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western Kansas that year they produced an enormous crop, didn't they? Mr. VESECKY. Very big.
Senator FRAZIER. Averaging sometimes around 40 bushels to the acre.
Mr. VESECKY. Yes, sir.
Senator FRAZIER. That wheat was wheat that would weigh 65 pounds to the bushel.
Mr. VESECKY. The best wheat you ever saw.
Senator FRAZIER. And about the only thing the farmer could do with that yield was to sell it. He had no place to put it.
Mr. VESECKY. Everything was full, even the terminals.
Senator FRAZIER. The wheat was out on the ground and there was no place to store it, is that not true? . Mr. VESECKY. That is true, Senator.
Senator FRAZIER. And farmers out there were forced to sell that wheat in the neighborhood of 25 cents per bushel.
Mr. VESECKY. It ran from 18 to 25 cents.
Senator FRAZIER. I can remember one day when it was 23 cents out there.
Now, the following 4 years 1932, 1933, 1934, and 1935, that country did not produce any wheat at all to speak of; isn't that a fact? Mr. VESECKY. Very little.
Senator FRAZIER. Šo a program of this kind, if it had been in force in 1931, would have enabled those farmers to provide a little bit in the years they produced anything for the future.
In other words, you had an average crop yield around 10 bushels an acre for the 5-year period, didn't you?
I merely wanted to call that matter to the attention of the committee. It looks to me as if we might have saved the western Kansas farmer had we had some such program as this.
Now, the bill provides, and I think we are drafting an amendment to undertake to make it impossible for this board to dispose of this wheat except to prevent deterioration or to make payment. Now, that is intended to go into the contract with the individual farmer. : Do you think that would be a sufficient guaranty that the storage would not unduly weigh against market prices?
Mr. VESECKY. It would help, Senator, but it would not be sufficient, because I know the speculators, I have dealt with them for years, I was in business with the Kansas Cooperative Wheat Market Association for 8 years in Kansas. This plan, combined with the ever normal granary plan, will do it. That is why I spoke awhile ago and said we will have to consider this a part of the complete program, as yet incompleted.
Senator Pope. Under this bill, the wheat stored cannot be dumped on the market. The only way that wheat can get out on the market is to pay the farmer his indemnities, and he can sell the wheat; or for his convenience, the corporation might sell the wheat and turn the money over to him. It is the same thing. So, we have tried to tie these reserves up tight so that the corporation and the Government cannot dump that on the market, so there is no way for speculators to get hold of the wheat.
Now, some have brought up the question whether the amount stored would be enough to affect the price of wheat. We do not know,
but we have tried to tie this up so the speculator could not get hold of it.
Senator McGILL. In other words, the bill provides the board shall sell wheat only to the extent necessary to cover payments of indemnities, that is, to the farmer or to prevent deterioration. Now, that provision, according to an amendment the committee is considering, would also be placed in the insurance contract. It would not only be a provision of the law, but a provision of the contract that the farmer had with the board in charge of this corporation,
Senator POPE. We also
Senator MCGILL. Now, I think to quite a limited extent, that will prevent the storage unduly weighing against the market price, but I think Mr. Vesecky is correct when he says regardless of what your contracts are, a large valuable supply of wheat in storage will have some bearing on market price.
Senator FRAZIER. Use it as an excuse whether it is to their advantage to do so, anyway.
Mr. VESECKY. Here is one unfortunate thing about farming, and has been for year, that it takes a calamity of some importance in some parts of the world to make it fortunate for the farmers in other parts. The unfortunate thing is we cannot have fair prices for the farmer every place without a calamity somewhere. If this works out, the farmer will always have some wheat and the speculator will say there is no danger of a shortage as the crop insurance would give us three-quarters of an average crop. Well, the speculators will say there won't be any calamity at all, the prices will go up some, but not as high as they would otherwise.
Now, that is good for the consumer, and I think it is perfectly fair; but unless there is something done to protect the farmer in case of a big crop, this would keep him from getting big prices in case of a low crop somewhere else. It would have a tendency to make the average price level lower. Now it is averaged on a series of too high prices where the consumer can hardly buy what he needs, and of too low prices, where again the farmer goes broke and the average between these is the farmer's average, which isn't fair to either producer or consumer.
