now when the highways are full of trucks and busses. That is all I have got to say about the railroads.

For instance, in 1910-I have got to use a right smart of personality in this thing to give you the viewpoint that you want-we figured on a basis of 50 cents for conversion charges. In 1933 we have to figure on a dollar and then don't hardly come out. There isn't a man in my employ but is getting twice as much today as he got in 1910. There is nothing that goes into the manufacture of a barrel of flour but what has almost doubled in price, if not more than doubled in price.

Senator FRAZIER. What about the price of wheat?

Mr. CORN. We were getting a good price for our wheat until they took charge of nature and put in that Farm Board. Wheat went from about $1.40 down to 40 cents. It made a 300-year low record. Senator FRAZIER. The wheat prices in Canada and other countries went down where they didn't have any Farm Board?

Mr. CORN. We had wheat pegged in Chicago at $1.23 when it was 72 cents in Liverpool.

Senator FRAZIER. Didn't that help?

Mr. CORN. It broke a lot of us instead of helping us.
Senator FRAZIER. Didn't it help the farmer?

Mr. CORN. It injured him. The wheat market went down from the time they put in this Farm Board up to a few months ago. Senator FRAZIER. It went down all over the world?

Mr. CORN. I don't blame the Farm Board and I don't blame those that handled the situation. I guess they were about as good as you could have got. What I am talking about, the principle is wrong and this plan that you have got now is a recapitulation of the Farm Board and it won't work. A good deal has been said here about the law of supply and demand, about nature taking its course. I beg for your information that you will just look back, you will find out that nature hasn't had its course since the Farm Board was inaugurated. The market and the exchanges all over the country have been hogchained and tied, they haven't been liberated to do like they had always been able to do, and we consider that one of the greatest things, along with the Farm Board, that we have been afflicted with. Now we lose money. We made a little money up to 1930. Since then we haven't made any money. In 1932 we have lost money, and whenever I say "we" I think I represent the majority of millers in my class. Some millers have made money.

What I would like to get before you gentlemen is this, that if there had been such a profit in flour, how did it happen that all these two thirds of the mills died in the last 12 or 13 years?

Senator FRAZIER. Didn't the big mills have something to do with putting the little mills out of business?

Mr. CORN. They may have. I couldn't answer that question. That might have had something to do with it. There were more factors in it than that one. Talk about the production of flour, the mill machinery is a big item. You have to renew your mill with new machinery every 10 or 12 years. It has more than doubled in price since 1910 and you take flour bags, they haven't gone down in proportion with everything else. I am telling you that the mills have had a hard time in the last three or four years in making buckle and tongue meet and if you are going to force this already, in my

opinion, tried out plan over again, I don't believe it would be any more than fair to pay the miller for the losses you made him sustain in this other try-out.

As I see it, it is the same thing we have tried before. We are going to cooperate with whatever plan you gentlemen have to the best of our ability, but I think it is awfully unfair for the Government to ask its subjects to go through with what we went through in the time of the war with these reports that we will be compelled to make; daily reports, weekly reports, and recapitulation in a monthly report. It takes no end of time and money and worry and trouble to put this over. You will surely make a little remedy on those lines and pay the miller as he is almost down and out for each report you compel him to make and maybe you won't want him to make so many. [Laughter.]

Now you will say, Don't you think the farmer is in a bad fix? I do, and I believe that your chairman has offered the most feasible help without hurting anybody, to the farmer or anybody else, in the Smith bill.

Senator FRAZIER. That just applies to cotton.

Mr. CORN. Yes; but cotton is all we need. We haven't got any year's supply of wheat or half a year's supply of wheat, and if you put this thing over and the Lord does not come to your relief, we will make a new record as certain as you are sitting there-in low.

The CHAIRMAN. Mr. Corn, we are much obliged to you for your testimony, and if no one wants to ask any further questions, I will call the next witness.

Senator NORRIS. Your answer to Senator Frazier was that you were interested only in cotton?

Mr. CORN. No, sir, I didn't mean it that way. I have no direct interest in cotton.

Senator NORRIS. Senator Smith's bill applies only to cotton?
Mr. CORN. I think they need help.

Senator NORRIS. I do, too. It is not claimed that that bill would give any relief to the wheat farmer?

Mr. CORN. Oh, yes, certainly it will. Why, it will bring up his prices right straight along. Cotton has never gone up in the world that wheat and flour didn't go up.

Senator NORRIS. That is when cotton went up, according to the law of supply and demand, but Senator Smith's bill proposes to buy the cotton and sell it to the farmer. I am not complaining about it, I voted for it myself, but I don't see where that is going to help the wheat farmer.

Mr. CORN. Whenever he comes along and leases a part of that land, it looks to me that ought to help every farmer.

Senator NORRIS. Yes; that will help the cotton farmer.

