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Mr. REID. Well, that would be sectionalism. I doubt, Senator, that we would favor that at all, to say that the rice-producing States in the South would be willing to be altruistic to the extent of abandoning the production of rice in favor of the Idaho potato grower.
Senator NORRIS. I haven't intimated anything of that kind. If you increase the price of rice to any degree, wouldn't that of itself have a tendency to cause people who are trying to be economical perhaps to buy more potatoes than they did before and less rice?
Mr. REID. Yes; but, as I say, that is one of the things that we are all actuated by—we are all actuated more or less, of course, by selfpreservation.
Senator NORRIS. I am assuming that your rice man is better off than he was before. He gets a bigger price but produces less rice. What I am trying to point out is that what you cite as a danger wouldn't after all be a danger. The rice man would be helped, get a better price, and the potato man would get a better price for his potatoes.
Mr. REID. There is a line of demarcation there that would make that true. If the price was not unduly appreciated, the rice farmer would benefit. If it was unduly appreciated until potatoes or something else was substituted, he would be hurt.
Mr. REID. I agree you might carry it to an extreme and put the rice man out of business.
Senator BANKHEAD. Suppose you increased the price of rice until it brought potatoes in demand-that would bring them in demand? Then that demand would raise their price? Mr. REID. Yes, sir.
Senator BANKHEAD. Wouldn't that tend to equalize itself and have them go back to rice again?
Mr. REID. No; there would be eternal war between the two commodities and neither one bring anything.
Senator BANKHEAD. You mean it would bring the price of both down because there was a bigger demand for the potatoes? There is no logic in that.
Mr. Reid. If the price of potatoes was unduly inflated because of the falling off in consumption of rice, don't you think there would be an over production of potatoes which would further decrease the price of rice?
Senator BANKHEAD. You don't want to continue to produce rice at a loss even if it does result in using more potatoes?
Mr. REID. No, sir; I don't think we will be able to continue any of these products very long at a loss.
Senator BANKHEAD. You had rather have an increase of price and take the consequences?
Mr. REID. Yes, sir; and we think that can be brought through a curtailment of acreage.
Senator POPE. When is your rice planted, in the spring?
Senator Pope. You think there would be time to put this bill into effect if it was passed soon?
Mr. Reid. Yes, sir; I believe it would affect next year's cron.
Senator BANKHEAD. Have they stopped producing rice in South Carolina?
Mr. REID. Yes, sir; in commercial quantities.
Senator FRAZIER. The committee is just as much interested in one agricultural product as another. We can't legislate for one group of farmers as against all.
Mr. REID. That is what I am asking.
Senator FRAZIER. If you are getting 40 cents a bushel for your rice, you are getting a much better price than the potato grower at the present time. We are getting only 9 cents a bushel.
Mr. REID. There is quite a difference in the cost of production. We are getting more for rice than wheat, but it costs more to produce rice than potatoes or wheat.
Senator FRAZIER. It costs more to produce wheat in North Dakota than 55 cents that you say you can produce rice for.
Mr. REID. I think under the present conditions they can produce rice for 55 cents. I think that would be an average cost for production this last year.
The CHAIRMAN. If there are no further questions to be asked the witness, we will go to the next. The time is getting short and the witnesses are, too, I am glad to say. The next is Colonel Ward, president of the Kansas Farmers Union.
Colonel Ward, give your full name, address, and occupation, please.
STATEMENT OF CAL WARD, PRESIDENT OF THE KANSAS
FARMERS UNION, SALINA, KANS. Mr. WARD. Mr. Chairman, it isn't “Colonel." It is “Cal.” I am Cal Ward, president of the Kansas Farmers Union, Salina, Kans.
Mr. Chairman and gentlemen of the committee, I want to say that I am happy to be here to represent the membership of my organization and those who are affiliated with the various farmers union activities in Kansas, numbering approximately 50,000, that we have in our various activities. We have something over 800 cooperatives in the Farmers Union in Kansas, and I want also to state this fact that Kansas is the biggest wheat-producing State in the Nation and we are proud of that. In 1931 we produced something like 230 to 240 million bushels of wheat, and as president of my organization, my contacts have brought me in touch with the majority of the farmers of Kansas as well as to a considerable extent in some of the other States.
