changed; all it did was to put an arbitrary bounty on the outgoing, but it did not take into consideration the fact that the American people must pay on imports. That is the difference between the debenture and this. It simply takes the 30 percent away from the horse and cow trade. That is all. If you find that you can put in 10 percent and get away with it, give the Secretary of Agriculture authority to do it and let him raise or lower that as imports and exports take place.

Senator MURPHY. Your proposal is to take care of this surplus by encouraging the other fellow to trade with us?

Mr. HART. Make it attractive for him to exchange goods.

Senator BANKHEAD. You realize that we can not initiate in here any bill seeking to raise revenue, do you not?

Mr. HART. It originated in the House. It has been introduced in the House. But I will tell you from my experience that you will never get a farm organization to back that up, because it does not create any jobs, you see. [Laughter.] It does not put one other man on the pay roll, and that is the objection to it. It is too simple.

The CHAIRMAN. We are much obliged to you, Mr. Hart. We will now hear Mr. Taber, of the National Grange.

STATEMENT OF L. J. TABER, COLUMBUS, OHIO, MASTER OF THE NATIONAL GRANGE

Mr. TABER. I want to say for the speaker that just preceded me that the Grange has been advocating before this committee and before other committees for almost a quarter of a century legislation of that type. The export debenture is after all a plan to enable us to sell abroad and to use the debenture for the payment of import duties.

Mr. Chairman, I want very briefly to state that the Grange favors this legislation. We hope that it will be enacted by this session of Congress at the earliest consistent date.

We do not consider this perfect legislation. We do consider it, however, legislation fitting into a most critical period in the Nation's history. This committee is considering America's oldest unanswered problem. The oldest unanswered problem is equality for the farmer. It was raised in the first Congress. Congress has attempted to find a solution, but that solution has not yet been found. This bill is a step in the right direction, recognizing the emergency. It is a step in the right direction because it gives to the Secretary more than one method of approach. It is a step in the right direction because it gives to the administration something upon which to act and makes it possible to place the responsibility.

Personally, I believe that this administration is entitled to the type of machinery it wants to do a tremendously important job; therefore, speaking for an organization representing 800,000 dues-paying members, a farmer all my life, representing farmers in 35 States, I simply want to emphasize the belief that the Senate would act with wisdom if it adopted this legislation in approximately the form in which you find it. I am not saying it is perfect, but I am saying that it does the three things that it seems to me ought to be done and done immediately.

That is all I care to say, Mr. Chairman. Thank you very much.

The CHAIRMAN. Now, we have one more for 5 minutes, Mr. Iverson, who wanted to be heard for a few minutes. Is Mr. Iverson present? [No response.]

Senator MCGILL. Do you want to hear from Senator Brookhart? The CHAIRMAN. Senator Brookhart; yes. I beg pardon, Senator. Senator Brookhart wants to be heard. I had overlooked that.

STATEMENT OF HON. SMITH W. BROOKHART, OF IOWA

Mr. BROOKHART. Mr. Chairman, I have an amendment that I desire to suggest to the bill, and in view of the late hour I believe I will go directly to that amendment. This amendment does not interfere with the functioning of any other provisions of the bill, but it adds to the powers of the President very much.

I do not think any consideration of this question as an emergency or final solution is going to take care of the situation unless this exportable surplus is sufficiently handled in some way. In Iowa, we produce 20 percent of all the hogs in the whole United States, 20 percent, one fifth of them. We produce one sixth of the corn. Those pigs are already farrowed; they cannot come into this bill this year. We produce more calves than any State in the Union except Texas, which is five times as large as Iowa, and we feed nearly all of these range cattle, coming from Wyoming and Colorado and even Oklahoma, and a lot of them from Texas and some even from Canada and, of course, a restriction of the livestock, of the cattle production, is out of the question for the coming year.

Corn could come into the bill, but since these farmers have their stock they will want the corn to feed the stock, and it will be difficult to get them to sign contracts for a reduction of acreage. So I have offered this alternative: On page 7, between lines 18 and 19, insert subsection (5) as follows:

Whenever the President shall determine that the exercise of the powers herein otherwise granted will not successfully restore the relation of prices of agricultural poducts to other commodities as herein contemplated, the following additional powers are herein granted and provided:

(a) Through the Agricultural Department or such other agencies as the President may determine or set up the percentage of each basic agricultural commodity or export shall be estimated and determined in advance and conversely the percentage for domestic consumption.

