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Senator POPE. It does seem to me that a limitation of $10,000 for salaries ought to be fixed, Mr. Chairman.

Mr. TUGWELL. Well, I do not know. Maybe we can get them for $10,000, but if we found a man that we felt could do it, we would not like to stop for $1,000 or $2,000. I do not think it would pay to do it. I think it would be a mistake.

Senator MURPHY. I agree with you.

The CHAIRMAN. Well, you know that was exactly the same argument used by the Stabilization Corporation, that they should guarantee a man $25,000 a year.

Mr. EZEKIEL. Might I suggest that the counsel for this new organization will not only have to write regulations for these commodities but will also probably have to fight a test case through the Supreme Court to determine the constitutionality of the whole operation, and that requires a very able man.

Senator NORRIS. Would not the Department of Justice have to carry that case to the Supreme Court

Mr. EZEKIEL.. They might, but the legal staff of the Department would assist in preparing the case. Mr. TUGWELL. At any rate, we are in your

hands. The CHAIRMAN. Gentlemen, as the House this afternoon is working on the bill and under the law it has to originate there, the committee will stand adjourned, subject to the call of the chairman,

Senator McGill. We will have a meeting after the House bill comes over ?

The CHAIRMAN. Yes.

(Whereupon, at 4:30 o'clock p.m., the committee adjourned to meet at the call of the chairman.)

AGRICULTURAL EMERGENCY ACT TO INCREASE FARM

PURCHASING POWER

FRIDAY, MARCH 24, 1933

UNITED STATES SENATE,
COMMITTEE ON AGRICULTURE AND FORESTRY,

Washington, D. C. The committee met, pursuant to call, at 2 o'clock p.m., in its committee room in the Senate Office Building, Senator Ellison D. Smith presiding.

Present: Senators Smith (chairman), Wheeler, Thomas (Oklahoma), McGill, Bankhead, Caraway, Bone, Murphy, Pope, Norris, McNary, Capper, Norbeck, Frazier, and Shipstead.

The CHAIRMAN. The committee will come to order.

Senator Thomas wants to make a brief statement before the witnesses are called.

Senator THOMAS. Mr. Chairman, my State of Oklahoma is primarily a farming State, and in order to acquaint myself of the facts at first-hand I sent a telegram to two of the leading farmers in Oklahoma asking for a statement of the price that farmers are getting for their main commodities, the main commodities being cotton, wheat, corn, and oats. I have a wire from one of them, Mr. A. E. Cobs, who is the head of the Oklahoma Cotton Growers Association, giving me these figures.

At the present time the farmers are getting 6.11 for their cotton at Houston, Tex.

Senator MORRIS. What do you mean by 6.11?

Senator THOMAS. Six cents and eleven one-hundredths, a little over 6 cents a pound, at Houston, Tex. That means they must plant the cotton, chop it, pick it, have it ginned, and transport it to Houston, Tex. to get their 6.11 cents.

The CHAIRMAN. That is basis middling, 78-inch staple.

Senator THOMAS. Here is a pound of cotton; I don't know how to describe it to get it in the record but it is enough to fill a fair-sized pillow, ginned cotton, and the farmer has to raise this much and send it to Houston, Tex., 4 or 5 hundred miles, to get 6.11 for that much cotton.

At the present time wheat in my State is selling at 31 cents a bushel to the farmer. There are 60 pounds of wheat to the bushel. Here is 2 pounds of wheat.

Senator NORRIS. Senator, where do you say?
Senator THOMAS. Oklahoma City.
Senator NORRIS. How much?
Senator THOMAS. Thirty-one cents to the farmer.

Senator NORRIS. What grade?

Senator THOMAS. I don't know the grade; an average grade, I presume. Here is a sack containing practically 3 quarts of wheat that the farmer has to plant, cut, thresh, and haul to the elevator to get 1 cent for it.

Senator NORRIS. Senator, will you let me interrupt you there to say I am surprised that the price is so high? It must be in the eastern part of the State, isn't it?

Senator THOMAS. Oklahoma City is in the central part of the State.

Senator Norris. I haven't looked at the price recently but when wheat was at its lowest, when I was home, wheat in my home town was selling there, farmers about there delivering it into town, for 24 cents a bushel only.

Senator THOMAS. Wheat has gone up several cents a bushel in the last six weeks.

Senator FRAZIER. Five or six cents in the last couple of weeks.

Senator THOMAS. It has gone back down 4 or 5 cents in the last few days. The information I have is that the corn is selling to the farmer for 28 cents a bushel. I have here a sack containing 2 pounds of yellow corn. It is more than a quart of shelled yellow corn, and the farmer has to plant his corn, plow it and shuck it and shell it and take it to market to get a penny for that sack of yellow corn.

Oats in my State are selling for 15 cents a bushel. There are 32 pounds of oats in a bushel. The farmers of Oklahoma must sow their oats and cut them, thresh them, deliver them to market to get a cent for 2 pounds of oats. I have here a sack of more than 2 quarts of oats that the farmer must produce and take to market to get 1 cent for it. I want the committee to see these samples of commodities which affect my State. I submit them as positive evidence that the farmers can't live under these prices.

The CHAIRMAN. Is Mr. Simpson present, Mr. John Simpson? He is not here.

I will call, first, Mr. George M. Peek.

STATEMENT OF GEORGE M. PEEK, MOLINE, ILL. The CHAIRMAN. Mr. Peek, you have been invited here to give testimony in reference to this bill. You are familiar with the terms of the bill." You may proceed in your own way to state your attitude toward it and your reasons for that attitude.