Senator FRAZIER. I think you must include in the farm program some method of putting out of business gamblers that control prices in the present set-up.
Mr. VESECKY. We have to provide something to protect the farmer against their machinations. They should not make money on that.
Senator POPE. Nobody contends this bill alone would eliminate the speculators, but it is a step in that direction.
Mr. VESECKY. It is a good bill, Senator, and we are strong for it. I think the farmers in Kansas are more unanimous about that billn than any other bill, even Triple A, or anything else, they are stronger for that bill than any other, but they are confident it is just a part of a complete program Congress has in mind for the farmer.
Senator MCGILL. I do not think we should in any sense mislead the farmers. We are not intending to. In the consideration of this bill as well as many others we are considering, I think the farmers ought to take into consideration whether or not the Supreme Court is going to hold this measure and the rest of them unconstitutional. [Laughter.] Senator POPE. We are doing everything we can do. Senator FRAZIER. You are an optimist. Mr. VESECKY. I said it, I don't know whether it should go into the record or not, but I believe the Supreme Court is unconstitutional itself in the way it decides on the legislation you pass.
Senator POPE. Are there any other questions?
Senator Hatch. I have just arrived and I thought I was attending a meeting of the Agricultural Committee, but I believe I am in the wrong place, from the discussion about the Supreme Court.
Senator McGILL. I do not want to lead the farmers to believe we are going to put this in effect; when as a matter of fact, we probably will not.
Senator POPE. All we can do is to provide and enact legislation that we think is beneficial to the farmers, and be just as careful in drafting that legislation as we can to meet objections appearing in the decisions of the Supreme Court. But I think we are perfectly frank in saying this legislation and any other legislation is in very grave doubt.
Senator MCGILL. So long as they (the Supreme Court) hold agricultural production is not a matter of national concern, but of local control
Senator Pops. Exactly. Are there any other questions? There seems to be none. Your statement is very helpful.
Mr. VESECKY. Thank you very much.
Mr. THATCHER. Mr. Chairman, before calling the next speaker, if we may take just a moment to discuss the very matter that Senator McGill raised about not misleading the people and have them expect too much out of this bill, I certainly agree with that statement.
The farmers, particularly the wheat farmers, because they did support the commodity exchange bill and spent an enormous amount of money over a period of years traveling back and forth to this town and maintaining an office here, which was primarily for that legislation.
We are very grateful to Congress for giving us what we received, but what we asked for in the commodity exchange bill, it appears we were reasonably modest when we now look at the report of the department of the Government, the Federal Trade Commission, to see what has been disclosed by their investigation; and this group here which composed the wheat-conservation conference.
We are, while here in Washington, going to give attention to the recommendations of the Federal Trade Commission for other remedial legislation to deal with these speculators who interfere with prices. And, as the Federal Trade Commission points out, we are going to try to seek the favorable attention of this committee and seek special legislation in regard to warehouses, and so forth.
Senator POPE. I think we cannot place too much emphasis on that. This legislation will help a great deal and I think no one thinks it is a complete solution of all our problems. Some people who are now very strong for the legislation will be disappointed, because it will not do all of the things they expect, but that is the way with everything. In this matter, we have today, we are doing everything possible, but cannot accomplish it all in one piece of legislation. I think as we get older, we realize that, and we cannot expect it to be a panacea for all of our ills.
Mr. SHUMWAY. Mr. Chairman, I want to say this — · Senator Pops. All right.
Mr. SHUMWAY. I think the average farmer feels exactly as Mr. Vesecky expressed himself, that there is absolutely no way to curb the speculator without some other remedial legislation. It is only part of the program.
Senator POPE. I think that is perfectly right.
Mr. THATCHER. I might add, at a conference yesterday, on Sunday, some outstanding leaders in agriculture have been in touch with this problem for years, and they are here discussing different ways and means of protecting agricultural economics through help of legislation. Some feel it is almost vital to have legislation to curb the speculators and some are of the opinion and so stated yesterday, in making an approach to this subject, that there should be an omnibus bill to take care of the many things asked and needed, including the assured income, so that farmers might work and produce for the needs of society and not be driven crazy and desperate by affairs arising under the present system of distribution.
