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I have never heard one farmer in that large group of people but who was wholeheartedly supporting this movement to bring about crop insurance, and they are just waiting and watching the action of Congress, hoping that this legislation does pass at this session of Congress.
Senator POPE. It is rather unusual to find any measure upon which they all agree, is it not?
Mr. MANNING. It has never been my experience before. It is natural that they would support a measure of this kind because it means the continued operation of farming in that district; it means the continued chance for them and their families to stay on those farms and exist and to live in a better manner than they have been living in years gone by. They are tired of receiving grants, seed loans, feed loans. It hurts their pride, and they are probably just as tired of receiving them as Congress, maybe, is of granting them. It takes a lot of money.
Senator POPE. How long have you lived in Montana? Mr. MANNING. I have lived in Montana since 1927. Before that I was in North Dakota for a good many years.
Senator POPE. Do you know of any other similar period of drought in Montana? Of course, it has not occurred since you have been there. Have you heard of any similar period over a number of years where there have been such droughts as in the last few years?
Mr. MANNING. I have heard some talk, Senator, back there in the years 1918 and 1919, especially in 1919, when it was so much worse, they say, than it has been in the last year or two or three that there is hardly any comparison.
Senator POPE. Do you know how long the period lasted then? Mr. MANNING. No, I do not. They are hoping for this legislation. They need it. It means their financial salvation; it means that they are going to operate the farms in Montana as wheat producers, not be forced to eventually move to some other territory. It probably means that they will stay in Montana instead of going out to Idaho or Oregon or Washington. [Laughter.]
Senator SCHWELLENBACH. I don't know whether we want that in the record or not. [Laughter.]
Mr. MANNING. Well, they know that you have a good country out there, Senator.
Under the operation of such a measure as this they can stay there and operate and carry on in an American way and be in a position to say to Congress: “We don't need seed loans; we don't need feed loans, and we don't need relief.”
Senator POPE. That would certainly be a very desirable thing. Are there any other questions? Mr. THATCHER. I should like to ask a question, Mr. Chairman. Senator POPE. Very well. Mr. THATCHER. Mr. Manning, I want to ask you to think back a few years. I have in mind the year 1932. I remember particularly one place in Montana, a great shipping place for grain, particularly wheat, Wolf Point, Mont. Calling your attention to the year 1932 do you recall that farmers were shipping rye and barley out of Montana from Wolf Point-I remember that place in particular—where the price card for the grain, those grains, was so low that the railroad company, figuring that they would be unable to collect the freight on
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drove out of the required the point, the
that grain when it arrived in Minnesota-it was the usual practice to collect charges at the unloading point, the terminal market—that the railroad companies required the prepayment of freight on rye and barley out of that drought-stricken area, what is now known as a drought-stricken area.
Mr. MANNING. I not only remember that, Mr. Thatcher and gentlement, but I also remember that the elevators refused to take rye into the elevators, to buy it outright from the farmers.
Mr. THATCHER. At any price?
Mr. MANNING. At any price. Because the terminal price would not guarantee the freight charges to ship it to the terminal market. They just would not take it.
Mr. THATCHER. Now, Mr. Manning, the farmers in that area are finding great difficulty in procuring feed for stock and have been obliged to ship out stock that they otherwise would like to have kept on their farms during the last year or two, have they not?
Mr. MANNING. Well, it is just a matter of record and a matter of history, and I think possibly this committee knows it as well as anybody, that the livestock industry, especially as it pertains to the smallfarm operator, the smaller herds, that he has depeted his herds, to the point where he is just out of business, due to the lack of feed and to the lack of the wherewithal to buy feed at the price that it takes to ship it in there. We have that condition out there this year.
Mr. THATCHER. So that, as matters stand, in 1932 and for some years thereafter they had tremendous production of feed grains in that area, for which there was no price, and now there is no feed that they can buy with the money they have. They are absolutely unable to buy feed at these high prices, and thus have depleted their foundation stock that otherwise they need for their continued farming operations.
Mr. MANNING. That is absolutely right.
Mr. THATCHER. And had we in those years been fortified and had in operation crop insurance for those feed grains out there, the farmers and the Federal Treasury would have been protected, if there had been a program such as this now proposed for wheat, where they could put away their premium reserves in the fat years and draw out the reserves in the lean years.
