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Secondly, since the hog is such an important part of the rest of your agricultural system for utilizing the corn crop and utilizing other things, it is very difficult to control the production and to get people to do the things that would be right if you knew what they
Senator NORRIS. Now, there are two serious difficulties. First, you do not know what to do and, second, it would be difficult to do it if you did know.
Mr. Woods. That you can not anticipate very exactly. Occasionally some of the statisticians have tried to anticipate what the demand would be, and they found it a difficult problem. Some of them think they can do it. Some of them maybe think they cannot do it. But now the biggest objection that has been raised to any effort at orderly production, production that would have a speaking acquaintance with demand, and orderly marketing has been, "Well, you can't control production. How are you going to control production?" My suggestion was that perhaps the use of credit-putting a little more elasticity into it or taking a little out-might have some influence in that direction. Of course, education is another
So far it has not worked very well. Some people have even said, “You should prescribe to the farmer how many hogs he should raise." That does not work very well and is subject to constitutional objections.
Senator BANKHEAD. Senator, would it interfere with you if I asked him a question there? Senator NORRIS. No.
Senator BANKHEAD. Does the production in the hog meat depend upon reducing the number of hogs, or can it be controlled by marketing them when they have attained a certain weight? Mr. Woods. Both
ways. Senator BANKHEAD. Now, assuming that you have got a certain number of hogs, could you, by regulation, or in any way that you could to make it effective, reduce production by putting them on the market before you put too much meat on them?
Mr. Woods. I think if you had some sort of council of producers and processors set up, with the Secretary of Agriculture participating, to see that the public was not exploited, or some other safeguard; then if you would let those people go so far as to say, “This is a season where we don't need as much meat; that is a season when we need more meat," it might be possible to put on differentials that would discourage a weighty hog or encourage a weighty hog:
Senator NORRIS. You would have to do that by a price-fixing arrangement, would you not?
Mr. Woods. No, sir. The base price would take care of itself under supply-and-demand conditions; purely a question of differferentials between grades.
Senator NORRIS. You are talking about hogs now, under ordinary conditions where the farmer would lose money if he fed it longer, and also where he would lose money if he did not feed it up to a certain point. Now, you would not want to make any arrangements that would interfere with the farmer getting the most out of his hogs that it was possible for him to get? He might feed it too long; he might not feed it long enough. If you arbitrarily fixed the point where he
had to stop, unless you fixed it at that point, you would be doing harm instead of good.
Mr. Woods. You mean, to the individual farmer, or to farmers collectively?
Senator NORRIS. I mean both. If you had the power to do so and issued an order that everybody must sell his hogs when they weighed 100 pounds--that is an extreme illustration, but I use it because it illustrates the point that it is not economically sound for the farmer to sell his hogs when they are just 100 pounds unless he has some extraordinary condition surrounding him where he can not feed them any longer. That would do an injury to the individual farmer, and to the farmers as a whole. So far as you said, he must feed this hog and sell it when it weighs 400 pounds; you would go to the other extreme, would you not? What I mean is, there is a point where, in order to get the most out of his business possible that he ought to, assuming now that the market is not changing—I realize that—but there is a point where he ought to sell that hog and loses money if he keeps it longer; but there is another point on the other side where he ought not to sell it and ought to keep it longer, and feed it more. Do you get the point?
Mr. Woods. Yes, surely. You could even say the same thing, Senator, of any voluntary arrangement. If everybody agreed, just out of a general patriotic spirit, that it would be good now not to make hogs so heavy-"Yes, we have a little too much hog meat to dispose of, and it would be wholesome if we did not have quite so much," and everybody except a few decided that they would market their hogs somewhat lighter, say 220; not run them up to 390; now, given that condition, when 90 per cent of the people did that, that would put a premium on heavy hogs and if somebody, as we say, wanted to "copper” that situation, would you be in favor, then, of protecting that fellow in his individualism?
Senator NORRIS. I do not see how you could, especially as a permanent proposition. I do not see how it would be practical to carry it out. I do not see how it would work myself.
