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The CHAIRMAN. No, Mr. Broussard. You certainly have given us a very clear statement.
Mr. BROUSSARD. Thank you, gentlemen.
The CHAIRMAN. Now, we are practically through with those who were previously listed. I have a request here for Mr. J. H. Mercer. Senator Capper has asked for him to be heard for a few minutes.
STATEMENT OF J. H. MERCER, STATE LIVESTOCK COMMIS
SIONER, TOPEKA, KANS.
Mr. MERCER. Mr. Chairman and gentlemen, I am livestock commissioner of the State of Kansas, also a feeder of cattle and hogs, and I am here representing the Kansas Livestock Association, an organization of Kansas, with a membership in quite a large number of States adjoining.
I did not prepare any statement. I have been in the livestock business about all my life and have paid a good deal of attention to the marketing of the industry. I appeared before the House committee, the Agricultural Committee of the House, recently on the allotment bill. The position of our organization is that we are anxious that any legislation shall be enacted that will be helpful to the farmers in general, but we have studied the plan of the allotment bill. I do not know just how much of those features are embodied in this bill, but we do not think it is workable as it applies to livestock. I cannot see how such a complicated industry could come under the provisions of a bill of that kind.
I have some thoughts, of course, about the plan that might be worked out in connection with being helpful to the livestock industry. I belong, of course, to several livestock organizations, and I believe that with an organization and something like the powers that are delegated to the Secretary of Agriculture, he could have authority to delegate the work or receive the support of an organization something like the National Livestock and Meat Growers, that is made up of all branches of the livestock industry, including packers, processors, and producers and breeders, sales agencies, and so forththat an organization of that kind, with the authority, the Secretary having the authority to work out a plan, would be of a constructive nature, and in my opinion it largely depends on the merchandising of our business, insofar as prices are concerned, even now.
It is my opinion that if we have what has been termed "an orderly marketing, we would have more control over the movement of supplies and also the movement, probably, of the finished product; that we could have the prices of the raw material gradually increased, and that the consuming public would absorb it without any particular notice in any way; but it would have to come in a sort of an orderly way and it could be handled, in my judgment, without any particular cost to the Government, and I believe that if something of the kind could be inaugurated, the prices of livestock, meat animals especially, could be increased very nearly 100 percent over the present prices, and the consuming public would absorb it and would not notice it at all. I base that declaration on my observation of the business over forty-some years. I have been a feeder of cattle and hogs all my life. I have cattle to feed now. The business has been very, very discouraging and people are going under with very heavy losses and have been for more than 2 years, but it is not because, gentlemen of the committee, in my judgment, of our oversupply. I do not think we are oversupplied with meat animals. I think the records show that we are even not up to normal, and of course there is a large number of our people who are out of work; most of them are meat eaters, and to bring about the employment of our people will certainly increase the prices of food in this country.
The question was asked here by one of the Senators as to what had been done by the Government to help agriculture. In my opinion, the greatest good to agriculture that this Congress has done, or that any Congress has done, is the amendment to the Reconstruction Finance Corporation allowing the Corporation to set up regional credit corporations loaning money direct to the livestock industry; and the reason why I suggest a set-up of men engaged directly in the business is because of the results of the corporation set-up in our land-bank district. I happen to be a member of the board of directors of set-up, and every man on it is a livestock producer. We have 1 or 2 bankers, and I feel we have made a success in that territory. I am positive that by reason of the use of Government money in the ninth land-bank district it has advanced the price of stocker and feeder cattle to as high a level as is warranted now under the conditions. The price has been advanced on cows from $10 to $15 a head, breeding cows, $1 a hundred to $1.50 on stocker and feeder cattle, and it certainly has been of great consequence to the people in our section. It has been a wonderful help to our farmers, and when we speak of the livestock industry, gentlemen, we speak of the farmers of our country. You talk about the dairy interests and the beef interests, the hog raisers, and so forth, the great bulk of our farmers are engaged in all classes of livestock business. They have some dairy cows and they have some beef cows and they raise hogs. So it helps them all along the line, and it certainly has been of great consequence in our section.
If Congress could fix up something along the same line to help in the financing of the farms and the real estate of the country, it seems to me it would be far better than to try to create something of a complicated nature, although I am not here to say one word against any provisions of this bill, only as it applies to livestock, and we are certainly anxious to have any help that can come through that feature; but, gentlemen, as I see it, and as a producer all my life, I cannot see how we could control the supply of livestock by any scheme that has been set up here by either one of these bills.