(b) The President is then authorized to direct all processors and purchasers of these commodities, except such as are used upon the farms, to turn over to such governmental agencies as the President may direct the percentage determined for export and Government warehouse receipts shall be issued therefor. This exportable surplus shall be disposed of in foreign markets by the governmental agencies in charge thereof at the best time and under the best conditions to obtain the best prices in the world market as the President may determine. The warehouse receipts shall then be redeemed at the price realized for the sale of such surpluses, less the expense and storage in marketing the same.

(c) The President is further authorized through the Agricultural Department or such other agency as he may set up or determine to fix a cost-of-production price, including a reasonable profit on capital investment, for the percentage of all such commodities to be consumed in the United States, and all buyers, processors, and agencies purchasing such commodities from farmers are required to pay for such percentage the price so fixed and determined.

Then the penalties for violation.

Senator NORRIS. Senator, I wish you would read that, too, the penalties. Read the balance of your proposed amendment.

Mr. BROOKHART (reading):

Each and every violation of this subsection shall be punished by fine of not more than $1,000 or imprisonment in jail not exceeding 1 year, or both.

Senator NORRIS. That contemplates the licensing, of course, of dealers?

Mr. BROOKHART. Yes.

Senator NORRIS. You do not set that forth.

Mr. BROOKHART. I have set no details, but I think the power is broad enough, Senator, that they can license them or set up any agency.

Senator NORRIS. I was wondering the question that entered my mind at once was whether you could provide a criminal penalty there for something that is not set up itself in the law. Now, you have not set forth even the framework of the method by which the law would be violated.

Mr. BROOKHART. Yes; I think I have. That is, I have set up the specific things that are to be done here, and for violation of those things the penalty is imposed.

Senator NORRIS. I think you ought to modify that a little. The violation of those things that you have set up-the thing set up is that the President has authority to establish the machinery by which this is to be carried into effect.

Mr. BROOKHART. Yes.

Senator NORRIS. Now, in doing that he will have to license a lot of people. Suppose one of these licencees does not follow out that instruction there in the segregation of the exportable surplus; it seems to me that in order to enforce it you must, of course, have some criminal statute. In order to have a criminal statute, I should think that the provision for the criminal punishment part of it ought to refer to something that is more definite than you have got there.

Mr. BROOKHART. I would be glad to have the Senator incorporate that in the amendment, so far as that is concerned, and perhaps the Senator is right.

Senator NORRIS. Let me ask you another thing. That is very similar, too, and fundamentally it is the same as Mr. Simpson's method and Mr. Clair's method; but I am wondering why you provide for the turning over of that exportable surplus to the Govern

ment.

Mr. BROOKHART. Yes.

Senator NORRIS. Why not, if you are going to license these dealers like an elevator man, provide that they shall export that, and that it shall not be used in domestic consumption?

Mr. BROOKHART. Well, there is this reason: They are not organized to export it; at present there is no efficient agency. It is a matter of competition.

Let us take cotton. Here is about 55 percent of the cotton that is produced in the United States is exported, on my check-Senator Smith claims a little higher percentage, I believe. That 55 percent, if that be correct, is about 68 percent of the world demand for cotton. In other words, the world gets about 68 percent of its cotton from the United States. Now, at present, in the first place the farmers are forced to sell their cotton here in the domestic market and flood the market with all this 55 percent. In the next place, there are about

46 or 47 exporting agencies competing with each other in selling cotton in the world market. The result is that the world market is constantly a bidder's market. It is fixed on the other side and we have no voice in it at all. If this is turned over to the Government and one agency is created so strong and so powerful that it does not have to sell cotton, it can hold and ask a price. It will have some voice then in the world market and I believe will considerably improve world prices.

Senator NORRIS. Now, Senator, that is true of cotton, I think, because we could really, if we would, control our cotton, and we could then control the world price for cotton, because the world can not get along without our cotton, but that is not true of wheat.