· The Government is spending tremendous sums of money through soil conservation to give the farmers what they need, and if we can add to that and some day arrive at a group of bills—maybe the last jump is assurance of income on a percentage basis, so the farmers will spend their time farming and not worrying their lives out about their debts and so forth.
The next speaker will be Mr. James G. Patton, from Colorado, secretary of the Farmers Union of Colorado. STATEMENT OF JAMES G. PATTON, SECRETARY OF FARMERS
UNION OF COLORADO, DENVER, COLO.
The State which I represent produces a comparatively small amount of wheat. We have a very diversified type of farming, sugar beets, potatoes, and onions, until we get into the dry lands where we have the wheat farmer.
We have always looked upon this agricultural problem as a national problem and not as a State problem. Therefore, in that connection, we are, as farmers, interested in what happens to the wheat farmer. We are interested in his welfare not only because we have a good many wheat farmers in our State, but because we know when wheat farmers in large wheat producing States are well taken care of when their markets are leveled out so they have some assurance of regular income, we are going to sell our fruits and other products in this area.
Senator Pops. That is a very broad view to take, and a very fine one, I think.
Mr. PATTON. In other words, to illustrate our point, in the last few years since the States of Kansas and Oklahoma and others have had crop failures, our sales of fruits from western Colorado in that area have been materially reduced and it has been necessary for us to find other markets which was more expensive because of the cost of freight to deliver our goods. So we have been up against that proposition.
We have for years as an organization, Farmers Union of Colorado, been interested in this crop insurance program. In fact, at one time we had the matter up with our State legislature, and after threshing
the thing out decided it was not possible and probably not the way to handle it. However, we did go so far as to put in State hail insurance which is now running very effectively for farm crops, so we have realized the necessity for some sort of insurance program. Quite naturally, because the views I have stated are the views of those intensely interested in seeing this crop insurance put in as an integral part of a broad program, not only crop insurance, but tenancy and soil conservation and all the other items we feel are necessary. Our State convention went on record unanimously asking Congress to introduce and pass the crop insurance bill, such as you gentlemen have worked out and have done a very fine job with, we feel. In addition to that, they also went on record unanimously endorsing the past acts of this administration and the attempts they have made to assist agriculture.
Since there are a number of others here, I do not believe I want to take up any more of your time.
Senator POPE. Are there any questions?
Senator McGILL. And the reason for that is it is the one commodity they seem to have figures on, on which to base a sound program.
Mr. PATTON. We have in our minds if it works on wheat and we can help it work on wheat, we can get it on some other crops, and we will be more interested.
Senator McGill. That would probably be the final result, but you would favor this on wheat as the bill provides?
Mr. PATTON. Absolutely. Senator POPE. I will say to you we have that thought in our minds Mr. VESECKY. Mr. Chairman, may I make another statement which I think is proper?
Senator POPE. Yes. Mr. VESECKY. It is this. You hear talk often about this dry section of the country, that it would be better to abandon it and quit farming it, but I wonder if the people stopped to consider that practically all the bread wheat of the United States is produced in that very section, taking the territory from the Canadian border to the Panhandle of Texas, including two-thirds of Kansas and part of Oklahoma, and all your bread wheat is raised right in that territory. . It is necessary to protect the wheat industry in that territory if we want to continue to produce bread wheat.
If it wasn't for that territory, if we didn't raise enough wheat in that territory, we would be like Germany, France, and other European countries, we would have to fortify our wheat. We would have to import high-protein wheat. One of the good things this bill would do, it would put in storage bread wheat against the years when we would not raise enough of it, and we would need to fortify the weak wheat raised in the other sections. We should never forget that. If we did that, this country would be permanently on an import basis, even if we export other kinds of wheat, because we will have to import enough high-protein wheat to make it possible to make bread out of our wheat.
Senator FRAZIER. That applies to eastern Montana, western Nebraska, clear on through.
Mr. VESECKY. Clear to the Texas Panhandle. It is all drought territory.
thimator Poort. It is that in the peoplnited Sta Canadiasas