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February 1932, will range from 36 to 68 percent, with an average, a simple average, of about 45 percent in the drop in price.
Senator WHEELER. It has not dropped very much in Washington has it?
Mr. Holman. No, Senator; there are peculiar conditions surrounding the Washington market which make it difficult for farmers to produce milk here at much less than what they are now getting for it. There has been a distinct decrease in the buying power of butterfat, and I might call your attention to the fact that in the chief dairy States of the United States we have the highest percentage of farm mortgages outstanding, and our people are having as much difficulty as anybody else in trying to find a gross income on which to pay their interest and their mortgage debts. In that connection the average amount of butterfat that it takes to pay the tax on an acre of land has increased from 1913 to 1932, 176 percent. In other words, while 1 pound of butterfat would pay that much taxes, it now takes 194 pounds of butterfat to do that.
Without consuming any more time of the committee in direct statement, beyond this, to say that if this licensing provision goes in there are approximately 4,000 milk distributors in cities of over 10,000 population; there are approximately 3,500 creameries, not all of whom would have to be licensed, because many of them are under consolidated ownership; and there are something around 450 to 470 evaporating and condensing plants. That is not a large job of licensing, but the effect of helping to straighten out these bad trade practices would result, in our judgment, in stabilizing the industry to where we could begin to come back.
In closing let me say that our people recognize that this is simply one of the pieces of legislation intended to fortify us through this liquidation period. We do not regard this as the ultimate answer. We stand primarily for this, for the farm-mortgage bill that is coming on, and then for the bigger thing and the real thing we want, and that is monetary reform, a new deal, but I do not feel that I should go beyond that before this committee.
The CHAIRMAN. Let me ask you just one question: If the situation so far as the volume of money available were rectified
is it not your opinion that most all of these—that all of these distressing symptoms would disappear?
Mr. HOLMAN. Personally I believe that if that could be done now, Senator, it would not be necessary to have so much legislation of the fortification character, as I described it.
The CHAIRMAN. The vessels are all aground and we are trying to dig pools under each one to see if we can float it, but the thing to do is to get water enough in the stream to float them all.
Mr. HOLMAN. But we must take what we can get. We want the mortgage legislation, we want this bill, and we would like to have it come out of this committee without changing a comma.
Senator SHIPSTEAD. Mr. Holman, you recognize the disparity of exchange between industry and agriculture?
Mr. HOLMAN. Yes.
Senator SHIPSTEAD. Now, if we got a cheaper dollar, that cheaper dollar would mean cheaper for everybody, including industry.
Mr. HOLMAN. We follow Dr. Warren, of Cornell, on that proposition. Dr. Warren, according to our understanding, makes the point that in these big basic commodities that have been stabilized and have not come down to the present average level of all commodities, that in the event of a cheapened dollar, those commodities would not and could not go up as rapidly as would the commodities that are of a lower value. In other words, we would come up and level up rather than having to level down, as is the present sad prospect before our people.
Senator SHIPSTEAD. Do you think that a cheapened dollar would dissipate the disparity between industry and agriculture?
Mr. HOLMAN. Not entirely; but it would greatly relieve all forms of industry.
Senator SHIPSTEAD. You realize that there was great disparity at the time the dollar was cheaper, and that agriculture was really losing out at that time?
Mr. HOLMAN. Yes.
Senator SHIPSTEAD. So you would not say that just cheapening the dollar would solve the problem of the farmer? He would still be below par with industry?
Mr. HOLMAN. No; there would still remain the fight between industry and agriculture as to the division, the right division of the national income, for which we have been working for many years.
The CHAIRMAN. We are very much obliged to you, Mr. Holman.
The next witness listed here is Mr. Broussard. I understand that Mr. Broussard wishes to speak in behalf of the rice growers, as the other speaker spoke in behalf of the rice millers, as I understand it. We will hear you for a few minutes now, Mr. Broussard. Will you state your name and occupation?
STATEMENT OF JAMES BROUSSARD, BEAUMONT, TEX.
Mr. BROUSSARD. My name is James Broussard, Beaumont, Tex. I am both a rice farmer and a rice miller. I have been in the ricegrowing business for 40 years, and consistently farmed from the time I started, and am still farming. I will say I represent the Rice Growers Association at this time and myself. We are in a terrible predicament, and we believe that there is merit in this bill, the House bill, and we want to give you our entire approval of it. We believe there are parts of that bill under which the rice-growing industry can be placed on a paying basis.
