the most conservative of our people, interference with the normal processes of law from almost one end of the country to the other, by the most conservative element of our population.

In the last campaign the farmers of this country were promised certain kinds of relief quite definitely. I am sure that the broadest kinds of powers are necessary in order to afford that relief. I think that no one prescription will fit every kind of a commodity. I think the bill must be very broad and must put power into the hands of the administration official who is to administer it to deal with each commodity as the particular conditions of the market require in any particular period, and I think anything less than that will not meet the situation at all.

Senator WHEELER. Mr. Peek, I am going to be for the bill because I have come to the conclusion that it is absolutely necessary to do what you say to give broad powers to the Secretary of Agriculture, and I have come to that belief rather reluctantly, but I do think it is necessary to do it if you are going to get any relief. But the thing that is bothering me is, and the thing that I doubt can be done, is to give any relief to the farmers of this country as long as you have 44 countries off the gold standard and we attempt to remain on the gold standard. I am just as convinced as I am that I am sitting here that it is a physical impossibility because of the fact that you have industries today which are not producing a surplus, which are protected by a high tariff, but which are almost if not as low as agriculture is in many instances. Then you have agricultural products that are likewise protected by a tariff of which we do not produce a surplus and yet those products are just as low as the other farm products-well, many of them are as low as those of which we do produce a surplus

Mr. PEEK (interposing). They are too low, Senator, but they are not as low generally and haven't been in the period of the last 12 years. The grain and livestock areas have suffered more in the last 12 years than any of the other agricultural commodities.

Senator WHEELER. During the last 12 years, of course, up to 1929, or up to the time when these nations went off the gold standard, Í will agree with you; but you are facing a different situation now than what you faced in 1929 and up to the time the 44 countries went off the gold standard. How are you going to rectify that situation by legislation in this country until you first either bring the price of the dollar down or get some agreement with these other countries to bring the value of their money up?

Mr. PEEK. Well, in the first place, as I just said in the case of hogs, it is not a question of our international relationships to a great extent. International agreements would be very helpful to encourage the export of fats, lards, and things of that kind, and some cured meats, if we could take something in exchange, because we can't get gold when we already have the gold. I agree that the situation is perfectly impossible when we prevent the more or less free interchange of commodities under conditions like this and when we have all the countries in the world owing us the amount of money they are.

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Senator WHEELER. Take, for instance, Japan, or take Argentina. I gave this illustration this morning. You have Japan with a depreciated currency of practically 50 percent and, notwithstanding the fact that you have a high tariff upon the product which she produces, she is able to dump by reasons of a depreciated currency on this market. China by reason of the depreciated currency is able to dump on this country, but she can't buy from us; and the same is true of India and of Argentina and of practically every country off the gold standard today. It seems to me frankly that the thing that the Congress of the United States ought to be giving first consideration and prime consideration is to the money question and settle that before we can hope to accomplish anything along the lines that have been suggested in this bill.

Mr. PEEK. I agree with you. Senator, upon the importance of dealing with the situation in our relation to foreign countries in the broadest kind of a way, but I think that that is not the question involved in the discussion of this bill because this bill has for its purpose the restoration of parity prices for agricultural products with industrial products within the country.

Senator WHEELER. If you are only seeking, for instance, to restore parity between agricultural prices and industrial prices in this country. I don't think candidly that your bill will do very much good because industrial prices at the present time, except those absolutely controlled by monopoly, like steel and aluminum and a few things of that kind, are down.

Mr. PEEK. Well, they are down to say 104 or 105 pre-war, while agricultural products are down to somewhere between 45 and 50 of pre-war, so if you are going to restore the parity by bringing down industrial prices you are going to more than cut them in two. Of course that would mean chaos. The alternative and the only way I know of to restore parity is to raise agricultural prices somewhere near the level of industrial prices.

Senator WHEELER. It should be done if it can be done, but the question in my mind is whether it is possible to do it by any legislation until you get around the proposition of the depreciated currencies in these other countries. I hope that you are right and that it can be done.

