of South Dakota as vice president, and more recently State chairman of the Roosevelt Agricultural Committee. Mr. Fosheim.

STATEMENT OF OSCAR FOSHEIM, OF THE FARMERS UNION OF SOUTH DAKOTA

Mr. FOSHEIM. Mr. Chairman—

Senator POPE. Mr. Fosheim.

Mr. FOSHEIM. And members of the committee; I am not prepared to testify before the committee. I really did not expect to be called upon, but I am heartily in accord with your crop-insurance plan. It occurs to me that it will do away with the valley and the mountain in the fluctuation of prices, that it will feed the market an even flow of farm products to the advantage of the producers and consumers alike and, therefore, I am pleased to see that the Federal Government will finance the cost of crop insurance—that is, the administrative cost. That will be a benefit to the consumers and to the producers, and to everyone in the United States. It seems to me that you are on the right track.

Senator POPE. Not only would it be a public benefit, a benefit to the consumers, but it would also tend to save the Government a good deal of money for relief, drought relief, and relief from pests. The Government now is spending a considerable amount of money for relief.

Mr. FOSHEIM. That is true, sir.

Senator POPE. And yet, while it would not entirely relieve the Government it would help relieve the Government from that expense. Mr. FOSHEIM. Yes.

Senator POPE. And those two reasons are the one that motivated the President's Committee and we followed the report of that committee to provide for an appropriation to take care of the overhead expenses of that Corporation, and that strikes you as being the proper thing to do?

Mr. FOSHEIM. The proper thing to do. It is fair to everyone; everyone, including the farmers, who should help pay the administrative costs. And, as a farmer from South Dakota, I will say that I believe that the farmers in my State appreciate the good work you have done and are trying to do. Some of us would like to have you do more and we are also thankful to the President of the United States for taking the initiative in this respect. Perhaps the wheel that squeaks the loudest gets the grease. Some believe we cry for a good deal more than we expect to get, but I am thankful for what you have done and what you are trying to do and hope you can see your way clear to do even more in the future.

Senator POPE. Thank you, Mr. Fosheim.

Mr. FOSHEIM. And thank you, Mr. Chairman, and members of the committee.

Mr. THATCHER. Mr. Chairman, the next witness is Mr. Emil Loricks, president of the Farmers Union of South Dakota.

STATEMENT OF EMIL LORIKS, PRESIDENT OF THE FARMERS UNION OF SOUTH DAKOTA

Mr. LORIKS. Mr. Chairman.

Senator POPE. All right, Mr. Loriks.

Mr. LORIKS. I don't think, Mr. Chairman, that there is very much that I could add to the splendid testimony that has been given here

today by the various representatives of farm groups whom I have listened to with a great deal of interest and I will say that I am not going to discuss the mechanics of this legislation.

As a member of the committee of 15 representing the wheat growing States, and unfortunately, they have not all been here to help on this legislation, so the best thing I can do is add support of another State and that is the State of South Dakota.

I will say, with the exception of my military service during the World War, I have devoted my life to farming.

As president of the Farmers Union, I will give a few facts relative to that organization in my State. We have between four and five hundred live, active associations throughout the State that meet regularly every month, besides a great many marketing cooperatives and other farmer cooperatives. We have on the average upwards of 20,000 voting members in the State.

The Farmers Union is vitally interested in farm legislation. In fact, our National Farmers Union is on record for crop insurance. Naturally we are interested in seeing the development of a workable plan.

As a member of the committee of 15 representing the wheat-growing States I regret exceedingly my inability to attend these conferences heretofore, however, we are more than pleased with the good work that has been done to date in formulating a crop-insurance program.

I want to commend this committee for the great interest it has taken and the fine work done in formulating legislation to create a workable crop-insurance plan. We feel particularly fortunate too that the President of the United States has taken a keen interest in the matter under consideration here today.

My statement to you will be very general. I will not go into detail as to the mechanics and administration of this proposed legislation. That has been so well covered that further consideration of it would be repetition. However, I want to concur in the statement of the president of the North Dakota Farmers Union, Mr. C. C. Talbott, in stressing the need for a longer base period. The North Dakota Legislature by resolution asked for a base period of 15 years. would go even farther and ask for 20 years or an all-time base period if that were possible. We have just passed through 6 years of drought. We may not have a recurrence of such a protracted period of drought in 50 years or 75 years. All insurance is based on law of averages and using only recent drought period as a base would be unfair.