I want to say to this committee that by experience I know farm life because I was born on a farm, and I lived on a farm until the time I was drafted as president of my organization and I am now serving my fourth term as president of the Farmers Union of Kansas. I think I have a profound sympathy, I am sure I do, for the distressed condition of American agriculture at this time. I am no wiser than a lot and not as wise as many but I have come to the position in this thing that, as was stated yesterday, we are facing a very grave situation unless something is done to rehabilitate the main and leading industry of this Nation. I think that more men are coming to the conclusion all the time that we have got to begin to recognize fundamentals and look toward a solution of this national problem beginning at the grass roots. To my mind we have been hanging too much
from the top and now if we are to save this Republic from a total collapse, may I say, we must reckon with the main key, which in my judgment will unlock the situation, which is agriculture.
Therefore, I want to be broad enough in my thinking to give heed and cooperate with any plan which will result in national legislation that will bring to the American farmer the cost of production. The Farmers Union has gone on record many times as favoring that type of national legislation. We feel that the farmer, if he is to survive, is entitled to cost of production, just as is the electric power company that furnishes that light, and if we are to maintain anywhere near the present standard of living, we must lift up American agriculture. Its buying power must be restored or else we will be compelled to go back to the days of wooden shoes, to the horse and mule and the single shovel and all that means.
I have been of the opinion that it is not impossible to lift up the price level of agricultural commodities to a point that we can continue to sustain somewhere near the present standard of living and be able in addition to that to pay the debts which were incurred back over the years when times were good.
I want to say that I am in favor in the main of this bill and I want to speak for just a moment or two relative to wheat. Other witnesses are giving testimony in behalf of the other commodities.
Senator NORRIS. When you say this bill, you mean the bill as it passed the House?
Mr. WARD. Yes, sir; that is what I mean, Senator. There are two things to be recognized and reckoned with if we are to maintain an artificial price and which we must provide in my judgment to take care of the overproduction. You cannot do that simply by asking the farmers to do it voluntarily. We tried that back in the early days of the Farm Board and one farmer planted less and the other planted more and the net result was that there was no reduction. So then we must have a lever or a legislative club, if you please, placed over us to bring our production in line or more nearly in line with domestic requirements until, if ever, we can reestablish world markets. I do not want to disturb the provisions of the present bill but I do want to suggest this as a suggested amendment, and that is that we establish a minimum price for these farm commodities based upon cost of production for the amount used for the domestic requirements and that we handle the surplus in the following manner:
Let us take wheat, for example: The surplus of wheat on an average of years is something like 200,000,000 bushels. We consume about 600,000,000 and we produce 800,000,000. The way the plan would work would be as follows: The farmer would bring in, we will say, a hundred bushels of wheat. He would get this cost of production for 75 bushels of it, if that was the proper ratio for domestic requirements, and he would not get anything for the 25 bushels. The point I want to make in that connection is this, that that 25 bushels could go to the credit of the Federal Treasury. You know some of the opposition to the present bill is that it will take a vast army of men and women to administer it and that it will cost a vast sum of money. Now if this 25 per cent can go to the Federal Treasury, the Federal Treasury will be reimbursed by the producer himself to the extent that at least a large percent of the administrative expenses and charges
can be paid for from that and it is also a fundamental lever against overproduction.
There are two or three points I want to make. We do have overproduction. In the years from 1921 to 1928 the world carry-over was something like 350,000,000 bushels, excluding Russia and China, of course. At the present time I understand that our carry-over in the United States is about 350,000,000 bushels. This surplus that the Government gets in its charge might be handled in the following manner or some of the following ways: You know today there are world markets to which we could go if credit could be made available, but they are without gold today and we are not on a balanced medium of exchange and that is one of the reasons we can't go there.
The second reason and place we might go is this: I think that we can do nothing greater to reestablish international relationships and outlets for our surpluses than to practice the principle of the Golden Rule, so then we might, as I term it, make missionary sales to some of these countries like China and certain provinces in Africa or so on, or we might barter with them, exchange wheat for some of the things we need in this country.