Mr. PEEK. Senator, I think if you had that question all settled today that within a very short time the disparity would creep in again between industrial and agricultural prices.

Senator WHEELER. There isn't the slightest question in my mind about it, but if you could settle that question it would be much easier to settle the agricultural prices. It would be much easier to settle it by legislation. The question in my mind is that until that is settled it is going to be exceedingly difficult, if not impossible, to settle your agricultural proposition and bring them up.

Mr. PEEK. The people who are framing the procedure to remedy our economic ills have elected to proceed in the other direction, and the agricultural bill is the one which is now under consideration. I want to make this point, however. The greatest depression in agriculture throughout all of these years has been in the livestock and grain sections, and the livestock and grain industries are perhaps the most highly organized industries of all dealing in processed farm

commodities. Now, I just want to call your attention, we will take the 12-year average

Senator SHIPSTEAD (interposing). You say disparity in prices? Mr. PEEK. I say disparity in prices. I will indicate what I mean right here.

Senator SHIPSTEAD. May I ask just one question? You are familiar with the farm machinery business and farm machinery prices? Mr. PEEK. Yes, sir.

Senator SHIPSTEAD. Can you tell us what they pay for a gang-plow now?

Mr. PEEK. No; I cannot tell you, but I will tell you roughly that farm implements are 50 or 60 percent higher than they were prewar. I will tell you also that steel and pig iron, out of which they are made, are 50 or 60 percent higher, taxes are double, and until the raw materials and the taxes can be relieved, I see no possibility of substantially lowering machinery prices. Farm machinery is on the free list, but the materials out of which they are made are highly protected.

I want to come back, Senator, if you please, to this situation with wheat and hogs. On the 12-year average, the prices of things farmers bought were 148 percent of pre-war. Wheat was 115 percent of pre-war.

Senator SHIPSTEAD. What year?

Mr. PEEK. Twelve-year average from 1921 to 1932, inclusive. Hogs were 115 percent, the same as wheat, against the 148 percent, while in these industries which are not so highly organized-we will take, for example, potatoes were 146; eggs, 131; chickens, 168; butter, 149. So that it is perfectly apparent that much of this difficulty can be traced beyond the point of the local market into the hands of the processor and the excessive expense of distribution has not come down. I don't mean by that a lot of them are profiteering and making too much money, and that sort of thing, but I mean that the effect upon the price of the farmers' product, depressing conditions generally in these industries caused by lack of buying power or what not, is to crowd down the farmer's price.

Then there are other influences; there are very large purchasers of flour and meats, if you please, with great power to bargain for low prices. General market prices are broken, competitors stampede themselves, and in order to protect themselves on these special contracts they make and upon the general low price of their manufactured commodity, they try to chisel at every corner, and the most vulnerable place is in the price of the raw products of the farmer, because it is impossible for the farmer to so organize himself as to protect himself against it. He takes the price that is offered him and pays the price that is asked of him, and he is the only one I know who does it.

Senator WHEELER. What is there in this bill, in your opinion, that will correct that situation?

Mr. PEEK. I think there are two things; I think the licensing system is one.

Senator WHEELER. The licensing of the processors?

Mr. PEEK. Yes. I think the agreement section is another, and the public is protected at every turn from the fact that the bill becomes

inoperable after it passes above the fair exchange value of the commodities. My criticism of the bill is that it doesn't do enough for the farmer, not that it does too much, because under the bill he would be only getting about 12 cents for his cotton, and that would be 9 cents if you take the export portion at six. He gets only about 72 cents for his hogs and say 93 cents for his wheat, which applies say to only 80 percent of it, because it does not apply to the export portion of 20 percent. It is too little instead of too much.

Senator WHEELER. You say 93 cents. I am interested to know how you are going to get it in operation so he will get the 93 cents for the wheat produced in this country.

Mr. PEEK. It is perfectly possible under the bill to put it into effect immediately by the benefit payments in the bill. I doubt if that would be wise, to evoke all at once. I think it would be better to make a gradual approach to it and give these processors to understand they must pay the farmer a fair price, and if they don't pay the fair price, they will have to pay it through taxes. Then I think you would see the prices come up. Then I think you would. get the cooperation of a lot of processors, maybe not all of them, but the cooperation of enough of them so that you would break down any veiled understandings or whatever there is about agreed prices.

