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Mr. Reid, please give your name, address, and occupation to the stenographer.

STATEMENT OF W. M. REID, SECRETARY OF THE RICE MILLERS ASSOCIATION, NEW ORLEANS, LA.

Mr. REID. Mr. Chairman and members of the committee, I have listened rather interestedly to the various remarks and some criticisms that have been passed on the bill. In the rice industry we do feel that we need some relief. We would like to see a bill passed that would give that relief to the entire industry. While I represent the millers, we realize that our life is dependent upon the producer, that our mills have no value unless the producer is enabled to get a living price so that he can produce a crop. In viewing our situation I think we should understand what the ills are. They are not wholly economic ills of this or the last few years but when we compare present conditions to the stated pre-war period from 1909 to 1914, speaking only of the rice industry because my remarks will be directed to that and not to anything else affected by the bill, there was an average of about 700,000 acres planted to rice in the United States during that pre-war period. The average farm yield during the same period was 33 bushels to the acre. The average production was about 23,000,000 bushels.

During the World War when all crops were augmented, the rice crop was materially increased and we jumped from a price of 38 cents a bushel up to a price of $2.66 a bushel, which led farmers to plant all the rice that they could possibly secure lands for. That condition in itself has helped to accelerate the conditions brought about by the economic crisis. During the last 5-year period, we have had an increase of nearly 50 percent in acreage over the pre-war period. Notwithstanding the increase in acreage, we have also had an increased yield per acre, brought about by better methods and better varieties. Whereas the average farm yield was 33 bushels in the pre-war period, in the last 5 years the average yield per acre has been 45 bushels.

The cost of the production of rice during the present season I would estimate at 55 cents per bushel. The average farm value of rice as of December 1 when all comparative statistics are made was about 40 cents a bushel. In other words, as of that date, we were about 15 cents a bushel under the cost of production. You ask me, then, how we are going to cure that condition, and I say to you that there are remedies provided in the present bill. The acreage should be reduced. While I have heard others in other lines here testify to the inadvisability of reducing acreage, it is readily apparent that an acreage reduction is necessary in our industry.

The industry is small, the section is rather compact; we believe that it could be effectively handled. We feel that the bill grants to the Secretary of Agriculture authority to reduce acreage. We would not like to see that feature stricken out of the bill, certainly not insofar as it affects rice.

I think, gentlemen, that I have told you the story briefly. I have tried to give you a clear picture in just as few words as possible, and I will be glad to answer any questions you might care to ask.

Senator THOMAS of Oklahoma. What should rice be selling for now to enable the rice producers to pay cost of production and enjoy some semblance of prosperity?

Mr. REID. I should say 75 cents a bushel.

Senator THOMAS of Oklahoma. Will this bill in your opinion enable them to get 75 cents a bushel if it is enacted into law?

Mr. REID. If enacted into law and properly administered, I would say "yes."

Senator THOMAS of Oklahoma. Are the rice growers in favor of the legislation so far as you know?

Mr. REID. There is a large rice grower present and I would prefer, Senator, to divide my time and let him speak for the growing industry. I am speaking for the milling industry. I think that they would at a price of 75 to 80 cents a bushel find that satisfactory.

Senator NORRIS. One of the things that worries me in considering this bill is why it is that men in the same business differ so radically in their ideas as to whether this bill is good or bad. Is there any reason that you know of why the benefits that the rice miller will get from this bill would not also apply to the wheat miller? Why should the wheat millers oppose it and the rice millers favor it? The same provision of the bill that applies to wheat applies to rice. Mr. REID. I should say there would perhaps be rice millers that will oppose it, but I think as a general proposition, the rice millers are agreed that relief is necessary and they appreciate the fact that relief of the rice farmer will also be relief to the rice industry. Senator NORRIS. Isn't that true of wheat also?

Mr. REID. Well, sir, not being in the wheat business

Senator NORRIS (interposing). I am in neither business, but I can't see why it doesn't apply to both of you alike. Maybe it doesn't. There may be some reason for that. If there is, I would like to find it out.