Mr. Woods. Perhaps it would not.
Senator NORRIS. If it would not work, then there is no use considering it.
Mr. Woods. No use, but I do not know whether we can dispose of it quite that readily or not.
Senator NORRIS. Well, maybe not. Let us go on with the other. Another reason you gave was another suggestion you gave was the regulating of markets. I agree with you that that would be a good thing. You can do something in that line, I think, but do you think that would remedy the situation confronting us now?
Mr. Woods. I think it would help it considerably.
Senator Norris. If it would help it, we ought to do it. Probably we will have to do a good many things, but what I am trying to get at is that the remedies that you are suggesting now, in my judgment at least, would not come anywhere near meeting the situation. I think, in other words, we would have to do something else, even though we were desperate in the selection of our dilemma.
Then your third one was—and it seems you relied on that more than any—was the expanding of the foreign markets. I can concede that that is a good thing, but I do not know how we are going to do it. We have got to get the consent of foreign governments to do that. We have got to make some trade or some deal with them. We have got to make it a profitable thing for them from their viewpoint as well as from ours in order to bring it about.
Mr. Woods. I am no lawyer, but I am told that it is not a treaty point; that it is a question of dumping. I think some automatic machinery could be set up, quite without the aid of treaties, some reciprocal tariff or something of that sort that would do the thing immediately, if it is politic and in consonance with whatever informal engagements we have.
Senator Norris. For the sake of argument, let us just admit that it could be done—I doubt very much if it could, but it would be a good thing if we could do it, I concede that, but if you had all that accomplished would that give the farmer cost of production and a living profit on what he produces?
Mr. Woods. If you got much stimulus in the foreign market it would. It would not take much now in the livestock and meat industry to swing this thing. We are different from the other industries in that particular, that only a small percentage is involved.
Senator NORRIS. At best we do not know how we are going to come out on that. We do not know whether we can accomplish anything.
Mr. Woods. We are not sure of it, no.
Senator NORRIS. Should we wait now and not do anything, and see whether we can afterward work that out?
Mr. Woods. I would try to do this.
Senator WHEELER. Let me ask you a question, if it will not interrupt you. You say that if the farmer could get cost of production you would be glad to see it?
Mr. Woods. Yes.
Mr. Woods. That is, get his aggregate return up? Yes, I think it would not.
Senator WHEELER. You think it would not?
Senator WHEELER. Of course, I think that is the thing that we ought to be concerned in, as to whether or not this bill will raise the price of farm commodities.
Senator MURPHY. Was the answer in the negative?
Mr. Woods. I said I did not think it would raise the farmers' total return.
Senator WHEELER. You say that you think you could get the price up by selling part of this surplus that we have got abroad? Is. that it?
Mr. Woods. At a better figure.
Senator WHEELER. At a better figure? Well, if you could do that, you think that would put the price up so that the farmer could get cost of production in this country?
Mr. Woods. I do not know what the cost of production is, but my impression is that if you could do that in any satisfactory way, as your question implies, except as we are touched by the general business situation, that probably our livestock producers' troubles would be greatly reduced.
Senator WHEELER. No matter how you got it up, the contention is here that if you got it up the consumer could not pay the price.
Mr. WOODs. Right.
Senator WHEELER. And now, you are saying in one breath that you feel that the price ought to come up, and no matter how you get the price up, the consumer is going to pay it?
Mr. Woods. Yes; indeed.
Senator WHEELER. He is going to pay it, whether you put a tax on him or whether you get it up by selling in foreign countries.
Mr. Woods. Yes, sir.
Senator WHEELER. What we are concerned with, it seems to me, and the only thing this committee should be concerned with is, Can we get the price up to the farmer? And you will agree that if you can get the price up to the farmer, it gives him greater purchasing power and then he will be able to buy manufactured articles?
Mr. Woods. If you can get his total return up; yes.
Senator WHEELER. Of course, and if you can get the price of his commodities up you will get the total return up?