Mr. BROOKHART. Let us see about wheat, now. There is less than about 20 percent of our wheat production that goes abroad, and it is not so big a percentage in the world demand for wheat. But there was a world conference called, and the Australians and the Canadians and the Argentineans, and even the Russians, all of them, wanted to establish a quota system for the wheat-producing countries of the world, and there are only 5 or 6 of them, so it is not a large number. Then one agent could handle the sale of that wheat in England, for instance, for all those countries, or in each other country. Have one agent for all of them, and in that way they could get a similar control of the wheat matter compared to the cotton situation that I have just described. But it was a distinguished citizen from Nebraska that upset that on the Farm Board.

Senator NORRIS. Yes. Well, if you would know that distinguished citizen and know what kind of man he was, you would not be surprised at his doing that.

Mr. BROOKHART. Well, I voted against his confirmation on the record. I anticipated him all right.

Now then, President Roosevelt, as the newspaper accounts state, is going to revive this national conference on the wheat question, and if it succeeds, and I think it will be comparatively easy to do, then I think the wheat proposition will be quite as well controlled as the cotton proposition would be if we had it handled as I describe. Senator NORRIS. Senator, we cannot afford to put into this law something that is based entirely on anticipation of something that does not exist yet. That may come out just that way. I would be glad if it would, but maybe it will not. It seems to me we ought to take conditions as they are. Why can they not export this surplus wheat, if the law compels the licencee to segregate, just the same as they do now? Why not let it be subject to the same influences that control it now?

Mr. BROOKHART. It can be done that way, and I would not particularly object to that, but it is nothing like as efficient as if we had one agency doing it. Then if we carried out the world arrangement I would like to have the foundation laid for that.

Senator NORRIS. You know the condition that we would be up against if we tried to have the Government do that. There will be a lot of opposition to it anyway, but the great opposition at once that would spring up, not only in Congress but everywhere else, would be that you are putting the Government into business on this proposition, and we can just as well avoid that criticism if we let it go and take its own course.

Mr. BROOKHART. Yes, but so far as I am concerned, that criticism does not impress me at all.

Senator NORRIS. Well, it is a criticism that as a legislator you have got to take into consideration if you want to pass a law of that kind.

Mr. BROOKHART. I realize you have to consider it, but under the present desperate condition of agriculture, with actual rebellion against the courts and States, I think the time is here when something should be done.

Senator NORRIS. But you have got a proposition, Senator, that I doubt whether it can pass anywhere and I am going to vote for that kind of an amendment myself. I think it is a good solution of the question. I am not speaking of it as an enemy, but why borrow a whole lot of trouble when you can avoid it?

Mr. BROOKHART. Well, I am perfectly willing to accept that suggestion so far as I am concerned, but I would prefer to present the proposition on its full merits at least.

Senator NORRIS. I would like to have-I have not prepared the amendment, but I would like to have the amendment presented in the Senate or before this committee when we get into executive session, that would carry out that idea.

Mr. BROOKHART. Well, the Senator can use this suggestion here then and prepare it in detail.

Senator NORRIS. I think you would come nearer getting down to a concrete proposition than anybody that has proposed it yet, but I point out that difficulty, not because I am necessarily opposed to it, but because I think as a matter of strategy it would be a serious mistake if we borrowed that trouble that I think we can get along and avoid.

Mr. BROOKHART. It would be a very great advantage to do it as the Senator suggests, over the other plan, as I see it, and I would not have the slightest objection to it, although, of course, I feel that one agency would be more efficient in handling either of these propositions. Senator NORRIS. Wheat is exported now. The man way out in the country, the country elevator, buys wheat, and some of that wheat perhaps all of that, is exported, gets into some foreign country. Now, it would not add anything to the machinery, it would not change any of the machinery; in fact, it would not change the amount as I see it, that would be exported under that proposition that is exported

now.

Mr. BROOKHART. I think that is all very true.

Senator NORRIS. The surplus is exported anyway. The only thing is that when it got into the elevator it would be segregated.

Mr. BROOKHART. The particular lot of wheat need not be segregated. The elevator could keep its count when it sold it.

Senator NORRIS. If he shipped a thousand bushels of wheat, he would not need to segregate every man's wheat in there, but he could segregate it in bulk.

Mr. BROOKHART. Now I want to call attention a little to the world situation on cotton. I have the Department of Commerce statement here of March 14 of this year, and I find that there are in consuming establishments 1,441,000 and odd bales of cotton, and there are in public storage at compresses 9,379,000 bales. That makes the total cotton in the United States about 11,000,000 bales. That is practi