Mr. MANNING. A program of this kind of insurance provided out of high-production yield would not only have provided for them the premiums that they paid in reserves, but they would also have been able out of the indemnities that were paid to them direct to build up some small surplus of feed and things of that kind, and he would not have had to deplete his herd and would not have to ask for help to get feed for them.
Mr. TALBOTT. Pardon me, Mr. Chairman, but I think right on this point Mr. Manning ought to put into the record the price of wheat at the local elevators. I think that ought to go into the record.
Mr. MANNING. At the time you are talking about, the rye price?
Mr. TALBOTT. At that time, yes. • Mr. MANNING. I could name you specific places—take Highwood, Mont., production of winter wheat, winter wheat territory, the farmer delivering his wheat to the elevator. The absolute records out there show that the price he received in many instances was 14 cents a bushel. That was just the price that prevailed all over that territory, possibly a little smaller than some farther east, because our freight rate is quite a lot higher.
Senator POPE. Have you any other questions, Mr. Thatcher?
Mr. MANNING. I thank you for the privilege of appearing before you, Mr. Chairman.
Mr. THATCHER. Our next witness, Mr. Chairman, will be Mr. A. R. Shumway, of Milton, Oreg., speaking for a grain cooperative regional of that area, the North Pacific Grain Growers, servicing farmers in the States of Idaho, Oregon, and Washington, and also speaking for the farmers Union of the State of Washington.
STATEMENT OF A. R. SHUMWAY, MILTON, OREG., REPRESENTING
THE NORTH PACIFIC GRAIN GROWERS Mr. Shumway. Mr. Chairman and gentlemen, as Mr. Thatcher has said, I represent the North Pacific Grain Growers, a regional of 7,500 wheat farmers with a sign-up of approximately 25 or 30 million bushels, almost half of the wheat of those three States that go into the trade.
I also have the right to speak for the Farmers Union of Washington and the Farmers Union of Oregon.
The Farmers Union of Washington embraces the northern half of your State [Senator Pope), and that of Oregon and the southern half of Idaho.
The Pacific Northwest is peculiarly situated and peculiarly interested in this measure. We are shut off from the rest of the country by a 35-cent freight rate to the East and by the lack of an export market which we had up until 1929.
Another peculiar circumstance is that in normal years we produce twice as much wheat as we need in that area, and we must have some market for that wheat.
We are interested in this measure for two reasons: Not only the fact that we do have large areas of land in that section that does not have as stable crops as the majority of the wheat section—and I am speaking especially ɔf the counties that border the Snake River and the Columbia River—they do have a lower production; they are subject more to drought and they do not have equal crop production. In the main areas we do not know what a crop failure is. Our crops run from 40 to 50 bushels. Sometimes they get down to 28 and 30 bushels, but we do not have the infestations and risks that they have in the other sections of the United States.
So for those areas that border the Columbia and Snake Rivers we are vitally interested in this section of the bill which provides that the crops shall be distributed over lean and fat years.
We have soil of very deep fertility, ash soil, and our main trouble is lack of moisture and hot winds. We can have a 30-bushel crop on those lands and in 3 days a hot wind can come down in those light areas and cut it down to 5 or 10 or 15 bushels in 3 days' time.
We are also greatly interested in that part of the bill which provides that premiums shall be placed in an ever normal granary, because those lighter counties, when they do have a crop, they fill out our granaries and warehouses and we have a surplus that we can hardly handle in the markets of the world. Now, by putting part of that in store at a premium to level off the high spots we would not have such a problem in disposing of the surplus grain. We also know that when our warehouses and elevators are overflowing with that burden from surplus, having no place to go with it, that our price structure, the price of the additional wheat goes down, down, way below the cost of production.
This would equalize that situation.
The bill as it is drawn and as we have all carefully gone over it, seems to need but very little correction from our viewpoint. There is one section on page 6, section 7, line 25, that I do hope you will see that there is just one word put in, where it says: producers of wheat against loss in yields of wheat due to drought, flood, hail, wind, tornado, insect infestation, plant disease, and such other causes as may be determined by the board.