Mr. REID. I think we are all of one mind in this respect, I don't know what is in the mind of the wheat miller or in the mind of others with respect to the bill. It isn't perfect, you know that as well as I do.

Senator NORRIS. We all realize that.

Mr. REID. We all resent centralized government to such an extent. We have heard statements here that it gives to one man dictatorial power. That is probably true, but if it requires drastic measures to bring about the desired relief, I think we should be prepared for a major operation and subject ourselves to it.

Senator NORRIS. I agree with you fully, but the thing I don't understand is why the major operation doesn't apply with equal force and equal equity to the two classes of millers, rice and wheat.

Mr. REID. Well, I want to state this with respect to the bill from the rice viewpoint rather than from the wheat. There are things that we are fearful of in the bill, too. One of them is the question of competing products. Rice is going to compete with potatoes and beans, and I don't know of any processing tax that can be applied on those products. Of course, if the price of rice was unduly raised and the consumption was decreased and consumers would turn to potatoes and beans and things of that kind that might not be brought under the bill, then I would say the rice people would be just as opposed to it as the wheat people or others.

We realize that the thing must be very carefully handled. As I said in the beginning, we don't like the bill 100 percent by any means,

but we do want to see some legislation enacted that will bring about a relief of the present situation. We know that it is impossible to continue to produce rice at 40 cents that costs 55 cents to produce.

Senator NORRIS. That is the way with the wheat fellow, just exactly. I want to ask you a question about the competing proposition. There has been a great deal said about it and it is in the bill, the power to levy a process tax on rice may result in your meeting competition from potatoes, you say. So far as I have heard, this competition of one agricultural product is always with another agricultural product. Now, if you view this bill from the broad standpoint of helping the farmer, and you found that rice went up in price and people used more potatoes than before, that would help the potato farmer. After all, one hand would wash the other as far as the farmer is concerned. It might make a little difference with the manufacturer.

Mr. REID. Well, no, I wouldn't say that, Senator, because I don't think the rice farmer could turn to potatoes.

Senator NORRIS. Well, you said a while ago if you raised the price of rice too high, the consuming public might use more substitutes and not quite so much rice.

Mr. REID. Yes, sir; that is the consumer. You said with respect to the producer.

Senator NORRIS. After all, if it does that with the consumer, who consumes potatoes, and he consumes more potatoes than he did before, that means the producer of potatoes gets a better market?

Mr. REID. Yes, sir; but you wouldn't put the rice producer out of business to benefit the potato producer.

Senator NORRIS. No. Perhaps it might cause people to buy potatoes instead of rice to some degree. I am asking now on the broad view of helping the farmer why that should be so material, because you are helping a farmer if you help the man who raises potatoes, that would do some good in his case, that ought to be some consolation, anyway?

Mr. REID. That wouldn't be any consolation to the rice farmer. Senator NORRIS. Of course not, and certainly if it injured him to such an extent as to put him out of business, that would be a serious thing and not be right.

Mr. REID. Yes; and particularly when his lands were not suitable for other cultivation.

Senator NORRIS. You believe in acreage reduction?

Mr. REID. Yes, sir; that is what I say I favor in the bill.

Senator NORRIS. When you reduce the rice man's acreage you have pretty nearly put him out of business, because he can't use that acreage in the production of anything else very well, can he, any acreage suitable for rice?

Mr. REID. It is not suitable for marketable crops. He might produce more feed crops at home, where he would be more self-sustaining; but I feel that he would get more on the 75 per cent acreage in actual dollars and cents than he is getting now on a hundred per cent.

Senator NORRIS. Undoubtedly. He would be in a little better fix. He might not be able to sell quite as much rice, because the potato man would sell more potatoes. If he gets the benefit of less production of rice and sells at a higher price and if he should lose a few consumers that really wouldn't be a loss to the farmer in the aggregate, because some other farmer supplies that deficiency?

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?

Mr. REID. Beginning in May and continuing along through June. 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. What States are producers of rice?

Mr. REID. Louisiana, Texas, Arkansas, and California.

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

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