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thing like approximately a million bales under her 5-year plan. So cotton bears a very peculiar and unique position in the agricultural economics of the world—that is, American cotton.
Senator PopE. Mr. Chairman, I wanted to ask one question: Mr. Blalock, you said a little while ago, the lower the price cotton is, the more they will produce. Then you said a little later, under the Clair plan if a price was fixed at 18 cents per pound for domestic consumption, that would cause them to raise more. I don't quite understand that.
Mr. BLALOCK. What I meant, Senator, was this: Just for easy calculating, suppose we produce a 15,000,000-bale crop and we consume a third of that as domestic consumption at 18 cents a pound and you export on the present-day price the other two thirds at 6 cents a pound, that would give you an average of 10 cents a pound for all the cotton that you produced. Therefore, with no limitation on us as to how much we shall produce, especially in the cotton area where they do not have to use fertilizer and they can afford to produce it at a profit at 10 cents a pound, they would go the limit.
Senator Pope. Would they raise more than at 5 or 6 cents a pound, the price that they now get?
Mr. BlaLOCK. Probably so.
Mr. BLALOCK. As long as it remained profitable. They raise cotton for two purposes-one, to liquidate their indebtedness, which they must do, and they will raise that regardless of how cheap it is. Then if it is profitable, they will try to increase the production for the profit that is in it.
I have no desire to take up too much of your time, Senator, but if you had your Clair plan and you had some way of controlling production of cotton at the gin, if the cotton farmers would ask for that, something out of the ordinary, it should be given some consideration, because the cotton crop of this country is our largest export crop and it is what keeps the balance of trade in our favor if you have it that way. With control at the gin, you could limit the amount of cotton that could be ginned and exported, and therefore not let them run wild with it as we have done in the past. Working as individuals, the cotton farmers are absolutely helpless. The cotton farmer is a helpless mass of humanity and he has got to have something to help him control himself.
The CHAIRMAN. We are much obliged to you, Mr. Blalock.
We will next hear from Mr. Chris Jensen. Mr. Jensen, will you give your full name, address, and occupation?
STATEMENT OF CHRISTIAN JENSEN, FARMER, PUTNEY, S.DAK.
Mr. JENSEN. Christian Jensen, Putney, S.Dak. I am a farmer by trade and have no other occupation.
Mr. Chairman and gentlemen of the committee, I can make my remarks very short by endorsing the two speakers preceding the last one in principle entirely, and I also sympathize with the last witness, because how can we help but sympathize? It is enough to make a farmer cry, you know; but I guess we are yielding a little too much to our feelings. But it is perhaps a phantom fear, because the worst can't happen. I am here against my better judgment, but the people insisted that I should come down, and when I continued to deny that I could tell you anything that you had not already heard at least a million times, they said you wanted to hear from a dirt farmer. Of course I can qualify. I have always been a dirt farmer, ever since I was born. I was born on a farm in Denmark and spent my first 23 years in Denmark and the balance of the time I have been farming out in South Dakota, engaged in the business of raising grain,
So I have made a good deal of a study of the marketing, of grain. I think I may say that I am very familiar both with the raising of it and the marketing of it and the costs connected with marketing. The people I represent and myself, we feel alarmed about any plan that proposes to give one man or even a number of men the power to hamstring or impair the marketing system that we have fought so hard to build up. I early became an organizer of farmers' elevators that cured the unfair practices prevailing in the primary market. Because of lack of competition, it was easy for 2 or 3 old-line elevators to go in collusion and not pay a competitive price. The farmers' elevator cured this in the primary market.
We feared that the same bad practices prevailed in the terminal market, but with the advent of the farmers' elevator came the independent commission merchant, and since then I am satisfied that the producer's interest is protected by every imaginable safeguard and the cost is so low that we can't afford to run the risk of having our market impaired by this legislation which has price-fixing features in it that has been disapproved of so often.
Of course the freight situation seems to be very incongruous. For example, when I began farming, I paid about 9 cents per bushel in round figures from my place to Minneapolis, about 300 miles. Now I pay 14 cents for the same distance. It is remarkable that from Minneapolis to Liverpool, the last time I checked up on it, the total cost, including cost of elevators and freight, was at that time 21% cents. That varies a little because of the ocean freight rates, they change. It is strange that I should pay almost as much for 300 miles as for about 4,000 miles. That seems strange. However, I am here to implore you not to impair our market.