Mr. CORN. Since you asked me about that, if this bill goes over like it has gone over in the House, they almost quit raising wheat in my county, there will be 25 farms put in wheat to where there is one got it in now. You never did see such a surplus of wheat as this will pile up. You know that this bill that you have got passed through the House will raise a 24-pound sack of flour 35 cents and there isn't any other way to keep out of it.

Senator NORRIS. I am not trying to criticize you for objecting to the bill. I want to hear those criticisms, but I want to direct your

attention to the fact that the Smith bill, as I see it, I supposed that was conceded by everybody, won't help the wheat farmer.

Mr. CORN. It will in the way I told you. If you relieve the cotton

man

Senator NORRIS (interposing). I suppose in theory he would buy a little more, but the wheat farmer would get no particular benefit. Isn't he suffering as bad as the cotton farmer?

Mr. CORN. I couldn't say about that. In my present locality, they are not. The best class of my farmers don't want anything. They just want to be let alone.

Senator FRAZIER. They are satisfied now and getting along very well?

Mr. CORN. Fairly well, they are making no money but nobody else is making any money.

Senator NORRIS. Then you don't need the Smith bill on cotton? Mr. CORN. I believe the farmer ought to have something, and I further believe you ought to refinance him in his mortages at a very low rate of interest, as low as you ever let any bank have it.

Senator BANKHEAD. Mr. Corn, you talk about the Smith bill being sufficient for the cotton farmer. I supported the Smith bill but I want to find out from you if you really know anything about it, what effect the Smith bill will have on the price of cotton?

Mr. CORN. I don't know nothing about it except just what they told me. I have been told that by a couple of smart fellows. Senator BANKHEAD. That is what I thought. If you have got a carry-over of 13,000,000 bales and you figure on raising another big crop, you think a reduction of 2,000,000 bales that may be brought about by the Smith bill would do much good?

Mr. CORN. It would help some.

Senator BANKHEAD. But it is just a cotton catch beside a big cotton field?

Mr. CORN. Yes, in a way it is.

Senator BANKHEAD. Getting rid of 2,000,000 bales when you are already starting in with a 13,000,000 bale carry-over, a 2-year supply for the consumption now in America? You think we ought to start in by getting rid of the 2,000,000 bales? I think we ought to do that, but do you think we ought to stop there?

Mr. ČORN. I couldn't say. In answer to the Senator's question about the wheat farmer, if you will free that market and cut out allotment plan, I guarantee-well, I couldn't guarantee because that guarantee wouldn't be any account.

Senator NORRIS. You could hardly pay all the wheat farmers. Mr. CORN. No, but I believe it would go up 30 cents in 30 days. Senator NORRIS. That would be a terribly big boost if we could. get it. What would we have to do to put the market up 30 cents a bushel?

Mr. CORN. Free these exchanges. They are in a position to put it up.

Senator BANKHEAD. Would that put the world price up?

Mr. CORN. It would put the United States price up.
Senator BANKHEAD. Thirty cents above the world price?

Mr. CORN. I have seen it here when it was 30 cents above the

world price many a time.

Senator NORRIS. It isn't working that way now.

Mr. CORN. No, because we are not letting nature have her course. Senator NORRIS. If nature took her course, the price of wheat in the United States would be 30 cents a bushel higher than the price of wheat in Liverpool?

Mr. CORN. I have seen it that way, Senator.

Senator FRAZIER. Was it on account of nature or the grain gamblers? Mr. CORN. It was on account of nature.

Senator NORRIS. That was on account of some fellow speculating. That wasn't nature taking her course.

Mr. CORN. Everybody was getting along mighty well. I tell you we didn't have any trouble until after you passed that farm bill.

Senator NORRIS. If we abolish the exchanges, if we will just let nature take its course, you say, the price of wheat in the United States would be 30 cents a bushel higher than in Liverpool?

Mr. CORN. I believe it would.

Senator BANKHEAD. Why didn't that happen before this bill was introduced?

Mr. CORN. It was caused by having the Farm Board.

Senator BANKHEAD. The Farm Board hasn't done anything lately? Mr. CORN. They haven't done very much lately.

Senator BANKHEAD. You have had a good long time since they have done anything?

Mr. CORN. We haven't had such a very long time. They are still selling wheat.

Senator BANKHEAD. A very small quantity?

Mr. CORN. I do know I bought 15,000 bushels from them last week. Senator BANKHEAD. You know they haven't so very much?

Mr. CORN. I know they had enough to give away to the Red Cross to almost floor us.

Senator NORRIS. With the exception of some instances that have happened here and there on account of some speculator bulling the market, have you ever known a time when the price of wheat in the United States was 30 cents a bushel higher than in Liverpool?

Mr. CORN. Yes, sir.

Senator NORRIS. When?

Mr. CORN. Why, it has often been that way. I couldn't pick out the years, but you can go to those statistics and find that out.

Senator NORRIS. I have never found that. I would like to have you recite it to me. Did that ever work with cotton?

