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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. It 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 raised, 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 you could 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 Nalional 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.
and no naked people or people going around in rags can it be said that too much has been produced.
I hope, therefore, that you may be able to work out an adequate farm relief measure but I feel confident that if you will give due consideration to the provisions of the present measure you will find that it is economically unsound, difficult of administration, and doubtful if not practically of no value to the farmer. In fact, in my own mind, I think it will produce a greater disaster than any that the farmer has experienced in the past. The hog producers want hogs left out of this bill.
Now I speak with authority on that. I have interviewed a great many farmers in our community and I haven't yet talked with one farmer that is favorable.
Secretary Wallace stated last week that this bill is an experiment. If it is the desire of the Secretary of Agriculture to experiment, I trust that you will not permit him to experiment with hogs. If you wish to help the farmer it can be done in three ways—lower governmental expenses, lower our taxes, and give us relief with our mortgages. And I think we will go along. That is my story.
Senator NORRIS. You haven't any other remedy for farm relief except those three you suggested?
Mr. STREETER. That is all I have to suggest, Senator.
Senator Norris. You think that would bring prosperity to the farmer?
Mr. STREETER. It will be a wonderful help.
I far as Congress is concerned, the reduction of taxes to the farmer would be a very small item. Most of his taxes come from local taxation, State taxation, county, and municipality, and so forth?
Mr. STREETER. Yes.
Senator Norris. So far as we are concerned, your method is confined to two remedies?
Mr. STREETER. Yes; I think that is true, as far as you can go with it here.
Senator NORRIS. One way would be to try to lower the interest rate of the mortgage indebtedness?
Mr. STREETER. That would help wonderfully.
Senator Norris. You realize that on that we are terribly handicapped; we can't compel a man holding a mortgage to cut it down, and neither I presume could a State under our Constitution?
Mr. STREETER. If you start right here in Washington, Senator, and show the people where you are going to cut expenses and costs, I believe it will continue right along the line clear down to the farmer. I think the mortgage holder will also fall in line and be more lenient.
Senator NORRIS. I think that is true, and as I understand it, Congress will try to do that before this session is over and probably have such an amendment on this very bill when it is passed; but I don't want anyone to get the idea that that road is free from difficulties and some impossibilities probably, because we would be at the mercy of the mortgage holder. It would have to make it to his interest to compromise or he wouldn't do it.
Mr. STREETER. Yes; but I believe that if the mortgage holder feels that the farmer is gaining a little, eventually he is going to be able to reduce or pay off that mortgage.
Senator NORRIS. Do you think the farmer can get out unless he can get higher prices for his commodity, even if all the mortgages were cut in two and the interest cut in two? He coundn't get out, could he, unless there was some method brought about so that he could get a higher price?
Mr. STREETER. I have serious doubts. I would like to say this, there is quite a different feeling, Senator, among the farmers in the last two weeks. Two weeks ago I went out to buy some corn. There is lots of corn in the country but they didn't want to sell, everyone of them, you would think they had gotten together.
Senator NORRIS. What price were you offering?
Senator Norris. You couldn't blame a farmer for not wanting to sell his corn for 15 cents?
Mr. STREETER. Oh, no; it would be selling it at a loss. But that was all it was worth to ship it.
Senator NORRIS. Before that farmer can pay off that mortgage, if you reduce it, wipe it out entirely and forgive it, which is an impossible thing and we can't expect that
Mr. STREETER. No.
Senator NORRIS. You have got to let him get more than 15 cents for corn?
Mr. STREETER. Absolutely.
Senator NORRIS. If he didn't owe anything on his farm, he couldn't live and pay his taxes?
Mr. STREETER. You are absolutely right.
Senator NORRIS. Then it seems to me that another one of your remedies almost disappears. It would help some, I concede, but it wouldn't save this situation. Then you have got nothing left of your remedies except that of reducing governmental expenses here, salaries and so forth, and the consolidation of bureaus. "That might help a little but it wouldn't be very much for the farmer, would it?
Mr. STREETER. Well, perhaps it would be more mental.
Senator KENDRICK. Pardon me, Senator. Mr. Streeter, is it not true that there is a widespread movement under way now on the part of the State and county and municipal governments to reduce their own taxes and put their financial houses in order to meet this very situation?
Mr. STREETER. That is being undertaken, Senator.
Senator KENDRICK. I hardly know a State that isn't reducing its budget of expense, many of them to the extent of a flat 25 percent reduction in the last legislature. Also, it is an interesting thing here to state that I saw corn sold in the Senator's State at 10 cents a bushel and bought thousands of bushels of it at that to feed cattle and those prople worked out of that somehow. It was a long time ago but there were lower prices than the present price on commodities.
Mr. STREETER. Of course we have seen lower prices.
Senator NORRIS. They may work out of this in time if they don't do anything, undoubtedly,