Our hazards out there are due first to drought. There is very little flood, just isolated sections where hail insurance is ever taken out, some loss by wind, never by tornado or seldom, if ever. Insect infestations are very rare. Plant disease we seldom have, other than smut, but the great hazard in that area is fire, very largely. Our wheat is a very dry wheat. Under the Federal grades they allow 13-percent moisture. It is seldom that our wheat gets up above 9 percent. It is tinder dry. The railroads going through the section frequently will fire that wheat and the fire will be carried to other areas. Sometimes carelessness—well, I would not say carelessness, but sometimes travelers along the highway will throw out a cigarette and light a field. It is true it says "other causes”, but since you have specifically mentioned a number of the hazards, I hope you can see your way clear to just insert the one word “fire” in there with the other hazards that are insured against in this measure.
Senator POPE. I will say that the committee has agreed upon an amendment to add the words “winter-kill and lightning.” The committee has also discussed fire. Also those who drafted the bill discussed fire, and we are very glad to have your suggestion and the committee will consider that.
Of course, fire brings in another element. That is the element of negligence on the part of the railroad company or on the part of others that the bill protects against. As to negligence and malfeasance of the producer, it does not cover losses due to that, but as to negligence of others, we are somewhat doubtful about that, because if the negligence can be established as against the railroad copany the farmer would have a right to damage to cover his losses.
Therefore, up until the present time we have not included fire as one of the specific hazards, but have thought that such other causes as may be determined by the board would include fire. It would include the matter of forest fires, which sometimes affect our wheat situation up there. Therefore, so far we have considered that we would leave that to the board to put in the policies in certain sections and perhaps not in other sections, but we are glad to have your suggestion and I assure you the committee will carefully consider that.
Mr. SHUMWAY. Then, in conclusion, I would just state that our organization is solidly behind this measure. It is true that they hope it is one of a series of measures, but they realize that crop insurance itself will materially aid our market in leveling off the high spots.
Mr. TALBOTT. Could I ask a question there, Mr. Chairman, in reference to fire, because I feel it is a vital thing to them? In the case
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of negligence of the traveler through the country, the farmer is helpless and certainly would not have any redress. He could not find the guilty party. That is what happens in prairie fires continuously, and it would seem to me, of course, that where there is a responsible corporation like a railroad company you can always collect, but you could not collect from an irresponsible person, yet that would be no fault of the farmer.
Senator POPE. Exactly, and that is one reason why we felt that if the board could consider fire as one of the hazards to be included in policies, with perhaps some limitations. If the fire was caused by the negligence of a responsible person or corporation, then it would not protect as to that. It might protect as against some other causes such as you suggest. That is why we did not name fire outright, but we would leave it to the board to determine in what cases they should be protected against fire.
Mr. TALBOTT. In other areas I think it would not apply as it does there, because the average wheat crop is cut before there is much danger of loss by fire. In our country there is too much moisture in the wheat, in the straw, to burn very readily.
Senator POPE. To your knowledge do private companies insure against fires in wheat?
Mr. SHUMWAY. Yes; there are very few farmers but what take out insurance on standing grain against fire in the wheat area.
Senator SCHWELLENBACH. This is true, Mr. Chairman, that the corporation will be subrogated to the rights of the farmer against the railroad company, for example, and could collect automatically. If the corporation paid the indemnity it would then have the right of action.
Mr. Shumway. And could collect it much more easily than a private individual.
Mr. TALBOTT. That was the thought, Mr. Chairman, that I had in mind, that the Government would relentlessly pursue the collection of damages, where the individual might not be able to do it.
Senator POPE. Are there any other questions? Mr. THATCHER. I would like to ask Mr. Shumway just one more question. In the Pacific Northwest we have, particularly since our world market for wheat was lost to us, we have most every year quite a problem with the surplus of soft wheat grown in our area, finding some outlet for it. The Government has engaged in the enterprise of subsidizing some of that wheat for the market. We have had that experience.
Senator POPE. That was about 2 years ago?
Mr. THATCHER. If this program is approved by Congress and the wheat producers receive aid, and these premium stocks are set aside, everybody is on notice that they are set aside; the farmer knows they are there and knows it is in warehouses, and on the one hand it will have a tendency to urge them to participate in control of production, and on the other hand, if no attention is given to surplus production but let it come as and when it may—and that wheat will certainly seek an outlet—isn't it true that as that wheat moves around by waterway to the east and moves west from the east, it should cause concern to all of the wheat producers in the central soft wheat States as to the matter of the price of wheat?