Mr. SHUMWAY. Absolutely true. Wheat must seek a market. If it goes east by rail, it will cost us 35 cents a bushel. The Government subsidized and got rid of 281⁄2 million bushels 2 years ago; and, at another time, they loaned $10,000,000 to the Chinese Government to buy some of the wheat. Relief agencies are in there buying wheat for relief purposes. It is a soft wheat and is not used in our patent flour, but it is used in the Southern States because it is known as biscuit flour. Our wheat can go down the Pacific coast, through the Panama Canal and up to the Gulf ports. We have received through our association many complaints from Ohio and Indiana that we were flooding many markets that formerly belonged to them; and, of course, affecting the price of wheat in the entire United States by taking markets that normally belonged to other sections because our export market is gone.

Senator POPE. It is always true in those Northwestern States we have a surplus of wheat.

Mr. SHUMWAY. Always about a 50 percent surplus.

Senator POPE. I am glad you brought out this point. In those States we do not have droughts to destroy the wheat generally. Mr. SHUMWAY. No.

Senator POPE. But we do have certain sections, arid and other, and a good many individuals who do suffer from losses and with a comparatively low premium spread over the whole area a man that was seriously injured could be compensated.

Mr. SHUMWAY. Yes, sir.

Senator POPE. And, in that way, while we do not have the general losses of wheat as in the drought area, it would be very effective as far as the individuals were concerned in the smaller areas.

Mr. SHUMWAY. Yes, sir.

Senator SCHWELLENBACH. Isn't this true, as Mr. Talbot has pointed out, it is difficult for the individual farmers to pursue his right of action against a railroad company, for example, and almost impossible for him to get a settlement without a lawsuit because of the fact the railroad company goes on the theory that you cannot afford to pursue a case through a very long period of litigation, and if the railroad company knew that the Government, through a Government corporation, which would last out just as long as the railroad companies could, was the one who was going to bring the suit, there would be much better chance of getting a settlement than the individual farmer would have.

Mr. SHUMWAY. No question about that; because when an individual farmer goes up against a corporation, in the first place, he knows he cannot stand the expense, and many times he takes a settlement. that is not equitable, or doesn't follow it up at all.

Senator POPE. I will say our committee in following this bill, regarded it very much as all risk insurance, and we desired to cover everything we could as directly as we could, not due to negligence or malfeasance of the producer. So, I am sure the committee will take that attitude in considering this matter further.

Mr. SHUMWAY. Yes; that is not exactly the same as drought or flood, but, of course, if there is any question about the negligence of the farmer himself, it is covered in the latter part of the bill and, if it isn't due to his negligence, it seems to me it should be covered in the bill and the corporation investigate the causes afterwards and

get what is right out of it. This is a protective measure and that is one of the measures that could be extended.

Mr. TALBOT. It would apply almost entirely to your particular area out there.

Senator POPE. Yes, sir. Are there any further questions? There seems to be none.

We thank you very much for your remarks which have been very helpful.

Mr. SHUMWAY. Thank you.

Mr. THATCHER. The next speaker will be Mr. K. W. Hones, Colfax, Wis., president of the Farmers Union of Wisconsin, who will present the interests of the people of his State with reference to this matter.

STATEMENT OF K. W. HONES, COLFAX, WIS., PRESIDENT OF THE FARMERS UNION OF WISCONSIN

Senator POPE. All right, Mr. Hones.

Mr. HONES. Mr. Chairman and members of the committee, our Wisconsin, as you folks know, is not a primary wheat State and possibly will not be as directly affected under this measure as the primary wheat States, yet, we have a deep interest in this bill from the standpoint of the whole agricultural economic planning program. Our philosophy in our area has run to something like this; that we don't believe that any particular farmers are going to compete with each other, if in our particularly adapted areas the type of farming that is most adapted to that area is made possible to them. I mean by that, if the boys in the western section whose land and climate is adapted to wheat are permitted to make a living out of that wheat and adequately protected against that, that they are not going to be as interested in diversifying as they otherwise have to be when they are not protected. That is also true of cotton. It is also true of corn; and so forth, and so on.