Mr. Woods. Not necessarily.
Mr. Woods. For the reason that the consumer will not take the same supply at an artificially higher price. We could take a dozen hogs here, if that was the total supply, and sell them for any amount of money, but we can not take the same supply and get more for the meat, or we would have done it long ago and shown some profit.
Senator WHEELER. As a matter of fact, you have not got an overproduction of meat in this country at the present time, have you?
Mr. Woods. Not in the sense of having more than the people can eat, if they could buy it.
Senator FRAZIER. There is no surplus at all in beef or mutton.
Senator FRAZIER. What is the use of talking about a surplus of pork when you have got the same conditions there that you have in mutton and cattle? You have no surplus of those, and the price is down so low that the farmers are not getting anything for it.
Mr. Woods. Exactly.
Senator FRAZIER. Then you talk about taking care of a little surplus abroad, that that would solve the situation. That is all bunk.
Mr. Woods. Well, I cannot agree with you there, Senator.
Mr. Woods. Well, I would say that the beef situation is about like this: That at present levels many producers are losing money, a number are breaking even, and some, very few, are making money.
Senator FRAZIER. They are mighty few, so far as I know. My renter had some good steers, thousand pound steers, and he was offered 2 cents a pound on the local market for them, fat steers, stall fed. Do you think he can make money at that price? do, you have got another guess coming. Mr. Woods. No; I agree with you he cannot. Senator FRAZIER. It is not because there is a surplus of beef either.
Mr. Woods. As more than can be sold at prices that will give him a profit, though, Senator.
Senator WHEELER. And you have got other farm products besides sheep and cattle of which there is no surplus, and on which you have got a high tariff preventing any importation, and yet those products are down to perhaps not quite as low as wheat, but they are down 50 percent, or 100 percent in some instances, notwithstanding the fact that you have got no surplus.
Mr. Woods. May I ask you what you mean by "no surplus"?
Senator WHEELER. I mean, you have not got a surplus that you have to sell abroad, ordinarily.
Mr. Woods. No.
Senator WHEELER. For instance, you have got a surplus of wheat-I mean that you produce more wheat in this country than we consume, and lots of people will say to you that by reason of that fact, that is why the price of wheat is so low at the present time; but likewise we have got lots of other products of which we do not produce more than we consume, and the price of those commodities is down.
Mr. Woods. Yes; but, Senator
Senator WHEELER (interposing). And the reason why all commodities are down in this country, of every kind and character, whether they are manufactured or otherwise, is because of the fact that today there is not purchasing power in the hands of the people of this country to buy the things that they want to eat and the things they want to wear, and if there was purchasing power in this country there are a great many people who would have radios and they would buy automobiles and buy new shoes and I would buy some new clothes and a lot of other things.
Mr. WOODs. Yes.
Senator WHEELER. So that the real problem is to put purchasing power in the hands of the people who need these things, is it not?
Mr. Woods. It seems so to me.
Senator WHEELER. Now we are seeking to do that in this bill by raising the price of commodities to the farmer, to the wheat farmer and to the cotton farmer, and if you can raise the price of wheat and the price of cotton to the farmers, and the price of corn and the price of hogs, then you are going to stimulate your whole price level throughout the United States, because when two or three or four of your major farm products go down, they bring down with them everything under the sun that we produce, whether it is manufactured articles or anything else, unless they can artificially hold them up, like they do with aluminum, but everything else they can bring down. That is correct, is it not?
Mr. Woods. I think that part is not correct, that an increase in price necessarily means an increase in purchasing power to the farmer.
Senator WHEELER. Why not? Mr. Woods. In the case of meat I think it might mean a decrease. We have no surplus in pork in the sense that it could not all be eaten up if you dropped the price low enough. If we could get the price per unit increased and still sell the same quantity, I would agree with you 100 percent. That would certainly increase the purchasing power.
Senator WHEELER. Of course that would absolutely increase the purchasing power if we could get the price up and still sell as much.