We are now producing rice at about 15 cents a bushel loss, actual loss. That is money gone.
I believe under the system of reducing acreage it can be worked out with the department here that we can put the rice industry on a basis where we will get from 75 to 85 cents à bushel for our commodity. That is due to the fact that we are protected with a tariff, and we are growing today about 25 percent more rice than can be consumed in the United State.
The CHAIRMAN. What is the tariff on a bushel of rice now?
Mr. BROUSSARD. The tariff on rice is about 242 cents a pound for the cleaned rice. It is a highly protected industry.
Senator McNARY. Mr. Broussard, what is the annual production expressed in bushels?
Mr. BROUSSARD. Forty million bushels today, a little over.
Senator WHEELER. You are affected by the depreciation in the price of silver in China and India?
Mr. BROUSSARD. We are, Senator. Of course, that 25 percent surplus must be sold in markets in competition with China and Asiatic rice, which of course is on a silver basis.
The CHAIRAMN. Your rice is on an exportable basis now? Do you produce more than is consumed in this country?
Mr. BROUSSARD. Twenty-five percent more than we can consume, and that regulates the price of what we do consume in the country. That is why we are selling rice so cheaply. It is a case of shipping it out of the country, and that is the pendulum that puts the market. on our domestic consumption.
The CHAIRMAN. You say it is about 15 cents a bushel under cost of production now?
Mr. BROUSSARD. Under cost of production; yes. The CHAIRMAN. Now, you say you are a miller and a grower. Then under the terms of this bill, that tax, that equalizing tax, or the parity tax, would be 15 cents a bushel. That is the object, to bring it up to parity. I do not know what your parity was between 1910 and 1914.
Mr. BROUSSARD. It was considerably higher than that, but I believe the reduction in the production, cutting acreage and reducing production, would fix it so that you would not have to pay probably more than 3 or 4 cents.
The CHAIRMAN. Have you investigated to see what that parity price would be per bushel?
Mr. BROUSSARD. It would be about 40 cents a bushel.
Mr. BROUSSARD. The difference between the price now and what it was in the pre-war period?
The CHAIRMAN. What is the estimate of the price to which you will have to raise a bushel of rice under this bill?
Mr. BROUSSARD. Eighty cents a bushel.
The CHAIRMAN. Therefore, you would have to raise it from 30 cents a bushel?
Mr. BROUSSARD. Yes, sir.
The CHAIRMAN. Therefore, you as a miller would have to pay a tax of 30 cents a bushel to get the rice that you would treat domestically—I mean the rice that you would mill for domestic purposes.
Mr. BROUSSARD. The rice growers and myself feel that there is one part of that bill where it provides for reduction of acreage by retiring acres from production. That will be the simple way to do it, because you will eliminate 200,000 acres with $600,000.
The CHAIRMAN. But you must remember that the operation of this bill does not contemplate taking the allotment plan and the leasing plan in the same place and with the same individual. They will work one where it is convenient and will work the other where that is convenient. Are you addressing yourself to the leasing plan or to the allotment plan?
Mr. BROUSSARD. I am addressing myself to the plan that is now proposed, that gives the Secretary of Agriculture, as I understand it, the opportunity of going either way; he can take whichever way is most convenient.
The CHAIRMAN. Exactly. Which way will be the most convenient to you?
Mr. BROUSSARD. The most convenient to me and to the industry would be on the leasing plan.
The CHAIRMAN. Rather than on the allotment plan?
Mr. BROUSSARD. Yes; because as a processor I would have to pay on every bushel of rice that we mill a certain percentage or a certain percent per bushel to pay the acreage rental.
The CHAIRMAN. Under the allotment plan you would have to pay 30 cents a bushel to bring it up to the pre-war parity?
Mr. BROUSSARD. Yes. Well, I believe there is a way in that bill that you can go either way. It is rather up to the Secretary, is it not?
The CHAIRMAN. Yes.
Mr. BROUSSARD. Well, from my standpoint I would say the retiring of the acreage would be the simple, easy method of doing it.
The CHAIRMAN. Have you read the bill?