I think that probably on our farm at home, we have as complete an example of what diversification means as in any place. We happen to have enough machinery on that place, I guess, to do everything except enter into the cotton business from which we are only prohibited because of the climate. Wheat, corn machinery, tobacco machinery, potato machinery, and dairy equipment and everything else. The overhead of that type of farm is tremendously expensive, because you are carrying a heavy investment in machinery that you will not use but a few days out of the year. And in this bill it will just give us an opportunity to try out something that I believe and we believe has been neglected for a long time in agriculture.

I don't believe that there is any particular patent medicine remedy at all for one-all cure of agriculture; and I think it has been remarkable in the last few years to see the tremendous strides that have been made to bring about the different grouping of problems so well correlated as to bring about a planned agricultural economic program for the future, and I have reference to soil conservation and production control, which closely relate to each other, and correlate. Then, we have the ever normal granary plan which we are working on and the cropinsurance program.

Those two, which I believe are very essential and very closely related in not only caring for the seasonal surpluses we have, but work

out for the future an orderly program for all our agricultural commodities.

I believe that crop insurance is just as important to agriculture as life insurance is to all of society, as insurance on farm buildings or city homes or insurance on our livestock and so forth. It is a protective coverage that should absolutely be put into operation.

I think another important thing that has been brought out here on this testimony and that I want to impress again, from my standpoint of view is the elimination of relief, of agricultural relief. Direct relief is bad enough at its best. I think that all of society's obligations and the consumers, and farmers themselves are large consumers throughout the nation. As I say, we are not a primary wheat State, but we use a lot of wheat products in Wisconsin. Trainloads of them. It is up to us to protect the wheat grower and as this program becomes successful, as it will, it will attach and extend to other basic agricultural commodities in the future.

I hope at some time, Mr. Chairman, we may sit down at this same table and work out a program whereby our farmers in Wisconsin can be insured against crop losses for feed for livestock.

I think as this program goes into effect and becomes operative, you are going to lessen a great deal of the heavy relief problem we have. There is only a matter or two, or one thing or the othereither give the agricultural people an insurance to keep them on the farm or we should recognize for once and all time that because of the lack of that insurance we are going to have a national community chest, a Nation-wide community chest and we are going to set up tremendous sums of money for this region and this disaster, and so on. Every year we have some section affected by some kind of disaster or other.

Senator POPE. And would this not be true, too; that the protection of the farmer and the producer would also have its effect on other allied industries, such as dairying?

Mr. HOLMES. Absolutely. That is a very important feature. I was just coming to that point to say that as far as our dairy farmers are concerned in the dairy area, that I feel very emphatic about this program, I presume probably from a selfish reason, that I can see ahead, Mr. Chairman, that this insurance program is going to stabilize our feed prices to a great extent. Thus directly as the program goes into operation with reference to soil conservation and every normal granary we are going to have the great fluctuations in the grain market, and the insurance plan is one of the important features of the whole program; and I say further, I think it is a vital, important factor in our whole agricultural economic program.

Senator FRAZIER. This insurance bill is a step toward putting agriculture on a paying basis.

Mr. HOLMES. Yes; and in our estimation it will eliminate a lot of discussion had around this very table in regard to soil conservation and in regard to the triple A, when everybody says, "We are going to take out this crop and this crop", of course, and go complete with the dairy farmer. Where the dairy industry has been adopted in nondairy areas, it is due to the fact those farmers, in their choice, so desperate had they become, they had to try something else.

On our farm, we have a 360-acre farm and carry about 30 head of Guernsey cattle. In order to set up an insurance program, I have to

put in 60 acres of potatoes, 3 or 4 acres of tobacco, some wheat, and all those things to insure against a dairy failure, in case the dairy business should go bad. Therefore, I am gambling all the time, and I think the insurance program is one of the mainstays to take the element of gambling out of agriculture to the individual farmer.

Senator POPE. And does it not occur to you that since the farmer is paying premiums to cover indemnities he may get, that this program is more nearly on a business basis than some of the other programs we have adopted?

Mr. HOLMES. That is right.

Senator POPE. The farmer is paying his way.

Mr. HOLMES. I do not think there is any farmer but who is not absolutely willing to pay his own way.

Senator POPE. Are there any other questions? I hear none. Thank you very much. Your statement has been very helpful. Mr. THATCHER. The next speaker will be Mr. Vesecky, Salina, Kans., president of the Farmers Union of Kansas.