I

The farmer is up against the greatest uncertainty, because of the elements of nature, insects, and so forth, of any individual on the face of the earth. Suppose the drought is over for a while. We have had floods, early frosts, hail, grasshoppers, and other elements of adversity. Suppose that we have normal and favorable conditions and a bumper crop ensues. What happens? Prices crash. As someone so aptly stated this morning, favorable prices for the farmers are always contingent upon calamity in some section curtailing the crop. That is entirely true. In South Dakota, my own State, farming is always a failure. That is a broad statement to make, but it is true and speaking from my own standpoint, we have known nothing but failure. If it hasn't been crop failures, it has been price failure, one or the other as sure as night follows day. The only thing that has been certain in the farming game has been uncertainty, and maybe that is the reason for the alarming condition that exists in our àitate

relative to tenantry. We recently made a survey and discovered that 63 percent of the land in South Dakota is tenant operated; and in my own county, 74 percent is tenant operated, and that tenantry has been increasing since 1880 regardless of good years or bad. So, there is something radically wrong.

We feel sure that a workable crop-insurance program would benefit, not only the farmer, but society as a whole. It would benefit the consumer who is likewise the victim of uncertain and fluctuating prices. It seems to me the most logical, sane, and sensible feature of any farm program that has ever been devised. We recognize the fact that it is not in itself a solution of the farm problem, but merely one very necessary and important feature to be integrated with a general farm program.

I just want to add another thought, and that is in regard to public opinion on this proposed legislation.

Crop insurance seems to have the most universal and widespread appeal of anything thus far proposed. Not only are the farmers vitally interested in it, but I find people in all walks of life, from the humblest citizen to the chief executive of our State embracing the idea, businessmen, manufacturers, processors of farm products, all agree that it is a very sensible and worth while program to develop. In conclusion, let me say that while South Dakota does not hold the important position as a wheat State that we formerly did, we are still in the wheat business, and we are interested in this program. We look at it from a national standpoint, realizing that it is a national problem. We appreciate very much the splendid progress that is being made in development of a workable crop-insurance program.

We realize too that all good legislation designed to remedy social and economic ills is darkened by the threatened shadow of unconstitutionality, veto by the courts. No one realizes this better perhaps than you gentlemen of the committee, and we hope the time will come when the road to progress will not be barricaded by this overhanging threat. We feel that the President of the United States in advocating Court liberalization has touched the very core of the boil that is festering our social and economic body.

Senator POPE. Any questions?

Senator FRAZIER. Do you have State hail insurance in South Dakota?

Mr. LORIKS. We have hail insurance. It was repealed 4 years ago. I think the insurance interests of our State got together and saw to it State hail insurance was done away with.

Senator FRAZIER. Was it fairly successful while it did operate? Mr. LORIKS. Yes; it operated on much the same basis as your insurance in North Dakota. I happen to know that because I own a farm in your State and I know something about the operation of hail insurance in North Dakota. It was very successful. It saved millions and millions of dollars in reduced premium rates to the farmers of our State.

Senator MCGILL. Was that done by the State government?
Mr. LORIKS. By the State; that is correct.

Senator POPE. Any other questions?

Thank you very much for your thoughts on that, Mr. Loriks. Mr. LORIKS. Thank you, Mr. Chairman and members of the committee.

Mr. THATCHER. Mr. Chairman, our next witness is Mr. J. Edward Anderson from Buffalo, Minn., a member of the Farmers Union of that State and active in the cooperative organization and had been our good secretary of the wheat and conservation conference.

STATEMENT OF J. EDWARD ANDERSON, SECRETARY-TREASURER, COOPERATIVE UNION ACTIVITIES, MINNESOTA, OF BUFFALO, MINN.

Senator POPE. All right, Mr. Anderson.

Mr. ANDERSON. I am glad to be here to testify from my State as others have been here to testify from their States.

Many of the wheat farmers of my State want this insurance. We realize it is a good business proposition; that American agriculture has gotten to the point where it must put itself on the same sort of business basis as other businesses.

As I understand, this is primarily for wheat farmers.
Senator POPE. Yes; limited to wheat.