Senator NORRIS. All that is in the bill as it passed the House? Mr. PEEK. Yes, sir.

Senator NORRIS. In your judgment, is that bill satisfactory as it passed the House?

Mr. PEEK. On the legal question, Senator, I am not competent to express an opinion. I am not a lawyer. I have heard some objections made to possible constitutional questions in connection with the appropriations and the taxes. As I say, I am not competent on that.

Senator NORRIS. I am not thinking of that. I am not talking about technical questions of that kind. Forget that.

Mr. PEEK. In general, the powers are essential as they are named in the House bill to a successful solution of the farm question.

Senator NORRIS. You said you were opposed to some certain amendment. Not only for my own satisfaction but so the record may be clear on that, I wish you would identify that amendment. Mr. PEEK. That was the amendment that was given me this morning.

Senator NORRIS. Where does it appear?

The CHAIRMAN. That is the proposition I made.

Senator NORRIS. I thought that was it but I want the record to be perfectly definite. I am going to ask you

Mr. PEEK (interposing). On page 6, title II, pages 6 and 7 are stricken out, which I think should not be; a substitute is made on page 8, sections (a) and (b), which I think should be omitted; on the same page the processing tax, section 9, extending over to section 10, is stricken out and substitute is made there in section 9, and I think the bill should be left generally as it came from the House. Senator NORRIS. That identifies it. Referring now to the amendment as embodied in what is headed here "committee print ", the same bill but committee print?

Mr. PEEK. That is correct.

Senator MCNARY. You are now opposing the so-called ment" offered by the chairman of this committee?

Mr. PEEK. I beg pardon?

Senator MCNARY. You are opposing the substitute brought in by the chairman of the committee?

Mr. PEEK. Yes; I am opposed to this committee print.

Senator McNARY. That is the retirement of the excess acreage and payment of rental?

Mr. PEEK. I am definitely opposed to it.

Senator MCNARY. Isn't that in the House bill under title II, subdivision 1?

Mr. PEEK. It is permissible in the House bill, but my understanding is that such a plan would only be evoked under particular conditions such as the chairman says exists in the case of cotton at present.

Senator MCNARY. Isn't the full authority given to the Secretary to invoke the Smith idea in subdivision?

Mr. PEEK. That is right; yes.

Senator MCNARY. It is in the bill as it passed the House?
Mr. PEEK. I so understand.

Senator MCNARY. To meet your objection, it would want to be stricken out of the House bill and limited only to the allotment plan?

Mr. PEEK. No. I think the administrative officer must have the broadest power, and personally I disagree with the idea of acreage rental. I think I can go out and rent 50,000,000 acres of farm land and increase production at the same time. On the other hand-that is, if you want to take it generally, I think it is a matter of great discretion as to how that should be undertaken-it is possible, I think, to go into the State of Illinois and in 20 out of 102 countries of the State remove all the surplus corn that is produced in the State. I think in Iowa you can go in 40 percent of the counties and get all the surplus corn produced in the State. I know in Nebraska you can go in a limited number of counties and get all the surplus corn produced in Nebraska. So I think the idea of general acreage rental must be handled very carefully, although, owing to the peculiarity of the industry from year to year with the different crops, the authority must be general to deal with it when and where it is.

The CHAIRMAN. If you eliminate any idea of acreage reduction and it becomes generally known that under this plan you are going to raise the price of farm products, aren't you going to have such an increase of products in these crops that come under that protection that the final result will be as disastrous as it is now?

Mr. PEEK. In the first place, Senator, I have tried to make it clear that I would not eliminate that provision from the bill. I would leave it in the bill to be brought up whenever the occasion warranted, and, in the second place, I disagree with the conclusion that prices, higher prices up to a reasonable level, are going to increase production.

The CHAIRMAN. In other words, you would give to the Secretary of Agriculture the power to control production; that is, he would