resumed the chair.)
The CHAIRMAN. Without objection, it may be placed in the record. The telegram referred to is as follows:
CHICAGO, ILL., March 27, 1933. LYNN J. FRAZIER,
Senate Committee on Agriculture, Washington, D.C. Livestock graze two thirds of the United States, consume 70 percent of crops raised; its products approximate half in value of our whole agricultural output; it is the most important factor in agriculture, occupies more land, employs more people, and its surplus is small compared to wheat or cotton. Livestock prices are far below the cost of production and the producer gets only 25 to 35 cents of the consumers' dollar. Nothing will aid the recovery of agriculture more than better prices for livestock.
The National Live Stock Marketing Association is producer owned and controlled, its members market the stock of some 300,000 stockmen throughout the country; our markets extend from Baltimore to San Francisco.
We were consulted by the Secretary of Agriculture on the proposed legislation. Its objective to raise livestock prices to a pre-war parity is necessary to save further damage to the industry and compatible with public interest. The pending bill is a great improvement over previous proposals; it provides several methods which may be used under varying conditions as required; it invites cooperation between producer and processor in its accomplishment. We strongly endorse its enactment into law. To leave livestock out of farm relief is unthinkable.
CHARLES A. Ewing, President National Live Stock Marketing Association, The CHAIRMAN. I must insist that the witnesses be as brief as can be with clarity, because we want to close these hearings today, and we will now hear from Mr. Streeter, who is a producer of hogs.
Mr. Streeter, please give your full name, address, and occupation to the stenographer.
STATEMENT OF C. D. STREETER, FARMER, OF KEOKUK, IOWA.
Mr. STREETER. I am C. D. Streeter, Keokuk, Iowa, operating a farm in Illinois.
Senator NORRIS. You live in Iowa and farm in Illinois?
Mr. STREETER. Yes, sir; it is just a hundred miles, two hours and a half from the farm.
Senator KENDRICK. Is your farm an experimental farm?
Mr. STREETER. Well, not so much as this bill is, I don't think, Senator. (Laughter.]
Senator FRAZIER. I am wondering why you go to Illinois to farm. Did you lose your farm in Iowa?
Mr. STREETER. The farm was given to me and I run a lumber yard in Keokuk, Iowa. I have to work in the lumber yard in order to pay the expenses on the farm.
Senator FRAZIER. Your farming is a sort of side issue?
Mr. STREETER. The amount involved is more but of course I don't give it quite as much time.
Senator FRAZIER. If you have to run your lumber yard to pay the losses on your farm, I should think you would be in favor of farm relief?
Mr. STREETER. Yes, I am, but in a different way. What I want to say in addition is that I am vice president of the Hampshire Swine Record Association, with headquarters in Peoria, I. I have a telegram from our president, J. H. Oliver, and I speak for the association. Shall I read that, Mr. Chairman?
The CHAIRMAN. You may read it.
With knowledge inadequate as to just what farm bill does provide and with minute to minute changes only judgment possible is an opinion that price fixing provision for all agricultural commodities will fail to produce desired results and that processing taxes on commodities will be passed to consumers as additional tax on necessities. Believe it best judgment to rise or fall with the rest of the commodities by hogs staying in the bill if other meats stay in or come out if they are out.
I want to say further that Mercer County, in which my farms are, I think is possibly the largest shipper of livestock in the State of Illinois. I own and am farming 680 acres of land in the State of Illinois and each year produce thereon approximately 2,000 head of hogs. I marketed hogs every month last year. I am, therefore, interested in the farm relief measure that has passed the House and now pending before the Senate to a very substantial extent. Being a farmer thus interested I am especially interested in what is termed "farm relief." Every form of legislation, therefore, that tends to improve the farm condition hæs my heartiest sympathy.
I have given consideration to the farm bill now pending and to the discussions in regard to it and I feel that the bill, if enacted substantially in the present form, will be a great detriment to the farmer rather than of adventage to him. I do not wish to discuss the entire bill, only is it relates to livestock and especially hogs. The act itself reccy nizes a tax; and when you speak of tax to our farmers, it is just like waring a red flag in front of a bull. They are taxed now to such an extent thet that tax is obnoxious to them.
Mr. FRAZIER. Doesn't that depend on who is paying the tax?
Mr. STREETER. Well, they usually do it. The difference between the actual price paid and the theoretical fair price is to be imposed upon the first processor as a tax and paid into the Treasury. This tax will have to be borne then either by the processor, by the ultimate consumer, or it will be pushed back on the producer. It stands to reason that this tax will have to be absorbed by one of these three groups.
The Department of Agriculture has issued statistics indicating that the per capita consumption of pork has had only a very slight fluctuation during the last 28 or 30 years, the amount consumed being from 65 to 70 pounds per capita. The same source of information indicates that in 1907 the per capita consumption of all meats was 167 pounds while the per capita consumption for all meats is now from 30 to 35 pounds less. Pork has, therefore, maintained its own as a food. Let me remind you right here that pork is the poor man's meat.
It seems to me, however, that to impose an added tax on pork will cause the consumer to shift his purchase to some other food article, such as fish, poultry, beans, or eggs.
If therefore the tax cannot be passed on to the consumer, will the processor or packer absorb it? The packer may be able to absorb some of it but he certainly cannot be expected to absorb the entire
In fact, it is extremely doubtful whether he will be able to absorb any of the tax and continue in business. The effect of this bill will destroy the farmer's cash market. There are approximately 6,000,000 farmers in the United States. There are approximately 4,500 counties in the United States and about 2,500 of these produce wheat. Something over 1,000 produce cotton, and perhaps between 3,000 and 3,500 counties produce hogs.
The problem of administration is staggering. Secretary Wallace stated in your presence last week that he did not know the cost of administering this bill. There will be an army of clerks and auditors and checkers and it looks like the beginning of the biggest bureau that the Government has ever undertaken in peace times. All of the expense of this giant bureau under the provisions of the act, will be taken out of the tax and only the residue be distributed to the farmers. I do not want you to get the idea that I am opposed to farm relief. I am trying to present to you fairly my view of the provisions of the proposed farm relief measure. It seems to me that this measure attacks the question from the wrong point. Its diagnosis of the farmer's ills looks to production as a sore spot. It seems to me that this is the wrong sort of diagnois. Our whole theory of civilization has been built upon the idea of encouraging the production of food and raiment. It has been said that he was a public benefactor who would produce two blades of grass where one grew before. Our Government has proceeded along that line from its earliest foundation by building up the Department of Agriculture and by establishing agricultural schools throughout the country. We have put a premium on education. We have been trying to give a reward to the producer.
Now to turn around and say that the producer has learned too much and is producing too much is all wrong, unless not only in this country but throughout the whole world there are no hungry mouths. So long as there is a hungry mouth or a naked body too much food and clothing has not been produced. Until there are no hungry people