And third, we might be able with this surplus to be in a position where we could enter into the international quota system, which we haven't been able to do in the past. Then the producing countries of the world, those which have an overproduction, could sum up this overproduction and they could take into consideration the countries that do not produce enough for themselves and they might work out an equitable quota as between nations.
I am simply offering that for what it is worth but to me the greatest possibility of it is that it does away with a large bureaucracy of hundreds and thousands of employees, necessitating a large sum of money, and that is one of the things that has drawn public disfavor. Naturally in our State legislatures as well as in the National Government, we are trying to work out a program of State and national economy with the merging together of boards and bureaus and departments, and I think it is fundamental that we recognize this fact in this time of emergency when we pass farm legislation of this kind.
I just want to say this in conclusion, that the mental attitude of the farmer is strained to the breaking point. Over in my State the farm leaders have so far attempted to turn thumbs down on the national holiday movement, but I want to say that I am receiving hundreds and multiplied hundreds of letters criticizing me for that attitude. Just as sure as we are here today, my friends, unless we can relieve this situation, we will be in a worse situation not in 2 or 3 years hence but in the very near future.
I want to say something else, just a word that slipped my memory, on this idea which I have suggested. I talked it over last night with our national president, John Simpson, of my organization. He concurred in that idea, that he was perfectly willing for the surplus to be handled in that way, if on the other hand we would give the farmer cost of production for the amount needed for domestic requirements.
Senator NORRIS. Wouldn't you give the farmer anything for this surplus?
Mr. WARD. Under this plan, I think I would not give him anything. I think it would be the lever that would bring the production in line with our requirements.
Senator NORRIS. How would you get it? Would you go to his farm and get it? If he wasn't going to get anything for it, he wouldn't bring it in town, would he?
Mr. WARD. Well, he would get cost of production for the pro rata part used for home consumption.
Senator.NORRIS. Why not take this surplus, as Mr. Simspon suggests, and sell it on the world market as we do now? Why not subject it to the same rules, regulations, and laws that it is subject to right now without any legislation? What is the objection to that?
Mr. WARD. The surplus part?
Mr. WARD. Well, I am doubting if that would control your production as would the other method.
Senator NORRIS. I concede that if you take the surplus away from him and don't give him anything for it, you would certainly reduce production, but has it ever occurred to you—I don't want to mention this because it is mentioned in every bill we ever get up—that if you tried to take this surplus away from the farmer who produced it on his own land and upon which probably the bank had a mortgage that you would run up against the Constitution of the United States?
Mr. WARD. It has been suggested; yes. I have heard some attorneys say that it was not constitutional
Senator NORRIS. I am speaking only of that part of it. I know they make the point on the whole scheme. I am referring only to this surplus that you propose to take away from the farmer and not give anything for it.
Mr. WARD. He can keep it if he wishes to on his farm.
Senator NORRIS. He would keep it if he wasn't going to get anything for it, if he had good sense. Speaking of the machinery now, that would be much less machinery than the so-called Clair bill that segregates at the farm, but there wouldn't be any difficulty in having the elevator man who bought this segregate it and pay whatever the market price was, or whatever might be agreed on with the farmer who produced it, but require him to ship that for export, keep it out of the domestic market. You would have to have machinery, however, to license all these dealers, I don't see how you can escape that?
Mr. WARD. Yes; either plan would require tremendously less machinery than it would to reckon with each individual farmer.
Senator NORRIS. Oh, yes; it would be much less.
The CHAIRMAN. We will have a session this afternoon and wind up the hearings. The committee will now stand adjourned until 10 minutes after 2.
(Whereupon, at 1:10 p.m., the committee took a recess until 2:10 p.m. this day.)
The committee reassembled at 2:15 p. m., pursuant to recess.
The CHAIRMAN. The committee will come to order. The first witness is Mr. Woods, who represents the packers. I will ask Senator Thomas to take the chair. (Senator Thomas of Oklahoma took the chair.)