Mr. PEEK. Mr. Chairman, would you like to have me address my remarks first to the bill that passed the House or to the substitute that was offered ?

The CHAIRMAN. In order that the record may show, I think Mr. Peek ought to tell us who he is. Give your full name, your address, and your business occupation.

Mr. PEEK. George N. Peek, Moline, Ill. I am not in active business. I am here today at the request of the Secretary of Agriculture to testify before the committee.

The CHAIRMAN. What was your business before you retired, Mr. Peek?

Mr. PEEK. I was in the agricultural-implement business, the manufacture of agricultural implements, all of my life until 1924, except

during the period of the war, when I was a member of the War Industries Board.

The CHAIRMAN. What was the name of the company to which you belonged ?

Mr. PEEK. I was in the Deering Co. for 26 years, and after the war I was with the Moline Plow Co.

Senator Norris. Merely for the record, Mr. Peek (of course, the members of the committee know it all now), but you are the same Mr. Peek who has been here in Congress off and on for quite a good many years in support of various kinds of agricultural legislation, are you

not? Mr. PEEK. Since 1922; yes, sir.

Senator NORRIS. What positions did you occupy with the farmers' organizations when we were considering some of these farm bills, for instance, the McNary-Haugen bill?

Mr. PEEK. In 1924 and from then on until 1928 I was president of the American Council of Agriculture, which was an organization of farm leaders organized at St. Paul in the summer of 1924. In 1926 I was chairman of the Executive Committee of Twenty-two, which was made up at the governors' conference at Des Moines, Iowa, at which was represented 11 States and there were 2 delegates from each of the 11 States, which made the committee of 22. I was chairman of that committee.

The CHAIRMAN. What were the 11 States represented; which States were they?

Mr. PEEK. Practically the North Central States; there was Ohio on the east and Nebraska on the west, going south to Kansas.

The CHAIRMAN. The grain and cattle States?
Mr. PEEK. Yes; grain and cattle States, livestock.
The CHAIRMAN. You may proceed.

Mr. PEEK. First addressing the suggested amendment by Senator Smith which was placed in my hands this morning, I want to say that it seems to me that that is a reflection of the repudiated policy of the last administration as advocated by the late President and Secretary of Agriculture and just before the closing of the last Congress recommended by them. That policy was first presented to Congress in the report of the Coolidge agricultural conference in 1925 of a balanced American agriculture, in order that production may be kept in step with the demands of the domestic markets and only such foreign markets as may be profitable. I have protested against such a policy from that time until now, and I now protest because I think we are merely, by its adoption, drying up this country in the interest of foreign nations.

The CHAIRMAN. Are you speaking of title II of the bill which passed the House?

Mr. PEEK. I am speaking of limiting the bill to the acreage rental proposed.

Senator WHEELER. You are speaking of the substitute bill?
Senator McNARY. It is also in the House bill, title III.

Mr. PEEK. Exactly, but there are other provisions of the House bill which have been eliminated in the proposal I read this morning and which, in my opinion, are essential to any successful treatment of the farm question.

Senator CAPPER. You regard the domestic allotment plan as the vital feature of the House bill?

Mr. PEEK. No. I regard the broad powers conveyed upon the Secretary to deal with the various ramifications in this very complex industry as essential. The conditions are different with almost each commodity. On cotton, for example, we have what amounts to a world monopoly of cotton. We produce over half the cotton produced in the world and we export roughly about half of what we produce. I think that we should keep that monopoly. I think that we should not dry up our cotton acreage and encourage the production of cotton in foreign countries, but at the same time, I feel that the cotton producer is entitled to the benefit of a domestic market as long as he is compelled to pay protected prices for everything that he buys. Now, in the case of hogs, the situation is directly the reverse. It is not the surplus of hogs which bears down upon the price in this country. Germany, for example, has been paying nearly three times to its producers of hogs what we have been paying in this country, so that it can't be the foreign price which determines the domestic price of hogs or we would be getting between 2 and 3 times as much for our hogs as we are.

I think that the difficulty with hogs lies in the processing industry, in the distributive systems, and I regard a straightening up of the distributive system the essential thing in connection with hogs.

In the case of wheat, you have an intermediate crop where we produce roughly 20 to 25 percent of the world's supply and export 20 to 25 percent of what we produce. Many of our millers have mills in Buffalo where they mill in bond, using a great deal of Canadian wheat. Others have mills in Canada. I think that our effort should be to process as much of the farm products of this country in this country as it is possible to process and dispose of, but I think that we should not let the foreign price determine the price at which the American farmer is permitted or rather is obliged to sell his products.

The CHAIRMAN. Before you leave the question of the production of cotton, your figures were about correct as to our percentage of the world's production. We have on hand now a surplus that if consumption does not increase not only in this country but in foreign countries, we are face to face with a year's production in excess of the world's needs. Now, the question is how to get rid of that surplus so that the law of supply and demand may operate within reasonable bounds. That is a physical fact that stares us in the face. It was not, I will grant you, a question of overproduction, but a question of underconsumption. The bargaining power of those who consume our cotton goods has been destroyed and it has had the same effect as overproduction. There has been a surplus piled up.

Mr. PEEK. I agree with you, Mr. Chairman, and I agree that in certain instances and at certain times it

may

be
necessary

to reduce production, decrease production, but to adopt the plan generally of decreasing production, to meet the demands of the domestic market, I do not approve of, and I think the effect is apparent to the farmer but perhaps even more would it reflect unfavorably upon commerce, transportation, and particularly our social system. We see here in this country right today evidence of outbreaks among

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