We have a satisfactory and safe market that guarantees us at all times the highest market price, which is the only price, because, gentlemen, as I know from the war times, the moment you try to establish the principle that a price can be arranged arbitrarily, the price becomes unsatisfactory at once, because neither the seller nor buyer knows whether he is ge.ting a fair price. How could he know? He couldn't know. You know, gentlemen, when wheat was still a dollar and a half, we hollored practically as loud for farm relief as we do now. [Laughter. If you look back at it, you can see that that is now ridiculous. If I could get half that, I would go home and buy a new car, which I can never do under present conditions. I have to run the old rattle-trap, and I don't know that I can keep on running it even. Whatever can be done about it? I really see nothing can be done about it. If the economic sense of the world refuses to believe that as long as you produce more than you can use, it is no use to holler you can't produce it, because it is being produced, and that is the only thing the economic law cares anything about. It doesn't care about our cries.
It is most distressing, gentlemen. I preach and holler every day to help comfort my fellow farmers in their distress. I try to tell them that what they fear most can never happen because it is naturally physically impossible.
İf you will permit me, since I am here as a dirt farmer, to make a few remarks about the farm-mortgage situation, I will. I began in the nineties when we were hit by the same conditions, only that the mortgages weren't so tall. There were the same wholesale foreclosures. There were many anguished cries from the dispossessed losing their homes. It involved my own family, who lost everything, and they felt that they had heard the crack of doom and were ready to lie down and give up.
Now, what came of it? I claim no power of prophetic vision as to what will happen tomorrow, no man can tell what will happen in the next minute, but we can review what happened in the past and it is very sure, I believe, to happen now again. It was esteemed a vast calamity at that time but in a few years it proved to have been a remarkable blessing. My father-in-law, if you will permit me to become personal, because it is a typical case entirely, lost everything he had; he couldn't pay me my wages, and they were only $15 a month, but he couldn't pay it, so I managed to get some horses at some auction sales and I went to farming. He was about my age, and after he got over the shock, he got back on the farm and rented some land.
You understand, gentlemen, when the mortgagees get title to these lands, they find them worthless entirely without the people on the lands. And all that happened. To make it very short, gentlemen, what happened was that Brown lost his farm and Jones lost his farm and Jones got Brown's farm and Brown got Jones' farm (laughter), and the total result was that my father-in-law became well off for the first time in all of his life. He lost his mortgage. [Laugh
Don't misunderstand me. It was no joke at that time, and it is no joke now. I often cry about it.
I often cry about it. I don't believe any of all this stuff is going to happen. It can't happen. As I say, they can't import a new population in South Dakota that will farm these lands under present conditions. The mortgagee can't get his taxes out of them except from the man who knows how.
I looked over the country as I came over to Washington and I thought, “What would I have to do if I should have to move over here." [Laughter.] I would rather live in South Dakota where I know how to farm. I promise you, gentlernen, you move a man out to South Dakota and have him farm beside of me and I will make a monkey out of him in one season and he will not try to do so.
On the mortgage situation, gentlemen, some of the tall mortgages will become scraps of paper. It is unavoidable. I am sorry for the mortgagee, but why in the Sam Hill the farmer is afraid of losing it beats me. That is beyond my comprehension. Why, he should be glad to lose it. I tell you, gentlemen, I am not joking or trying to be humorous, but I try to comfort my fellow farmers. They are all good people that are involved in a situation not of their own making except in part that we recklessly spent what we didn't have, which is the real trouble, the unpayable debts between nations and between individuals.
I can speak independently. I am not a mortgagee and never expect to be, because I know if you want to make an enemy, get a mortgage on his property and you will have a good foundation for it. So I don't want anything like that. I think I have said enough, gentlemen. [Laughter] But I do hope that we will not succumb to an orgy of price-fixing. I don't wish to speak disrespectfully, but that is economic quackery. I had to learn the language after I got here. It would make it very much worse, I know. The thing is to maintain our courage and manhood and pay our bills, especially the small bills. I am not talking about the mortgages, that is out of the question. I tell you that the mortgagee is more to blame than the debtor. He is supposed to exercise greater perspicacity in lending and he hasn't done so. He has been more foolish than the debtor.