I think, in connection with this set-up, that probably the Secretary should have someone representing his Department set in on these groups and also more than likely the Attorney General should have, because there is no question but that because of this emergency, in undertaking to work out a plan of this kind it would have to be some agreement that might conflict with our antitrust laws. I think, Mr. Chairman, that is about all I have to say. The CHAIRMAN. We are very much obliged to you, Mr. Mercer.
Now, I want to state to those present, there are a few here who would like to be heard, and as this is the last meeting at which there will be hearings, Congressman Shoemaker, of Minnesota, desires 5 minutes, and the committee will be glad to hear him at this time.
STATEMENT OF HON. F. H. SHOEMAKER, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MINNESOTA
Mr. SHOEMAKER. Mr. Chairman and gentlemen of the committee, as an actual farmer and as having had approximately 25 years of experience with various farm organizations throughout the United States, in the organization of cooperative institutions, and so forth, I have prepared a little plan which I would like to submit to this committee for consideration, and it is a plan which I think will be constructive and which will stimulate business, start our manufacturing industries going, thereby creating a market for our farmers and at the same time will not cost the taxpayers anything in the way of a tax or a levy.
In the first place, the money problem is the most serious part of our entire social fabric at the present time, and our immediate set-up which can be eliminated by taking three basic farm articles or commodities, wheat, cotton, and tobacco. Wheat, the older it is the better it is for milling purposes; tobacco increases in quality with age, while cotton is not affected by age. And the way to handle this is to issue actual currency, commodity currency, against these three staple products. These three staple commodities will act as a leverage to bring farm prices on all other commodities up.
Let me take, for example, wheat. The Government figures show that it costs $1.05 a bushel to produce wheat. That was the last figure that we have available from our Department of Agriculture, No. 1 northern hard. This is taken into consideration by averaging the cost of wheat production with some of the non-wheat-growing territory where wheat is not actually grown, as well as where it is successfully grown. But to illustrate that, we can take wheat for easy figuring as $1 a bushel, and instead of handling this in the manner that it was handled by the Farm Board—if I am correctly informed, there have been millions of bushels of wheat bought by the Farm Board and stored in our elevators, such as terminal elevators at Minneapolis and St. Paul, on which I have been told there has been a rate of 2 cents per bushel per month paid for storage on that wheat, and where it has been in storage for 2 years the amount of storage charged against the wheat is 48 cents a bushel, and the wheat when it was finally sold was listed somewhere around 40 cents a bushel in Minneapolis. So we not only lost the storage and money on the wheat, but we lost the entire money that was paid for the wheat plus the railroad transportation and freight charges to deliver it to these elevators. If we will change that around now and store this wheat on the farms—for illustration, if Senator Norris has a thousand bushels of wheat on his farm, he provides suitable storage for that wheat, and he goes to the Government and gets $1,000 at $1 a bushel, we will say for easy figuring, printed money, against that wheat. This wheat he must keep insured and make the Government the beneficiary against the elements. As long as that wheat is stored on his farm, he must also pay one half a cent per bushel annually to cover the clerical overhead on that wheat. This immediately gives him a thousand dollars in wheat currency that he goes out and spends for the various things necessary on his farm, new shingles or paint on his house, or pay up the debts that he owes the International Harvester Co., and pays his taxes, and so forth and so on. This will start up your industry and put purchasing power back into the hands of the producers.
Now, it will be argued that this cannot work because of the difference in our bushel of wheat and the Argentine bushel of wheat, and a provision can there be brought in whereby any importer that is buying goods in any foreign country can exchange this money based on commodities for regular large currency money, gold or silver, when he wants to step outside of the United States and use the regular dollar. This will put something of value, something of utility, something material and something that can be used, back of every dollar that is floating.
Some of you may say that this in inflation. This is not inflation because it automatically takes care of itself in this manner: If the United States Government is the only dealer in wheat, the miller must go to the Government to buy that wheat. He in turn buys a thousand bushels of wheat from the Government and surrenders to the Govvernment $100,000 of this commodity currency, which is then destroyed by the Government.