Mr. ANDERSON. My State is diversified, so that in the west and northwest we grow wheat and in other parts of the State there is corn, hogs, and dairies.

These farmers are interested to see this crop insurance go through, tried out because if it is successful, as it will be, if it is worked soundly, they, too, will want insurance. I, personally, can testify to this fact, because in my territory we grow both wheat, corn, hogs, and dairy cattle and it can be quite a calamity when your hay crop fails, and when your feed crops fail. There hasn't been total failure exactly on those crops, but there has been a 50-percent failure, at least, which means you have to take 50 percent of your cattle or hogs and drive them off unfinished to market. It is a terrible position to be in. I have been in that position myself. So we are for crop insurance, and we can pledge that our people from Minnesota will help. I think that is about all I have to say.

The other boys have covered it so well, that there is very little of anything I could add, as far as that goes.

Senator POPE. Your statement is very interesting that farming should be on a business basis. I think, as you have said, that has been one of the difficulties with farming.

Mr. ANDERSON. That is right.

Senator POPE. It has been haphazard.

Mr. ANDERSON. That is right.

Senator POPE. Catch-as-catch-can enterprise; and people go into that when they could not go into anything else. By putting it on a business basis and having insurance as other business has, that ought to be a step in the direction of putting the farmer on a business basis. Mr. ANDERSON. Absolutely.

Senator POPE. Are there any questions?

Mr. ANDERSON. Thank you.

Mr. THATCHER. Mr. Chairman, the next witness is Mr. D. L. O'Connor, from the spring wheat area, president of the Farmers Union Terminal Association and Grain Cooperative Service and Cooperative Elevators in this spring wheat area.

STATEMENT OF D. L. O'CONNOR, PRESIDENT OF FARMERS UNION
TERMINAL ASSOCIATION, ST. PAUL, MINN.

Senator POPE. What is your address, please, sir.
Mr. O'CONNOR. New Rockford, N. Dak.
Senator POPE. All right.

Mr. O'CONNOR. Mr. Chairman and gentlemen of the committee, I have two particular aspects I would like to touch on.

One, security to farming brought about by insurance, and I would like to illustrate that through a personal experience. For years, I have been interested in a local county elevator. In the year 1932, our wheat went as low as 16 cents a bushel to the farmers or 31 cents at the terminal, In 1936, between Christmas and New Years, we sold two carloads of wheat at $1.98 a bushel, which would return to the farmer about $1.80 a bushel.

Senator FRAZIER. Just last December?

Mr. O'CONNOR. Yes, sir; and what I am referring to would be the difference in these two prices over a term of 5 years, from 1932 to 1937. If in 1932, when we had to dispose of our wheat at 16 cents a bushel we had insurance, we could have paid premiums for 5 years or turned in 5 bushels per acre into insurance which would guarantee us a crop for the next 5 years. Taking that amount off the market generally would not have let the market go down to 16 cents. This premium would have been returned to us during these years. We would have been insured a crop during all that time.

I have been in North Dakota in Eddy County since 1887. During all that period the first complete washout we had was in 1934. Up to that time we always had something. We might have lost potatoes or wheat, but in 1934 we had a complete washout. In 1936 a large part of the State was washed up. That is two complete failures in 50 years and both just recently. If this insurance had been in effect during this time we would have held up the prices in 1932, because it would not have been necessary to put it on the market. We could have paid our crop insurance and placed it into an ever-normal granary, with the understanding it would be held to pay indemnities when we lost our crop, thereby making social security available to the farmer. Another point

Senator POPE (interposing). On that point it has been suggested that if the individual farmer were in position to store a part of his crop during the fat years and use it during the lean years; and if every farmer did that, you could accomplish the purposes set up by the bill, but the individual farmers can't do that, so the Government is undertaking to do the thing which if individual farmers could do, would be a help to them.

Mr. O'CONNOR. That is right, and I might add under our system of marketing the putting of grain into warehouses, it is no guarantee it will stay there. It often moves into the market and destroys the market as though we sold it ourselves.

The other point I wish to make is the setting up of a corporation to carry out the purposes of this bill. A corporation is far more flexible than if the administration is conducted under a bureau of the Department of Agriculture. I think adjustments in rates and policy could be far more easily realized through a corporation than through a bureau in the Department of Agriculture.