The CHAIRMAN. And you see it is clear and fair with the farmer; he can take either plan?
Mr. BROUSSARD. Yes.
The CHAIRMAN. I just wanted the committee to be advised as to which plan you preferred in your business.
Mr. BROUSSARD. My preference would be the retiring of the land from production, because that is simple, easy to work, will not cost anything hardly. The machinery for doing that is practically on the ground.
The CHAIRMAN. And that would get rid of it, temporarily at least.
Mr. BROUSSARD. Temporarily. That is not the final panacea, but that will correct it for the next 2 years.
Senator BANKHEAD. What is your average acreage in production?
Mr. BROUSSARD. About 30,000,000 bushels. You take 25 percent of that, 700,000 acres, would just about produce what we can sell in this country and export. That would still leave us on an export basis, but we can export a million pockets of rice at a high price.
Senator McNARY. Where is your foreign market?
Mr. BROUSSARD. In Germany, England, France, Argentine Republic—all over the world.
Senator NoRRIS. What countries do you come in competition with in Germany?
Mr. BROUSSARD. We come in competition with all of them. The only difference is that they prefer—they can use a small quantity of our high-grade rice--we raise the highest grade rice in the world.
Senator NORRIS. So the competition from China is not real competition for that grade?
Mr. BROUSSARD. Not for that grade, but Italy and Spain grow a high-grade rice that comes in competition with ours.
The CHAIRMAN. That is an interesting statement you made. You say that you can export profitably about a million bushels?
Mr. BROUSSARD. Yes; a million pockets. That is more than a million bushels. There is 100 pounds to a pocket—that is clean rice I am talking about—that would be about 3,000,000 bushels of rice.
The CHAIRMAN. That is about what percent of the crop?
Mr. BROUSSARD. That would be about 10 percent.
The CHAIRMAN. Therefore, you could raise for export purposes 10 percent more than domestic consumption and still do a very comfortable business?
Mr. BROUSSARD. Yes; still put rice on a paying basis.
The CHAIRMAN. And therefore you would like to have the leasing system apply to your business?
Mr. BROUSSARD. Yes. It will work. There is no question in my mind about that, and it will not cost anybody any money.
The difference to the farmer is that on 30,000,000 bushels he will get nearly twice as much money as he gets now for the 40,000,000 bushels.
The CHAIRMAN. Rice lands are not very profitable planted to any other crops, are they?
Mr. BROUSSARD. No, sir; there is no other crop that you can plant on rice land profitably. You can grow cattle on it. That is what I do. We grow cattle on our lands that lay idle, and you have got to lay land out, you have got to have 2 acres in the rice business where you ordinarily would have one in any other crop, because it is not profitable to plant the acreage year in and year out. I plant one year, then lay it out and plant it again the second year. You have got to have 2 acres where with other crops you would only have to have one, and we have stock on our lands that are laid out.
Senator POPE. What effect would that have on the consumer-the price to the consumer?
Mr. BROUSSARD. The price to the consumer will not be very much advanced, because in a large portion of the United States there is a spread between what the farmer gets today and what the miller gets and what the consumer pays, enough to take care of that additional price. Of course, in our immediate vicinity, where they sell rice awfully cheap, it would raise the price there somewhat.
Senator FRAZIER. There ought to be some regulation, should there not?
Mr. BROUSSARD. No; let them pay more for it, because they would be getting more for it.
Senator FRAZIER. The retailer would raise the price again, on the same theory?
Mr. BROUSSARD. Well, I say the consumer can pay more for it, because it will put him on his feet. I am speaking about in the Rice Belt, where we sell awfully cheap, 2 cents a pound, or a cent and a half a pound or a dollar a hundred. I sell lots of rice for a dollar a hundred.
Senator MURPHY. Did you ever figure out what it costs us when we buy it in packages?
Mr. BROUSSARD. Package rice comes high, because they put in a little better quality of rice and standard quality, and you are paying for quality then, you see. If you go down to the store you will not go to a cheap store to buy clothing, but you go where you can get a better grade. The other will last you just as long, but that is the way it is in rice; if you buy in a package you buy a little higher quality of rice, and for that reason you pay for it. It is a better grade of rice and you would pay a little more for it in the package, but probably the farmer would get twice as much for his rice. Are there any further questions?