STATEMENT OF JOHN VESECKY, SALINA, KANS., PRESIDENT OF THE FARMERS UNION OF KANSAS

Mr. VESECKY. Mr. Chairman and members of the committee, there has been so much said already this morning that I do not know as there is much more to say. Kansas is nearly unanimous for crop insurance I would not say unanimous, because we farmers are like a lot of other folks, we always have some reprobates among us that are against everything. You can never find any humans unanimous on anything. But we think we are as near unanimous in this as you find us in anything that is for the benefit of agriculture; but we feel this way about it, that it is not in itself a complete program. is one of the very important parts of the program that we expect this Congress to enact, soil conservation, the crop insurance and ever normal granary, those things put together.

It

I wanted to call your special attention to the dangers in this insurance program if we do not have with it also the next step, the ever normal granary proposition that we have discussed here so much last month.

We are providing two things in this crop insurance. We are providing an insurance for the farmer for bad years; and in a limited way, not as much as in the ever normal granary, we are providing insurance for the consumer that he shall have grain supplies in the subnormal years, and in providing that insurance, unless we couple this up with the complete program we are liable to find we will cut off the tops in the bad years of prices and this insurance reserve will be used by the speculators to drive down the prices when there is a good crop. We Kansas farmers, without bragging, Senator McGill, feel that Kansas is the biggest wheat-growing State in the United States. Senator MCGILL. We have the right to brag about that.

Mr. VESECKY. We are very much interested in this program. We know what this thing might do. We know right now whenever it rains in western Kansas wheat goes down, so we feel this crop insurance must be coupled with a complete program if it is to be really effective. It is a necessary part of the complete program. That is why we are so strong for it, because it is a step up and up until we get some assurances of a balanced adequate income.

Mr. Talbot spoke about North Dakota, and others about Montana. In Kansas, 1932 was subnormal and 1933, 1934, 1935, and 1936 were way down below normal, and taking those years, including 1931, we would be still below normal. In 1931 we had a tremendous crop in Kansas. If we could take a 10-year period we would have average production. We have had bad years before. I have been in Kansas since 1882. In 1893, 1894, 1895, and 1896 we had a series of bad years, but not as bad as these because one thing we are trying to remedy now. Our soil was better. It would produce crops with less rain and the drought was not as bad as in these trying years.

We need to have a complete program and build the soil back up again and a program that is based on a fair average, not only 5 bad years, nor only 5 good years.

The farmer doesn't like to be a ward of the Government any more than anybody else and probably less than other folks. I know farmers in our territory that are very hard up and they will live on anything rather than ask for relief. They go out and pick cow chips, like they use to do in the early day in western Kansas. You will find those boys as independent as you did in the old times. They do not want to go on relief, and they want this Congress to help them become self-supporting and self-respecting citizens, and they have a right to ask that.

Senator POPE. Do you not think that the farmers as a group are as independent and self-reliant as any other group in the country? Mr. VESECKY. I think perhaps they overdo that.

Senator FRAZIER. I think you are absolutely right. The farmers have been told that so long they believe it.

Mr. VESECKY. They are sure teaching them a lot now. Speaking about the benefit of crop-insurance program, one of the reasons for continuous cropping of our land was this: You take a good crop year and the prices are low, and we do not have enough money to pay the debts, so in order to have enough money to pay the debts, we go and put in a big crop. The next year we have a crop failure

Senator FRAZIER (interposing). You are in debt further than ever. Mr. VESECKY. We are in debt further; and in order to try to get out, the necessary thing to do it to make some sort of sensible provision for the contingency. We cannot wait for the promise of the crop next year. Those fellows we owe will not wait for their money. They are after us. If we had a way to spread this out, we could treat our soil right.

Senator FRAZIER. And because of that very condition farmers are criticized for being shiftless.

Mr. VESECKY. That is it. The farmer does love his soil and he would take care of it if he were able to, but when it is a question of putting in something to try to save your place; and everybody tries to save his place, we impoverish our soil because of necessity and not because of the desire. No farmer wants to do that.

Senator MCGILL. In 1931, you mentioned about the large crop Kansas produced that year.

There was a large quantity of wheat that was placed in storage before that crop was produced that was subject to being sold at any time the Federal Farm Board wanted to dispose of it which had a tendency, of course, to drive the market price down. Now, in