Senator Thomas of Oklahoma. Will the gentleman yield for a question? Have you any reform bill such as this in the House of Representatives?
Mr. SHOEMAKER. I tried to, but we were worked too fast.
Senator THOMAS of Oklahoma. Why do you not experiment over there, rather than experiment on the Senate with your ideas?
Mr. SHOEMAKER. Well, I did not know I was experimenting, Senator. In fact, I do not think this is an experiment.
Senator THOMAS of Oklahoma. What do you think about this bill before us?
Mr. SHOEMAKER. What do I think about the bill as it left the House?
Senator THOMAS of Oklahoma. Yes, as you passed it.
Mr. SHOEMAKER. Very emphatically I would class it as a monstrosity, from my observation, although I hope I am (Laughter.]
Senator CAPPER. You were one of those who voted against it?
Mr. SHOEMAKER. No; I voted for it. [Laughter.] You see, Senator, we do not have quite the opportunity for discussion over in the House, and I could not vote for anything else, so I was caught between the devil and the deep blue sea.
The CHAIRMAN. You considered the Senate was a hospitable place to go?
Mr. SHOEMAKER. Well, I felt it was a place that I might go to be heard. (Laughter.]
Senator CAPPER. I thought you would have presented this plan of yours to the House.
Mr. SHOEMAKER. I did not get an opportunity, Senator, I am sorry. I would have liked very much to present it to the House. [Laughter.]
Senator NORRIS. I think those of you who have served in the House realize the predicament that was presented to the Congressman.
Mr. SHOEMAKER. Four hundred and thirty-five people there were trying to get into that agricultural committee, and they could not all get in.
Senator NORRIS. No; it cannot be done.
The CHAIRMAN. You all seem to vote pretty regular over there. (Laughter.]
Mr. SHOEMAKER. Well, I have not been just exactly regular.
The CHAIRMAN. Are there any questions that the committee desires to ask Mr. Shoemaker?
Mr. SHOEMAKER. I would like to add that in the carrying out of this plan, it could be carried out by every postmaster and every rural carrier throughout the United States being made a representative of the Government for that purpose, so that he could pick up this wheat for sampling, and it could be reported to the county agent, who is more or less an ornament at the present time, and this would give him something to do, who in turn would report it to the State department of agriculture and to the Federal Government, so there would be a check-up on this material at all times. Also the fact that this wheat is stored on the farm would do away with one of the greatest evils that the farmer has to contend with today, and that is gambling in food products. This wheat stored on hundreds of thousands of farms throughout the United States of America would make it impossible for anyone to gamble in these wheat products. Furthermore, under my plan, this would be carried out through the Department of Agriculture and the Secretary of the Treasury, and a holiday could be declared, or a vacation in wheat or cotton or tobacco, as the case might be, but the three principal commodities which are nonperishable and do not spoil and can be stored on the farm would be the basis back of our currency that would in 60 days bring prosperity into this country and put buying power back into the hands of the farmer, allow him to pay his interest and his debts and his mortgage and his taxes, and so forth and so on, and go on like most any other American citizen does.
I have spent considerable time on this farm situation. I may not have it all; I do not say that I have a panacea for all ills, but I feel that in 26 years a person ought to learn just a few things; if he does not do it in that time he had better resign and quit.
The CHAIRMAN. We are very much obliged to you, Mr. Shoemaker. It seems almost impossible to limit them to 5 minutes. Mr. Hart wants to be heard for 5 minutes.
STATEMENT OF HON. MICHAEL J. HART, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Hart. I will lay my watch on the table, Mr. Chairman. My name is M. J. Hart, Saginaw, Mich. I am a farmer, growing everything included in this bill, except rice, cotton, and tobacco. I would like to have everything I grow exempted from the bill, because I do not believe the Government or anybody else can pass the contemplated tax on to the consumer at the present time.
My plan for aiding the farmer is to remove the tax known as the tariff, which he has to pay. Let us assume that Senator Smith has 3 horses and that Senator Thomas has 3 cows. Senator Thomas wants to get rid of 2 cows and get a horse. The Government comes in and says there must be 30 percent paid each way before he can do it. There would be no trade. He would have to pay the tax in cash, and he does not have it.
Now, I did introduce a bill in the last session which would provide for the removal of the tariff on the surplus, on surplus commodities when exported direct to foreign countries. For instance, if England