Senator THOMAS of Oklahoma. Are you advising your farm friends to let the mortgage be foreclosed?
Mr. JENSEN. I am.
Senator THOMAS of Oklahoma. You think that is the proper remedy?
Mr. JENSEN. Yes, sir, it is. It cannot help, gentlemen-excuse me, Senator.
Senator THOMAS of Oklahoma. What do you raise on your farm? Mr. JENSEN. I raise mostly wheat.
Senator THOMAS of Oklahoma. What do you get for wheat on the farm?
Mr. JENSEN. Right now?
Mr. JENSEN. There are so many factors involved. If you have always a good crop, Senator, it seems now we have to put our financial house in order. I could live on it.
Senator THOMAS of Oklahoma. Pay your taxes and educate your children and wear respectable clothes?
Mr. JENSEN. You know automobiles take the major portion of our income, and that may have to suffer. I hope not, because it is a splendid thing to have, but we must live first.
Senator Thomas of Oklahoma. Your policy would be first to have all the farmers quit paying taxes and interest?
Mr. JENSEN. Oh, no.
Senator Thomas of Oklahoma. And let the mortgage be foreclosed?
Mr. JENSEN. That is when they can't do it and the mortgagee insists on being unreasonable and will not face the realities. If he then won't do that, why, then I can't see any other way but that the law takes its course. The law will protect the debtor, it is in his favor in every case.
Senator THOMAS of Oklahoma. The farmer that has been foreclosed can go to some other farm and start at the bottom again?
Mr. JENSEN arose.
Senator THOMAS of Oklahoma. And some way get one or two mules
Mr. JENSEN (interposing). You can't farm that way.
Senator Thomas of Oklahoma. Or a couple of oxen and a plow and start in again? Is that your remedy for the farmer?
Mr. JENSEN. No; not out our way; we can't farm that way. Most farmers have personal property.
Senator THOMAS of Oklahoma. Isn't that mortgaged?
Mr. JENSEN. In some instances. The mortgagee isn't anxious to get it, because he can't sell it for anything.
Senator Thomas of Oklahoma. As soon as it is of any value, they will come out and take it?
Mr. JENSEN. No. If there is the slightest chance that this man has an earning power, he don't want it.
Senator Thomas of Oklahoma. Are you in the Holiday Association? Mr. JENSEN. No, sir. Senator THOMAS of Oklahoma. You don't believe in that? Mr. JENSEN. No. Senator SHIPSTEAD. Is it your theory that all of these farmers who have their places mortgaged and can't pay the mortgage will do the best thing by letting them go to foreclosure?
Mr. JENSEN. If they can't make terms with the mortgagee.
Senator SHIPSTEAD. Then they can't pay their taxes and the State takes the land for taxes?
Mr. JENSEN. It has the first claim.
Senator SHIPSTEAD. Then the State and the mortgagee would have the land?
Mr. JENSEN. Yes.
Senator SHIPSTEAD. The chances are they couldn't do anything with the land?
Mr. JENSEN. They couldn't.
Senator SHIPSTEAD. The chances are the farmer might buy the land for very little or nothing?
Mr. JENSEN. Yes.
Senator SHIPSTEAD. In the present conditions you think the farmer shouldn't worry and let the other fellow worry?
Mr. JENSEN. Yes, sir; just that, if he is unreasonable. I have always paid my bills, every penny, gentlemen. Don't get the idea I think little of paying my bills. That is the last thing a man can afford, but there is a situation when a mortgage is created at the top of the price level that must be adjusted on a plane of reality.
Senator SHIPSTEAD. You said something about the people you represent. Who do you represent?
Mr. JENSEN. I represent groups of independent cooperatives, but most of the farmers' elevators of South Dakota, of which I am president. This job, you understand, gentlemen, the salary connected with it is always in the red; it doesn't help my income.
The CHAIRMAN. It is impossible to hear what the witness is saying and I respectfully ask that the audience be quiet.
Mr. JENSEN. The last I said is just my own opinion. I am not representing anyone except in regard to our marketing system and I do hope you will not impair the grain marketing system as I know it. Also, as far as I know, it is highly developed on a very economic basis in the terminals but I know less about that. I am prepared to