Mr. CORN. I couldn't tell you about cotton.

Senator NORRIS. How much a bale above the Liverpool market was cotton worth while nature was taking its course?

Mr. CORN. I couldn't answer that question.

Mr. Chairman, I have a brief here I would like to file.

The CHAIRMAN. Without objection, it will be filed.

(The brief referred to is as follows:)

A BRIEF SUBMITTED TO SENATE COMMITTEE ON AGRICULTURE BY C. H. CORN, LILLIE MILLS, FRANKLIN, Tenn., in BehaLF OF THE SOFT WHEAT MILLERS ASSOCIATION, SOUTHEASTERN MILLERS ASSOCIATION, PIEDMONT MILLERS ASSOCIATION, AND SOUTHERN ILLINOIS MILLERS ASSOCIATION

The above-named organizations have a total membership of over 200 mills, whose business is largely or wholly family flour in the Southern States. They produce about 6 percent of the flour made in the United States and half the family flour sold in the Southern States east of the Mississippi River. A large proportion of their business is in the Cotton Belt.

There is nothing that would help this group more than maintained higher prices for wheat and cotton and we pledge now, as always, sincere cooperation in any efforts to achieve this objective. We will cooperate in carrying out the proposed farm relief bill, but we are convinced that the same principle is involved in attempting to boost prices artificially that were involved in the stabilization operations of the Farm Board. The same elasticity is granted to the Secretary of Agriculture under this measure that was granted to Farm Board officials. If this measure is passed prices will be maintained temporarily just as they were in farm stabilization operations and they will eventually be broken just as they were in the attempts to peg the wheat price.

The

You are painfully aware of the fact that farm prices broke more than other commodities and in our judgment the sole reason for this is that there was a painful adjustment under the law of supply and demand. Anyone who investigates the full facts can see that the taxes assessed under this measure must be passed on to the consumer. This will mean an increase in the price of a 24-pound sack of flour, the standard package in the South, of about 35 cents, or nearly double the present prices in certain markets having low freight rates. average profits of the better class of mills is only about 2 cents per bag and it is my belief that taking all the mills, the losses of some mills was greater than the profits of those making money. I know my own mill made money from 1909 to 1914, but have made no money since 1930, when the Farm Board operations caused such great depressions in wheat and cotton prices, and in 1932 we sustained a loss. I have no profit and loss statements from the mills that I represent, but from conversations with many of the mills which were formerly the best moneymakers I find that our own record is representative. The same thing is true of grocers-wholesale and retail-as well as bakers.

It has been stated that the farmer is receiving far less for his wheat than in 1909 to 1914, while flour is about the same. Therefore, it has been reasoned that the miller and middlemen are making exorbitant profits and the increase in prices of agricultural commodities could be absorbed by them without passing the tax on to the consumer. The true facts could be ascertained by the committee, by examination of corporation income tax returns, which I believe would prive the above statements. The premise of the critics is correct, but the conclusions are wrong for many reasons, for example:

The freight cost from Kansas City to Baltimore on a barrel of flour is 50 cents greater than in 1914. Wages are around twice as much and traveling expenses, due to increase in railroad rates and gasoline, living costs, etc., are much greater, mill machinery costs, power cost, taxes and in fact every item that goes to make up the cost of making and selling a barrel of flour have practically doubled. In 1910 to 1914 we figured an allowance in our mill of 50 cents a barrel and now we figure $1 and received as much profit or more in the pre-war period than now. As further evidence of the unprofitableness of milling, there were according to the Bureau of Census-around 4,000 mills in operation in 1929, while there were only 2,400 at the end of 1932. Taking the milling industry as a whole, it is in as bad, if not worse, condition than the farmer. I could buy you 50 mills today at 20 percent or less of the appraised value fully depreciated, but I would like to know of some farms that I could buy on the same basis, for then I would quit milling and go into the real estate business.

In view of these facts, can anyone doubt that the milling industry is in a sad condition and that it would not welcome sound legislation to help the farmer? Higher priced wheat makes it easier for us to make money. Generally speaking, the higher the price of wheat the bigger have been our profits. Our markets are dependent almost entirely on the purchasing power of the cotton farmer, directly or indirectly. If we thought he could be permanently benefited, we would submit to any sort of regulation voluntarily, purely from a selfish standpoint. We oppose this bill simply because we are convinced that it will defeat its own aim.

We do not now need an experiment, when we have already seen what the same attempts in principle have resulted in, both in this country and abroad. We believe that this measure will hurt the farmer, hurt the miller and hurt the country, even if only tried out for a relatively brief time. If the measure is passed, of course we shall do our very best to cooperate with the officials, but we sincerely trust that you will at least first give a trial to the acreage rental and special cottonaid plan proposed by your committee chairman.

The CHAIRMAN. We will now have a representative of the rice people, Mr. W. M. Reid.